As a business owner, you want to protect your company. Unfortunately, business disputes happen all the time. When things get to the litigation stage, even if the business prevails in the case, there can still be adverse after-effects. As a result, it’s important to know how to avoid these types of disputes.
Make important decisions early
One of the first things you can do to prevent business litigation is to make the most important decisions early. Establish your goals for the business and how you will achieve them. Designate specific responsibilities to individual employees. Ensure that your entire staff is in the know and understands their role. This can help to avoid a potential conflict later.
Documenting everything is wise. It lets you keep track of everything so that in the event of a dispute, you’ll be prepared and have proof of important details. You should keep all of the following as documentation:
- Accounting data
- Agreements and contracts
- Loan information and paperwork
- Minutes from meetings
- Proof of payment
Set strong policies
The best policies and procedures within a business are those that are strong and comply with the law. Everyone should be fairly treated whether they are employees, customers or stakeholders. Treating everyone fairly can help to avoid potential issues that could result in business litigation.
Take ownership of your intellectual property
Make sure that all employees and independent contractors who perform work for your business are creating material that is your intellectual property. As a result, you should require them to sign their rights to that material over to you.
Be specific with contracts
This can help to avoid confusion and potential business litigation. Everything should be clear in the contracts you have with anyone you work with – including your employees, suppliers, officers, licensees and other professionals. Be specific about all pertinent issues, including:
- Resolution of disputes
- Quality expectations
- Time frames
- Responsibilities and rights
Always be fair
Be fair with everything and everyone. It can help you to prevent disputes and can minimize potential issues. Be honest as well. This can help you to build a solid foundation for your business and the relationships you have with everyone associated with it.