Being a business owner requires making many important decisions. Making the wrong choice in certain cases could land your company in legal hot water. Below are six of the worst legal mistakes any business can make.
You Haven’t Incorporated When You Should Have
One big mistake that many entrepreneurs make is choosing the incorrect legal form for their company. While many people are successful sole proprietors or partners, most of these businesses stay rather small. If you get too successful, you are likely to be sued for something at some point, and your personal assets could be at risk.
Your Business Is Not Licensed
One mistake many people make is not gaining the appropriate licenses to practice their trade. This should include federal, state and local licenses. You also need to make sure you are following all zoning laws as well. Otherwise, your business could be shut down by authorities.
You Don’t Actually Own Your Intellectual Property
During the planning stages of your business, you need to make sure that you do in fact have the legal right to use your logos, names, content and business processes. Do research to find out if these are already copyrighted or trademarked by another party. If you don’t, prepare for a cease and desist order.
Related Article: Intellectual Property Awareness
You Haven’t Purchased Business Insurance
Insurance needs to be purchased to protect a business and its assets from things like fires, floods, theft and lawsuits. If your company doesn’t have the appropriate coverage, you could be put out of business due to a sudden event.
You Have Poor Legal Representation
If you are a large enough business, you should always make sure to hire an experienced legal team to defend your company in court. You should also make sure to have appropriate court reporting and litigation support services from a company that specializes in this area.
Related Article: Getting the Right Legal Service
Your Employee Contracts are Inadequate
You need to make sure the contracts your employees sign are legally enforceable and have been reviewed by a lawyer. Otherwise, you may end up making your company a target for workplace discrimination lawsuits. Another common mistake is forgetting to include a non-disclosure agreement when employees are exposed to important company information.
The legal aspect to your business is one of the most important ones you should be aware of. It can determine whether your company succeeds or fails. Make sure all facets of your business are operating legally.
Author: Anita Ginsburg is a freelance writer from Denver, CO. She enjoys writing about business, education, home and family. Informational credit to NAEGELI.