Have you ever considered that virtually all small businesses will be sued by someone? Do you know what to do if someone breaches your business contract you rely on for goods or services? Did you know that without a business legal consultant or business lawyer, your business could run into serious legal problems that could be prevented?
You as a business owner may say that you cannot afford to hire a lawyer. In fact, you cannot afford NOT to have a competent legal consultant in today’s complex, risky and changing business climate.
Spencer Ball, Attorney at Law
7084 South 2300 East, Suite 250
Salt Lake City, Utah 84121
It is therefore a necessity to put sound and effective policies and procedures to prevent and to reduce the very real exposure your business faces from such liability. the burden of a lawsuit not only causes a drain on company resources, but also a serious emotional burden on you as a business owner, when you see a constant stream of high legal costs for an outcome that is uncertain in both the result and the duration of the lawsuit. This emotional drain on a company can take the place of your putting your mind, abilities and effort on growing your business. It can be devastating to your business for years.
Give us a call today at (801) 453-2000 regarding how we can identify the holes in your business to avoid liability and to take care of business problems while you concentrate on what you do best–growing your business.
There are effective prevention measures to reduce and limit this significant and real exposure. Listed below are areas where many business owners often have far less protection and have limited themselves from opportunities for growth.
Is My Small Business At Risk for a Lawsuit?
In our complex and litigious society, nearly every business will be sued at some point. This is a non-sugar-coated reality that is part
of our business world in this country and in Utah. While personal injury lawyers advertise at great length, lawsuits can arise from many causes, such as disgruntled employees, misunderstandings and breaches of business contracts, all acts of employees while working for the company, and any other way that a Plaintiff or his creative attorney can come up with. Our society and legal system has a mindset to have business take the financial responsibility for bad things that happen to people as a part of the cost of doing business.
One of the serious areas for liability to businesses is responsibility for the actions of their employees. This includes automobile accidents when an employee is acting within the scope of his employment. Employees can create many liability situations for which the employer with the deeper pocket is nearly always liable. Many of these situations are preventable with a careful examination of monitoring and supervision policies. While most of such liability can be insured, there can be significant unexpected holes in the coverage of insurance policies.
How can I Prevent Loss from a Breach of Contract?
Business contracts are inevitable places for misunderstandings to blossom into expensive lawsuits and huge losses. Contrary to the belief of some, oral contracts are completely enforceable, except as prohibited by statute, even though a misunderstanding of the contract terms may be hard to prove.
The most common policy one can immediately implement to prevent many contract disputes is to follow up all oral agreements with a written email, which is a handy way to put in writing terms which are automatically documented with the date, time, subject, as well as specific written terms. The more you put in writing, the greater the chance to avoid misunderstandings and the confrontations arising from them. Our office has the business forms and knowledge of important provisions which your business contracts should have to protect you.
Should I Incorporate or Form a Limited Liability Company?
The most common choices for a business entity are forming a Corporation, a Limited Liability Company, a Limited Partnership, or
just not forming any such entity as a sole proprietor or a partnership. Each has their advantages and problems. The least favored options which put at risk your personal assets are a partnership and a sole proprietorship.
The choice of a business entity not only affects whether your personal assets are at risk, but also may determines to a real extent what assets a personal creditor may be able to collect from your business.
There are situations, for example, when a Limited Liability Company may be the best choice, as it may limit a personal creditor to enforce a charging order on your business which limits the ability of the creditor to a portion of business income and prevents the creditor from closing down your business.
Do I Comply with government regulations?
One area which the government heavily regulates is the hiring and control of employees. Taxes need to be timely paid, or the Government assesses penalties. The law seriously affects employee policies, such as whether an independent contractor may be considered an employee. Is overtime required to be paid. An employee manual can be a benefit to the company, but at the same time it can be a big problem creating serious obligations to an employee. You cannot afford to be without the guidance of an attorney in this important area.
Does My Business Have Sufficient Insurance Coverage?
There are several areas of coverage which you as a business owner should have. Do you have disability coverage to protect your most important asset–your ability to create an income? Is it sufficient to avoid your having to close down the business? Do you have general liability coverage for customers and others who come on your premises? Do you or your employees use your automobile or a company car for business purposes? If so, is the coverage broad enough? Do you have workers compensation?
Some insurance agents simply do not know the value and importance of certain provisions of insurance contracts, and cannot fully appreciate the types of liability which you really need. You should have an attorney who understands your legal needs, rather than place all of your confidence on agents who are motivated by the insurance commission and cannot fully appreciate the legal ramafications of certain disclaiming provisions leaving holes in your coverage.
What will happen to my business when I retire or become disabled or die?
A very common area of neglect in one’s business is a lack of planning for contingencies and the eventualities of retiring, becoming disabled, or leaving the business to one’s heirs, or otherwise planning a wise exit strategy. This is especially true with partnerships, where two partners may work together just fine, until something happens to one of the partners, or partners did not adequately plan for how and when they would retire.
Many problems arise when a business grows over the years, and then partners are faced with a misunderstanding or challenge of mutually deciding what the business is worth, and how to divide the business by a sale, by having to choose a replacement for one of the managing partners. This can happen very unexpectedly when a partner becomes disabled or dies.
Am I Running My Business with Too Much Risk?
Just as the Titanic was at great risk for hitting icebergs, there may be serious holes in the way your business is now operating which may cause your business to take on too much water, causing a serious risk of sinking. The items mentioned so briefly in this article is intended to help you see issues which you may not have realized how you are at risk, and may merit closer attention.
You simply cannot afford the effects of a lawsuit which turns your attention and resources to the dispiriting effects of high attorney’s fees that go on and on with no clear outcome in sight, and which could be truly devastating to your business. Let us help you prepare now to put in place paper trail systems so that a future adversary can see that it would not make sense to go very far with a lawsuit against you.
Let the Law Office of Spencer Ball perform a Small Business Audit, a serious analysis of the risks in your business to identify the same and suggest the best remedies which need to be taken to remedy them. Spencer has over 25 years of experience in general law practice, which includes 16 years of owning and managing two title companies, which gives him the unique ability to see the risks, problems and opportunities which business owners face. Let us manage your risks and even help you identify opportunities, so you can put your full efforts in what you do best–in growing your business. Call us at (801) 453-2000 for a full business legal audit, which is free if you mention this website.