When my husband I decided to start a business, we didn't think about the legal aspects of doing so. We didn't realize that purchasing business insurance, getting building permits and making investments all required some type of legal advice. But after speaking to a close friend, who also happens to own a small business, we contacted a business attorney. Now, we have the legal smarts to make the best decisions for our business, as well as the legal representation in case something happens to our company. I hope that you find my blog helpful and informative for your own business. It's a great resource for finding the legal advice, resources and guidance you need to get your company up and running.
Opening a new business is exciting, but it's also fraught with potential pitfalls. You have to manage your budget and attempt to attract customers and make a profit while staying in compliance with any legal obligations and requirements that apply to your business – and there may be more of those than you think. It's important to have a good grasp of the business laws that might apply to your company because running afoul of them could cost you your chance to succeed. Take a look at some legal tips that can help you make your start-up business a success.
Know The Difference Between Contractors And Employees
What do you do when you need help, but aren't busy enough yet to support full or part-time employees? For many companies, the answer is to use independent contractors to complete the jobs that need to be done while saving the money and benefits that would have to be spent on employees. This is a smart strategy, as long as you're clear on the differences between contractors and employees.
Employees are entitled to certain benefits and protections under the law that independent contractors don't have. For example, you are required to pay taxes for unemployment, workers' compensation, and income tax for your employees, while independent contractors take care of these considerations themselves. If you hire independent contractors, but treat them like employees, you may find yourself on the hook for these benefits. Independent contractors should supply their own tools and materials, set their own hours, and should not be considered integral to the business. Make sure that you're familiar with the legal differences between a contractor and an employee before you choose to go this route.
Protect Yourself From Unscrupulous Clients
One hard lesson that you may learn when you go into business for yourself is just how common it is for clients and customers to try to walk away without paying for products received or services rendered. Not only is it disappointing when this happens, it can be an expensive lesson to learn when you aren't properly protected by a contract that allows you to collect payment or pursue it in court.
It's important to have a legal professional look over the contracts you intend to use and ensure that the language is sufficient to protect your business from clients who choose to try to default on payments. You need to be certain that your contract gives you the right to collect and can be used in court if necessary to receive a judgment against a client who fails to pay.
Ensure That You Have Liability Coverage
Nearly any business can be vulnerable to a liability lawsuit. You could be sued for anything from defective products to bad advice to injuries to customers that occur on your business property. If you have employees or contractors you're also liable for their safety and well-being on your property.
This is why it's important for start-up businesses to carry the proper liability insurances. Liability insurance protects your business assets in the event of a liability lawsuit. You pay the premiums, and if you're successfully sued, the judgment is paid by your insurance company instead of out of your own pocket. Your business insurance company will probably require you to meet certain standards and conditions in order to maintain your coverage. Before purchasing liability insurance, you should talk to a legal professional about the different types of liability your specific business is open to, so that you can make sure that you choose the right insurances for your company.
An attorney specializing in small business matters can be a great asset to your start-up when it comes to defining workers as employees or contractors, drawing up contracts, and choosing liability coverage. Make sure to include legal expenses as part of your start-up budget, so that you can ensure that you're legally covered. For more information, contact a professional like those at Lane and Waterman LLP.