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Steps to Protect Your New Business

protect-your-businessStarting a business represents an exciting time of new possibilities and unlimited potential. As you get your new venture off the ground, take some precautionary steps to help protect your business from legal problems in the future.

Understand Applicable Laws

Most U.S. businesses are subject to a variety of local, state and federal laws that govern the way your business should handle its finances, employees, relationships with vendors and customers, business operations, and intellectual property. Your corporate attorney can keep you apprised of changes to laws that affect your business and advise you on compliance.

Choose the Right Structure

Even if you’re running a one-person business, a sole proprietorship may not be the best structure for protecting you from legal challenges, since your personal assets could be at risk. Work with your attorney to determine whether a limited liability company, S corporation or another arrangement will best suit your needs. Your attorney also can assist as you file incorporation paperwork.

Protect Your Name and Business Identity

Before you settle on a name and logo for your business, it’s important to conduct a proper search, choose a compatible domain name and make sure your names and trademarks have legal protection. You can research  your preferred name through the U.S. Patent and Trademark Office, and your attorney can assist with filing the proper paperwork to apply for trademark protection.

Purchase Adequate Insurance

Insurance such as liability and workers’ compensation are critical for the success of your business. Should a customer or vendor suffer an injury at your site, liability insurance aids in protecting assets from a lawsuit. In certain lines of work, such as consulting, you may want to consider coverage for “errors and omissions” in the event that you’re sued for the quality of your work.

Emphasize Safety

Regardless of your industry or the size of your business, accidents can happen that cause injuries and open you up to potential liability. Try to make your workplace as safe as possible, including promptly attending to any hazards like spills, clearly marking exits and implementing safety policies.

Get the Right Tax Advice

Avoiding tax paperwork — or completing it incorrectly — can result in legal issues for new businesses. Work with a qualified accountant who can oversee the entire tax picture for your organization and make sure that all required paperwork is filed correctly and on time. Keep records in an orderly fashion that allows you to access the right documents should your company become the subject of an audit.

Create Effective Contracts

Work with an experienced business attorney to create contracts that clearly state terms and conditions of your agreements with other parties, along with remedies in the event of noncompliance. In addition, avoid signing contracts on behalf of your business without having your attorney review them and, if necessary, make changes.

Limit Conflicts of Interest

To shield your company from legal liability, avoid situations in which possible conflicts of interest may arise. Any appearance of improper dealings can damage your reputation and increase your risk of being sued if another party perceives harm from the alleged conflict.

Partner With an Experienced Business Attorney

One of the most important steps you can take to protect your new business from legal challenges is working with an experienced attorney.

By forming a relationship with an attorney as you start your business, you gain a trusted advisor who understands the unique circumstances of your business and industry. When problems inevitably arise, your attorney already has the background and knowledge about your business to assist you immediately.

To schedule an introductory consultation with our attorneys, please contact us today.