When you are a business owner it is clearly your responsibility to protect your business from anything that comes its way. Not only is it important for your own well-being, but also for your employees, partners and your reputation for the future.
While you may be an absolute expert in the industry of your business, you might be a bit more of a novice when it comes to commercial law. But just because it's not your area of expertise doesn't mean you can ignore it or use that lack of knowledge as a defense if you happen to make a legal mistake.
As a business owner you have a duty to educate yourself on the law that pertains to you and to be vigilant about ensuring that you adhere to it.
That may include preventing the business from being sued. So how do you go about doing that?
Maintain the Business Image
Always watch what you say or do as it can affect the image of your company. Avoid making any public announcements or statements that may have the risk of turning into a PR disaster or even mildly offend potential clients. You have to realize that you and your business are somewhat synonymous, so what you do in real life or even online reflects directly back on the company.
This also involves distancing yourself from people or groups with shady business practices. You may think you are safe since you don't take part in any illegal activities yourself, but being connected with anyone who does is a liability you can't afford - if they take a fall and your connection to them becomes public, it could be a serious problem for you.
1. Hire A Specialized Attorney
When first starting up, it's wise for business owners to hire an attorney who is experienced in commercial law; you may even be able to find one who has a background working with clients in your specific industry. If you're like many startups, you may not think you can afford to hire a lawyer, but you shouldn't think of it as an unnecessary cost, but rather a mandatory investment in your company's future viability and safety.
Find someone you trust who is very familiar with local laws and regulations, and let them guide you in setting up your business structure, taxes, and contracts. Sometimes you may need a specialist too, like a tax attorney, so keep one on standby in case you need it.
2. Separate Yourself From Your Business
There is really no issue running your business as a sole proprietorship, but the problem arises if the company is ever sued and your personal assets become involved. The best solution for many business owners is to have a trust own the business.
A trust is a legal entity that can hold assets, cash, properties and businesses and file its own tax return. Incorporating as such separates your finances from that of the business so that you are not taking on undue risk. It does involve additional paperwork, which you may need assistance completing properly, but it's the best way to make sure that your personal security is not forever linked to your company.
3. Get Insurance
If there is a chance a customer may slip and fall, or that an employee could get injured at your place of business, you absolutely must invest in liability insurance. This covers the danger of being sued if anything like this should happen and you could be considered the liable party.
People who work with people and offer services may also need errors and omissions coverage. This sort of insurance protects you against making errors or not delivering as per the contract you have signed with a client. In short, do some research to find out what types of insurance you need so that you can always be safe rather than sorry.
4. Protect the Files
Losing essential files or having them stolen from you could lead to a lot of trouble with your clients and suppliers. Most modern office work is done digitally these days, so installing the right sort of antivirus and backing up your files is imperative if you want to avoid legal troubles.
Every business and every industry is a little different, so your particular needs may be more or less than the ones listed here. The bottom line is that it's critical for business owners to prioritize legal protection at all times.
You think that being sued could never happen to you, and we hope it never does, but you need to be prepared for anything if you hope to maintain a successful business for a long time to come.
Contributed by http://Www.Maylawpc.net.