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Written by: Kevin Gardner
Whether you are opening a new business or trying to get smarter about running the business you have, legal protection should figure prominently in your decision making. No business owner ever wants to be at the wrong end of a lawsuit, but it’s bound to happen at some point for every successful business. Plan to protect yourself.
Keep Accurate Records
One of the best ways you can take care of your business in the future is to keep accurate records now. Make it a priority to update all documents, agreements, bookkeeping, warranties, personal files, etc. If you do find yourself getting sued, accurate records will be your best friend. If you’ve been sued in the past, order a record from court reporters in Sacramento, for example, whose job it is to record a precise transcript of what was said by all parties. Even if the case has been resolved, it’s best to keep a personal copy of the record for yourself.
Protect Your Data
If you’ve worked so hard to keep accurate records, make sure they are stored safely. That means backing up files regularly as well as performing virus scans. If you keep paper files, make sure they are locked up tight in a fire and waterproof cabinet every night. If you live in an area prone to natural disasters, like along the flood-prone coast for example, make sure your files are stored up high, or better yet, copied and taken off-site on a regular basis.
Hire a Professional
To keep costs down, you may consider doing your own taxes, but hiring someone who really knows what they’re doing is rarely wasted money. You may have done your personal taxes for years, but it’s worth it to hire a CPA or tax lawyer to address the more complicated tax aspects of your business. You can usually find someone who specializes in small businesses or is willing to work part-time on an as-needed basis. If you get audited, you’ll be happy you have someone already onboard who can speak that language.
Copyright Your Ideas
Don’t forget to copyright your unique creative ideas because if you don’t, it’s very easy for others to do so right out from under you even if you had the idea first. In addition, trademark your business logo before you go public and register your domain name early to avoid others grabbing it and trying to sell it back to you at a high price.
Incorporate Your Business
Incorporating a business brings a whole host of extra laws and paperwork, but ultimately, it means if you are ever sued, only your business is at stake (as opposed to your home or car). Another option is to have a trust own your business which also protects your personal property. In either case, an attorney will need to be hired to oversee the paperwork to make sure there are no legal loopholes accidentally left open.
Purchase Insurance
Your business should definitely have liability insurance to protect against all sorts of accidents. Even if something happens and your business is ultimately not found at fault, insurance companies will help you handle the paperwork and untangle the legal process. Some attorneys also recommend businesses add an extra layer of insurance called errors and omissions insurance in case you get sued by a customer who accuses your company of making a mistake or being negligent.
Keep Your Public Image Neutral
Many big corporations are pushing a specific political agenda, and that’s fine because they can bear the brunt of losing offended customers. Not so with small businesses. Although you may feel called to post your stance on controversial issues, it’s better not to. The internet is filled with stories of well-meaning business owners who posted a pro or against message on their website (or even personal Facebook page) and were completely unprepared for the fallout. Some posts could even get you in trouble. For example, you could get sued for posting something that someone else views as libelous even if you had the best intentions with your words.
Owning a business can be personally and financially rewarding. Do yourself a favor and legally protect yourself and your business against unforeseen problems.