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As an entrepreneur, it is your responsibility to apply the relevant measures to limit risks and keep your business running smoothly. A legal fallout is one of the potential business pitfalls that you should avoid at all costs. Being a business owner comes with the potential for varying types of claims from other businesses and customers.
This being the case, it is essential to adhere to certain laws and regulations to protect your business legal issues. Below are some of the actions that you can take to protect your business from a potential lawsuit.
1. Start With Your Website
A website disclaimer is a clear statement of who you are, your business’s scope, and your qualifications. The terms and conditions page, on the other hand, is where you set the rules and regulations for the use of your site.
2. Have Client Contracts
While using text messages, emails, and Facebook messaging has made interactions with prospective clients much easier, ensure to utilize old school contracts when making client contracts. Any agreement that your business makes for the collaboration of products or services with another entity should be made either in writing or digital paper and via a client contract.
The contract should clearly state any disclaimers, your payment terms and company policies along with other important information. You can then refer to the contract if any issues arise during the agreed period. An official contract will also encourage your clients to be clearer of their terms and make payments on time. If you find yourself under arrest for breach of contract, you can secure Amistad Bail Bonds to continue operating your business as you take legal action.
3. Keep Up to Date Paperwork
After creating written contracts, you need to ensure that they are updated every time you make changes. If you find it hard to keep up with your financial and tax documents, for instance, hiring an accountant would be beneficial.
An accountant will also allow you to have peace of mind in the event that your business is audited. You can also ask them to show you an easy process of maintaining your paperwork so that you only hire their services several times a year.
4. Watch Your Words and Actions
It is essential to maintain a good image for your business. That is why you and your team members should avoid conducting any business or making public announcements that the public may consider questionable.
Potentially defamatory or libellous statements should be avoided at all costs. You should also avoid doing business with unscrupulous individuals. Engaging with individuals who are known for shoddy business practices could hurt your business significantly if they are exposed, and your company could be linked to them in the fallout. You should also try to limit conflict of interest with your workforce as much as possible.
5. Stay Within the Scope
Another good practice to protect yourself and your business from legal action is to operate within the scope of your practice. The scope of practice is different for every individual, depending on your qualifications. For instance, a nurse’s scope in the wellness space is significantly different from that of a health coach or dietitian.
If you are operating outside of your scope, include this information in your contacts and website. Additionally, create a reliable network of professionals that you can refer to within your business’s scope.
6. Hire a Competent Attorney
Find a good attorney when starting your business so that you can have good counsel nearby. A lawyer is beneficial in advising before you take action and guiding you through the steps to take if you are sued.
It will help if you retain an attorney familiar with the customs of the area in which your business operates and its local laws. It is also beneficial if they have adequate knowledge or expertise in your particular field.
You can utilize several resources to get leads to a good attorney. For instance, you can ask for professional references from other business owners in your network. You can also look up a lawyer from the internet and call them for consultation.
7. Separate Yourself From Your Business
Owning and operating your business as a sole proprietorship can be problematic in the event that it is sued. In this case, your assets, such as your car or home, can easily be attacked or attached in a court of law.
The best way to limit the possibility of such an occurrence is by having a trust-owned business. This is a legal entity that files its tax returns and can own assets such as securities, cash, businesses, properties and more. If a trust-owned business is sued, the only assets attached to a court of law or attacked are those in the trust itself.
Another way to separate your business’s finances from your own is by incorporating. It is the process through which you secure your personal wealth and house from attack in the event that you lose your business to a lawsuit. However, you must keep up with the additional reports, laws, and taxes that the government requires for incorporation.
8. Protect Your Online Course
As your business grows, you may need to create a group program or online course to get a wider reach. However, it is essential to ensure that your business is protected and ready for this kind of growth beforehand.
An online program or course can bring up a host of legal issues when someone downloads your content and shares it online or your customers share login information with people who didn’t pay for the course. Disputes in monthly payments may also arise over time.
You should therefore address these issues with your clients before they purchase your program or course or sign up for it. You can do this through a terms and conditions document that people read and sign off before they make the purchase. Alternatively, you can provide a check-off box where they confirm that they have read and agreed to your terms before they finalize the transaction.
9. Insure Your Business
Obtain liability insurance for your business to protect it from lawsuits after incidents like a slip and fall accident happen within your business premises. Professionals such as consultants and insurance agents should also consider getting an error and omission insurance to protect the business in cases where the client or customer accuses it of making an error or failing to live up to the contract.
In addition to insuring your business, you can also build liability protection into your contracts. It is beneficial in situations where you were unable to fulfil your contract due to a specific reason. The contract should indicate that you are not liable for the incomplete work due to such factors.
10. Register Intellectual Property
Intellectual property is an essential component of your business, especially if it operates online. Today, it is quite easy for malicious individuals to steal your creative projects, and it is, therefore, essential to ensure that all of your designs, ideas and processes are protected.
Register your copyrights and trademarks to clarify your IP ownership.
11. Protect Your Files
Modern businesses work exclusively on computers. That is why it is vital to emphasize the safety of your computer system. Update your antiviruses and other forms of security software installed and activated on your computer systems as often as you can.
Failure to do this may leave your systems susceptible to damage by viruses and other software, therefore leading to slowed down or halted the operation. Key files could also be stolen or lost, which may lead to legal action from suppliers and clients.
Ensure that you have back up files to refer to in the event of a huge technological breakdown. Perform daily, weekly or monthly backups, and ensure that your clients are aware of the backup methods that you utilize. If you keep physical files in your business premises, ensure that they are stored in a fireproof safe. You may also opt to store them off-site for additional safety.
12. Set a Shared Policy for Your Business Transactions
To avoid unnecessary disputes, have a clear sharing policy on-site, preferably one that is in your terms and conditions. Here, you outline the steps that someone has to take if they want to share some of your intellectual property, such as recipes, posts and photos.
The sharing policy should also be available and set out on your website so that its visitors are aware of the terms of using the information on the website. You can also use it as a reference point when contacting someone who used your content in a contradicting manner.
Business owners are responsible for protecting their personal assets and business from potential legal action. Apply the strategies outlined above to protect your business from a potential lawsuit.
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