When it comes to owning and operating a small business, it’s important to note that there are many different legal issues that can cause all sorts of problems.
Here are four important legal tips to consider making note of in order to ensure that your small business is able to operate as smoothly as possible.
*First and foremost, always make sure that you maintain proper records. As a small business owner, you will be required to both create and maintain accurate records that include paying taxes and payroll, bookkeeping maintenance, and license/permit maintenance. Additionally, your business finances and personal finances should always be kept separate. Furthermore, you should ensure that you have an agreement that is designed to cover items such as profit-sharing, voting protocols, management, and more. Generally, these factors will often be included as a normal part of an operating agreement, stockholder agreement, or company agreement. In the long run, knowing that you have an agreement that is put together well will greatly reduce the chances of you experiencing any kind of dispute. Additionally, it can also help to promote all kinds of positivity among the actual owners of the businesses themselves.
*Another legal tip to consider is to form a separate entity, as this is something that will help to influence not only how you’re able to borrow money, but also how you will end up being taxed and how the potential sale of your business will be structured. By establishing your business as a separate entity from the beginning, you will be able to fully protect all of your personal assets. Failing to do any of this will end up resulting in you being personally responsible for all of the obligations and debts that your business ends up incurring, as many experts have noted that a company should always have enough capital on hand in order to pay all foreseeable debts and expenses.
*One other important legal tip to consider is to always insist on written contracts, no matter what. There are many times in which business owners prefer speed as opposed to accuracy in terms of detailing their relationships with customers, vendors, partners, etc. When it comes to a verbal agreement, these are almost next to impossible to enforce, but written agreements will address each and every obligation between parties, as well as how any and all possible issues related to the products and/or services that you offer will end up getting resolved. Additionally, you will also need to ensure that you document all extensions and modifications to agreements in writing.
*Another important legal tip for all small businesses to consider is to always take steps to help with protecting the intellectual property of your company. Generally defined, intellectual property is property that can include any work as the result of some form of creativity, such as discoveries, inventions, and more. It’s important to always consider requiring both employees and independent contractors various new types of technology that they develop to your company, as well as ensuring that you properly register any and all trademarks and license software to any third parties.