Business Law 101: How to Reduce the Chances of Facing a Lawsuit

Running a business is a great way to make a living and can be exciting in many other ways. One of the challenges, however, is managing all your legal risks. Most small-business owners are great at the specific things that their business is responsible for, but may not be as interested in the legal aspects of things, which can land them in trouble. The following simple tips can help you to protect yourself, and your business, from lawsuits so you can continue to be successful for years to come.

Ensure Proper Contracts

Most businesses will use a variety of different contracts when working with employees, vendors, contractors, and even customers. These contracts are critical for identifying which parties are responsible for what so that there isn’t any type of miscommunication. Making sure that your contracts are properly written will help ensure your company is protected and leave far fewer openings for potential lawsuits should a disagreement arise.

Watch What You Say and Do

When engaging in day-to-day business, you need to make sure you aren’t saying or doing anything that could leave you open to a lawsuit. For example, never make any statements that could be considered libelous or slanderous against a competitor or any other individual. Another thing to be careful with is sitting on any boards or activity with other groups, or even running for local government office without taking steps to ensure it can’t be considered a conflict of interest.

Ensure Your Business is a Separate Entity

One of the most important things you can do to protect yourself is to ensure that your business is an entirely separate entity from yourself. This is done by establishing a corporation, LLC, sole proprietorship, or another type of legal business. Once a separate entity is formed, make sure you are protecting its purpose by maintaining separation between personal and business accounts and signing any business contracts as an authorized representative of your business, not as an individual. Taking this step will make sure that if your business is sued, your personal assets won’t be at risk.

Protect Business Information

One of the biggest threats to businesses today is something that only a generation ago wouldn’t have even been a concern. Companies today often collect and store a lot of information about their customers. This could include names, addresses, email addresses, account information, credit card numbers, and much more. When you collect this information, you are legally responsible for keeping it protected at all times. Having a comprehensive data protection standard in place will help avoid any legal problems related to data breaches.

Have an Attorney Available to Consult

You likely know that major corporations all have a legal department that they can consult with when making decisions. This helps them avoid many types of lawsuits, and also helps them to respond appropriately to potential legal issues. Just because your business is small, however, doesn’t mean you can’t afford to have an attorney with whom you can consult. Contact APH Law to learn how you can have us available for all your legal needs, without breaking your budget.