Owning your own small business means being your own boss and pursuing a career about which you’re truly passionate. Unfortunately, it also means stepping up to the plate when it comes to legal issues outside your expertise.
Just because you’re running a small business and not an international corporation doesn’t mean you’re immune from legal concerns. As the owner of a small business, you need to take steps to safeguard both your company and your livelihood. Here are five ways to protect your small business against legal fallout:
1. Do Your Research
As a small business owner, you need to research the employment and labor laws affecting your organization. Along with hiring laws, businesses need to know the guidelines surrounding employee benefits, human resources, and wages. As of this year, salaries employees earning less than $47,476 annually are eligible for overtime pay. If your team members regularly work long hours, you might want to consult a lawyer to be sure you aren’t violating labor laws. There have been many instances recently where small businesses take help from independent contractors not fully understanding the rules that define the distinction between independent contractors and employees.
2. Stay Up to Date on Taxes
Failing to file taxes on time – or neglecting to pay your bill in full – can put you in dangerous standing with Uncle Sam. Although tracking sales and expenses isn’t always fun, it’s crucial to record this information and check that you’re only deducting those costs that the IRS allows. For best results, strive to record purchases as soon as they happen rather than waiting and fudging the figures down the line.
3. Separate Your Business From Yourself
As passionate as you might be about your small business, it’s important that you not consider yourself and your company a single entity. As a sole proprietor, you can be sued along with your business, putting your home and other assets at risk. For this reason, business owners should consider incorporating to separate their personal finances from those of the organization. Because corporations have their own unique tax rules, owners should consider consulting with accountants upon incorporation to ensure they’re following all the necessary rules and regulations.
4. Protect Your Assets
Savvy small business owners take steps to protect their assets in the eyes of the law. Rather than assuming your products are safe from copycats, consult a lawyer about trademarking, copyrighting, and patenting your business’ property. It’s usually cheaper to obtain a copyright immediately after the creation of a product than to deal with lawsuits and legal ramifications down the line.
5. Don’t Ignore Customer Complaints
Overlooking customer grievances can result in legal consequences that affect your business in the coming years. Along with creating clear return and service policies, companies should strive to follow up on all customer complaints. The goal is to resolve the issue to everyone’s satisfaction before it turns into a legal dispute.
It is always a good practice to consult a well qualified attorney who specializes in business litigation on matters where you have doubts. Hiring new employees, creating new products & services, determining compensation, firing of employees, exporting your products & services are areas where possible litigations may arise thus the need to get attorney consultations. Many business owners either purchase inadequate business liability insurance or do not buy at all, these could prove fatal for a small business in the event of an expensive lawsuit or settlement.
Contact Accurants for Business Accounting Made Simple
From tracking sales to keeping a record of inventory and expenses, Accurants offers full-service accounting to suit a variety of small businesses. Because Accurants is based in the cloud, users can record purchases the moment they occur. Additionally, it’s easy to create professional-looking reports come tax season. The IRS will be happy, and you won’t miss a single write-off. To learn more about our services, register to try Accurants for free.