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Last Updated on by Noni May
Laws govern business, and it is relatively easy to get on the wrong side of the law if you do not follow the rules. Legal issues in business is quite common. It is your responsibility as a business owner to make sure that you limit the risk that your business faces. Failure to do so may increase the possibility of a lawsuit, and in some cases, you may need bail bonds to get out of jail. Here are four tips to resolve and avoid legal issues in business.
You are the face of your business and any unsavory utterances or actions that you make may affect your business. Therefore, as much as possible, avoid engaging in any questionable acts or speaking out of turn. Be mindful of statements that could be potentially defamatory or slanderous. Also, be critical of the people you conduct business with, and never engage with those who have a bad history or track record. Doing so could set you up for a legal suit when things go south. Keep these in mind and ensure that your employees do the same.
Even before you set up your business, you should consult with an attorney about the legalities that revolve around your industry and understand how the law works in specific scenarios. It is best if you hire a competent attorney and keep them on retainer. By doing so, you can always call on them to help you understand how certain actions you take may affect your business. There several branches of law that may cover your industry. Make sure your attorney is good and well-versed in such areas. Better still, you could just hire a good law firm that has excellent lawyers in diverse fields to help you with legal matters when they arise.
One mistake a lot of small business owners make is that they run their businesses as sole proprietorships. This can be a huge problem if the business is sued as the personal properties of the business owner can be easily attached to the suit. Detaching yourself from the business is an excellent way to avoid such eventualities. You can detach yourself from the business by arranging for a trust to own the business. A well-established trust will offer a buffer during a legal suit as only the assets owned by the trust can be targeted. You may also want to consider incorporating the business so that if you do lose your business by a court ruling, your personal wealth will remain safe.
Every business must be insured, and based on your business’s products or services, you should have the corresponding insurance labels to cover them. Liability insurance is a must, as is acquiring errors and omissions insurance especially if you are a service provider. You should also consider building liability protection into all your contracts. Engage your attorney and insurance broker so that you can add possible clauses and legal phrases into your contracts to reduce the possibility of legal troubles.
To conclude, as a business owner, you are responsible for the protection of your company and your personal assets if you have legal trouble. With these clues, you should be better positioned to avert legal action or be victorious in such an event. If you want to read more about business, make sure you read the Ultimate Guide To Business.
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