When it comes to small businesses, there are all sorts of various legal issues that can cause problems for them. Thankfully, there are many different methods in which small business owners can ensure that things run as smoothly as possible.

Here are four important legal tips for small businesses to consider making note of.

*First and foremost, one important legal tip for small businesses involves maintaining proper records. Businesses are required to both create and maintain proper records, which includes items as adopting that document business decisions, maintaining bookkeeping, paying taxes and payroll, wage and safety requirements, complying with state and federal labor, and maintaining and acquiring permits or licenses. Additionally, both personal and business finances should always be kept separate. Furthermore, there should also be an agreement that is designed to cover items such as voting protocols, management, restrictions regarding new owners, profit-sharing, and how owners will actually solve disagreements.

*Another important legal tip for small businesses involves investors and securities laws. Oftentimes, many small business owners will turn to outside investors in order to raise cash to help with operating their business. As a result, the investors and owners will disagree on how the business itself should be run, meaning that you should choose all of your investors as carefully as possible, as well as make sure that you update all of your governing documents in order to address all new ownership and management issues.

*One other important legal tip for small businesses involves insisting on written contracts. Many times, entrepreneurs will end up valuing speed over accuracy in terms of detailing relationships with partners, customers, vendors, and employees. When it comes to verbal agreements, these are almost next to impossible to enforce, meaning that contracts should be enforced in order to address the obligations of all parties involved, as well as explain how any and all possible issues that concern your services and products will actually be resolved.

*Another important legal tip for small businesses involves forming a separate entity. This means that you will need to determine your business’s proper entity structure, which will influence how you actually borrow money, as well as how you will be taxed and how you actually structure the overall sale of your business itself. Additionally, you can also establish your business in a separate entity so that you will be able to protect all of your personal assets, as failing to do so means that you will be personally responsible for all obligations and debts that will be incurred by your business. Furthermore, your company will also require enough capital to pay all foreseeable debts and expenses, as lenders often realize that a newly formed business likely won’t have the proper resources in order to repay a loan, as well as frequently require business owners to guarantee loans. Additionally, many business owners often fail to appreciate the overall impact of guaranteeing company debts or even personally guaranteeing other contractual obligations of the company as well, which includes leases. Furthermore, failures of small businesses can also cause financial hardship and/or bankruptcy for the individual business owners as well.

Reeves Law, PLLC, located in Austin, Texas handles cases in a variety of legal practice areas. The professionals at Reeves Law are committed to providing personalized attention to their clients. The competent team will work to ensure the most favorable outcome possible in every case. Contact Reeves Law for more information on the legal services they provide and for a free consultation tailored to your specific needs.