>> Feb 7, 2017
No business is immune to lawsuits. As a business owner or partner, it is your role to protect your business from lawsuits. You have to do everything within your means to keep the business running properly and to limit risk. A simple mistake can cost your business millions. Save yourself and your business from such horror by following the tips listed below:
1. Choose your business structure wisely
“You should have come to us earlier!” Haven’t you heard these words too many times? Unfortunately, it is the truth. You shouldn’t contact a business attorney when in the mud. There is a high chance that the lawsuit is a result of a poorly chosen business structure.
Business attorneys facilitate business formations and structuring. Lawyers know the structures to shield you from personal liability. Your choice between a limited liability company, a corporation, a C or an S corporation is simplified by an attorney and will save you in future lawsuits.
2. Hire a competent attorney
You need a lawyer’s help to determine your best business structure. This means that you must hire a lawyer. Conduct extensive interviews and pick someone who knows what they are doing. Their advice is invaluable when you get sued. This lawyer must be knowledgeable on all business matters. They should handle any lawsuit from any direction.
Professional organizations and recommendations are your first stop in the search for a competent and affordable business lawyer.
3. Record everything
Information is your business’s life. The line between losing and winning a case is determined by the availability of information. Keep a record of all your business transactions. The company’s rules and procedures should be documented as well. Discrepancies will be pinpointed easily with proper documentation.
4. Abide by the rules and regulations
The group of business attorneys at encinitaslawyer.org as well as other lawfirms in San Diego, insist on this covenant. Stick to the wage and hour requirements, health codes, business regulations, intellectual property registration, and taxation laws. If unsure of the employment, intellectual property, commercial, or business litigation rules and regulations, consult with reputable business attorneys.
5. Invest in a good insurance plan
Insurance offers protection when your business is sued. You need a comprehensive general liability policy at the very least. The law requires you to have a workers’ compensation insurance or a products liability coverage.
Insurance policies provide legal defense for claims that could result in payments under a policy. The insurance company’s duty to defend means that they have to hire a lawyer to defend your business against a lawsuit. Legal fees are their responsibility.
6. Protect your files
Have a backup system in the event of a technical breakdown. Include additional safety agreements in case of natural disasters.
7. Stay up to date with law changes and new regulations
The laws applicable when you form your business are bound to change. You may not get wind of all the changes over the news or in time. Your business attorney should inform and guide you through the new changes. You cannot feign ignorance in court.
8. Clarify roles
The roles, responsibilities, and limitations of your employees must be communicated. Concise communication and implementation of the right procedures will save your business.
In conclusion, you have a responsibility to protect your business and your personal assets in the event of a lawsuit and from the lawsuits. You can do that by following the tips above.
David Wicks is a business law attorney working with a leading business litigation law firm in San Diego. Visit encinitaslawyer.org for more information on business protection laws.