Running a business is a huge juggling act. Many people will put off thinking about the legal side of things to focus on other aspects. However, neglecting legal precautions could be costly as it could open you up to lawsuits. Not implementing certain legal requirements may even get you fined. Here are five mistakes to avoid in order to keep your company legally tight.
Choosing the wrong business structure
There are lots of different business structures to consider from sole proprietorships to partnerships to LLCs and corporations. All of these structures can have different benefits and drawbacks, so it’s worth doing your research before picking one. For example, if you’re a sole proprietor, you’ll have more control over the running of your business and won’t have to pay corporate taxes, however your personal assets could be at risk if you’re sued.
Not having a solicitor on call
There are a lot of rules and regulations that businesses have to abide by. Hiring a solicitor can be useful to help guide you through these regulations and ensure that you’re doing everything above board. Corporate lawyers can also help handle lawsuits. Shop around for solicitors with a good reputation that have worked in your field before.
Writing contracts yourself
Every business needs legally-binding contracts. These could be terms and conditions for clients or contracts for new employees. Whilst you can write these yourself, it’s worth getting contracts professionally written so that there aren’t any loopholes. Legal contract writing is a fine art and wording is very important – it could help defend you against lawsuits in the future or allow you stable ground to sue others who have done wrong to you.
Neglecting non-compulsory insurance
There are lots of insurance schemes out there for business owners. Many will only take out employer’s liability insurance as this is generally the only one that is compulsory. However, there are lots of non-compulsory schemes that could also be of benefit to your business such as product liability insurance and professional liability insurance. These can help to cover other common claims made against businesses such as faulty products, malpractice or negligence. Often you can save costs by taking out a general business insurance scheme. Whilst not all trades may benefit from these insurance schemes, others could find that they are very useful for deflecting big lawsuit costs.