Whether your business is just you wearing multiple hats or you and a team collaborating towards success, legally protecting your business is one of the most crucial components of running a business. Small businesses are subject to legal issues as much as bigger corporations so legally protecting your business can potentially save you a lot of time, money, and stress in the long run.
Why is it important to legally protect your business
While it may be easier to think that legal issues won’t happen with your business or push off dealing with it until “later,” the safest thing to do is take care of this as soon as possible. Lawsuits are not only expensive but handling a situation like that will take up time you already don’t have. And, it can damage your business’s reputation or potentially put you out of business. Limiting your risk of a lawsuit now, can benefit the future of your business greatly.
Here are 6 ways to legally protect your business:
Hire an Attorney
It can be helpful to have legal counsel on standby for many reasons–from needing legal advice before a business decision to legal action taken against your business. Though it may be tempting to put off hiring an attorney until later, the costs associated with having a lawyer might be easier to bear than the costs associated with litigation.
Take the time to interview attorneys that have experience in your specific industry. Having an attorney you trust is a comforting and helpful resource when you need it.
Consider Small Business Insurance
Insuring your small business means you’re purchasing protection in the event of something bad happening to your business. Legal fees can be expensive so having the protection of insurance can help to prevent lawsuits.
Depending on the type of business you run, there are various types of insurance to consider. You might need a few insurance plans so it’s important to consult with your attorney to determine which are right for you. Some of these insurance plans might be:
- Workers’ Compensation
- Employers’ Liability
- Property Liability
- Cyber Insurance
Having insurance can give you peace of mind that your business is safe in the event of something unexpected.
Protect your company’s data
With a reliance on technology, protecting your computer system is essential. In the event that a virus takes down your computer, you can potentially lose important files or be prevented from working. Either can potentially lead to legal action so consider antivirus and relevant security software and make sure it’s activated and actively running on your system. Ensure your files are backed up regularly and if you keep physical files, store them in a location that will protect them in the event of a natural disaster.
Keep your reputation clean
Your business’ image is a key component of your success. Transparency, authenticity, and honesty are things your customers consider before they decide to make a purchase. Aspects of your business like your online presence and customer testimonials can contribute to potential issues. Start by developing a clear mission for your business and standards for optimal customer service. Hold your business and your employees to these standards in person and online via your social channels. A solid reputation can prevent issues of things said or done being held against you.
Keep separate from your business
In the event that your business is sued, your personal assets like your home or car can be attacked in a court of law. One way to protect your personal assets from anything happening with the business is to file for an Limited Liability Corporation (LLC). An LLC is a legal entity used to own, operate, and protect a business. It can offer the same legal and financial protections as a corporation but might work better for your small business. With an LLC, your personal assets can be protected from business debts and lawsuits.
Protect your employees
If you currently have employees or plan to take on employees in the future, you’ll need to make sure you’re abiding by the law as an employer to honor employee rights and create a positive work culture. These include things like health and safety, code of conduct, discrimination, and working hours. Be sure to consult with your attorney since this can be a complicated topic.
Ultimately, a legally protected business is a smart business. Take the time to do your research and consult legal professionals to make the best decisions for your unique business needs.
For Informational/Educational Purposes Only: The opinions expressed in this article may differ from other employees and departments of Valley National Bank. Opinions and strategies described herein may not be appropriate for everyone, and are not intended as specific advice/recommendation for any business. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s).