Running a company is exciting but also comes with many responsibilities, among them legal responsibilities. As much as you want to impress your customers and sell more, you still need to ensure no legal fallouts can interfere with the smooth running of your business. Below, we have compiled the top six tips to protect your small business and keep it thriving.
1. Register Your Company
Is your company registered? If yes, the first important legal tip is registering it. Registration establishes your organization’s identity and allows you to hire full-time employees. Also, your company can easily access bank loans or grants when fully registered, in addition to other perks like more credibility. If your company is not fully registered, you could miss out on important opportunities, get sued, or even be fined. With more than 1.35 million lawyers in the United States, you can easily get help with the registration process.
2. Register Your Intellectual Property
It’s vital to protect your creative ideas, designs, and even work procedures that you think would affect the company’s operation once stolen. The earlier you trademark your intellectuals, the better because you will prevent the chance of others going to court and infringing your property.
In 1962, nearly 11.5% of federal cases reached trial. Today, the cases that reach the trial stage are only 1%. Therefore, you should register your property in time to avoid the legal repercussions which could cost you your company.
3. Create Formal Contracts
Contracts are important to companies, and you can not avoid them. As you run your small organization, you will often sign contracts with your customers, suppliers, and even financial institutions at some point. Each contract requires careful planning to avoid costly mistakes, so you should be keen on understanding the terms and conditions of each contract.
Don’t rely on verbal or handshake contracts because they don’t provide future evidence. Instead, ensure all contracts are in writing and that every party signs. Also, a lawyer should be present in the contract signing process. According to Forbes, many lawyers are paid on contingency bases, and the charge mostly falls between 25% and 40%, with an average of 33%. So, find a lawyer you can afford to witness all your business contracts to avoid future possible legal problems.
4. Update Your Paperwork
Paperwork is inevitable in every company, regardless of size. From the ownership documents to financial records, you should document everything well and keep it safe for future reference. Tax records also need up-to-date documentation in case a problem arises. If you don’t have an internal auditing team, hire a professional auditor to help analyze your documents, update them, and store them well.
5. Do Your Research
Don’t rush your decisions, especially when it comes to hiring or marketing. When hiring, follow all the employment and labor laws to avoid legal issues should one of the employees report you. Pay them on time, and record all your contracts or deals with your employees.
Similarly, you should keep time records for your sales and marketing deals. Work with reputable marketers, follow the right marketing channels and adhere to legal marketing standards. That way, you will market your products without trouble.
6. Acquire Insurance Coverage
Lastly, you need insurance for protection against any dangers that would result in injuries or damages. Adequate business insurance can protect you from the main liabilities and give you peace of mind that you won’t have to use your revenues to cover any risks that could arise. However, you should understand your insurance’s main terms and conditions to avoid problems when you finally claim compensation.
The above tips will help your business thrive and avoid most legal problems. Don’t hesitate to seek the help of a lawyer when you face problems. Check out our website for more important news and sports, business, finance, and lifestyle guides.