Pitfalls to avoid with your small business.
No one comes to see a lawyer on the best day of their life. Usually, disaster, chaos, and uncertainty bring people through the doors of our office. One of the reasons I decided to become a lawyer is because I saw firsthand how attorneys can help their clients manage that chaos and resolve issues through predictable and trustworthy action.
Unlike a lot of lawyers, I didn’t grow up surrounded by attorneys. But, as a new lawyer, I worked at a private firm dealing with issues of contract defense and enforcement. This work gave me a completely new perspective on the ways attorneys can help businesses get off the ground, develop solid plans for growth, and mitigate the risks of doing business.
It also taught me how I could effectively counsel my clients in such a way that would allow them to stay away from the pitfalls so many others find while operating their small business.
The biggest (and most easily avoided) pitfall is not giving the business a corporate form. In essence, the action of filing the appropriate documents with the Kentucky Secretary of State creates a fictional, “legal person” separate and apart from the actual, human person overseeing, operating, and investing time and money into the business. Taking this simple step protects the business owner from the liability of operating the business. So, for example, if someone slips and falls in your restaurant and sues, having your business incorporated could protect you and your family from being financially responsible.
Probably the next biggest problems most small business owners encounter is when they operate in the service industry. So, if the company agrees to complete a job to build a deck, and they have the client who wants the deck built sign a contract that does not contain all terms necessary to protect the company, then the client could come after the company (or the owner, if they have not incorporated) if something goes wrong.
Often, the employees of these businesses have specialized skills that make them crucial to the operation of the business. When these employees leave, the business suffers. Many small business owners do not have sufficient protections for the company by way of agreements with the employees or relevant policies. This, too, can result in adverse legal action.
Having a trusted attorney to help you take these steps can save you time and money while operating your business. At Reczek Chase, we work with a variety of small businesses to tackle these common problems, and save our clients from the headache.
If you’re open to a conversation about how we can help your small business thrive, feel free to schedule a time to talk or give us a call.
By: Ethan Chase, Esq.
