As a lawyer for small business owners and online entrepreneurs, I have heard it all:
“I’m just a small shop. It doesn’t matter if I have that type of thing in place.”
“It’s going to cost me thousands to have a lawyer do all of this stuff. I’d rather put that into building the business.”
“I have known her for years and I trust her. We don’t need a contract.”
Does any of this sound familiar? If so, read on. Failing to take care of your business from a legal standpoint can result in even higher costs down the road. Whether you are just starting your business or you’ve been serving your customers for years, it is important to make sure that you are covering yourself legally.
3 Legal Tips for Small Business Owners
Protect Yourself Personally
If you are the sole proprietor of your business, you can be held personally liable for any business losses. What does that mean? If you get sued, you could be personally responsible for paying any judgments against your business. And that means a creditor could come after any assets that you own, including your house.
To protect your assets, form a limited liability company or an LLC. LLCs provide outstanding legal protection and allow you to protect your personal assets so long as you properly maintain them. To learn more, check with the Secretary of State office for the state where your business is based. If you aren’t comfortable filing the paperwork yourself, touch base with an attorney and they can help you with the paperwork and any questions that you may have.
Get It in Writing
I cannot say this enough: have contracts for every area of your business. Make sure you get everything in writing and that your contracts are specific. A contract should cover the rights of both parties, so there are no misunderstandings about what is expected. Even if you know and trust the party, put it in writing.
Your contract should include any important terms about the transaction. For example, if you are hiring an independent contractor, make sure you outline the contractor’s duties, payment schedules and confidentiality expectations. An attorney can draft agreements for you, or you can use DIY contracts that are available online.
Be Transparent with Your Audience
Depending upon the type of business you run, you may want to consult with an attorney, but you may be able to use DIY legal forms for this as well.
Just remember, handling the legal side of your business doesn’t have to be scary. Find a lawyer that you trust and get everything into place so that you know you are protected.
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Danielle Liss is a lawyer from Las Vegas. She is a partner in Businessese, which offers DIY legal forms for influencer marketing companies, and Hashtag Legal, a law firm offering services to influencers, small business owners, and online entrepreneurs.
These tips are great! It’s so important to protect your small business from any long term damage that could be potentially inflicted upon it, and you give awesome advice here on how to prevent that! Nicely done! Thanks for sharing!
Silas Knight says
You have some great legal tips here for small business owners. My friend is looking at starting his own business, so I will show him this. I can definitely see why it would be important to get everything in writing, even if you trust the person. That is just protection for yourself.
Elena Malta says
Yeah! I couldn’t agree more on these pointers. Contract is one of the most important things on every business.
Elizabeth Ferris says
Yeah, I’m agree with your important 3 tips so far. It’s really important to protect our small business and avoid long term damage. I think every small business owner should follow this 3 tips at anyhow. Though the business situation is totally depends on how the owner manage his/her business.
Cynthia Lauriston says
Thanks for sharing these tips! This is a good initiative, I agree with it.
Springwood business law says
According to the law, every business is its very own legal substance. Beginning another business ordinarily begins with documenting the desk work that makes the business officially exist in the administration’s eyes. Business law begins with setting up a business.
Mount Gravatt litigation says
No matter what kind of business you have, the services of a lawyer will ensure everything is smooth sailing as far as the business in concerned.
Afton Jackson says
I like that you advised having contracts on every side of the business. My wife and I plan to start a business. However, we do not know where to start, I think we will need help from Corporate transaction attorneys for advice.
There should be no winging it when it involves something as important as your business. If you’re unsure of a contract or have any doubts regarding your business, a lawyer is going to be ready to step in and skim things. The advisor is going to be ready to explain contracts and specific terms within a contract that you simply might not understand. Ultimately, there’s no shame in seeking help, but there’s shame in not posing for help when it’s required.
Zoe Campos says
The part where you mentioned that we need to have a legal contract for every aspect of our business really intimidated me. I initially thought that I can handle everything on my own since I’m only planning a small food business but I guess that isn’t the case. It would probably be safer for me if I were to hire a business lawyer who can work with me.