Operating a business comes with many risks. For example, starting a new business can put your finances and reputation at risk.
Risk can pave the way for great rewards in the future, but it is essential to limit the legal hazards inherent to running a business. Doing so helps you grow your company without facing undue business disputes or litigation.
First, identify the possible risks
Some hazards are beyond your control, but forethought and planning allow you to minimize your legal risks. Examples of perils you have the power to address include:
- Filing business taxes improperly
- Terminating employees wrongfully
- Compromising intellectual property
- Selling, buying or leasing real estate
- Misclassifying your workers and contractors
- Ignoring business and corporate compliance
- Discriminating against employees (even unintentionally)
Using employment agreements and contracts without including legal protections is also a top hazard for many businesses.
Now, reduce those risks
Once you have identified the legal risks your business may face, it is time to minimize them. As business law professionals, we believe all company owners should:
- Learn the rules. If you want your business to flourish, you must learn about and comply with corporate regulations or litigation may occur. Knowledge of what you can and cannot do in your company significantly minimizes statutory risk.
- Assemble a team. A team of professionals supporting your business helps to minimize risk. Most entrepreneurs need a financial advisor and a business law advocate (at the very least) on their team.
- Use well-drafted contracts. If you use cookie-cutter contracts, you risk financial loss, and you open an avenue for associates or employees to file a lawsuit against your company. For maximum protection, you need contracts built around your business.
Learning more about business law, disputes and the benefits of corporate counsel services can also protect your business.