You may have done an excellent job setting up your business and getting your first clients. However, if your business is not legally compliant, you are setting yourself up to fail. Lawsuits are pretty expensive and can set you back thousands of dollars you would have used to invest in more meaningful projects. Check out some common legal mistakes you should avoid as a startup business.
Failure To Register The Correct Business Structure
How you structure your business will determine its growth and development moving forward. If you select the proper structure for your business, it will perform well and generate revenue while posing little risk to your assets. The various business structures include a partnership, corporation, limited liability company, or sole proprietorship. Select the best structure for your business venture and one that will pose the least risk.
Ignoring Proper Employee Agreements
It will come to a point where you need to hire personnel to support business operations. When hiring employees, you need to adhere to strict policies to protect the interests of both your staff and your business. Please don’t wait until there is a pressing need to start fumbling to erect working policies. You risk being sued if any of your employees report any instance of discrimination or harassment at the workplace. Start working on employee agreements before you get to the hiring phase to stay prepared.
Lack of Legal Counsel
The moment you decide to form your business, you are better off hiring a business lawyer. According to Edmonton commercial lawyer, legal counsel is also necessary in the unfortunate case you are involved in a lawsuit. Your lawyer can help you draft contracts, avoid common legal pitfalls and help you save money. Please don’t go about thinking you can do without a lawyer.
Neglecting Protection of Intellectual Property
It is normal to want to share your success with the rest of the world. However, before you blurt anything out, you should first seek to protect your intellectual property. Someone else might want to steal your ideas and make them their own. We recommend keeping your business ventures confidential until you patent them to keep your intellectual property safe.
Taking Their Cybersecurity Lightly
About 45% of cyberattacks target small businesses. Therefore, don’t think you are safe from hackers because you are not as established as some large corporations. Invest in a robust security system for your data and files lest you find out that your sensitive information has been leaked. You should also seek to protect your client’s confidential data to avoid lawsuits.
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Not Having Written Agreements
Written agreements are still legally binding. However, when you fail to have a written record of your transactions, you leave the contract open to interpretation, leading to an altercation. To be on the safe side, have a formal document of any transaction and agreement and follow up any verbal communication with an email or memo.
Now that you have an idea of the legal mistakes you should avoid, we hope you will avoid the common pitfalls. Don’t wait till your legal issues crop up for you to start handling them. Take a proactive approach to prevent legal issues pegging back your business.