The United States is home to roughly 32 million small businesses, defined as those with fewer than 500 employees. Even though the United States is packed to the proverbial brim with these much-needed business entities, there’s still room for more. The United States Census Bureau indicates that some 450,000 businesses are created each year!
Whether you’re considering opening a small business or if you already own one, you should be familiar with the following legal tips.
Do you want to be held liable for potential damages?
A public relations company is hired by a business to increase the buzz around a new product line. That PR firm makes claims in press releases to investors that turn out to be false. That company can now reasonably be sued by that business for potential damages.
Assume a doctor delivers a baby from a mother via Caesarean section. The baby dies. It is determined that the C-section was not necessary and lead to the death of the baby. The mother can seek out a birth injury lawyer to claim potential damages from that doctor or his employer.
There is an infinite number of scenarios in which businesses can be held liable for not doing their job correctly.
If your business is incorporated as a limited liability company or a corporation, suitors can only sue for the total assets that your business owns. In other words, those angry suitors can’t come after your personal belongings.
Failing to incorporate your business as one that deflects liability from your assets is a bad idea. Study the differences between partnerships, sole proprietorships, corporations, and limited liability corporations. You’ll be glad you learned about these different business structures if an angry customer threatens to sue.
Establish written contracts whenever possible
Let’s say you take a business partner to court because that business didn’t come through on their promise. The judge would immediately dismiss your case if you claimed there was a verbal contract or agreement in place.
Why is this so?
In the United States’ courts of law, verbal agreements aren’t valid. Handwritten notes are the least reliable means of proving contracts. These are trumped by things like text messages or emails.
The most meaningful contracts are created on computers, signed, and recorded. Without written contracts, you’ll never be able to hold other parties liable for failing to deliver what they promised. If you can’t afford to lose the cash value of a transaction, it needs to be backed by a written, legally-binding contract.
Competitors can steal intellectual property if it’s not safeguarded
Intellectual property, according to the World Intellectual Property Organization, is a collective term that refers to, put simply, “creations of the mind.”
Without patents, trademarks, copyrights, and protections on trade secrets, others can rip off your hard work as their own. Patents protect inventions, trademarks guard logos,and catchphrases, and copyrights prevent authored works from getting stolen. Trade secrets like secret recipes can be protected, as well.
Make sure that you fully understand your jurisdiction’s laws concerning intellectual property, so you know how to protect your intangible assets.
Create response plans
Protocol refers to steps that are taken when something happens. Your business should have plenty of protocols to follow if serious issues take place. For example, what will your business do if it is asked for its thoughts on a sensitive issue?
Answering such questions incorrectly could result in serious, permanent harm to your business’ reputation. You and any employees should follow the protocol of not answering questions at any time to prevent negative outcomes from taking place. This is one of many examples of common business protocol.