Starting your own business can be potentially lucrative but also very risk. However, there are some measures that business owners can take to reduce their potential exposure if things turn out for the worst. Below are a few policies a business owner can undertake to minimize unnecessary liability in the event of a lawsuit:
Failing to Separate Your Personal and Business Assets
One of the biggest mistakes that a new business owner makes is failing to incorporate their business. Incorporation is necessary to limit the cash, assets, and property that may be vulnerable in the event of a lawsuit. The process may entail extra payments and paperwork in the short run, but will save substantial stress in the long run.
However, once you have you incorporated your business, you must maintain the distinction between personal and business assets. If you commingle your personal corporate assets, a court may pierce the corporate veil if the corporate form is just a sham.
Non-Disclosure Agreements to Protect Your Business
A new business will need to keep its proprietary information safe from competitors, but still needs employees and vendors to access such information. Non-disclosure agreements are essential to ensure that your employees can speak freely within your company without worrying about losing valuable work to a rival business. Non-disclosure agreements need to be specific enough to enforce and should include the employee or vendor’s name, the information to be protected, and an expiration that the agreement will expire.
Managing Your Employees
Negligence is one of the most common claims in a lawsuit. A business is liable for negligence when it had a responsibility to take an action but failed to do so and this inaction causes another person’s injury. One way to defeat these accusations is to have detailed written procedures for employees to follow. Companies should consider having new employees sign acknowledgment forms and having employee handbooks in place to ensure these policies are known and followed. Policies can encompass topics ranging from procedures for slip and fall incidents to sexual harassment allegations. The most important thing is to have documented procedures and to ensure that these procedures are followed.
Should I Hire a Georgia Business Lawyer?
Matters involving business laws can be very complex. Whether you are starting, merging, or dissolving your business, it is a good idea to hire a Georgia business lawyer for help. There are generally many different types of laws and regulations that apply when running a business. Hiring a local Georgia business lawyer will help to ensure that you and your business are compliant with all state laws, that any documents related to your matter are enforceable, and that you have followed the proper state procedures for all relevant matters.