How do small businesses keep themselves from being sued?
Lawsuits can be unpredictable, stressful, and time-consuming. If your business is small or vulnerable, a lawsuit could mean the end of your business. However, there are steps you can do to significantly reduce the likelihood that your small business will find up in court.
1. Document everything.
Small business is full with “handshake agreements.” However, if you don’t put things in writing, you risk misunderstandings that could lead to legal action.
Create a written agreement outlining the key terms of every transaction, including the amount to be paid, the delivery schedule, and the goods or services you will supply. For every transaction, you might not desire a lengthy, formal contract, but you should at the very least have an email, estimate sheet, or other documents that outlines your agreements.
2. Adhere to ethical employee practices
Numerous employment rules, such as those governing wages and hours worked, workplace safety standards, and legislation are aimed at eradicating harassment and discrimination at work. Even accidentally breaking these regulations could result in a costly and trying legal battle.
3. Protect your intellectual property
You must safeguard your intellectual property if you don’t want to find yourself in court. Make sure that the requisite trademarks, patents, and/or copyrights are in place to safeguard your intellectual property.
4. Get liability insurance
As soon as your doors open for business, you may be held responsible for workplace accidents, car accidents that occur while commuting to work, and a variety of other legal claims. Insurance makes sure there is money available to cover the damages, liability insurance can reduce the number of lawsuits that are filed.
5. Follow tax laws
Use the proper tax forms and maintain accurate records to prevent the IRS from targeting your personal assets if your business taxes aren’t paid properly.
6. Hire a business attorney
Get a business lawyer to aid with litigation and all the other legal concerns that just come with being a business owner if you want to retain your focus on expanding your business. A lawyer can help you with everything from building a business plan to protecting your business in court.
