Expert Legal Tips for Small Business Owners
Check out these expert legal tips to run your small business right and not get into trouble later.
The legal end of a small business is perhaps the least fun, but it’s the most necessary. Failing to take the proper legal measures can cost you tens of thousands of dollars down the road. Playing a clean and fair game can help your business run and grow without incident. If you’re a business owner (or about to become one), make sure you have at least a basic understanding of the laws that apply to your businesses and the way the law will affect you.
Laws surrounding business are constantly changing. Keep a yearly checklist to assure things are exactly the way they’re supposed to be. When in doubt, call that great lawyer you’ve been hanging onto.
Small Business Structure
Your small business needs to be a separate entity from yourself. If it isn’t, you’ll be personally liable for everything that happens involving your business. The structure you choose will affect all aspects of your small business, from the way you pay taxes to how liable your business can be. Your structure will also affect the way you can receive money from outside institutions – if your business is new, you may still be personally responsible for debts you incur from lenders no matter the structure. It’s important to keep that in mind when you request startup capital.
Will you be creating an online business? Or will it be a local brick and mortar store? Will you be using services like Paypal or Stripe? Who will be in charge of your accounting? Your or someone you outsource? You need to structure every aspect of your small business with the help of a small business lawyer. That way any eventuality will be covered.
Whenever you’re discussing sensitive information with a potential employee, a potential customer, or an outside service provider, be sure to enter into a Non-Disclosure Agreement (NDA) with the person receiving that information. This is especially important in the early stages of a business when you’re seeking help, advice, and solutions from prominent authorities, investors, or business to business providers. Never release any important information to someone who has not signed an NDA.
Let’s say you hire someone and then they go work for the competition. If they didn’t sign a non-disclosure agreement with you, they could be telling the competition all your secrets. You would have no legal backing to protect yourself or your business
Smart Small Business Contracts
When someone agrees to do something, you can’t just take them at their work for it. Anything that involves a recurring payment or shipment, whether you’re on the sending or receiving end, requires some type of contract. Contracts keep people honest and accountable. If someone wants to flip the script, claim they didn’t know something, or simply stop living up to their end of the deal, a contract can prove and arrangement and create a foundation for enacting consequences.
If you need help drafting a contract, you can hire a lawyer or get a contract template online. There are different contracts for different industries, make sure your small business is using the right one. If the person you are working with wants an amendment to the contract, always contact your lawyer so you don’t get taken for a ride.
Protecting Intellectual Property
Nothing is really yours until it’s legally yours. This includes your logo, your slogan, your tagline, and even the packaging on your products. Anything you’ve developed or created from the ground up needs to be protected as your property. If you don’t file for things like patents, copyrights, and trademarks, you’ll have no way to defend your intellectual property against unauthorized use.
Small Business Record Keeping
Your records are the closest thing your small business will ever have to a reliable narrator. If anything should ever come into question, being able to refer to your thorough records can save your business. Keep copies of signed and dated contracts. Document payroll and especially tax payments. You never want to be caught not being able to prove something – especially if you know you’re in the right.
Record keeping and accounting are always better with help. Get an acounting app, a project management app and other tools to help you out.
Choose Investors Wisely
Investors aren’t generous friends. They’re businesspeople, and they want to know that they’re going to get a return on their investment. Money sometimes comes with advice. An investor may have specific expectations that you may not be able to fulfill. He or she may request that you make significant changes to the way you run your small business, and you might not be comfortable with those changes. Don’t enter into any agreements with investors unless and until you’re sure you understand what the terms and expectations are.
To get investors, you need to have a rockstar pitch deck to present them. Think of Shark Tank for your small business. Just how you need to choose investors wisely, you need to let them choose you just as wisely.
A Small Business Lawyer is your best friend
Many small businesses will forego keeping a lawyer on retainer to avoid costs. Lawyers can be expensive, but legal battles are even more expensive. Ask yourself if you can truly afford to go without a lawyer. How will your contracts be reviewed? Who will assure your compliance with local law? It’s better to get professional advice beforehand than it is to need professional help after the fact.
Who are you going to ask about that business owner that is copying your content? Your lawyer!