Small businesses make legal mistakes all the time — some of which can be disastrous and difficult to recover from. I’ve spent most of my career representing startups, and I’ve encountered small business owners making the same mistakes over and over. I’ve aggregated some of those issues here to help you avoid making the same errors yourself.
Protecting Your company Name in Your Home State
One of the best ways to secure your business name in your home state is to form a business entity such as a organization or a limited liability business.
Your state’s business filing agency won’t let two business entities have the same name. In some states, company entities also can’t have names which are deceptively related to one another. Because of this rule, including or forming an LLC permits you to “claim” your name in your home state and prevent other business entities from using it.
You can look at business name availability in your own state by getting in contact with the state agency that deals with business filings. Many states allow you to search business names online.
Develop relationships with your competitors
This may sound counter intuitive, but building mutually effective relationships with your greatest competitors is one of the best ways to secure your idea. When I released my own novel idea guitar pick business, I hired the largest producer in the marketplace to manufacture our recommendations. They had little inspiration to rip me off because they were already profiting from the achievement of my business. By providing them business, we were not seen as a danger (even though, in reality, we shared the same market space). We respected one another.
Hire a Skilled Attorney
Business owners should job interview attorneys when they first start up, in order to have a ready 100 % legal contact. You may need this person to recommend you before you act or on just how to respond when you’ve been sued.
Owners should also effort to secure an attorney that is common with local laws and traditions in the area in which the business operates. Care should also be taken to retain an attorney with experience in a specific field if necessary. If your company is looking forward to legal challenges from the Internal Revenue Service (IRS) or taxation state department it can make sense to hire a tax attorney.
There are many potential sources to help you find a good attorney. These consist of cold calling and interviewing from the phone book, expert references from other business owners, or through the professional organizations to which the business belongs (like the local chamber of the business sector or any sector organization).
Protect Your Files
As most businesses these days work quite intensively on computer systems, it makes sense to emphasize the basic safety requirements for your computer system. Businesses must have updated ant-virus and other types of security software program loaded and activated on their systems. If a computer system were to go down because of a virus, the business may be at risk of not being able to perform specific contracted work. In addition, key files could be lost or stolen, which could then lead to legal action from customers and/or providers.
In the event of a significant technological malfunction, you should have a set of backed up files to refer to. This could mean performing daily, weekly or even monthly backups, and making your clients aware of which you hire. Keeping these backup files offsite will also help to make sure your company’s carried on safety. If you keep these files at your place of business, it is essential to order a fireproof safe in which to store your files. Should the very worst occur to the rest of your elements and supplies, your backups would be protected.
More Safeties for business
In the event of a disaster such as a hurricane or fire, will your business be able to function? Failure to operate could lead to the company’s incapability to live up to particular contractual requirements or to satisfy other legal or financial agreements.