Even the smallest company has potential legal considerations. Shielding yourself from a lawsuit can help protect your investment in your work.
Review these strategies for preventing litigation that can threaten your small business endeavor.
Avoid conflicts of interest
Make sure you turn down opportunities that could unfairly benefit your business. For example, if one of your employees serves on the town council and gives preferential treatment to your start-up, you could experience legal scrutiny. Avoiding unethical business practices can keep you from getting your business in hot water.
If an unhappy client, neighbor, employee or competitor sues your business, do not contact the plaintiff directly. You should protect the interests of your company by communicating only through an attorney who specializes in business litigation. Speaking with the other side could hurt your case.
Be cautious online
Social media is an essential tool for many modern business owners. If you use these platforms, avoid expressing controversial opinions that could damage your business reputation. If you have employees, you should establish a clear policy about social media use as it applies to your business.
Establish clear policies
Speaking of employees, business owners have a responsibility to treat workers fairly. A detailed employee handbook can establish guidelines that protect both your business and your employees. Have a zero-tolerance policy about harassment and discrimination among your staff.
Keep your business and personal assets separate, even if you work as a sole proprietor. Otherwise, a business lawsuit could put your home and possessions at risk. Creating a distinct legal entity for your business, such as a limited liability company, also protects your personal assets.