Common Business Mistakes
As professionals, we work hard every day to ensure the success of our businesses. Unfortunately, if we are not well prepared and protected, our business, our reputation, and even our personal assets can all be lost, due to a single mistake or oversight.
As business owners ourselves, we understand the limits all of us face in regard to time and money, but as attorneys, we have seen the consequences, which can financially destroy a business and the owners personally. The most common legal mistakes we see business owners make are in the following ten areas:
- Failure to Incorporate (Corporation) or Organize as an LLC (incorporating as a corporation or organizing as an LLC generally protects you against having your personal assets seized to satisfy a judgment)
- Piercing the Corporate Veil (even if you incorporate, if you fail to follow the formalities, such as conducting meetings and taking minutes, your corporate veil could be pierced, and your personal assets may be seized to satisfy a judgment)
- Merging/Selling a Business (failure as a buyer to conduct due diligence might saddle your business with a bunch of liens and judgments)
- Buy/Sell Agreements (failure to have a buy/sell agreement in the event of a partner’s death will determine who your new partner is – your deceased partner’s spouse/heirs)
- Contracts/Leases (does your contract meet your goals, comply with the law, and provide you legal protection?)
- Personal Guarantee (do you understand the financial implications to signing a contract with a personal guarantee?)
- Non-Compete Agreements (have you had an employee sign a non-compete after their employment began, but there wasn’t additional consideration)
- Employment (for example, what are your responsibilities if a terminated employee requests the reason why she was fired in writing, and what are the implications if you do not comply)
- Compliance for Certain Industries (are you aware of the laws that affect your industry, such as, the requirement in the construction industry regarding the use of independent contractors)
- Local Ordinances (check out your local laws and determine how they apply to your business)
Spangler and de Stefano, PLLP are experienced business attorneys that can help your business avoid these common business mistakes and other legal mistakes.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.