3 Ways Entrepreneurs Can Protect Their Businesses
As a business attorney, I find myself representing entrepreneurs that are often blindsided by legal risk and unforeseen exposure that accompanies the business lifecycle. The good news – there are 3 ways three ways entrepreneurs can protect their businesses.
Here are 3 practices that provide incredible protection in the event of a claim or lawsuit against your business.
1. Protect your company with Written Agreements
One of the easiest ways to leave your business vulnerable for attack is the lack of proper written agreements. Too often, entrepreneurs transact deals via a “handshake agreement,” leaving details up for interpretation. Avoid this at all cost with contracts drafted by your attorney for any agreements you make. From vendors to employees, you need terms and agreements to be clear and concise for both parties to work comfortably with one another.
2. Protect proprietary and confidential information
Your growing business is likely to have proprietary and confidential information that gives it a competitive edge in the marketplace. Often that information is integral to the business’ survival. If disclosure of this information to your business’s competitors or to the public could put you out of business, then you must take action early with non-disclosure agreements, non-competition agreements, and non-solicitation agreements. All are available to you with the help of a business attorney.
3. Form the right entity for your business
Choosing the right entity for your business establishes boundaries between you and liability. Every entrepreneur has the right to decide the appropriate business filing that bests suits the future of their company. Establishing a legal entity, such as a limited liability company (LLC) or an S corporation, is pivotal in safeguarding your assets. For some, a sole proprietorship is the easiest way to upstart a business, but unfortunately, it leaves you at risk for creditors and tax laws. Keep the business a completely independent entity from you to prevent any commingling or confusion of assets.
If you’re a growing business and looking for legal protection, hiring a business attorney is the safest and easiest way to protect yourself and your business. To discuss ways your can protect your business, email me at firstname.lastname@example.org.