Small businesses make legal mistakes all the time—some of which can be disastrous. But knowing what pitfalls to watch out for can make all the difference. AllBusiness.com discusses them in detail, a great free resource. Read full article »
- Not Having Good Written Agreements: All of your important business agreements must be in writing. Oral agreements are usually not enforceable, and leave you with no recourse for compensation or legal action. Make sure your contracts are well thought out, drafted in your favor and give you flexibility and protection. (…)
- Unclear Expectations and Rules for Employees: It’s important to set clear expectations and rules for your employees. Make sure they acknowledge they are “at will” employees, which means they can quit or be terminated at any time without exposing your business to liability. (…)
- Not Getting an Experienced Corporate Attorney: Every growing business faces issues that require the services of an experienced attorney. Issues such as stock-option plans, employee negotiations, state and federal tax rates and intellectual property rights all require a corporate lawyer experienced in representing start-up and emerging companies. (…)
- Ignorance of the Law: Just because laws are numerous and complex doesn’t mean your business can ignore them. Learning a little about the following basic areas of the law can keep you out of legal hot water (…)
- Not Keeping Proper Corporate Records: Improper record keeping can cause problems with the IRS, hamper your ability to raise equity capital and could result in personal liability. (…)
- Starting the Business as a General Partnership Instead of a Limited Liability Entity: Under many states’ laws, the partners are jointly liable for the debts and obligations in general partnerships. If the business encounters a problem, all of your investment in the business—as well as all of your personal assets—is at risk. There are other legal options that avoid liability—corporations, LLCs and limited partnerships, for example. (…)
- Getting Involved in Litigation: Litigation fees can be astronomical, and they can quickly drain management time and resources. Consider alternative means of dispute resolution, such as mediation or arbitration. (…)
- Ignoring Intellectual Property Issues: Even low-technology companies have intellectual property issues that may be important for the future success of the business. (…) Have you registered for a trademark for an important company logo or product? Do you put copyright notices on your written information? Are your trade secrets adequately protected? (…)
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