When an entrepreneur is creating or implementing a business plan, one of the most overlooked costs is the business's legal risk and liability. It seems rather pessimistic to have a line item in your budget for lawsuits. Business litigation is rather common, but it is not inevitable, especially if you plan ahead. Here is how the attorneys at Swier Law Firm can help:
You can begin limiting your liability by forming a business entity that limits personal liability, such as a corporation or a limited liability company. These entities can separate your company's liability (and assets) from yours, ensuring that your personal finances are not drained in the event of a major lawsuit. If your business has been operating as a sole proprietorship or partnership, you should consider switching to an entity that will limit your liability.
In addition, you should make sure that your business is properly insured. Often this means obtaining general liability insurance, workers' compensation plans, or commercial property insurance, among others.
Employees who you once thought were loyal to a fault can turn into an opposing party during litigation if you are not careful. Avoiding employee lawsuits not only starts with good people, but also with having a great corporate culture. Make sure to have written policies and procedures; don't discriminate or harass your employees; and hire and fire people in the right way. Minimizing employer/employee conflict is key to a healthy relationship, and Swier Law Firm can help you create the proper policies and procedures to start off your business on the right foot.
For advice on setting up your small business to limit legal liability, please contact Swier Law Firm's Business & Corporate Law Practice Group.