Starting your own business can be an exciting time. Maybe you’ve just quit your corporate job and have finally worked up the courage to branch out on your own. You may be filled with ambition and creative energies – eager to get things running.
While your enthusiasm will certainly be a valuable asset in your new business, you should be careful not to jump into things too quickly. Establishing the right legal foundation for your new business from the onset can prove to be extremely worthwhile as your company grows. In today’s post, we examine three key protections you should be sure to put in place:
If you’re just starting out, you need to register your new business. You may think creating an LLC will be the simplest option, but this type is business may not serve your best interests. Many factors – such as your personal assets, your tax situation or whether you have children – affect what business structure is right for you. In addition, you want to make sure that your personal assets are protected from any potential debts or liabilities of your company. It’s a good idea to discuss your situation with a business lawyer to help you pick the best structure for you.
Whatever goods and services your business provides, you need to take steps to protect them. A service agreement provides a clear breakdown of responsibilities – what you provide, and what your clients are obligated to pay – as well as a straightforward return policy. In addition, it’s wise to work with a business lawyer to draft a robust disclaimer – particularly if you work in a high-risk profession.
If there are other employees, contractors or partners involved in your business, then you’ll probably find yourself in the position of having to share sensitive information with them – such as credit card numbers, client records or passwords. You want to make sure that these individuals are legally prohibited from distributing such information outside of the company. Make sure any new hires sign a comprehensive non-disclosure agreement from the start.
Designating a general counsel for your company is a responsible way to prevent complex and expensive legal issues from cropping up further down the road – and protecting you if they do. Your lawyer can help you adjust to the changing needs of your business as it grows.