As you prepare to launch a new business enterprise, it may seem as if you must make thousands of decisions each day. Your to-do list encompasses a wide range of tasks, from purchasing pens, paper, and office supplies to developing a mission statement to serve as the “north star” of your company. Working through these tasks and decisions can be overwhelming, as they require considerable time and effort to complete. While it’s natural to prioritize the immediate considerations of your business, you should also set aside some time to focus on the big-picture vision of your company. Enlisting the guidance of a knowledgeable and experienced business law attorney during the infancy of your business is the best way to safeguard it from potential legal issues or litigation that may arise in the future. This post will explore some of the key steps you can take today to minimize the potential for lawsuits or litigation as your business grows and thrives.
Protecting Your Personal Assets
If your business enterprise only involves one individual (you), you may gravitate towards forming a sole proprietorship. While this business structure works well for many people, it’s often more strategic to consider forming a limited liability company (LLC) or limited liability partnership (LLP) instead. These business entities shield the founders from personal liability in the event of a lawsuit or legal dispute. Your business lawyer can walk you through the advantages of forming an LLC. Together, you can decide whether this option will work best for your needs and goals.,
Researching the Basic Laws Affecting Your Industry
While no one expects you to be a legal expert as you form your business, it’s important to research and familiarize yourself with the basic laws governing your industry. For example, opening a recreational marijuana store means that you should recognize how state and federal laws will impact your business. Neglecting to understand these essential rules and regulations can put you and your business at risk of penalties, legal disputes, and other negative consequences. You can work with your business lawyer to identify the most appropriate sources of information to help you navigate the fundamental laws that impact the operation and longevity of your business.
Avoiding Potential Conflicts of Interest
As you launch your new business endeavor, you will want to feel confident that you are doing so openly and freely. Some individuals start a business without exploring possible conflicts of interest, leading to complicated conversations and even legal disputes. For instance, if you already work as an employee for a larger company, make sure that your “side hustle” does not violate the terms of your employment agreement or employee handbook. Or, if you worked at a fitness center for a while and you’re interested in starting your own exercise studio, you may need to work with your attorney to determine whether making this move will create issues between you and your former employer.
Document Everything in Writing
As you lay the groundwork for your new business, be sure to document every decision you make. Unfortunately, verbal agreements are extremely difficult to enforce—just because someone told you they would pay you a certain amount for your service does not mean that they will follow through on this agreement. It’s essential to draft comprehensive business contracts that clearly establish the terms of any and all agreements between business partners, employees, vendors, and other involved parties. When you invest in having your attorney write effective contracts before your business gets off the ground, you are protecting yourself and your company from costly lawsuits later on.
Know What You’re Signing
Just as it’s essential to write clear and effective business contracts, it’s also crucial to review and understand every detail of the agreements you sign on behalf of your company. Many people understandably skim the fine print of the documents they sign, hoping to rush this process so they can focus on another pressing matter. However, failing to read and understand any written agreements you sign can lead to significant issues later on, increasing the potential for costly and stressful litigation. You can rely on your business lawyer to review these dense documents before you sign them to ensure that you are moving forward with your company’s best interests upheld and protected.
Keep Your Business Records Organized
Whether your business records are written or digital, it’s best to establish an organized storage system to ensure that you can easily access these documents when necessary. Tax season can be a nightmare for small businesses that have not made organizing a priority. Suddenly, they must comb through stacks of paper to find the necessary documents and information. Additionally, as sensitive information is increasingly stored online or through a cloud-based system, it’s essential to keep these records protected from hackers or other unauthorized users. You can discuss your options with your business attorney to identify the most suitable record storage system that prevents these sensitive documents from becoming lost or stolen in the event of a security breach.
Forge an Ongoing Relationship With Your Business Attorney
Once your business is up and running, you may assume that working with an attorney is no longer necessary. However, an uncertain future means that legal arguments and disputes can erupt at any time, even if you’ve taken steps to protect your company’s best interests. Should a disagreement arise, it’s important to recognize that you can turn to your business attorney for guidance during this challenging time. Sometimes, knowing that you have a trusted legal advisor who can assist you anytime can empower you to make decisions with greater clarity and confidence. Many business-related disputes can be resolved through negotiation before they escalate into litigation—all you need to do is ask your attorney to help you identify the most strategic course of action.
If you want to learn more about launching a new business as smoothly and strategically as possible, call Judex Law, LLC, today at (303) 523-4022 to discuss your options with a dedicated and friendly Colorado business law attorney.
