Many legal issues could arise when starting a small business that is unique to this situation, as many small business owners retain sole ownership, in comparison to partnerships or corporations, which could have multiple owners. Being a sole owner leaves you personally liable in certain situations. The following contains legal advice to help you keep your business life separate from your personal life.
Pay Your Bills
Paying all your bills on time will help yous steer clear of late fees and potential lawsuits.
Special attention should be paid to the payment of payroll taxes. If paid late, business owners could be held personally liable.
Because contract workers are treated differently than actual employees concerning payment in the eyes of the IRS, it is important to ensure that any contract workers you have are contractors. To do this, an agreement should be signed that specifically states their position.
Furthermore, any employees that are hired should sign a non-compete agreement before they begin working for you. Doing so will keep company secrets within the company. Also, an arbitration agreement should also be signed so that any issues that arise between employee and employer will not result in a lawsuit.
All contracts, including receipts for goods and services, should be legally binding. This can be easily accomplished by putting them all in writing.
Any customers should also be giventerms of service agreement outlining specific obligations your company holds as well as the rights of the customer concerning any product or service.
Ensure that all fine print is readbefore signing any contracts in addition to any terms of service agreement that you are given. Doing so will allow you to avoid additional costs later or unexpected restrictions.
To better protect your personal life, several options are available, including the purchase of business liability insurance, the formation of a limitedliability company, or you could incorporate your company. Also, putting a limit on the amount of debt you hold for your company could also help.
Searching for trademarks and patents will help when you are considering the creation of new products. Large fines could result if a product introduced by your company makes use of an already patented process or device.
Hire a Lawyer
It is highly suggested that you hire a lawyer that you could bring any legal issues that arise to. Also, legal advice should be sought if you are having an issue with an employee or customer to limit the amount of legal obligation you have in each situation. For example, a top medical malpractice attorney could be a huge help to a small doctor’s office that could otherwise face lawsuits.
Should a legal conflict arise, having complete records will help you to prove your side of the story. A filing cabinet will help to ensure that these records are easily accessible and well maintained. It may also help to have a second set kept somewhere off-site in case of a natural disaster such as fire or flood.