As the owner of a small business, commercial litigation is something you are likely to be concerned about. Litigation can mean a great deal of stress and spending that affect your business and your personal life. Here are some things you can do to protect yourself and avoid legal trouble.
Set Up the Right Business Structure
When you first started your business, you may have opted to be a sole proprietorship because you were the only person in your business. However, as a sole proprietor, if someone should sue you, your personal assets might be affected.
To protect yourself, consider changing your business structure. Turn your business into a Limited Liability Corporation (LLC) or incorporate your business (INC) so that your personal belongings and assets that belong to you and your family cannot be affected by any business legal issues you have. Talk to an attorney or accountant to determine which structure is best for your business.
Keep Detailed Records
There will be some times when a disagreement could be solved simply by being able to show certain records or having proof of your claims. For instance, if you claim you paid a vendor and they disagree with you, the cashed check or your bank records may be able to back you up. Take notes after phone calls so you can remember what was said, and get the name of the courier that delivers particular papers. The more information you have, the better able you'll be to protect yourself if there is a problem.
Properly Train Your Staff
Because you own your business, many of the actions taken by your employees could affect you and your company. To avoid legal problems, it is critical that your employees are properly trained and do not do anything that would compromise your business.
Other than making sure there is a set training period when anyone starts working for you, you might want to enact an employee handbook or policy book. That way, your employees know for sure what is and is not tolerated. If you learn that an employee is not acting in line with your policies, you can then take action before that employee causes your business legal trouble.
Use Business Contracts
You may not think you have to use contracts when you make an agreement with vendors, partners and clients. However, if you draw up contracts and have them perused by a lawyer, you give your business another layer of protection.
If you have been asked to sign a contract, it is wise that you not only read the contract, but to talk to a lawyer about whether your business interests are protected. You may not want to spend the money to do so, but it may help you avoid a more expensive problem in the future.
Now that you know some of the things you can do to stay out of legal trouble, use the information above to take steps that could prevent problems. You might want to consult a commercial litigation attorney to ensure you and your business have adequate protection.