Addressing potential legal issues might seem daunting, but ignoring them could put you out of business.
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There are a lot of benefits to being a business owner: control over your schedule, unlimited income potential, choosing projects you genuinely enjoy. But there is a lot of responsibility too. What if you don’t get the legal stuff right? What steps should take to protect yourself and your business? What can you do on your own, and when should you hire a lawyer?
It can seem daunting and overwhelming. But the legal-issues need can’t be ignored because one mistake can be enough to put you out of business. The good news is that while hiring a lawyer is often the best option, there are some things you can do on your own without incurring hefty legal fees. Here are three.
1. Link your business bank account with your LLC
As an attorney working with small-business owners in New York City, I see this mistake time and time again. You go to the trouble to set up an LLC, and you even go so far as to set up a business bank account. But you set up the bank account under your social security number when it should be set up in your LLC’s employee identification number (EIN). The LLC is meant to protect your personal assets from the actions of your business. The only way it can do that is if your business bank account is linked to your LLC’s EIN, not your personal social security number. If you don’t have an EIN, you can get one by visiting www.irs.gov.
2. Buy business insurance
Insurance doesn’t solve every problem, but it can go a long way towards reducing your out-of-pocket expenses if you run into any legal issues. Lawsuits are expensive, even if you win. Businesses need business insurnace because it helps cover the costs associated with property damage and liability claims. Without business insurance, you may have to pay out-of-pocket for damages and legal claims against your company. Depending on the incident, this could be a financially devastating scenario. Plus, insurance provides peace of mind, which can’t be understated when running a business. There are different kinds of insurance business owners may need, including general liability, professional liability and data breach. Speak with a broker about your options.
3. Put legal notices on your website
If it’s not in your budget to hire a lawyer to prepare these for you, there are templates online that are a good start. You can then have them reviewed by an attorney licensed in your state, potentially for a lower fee than if they were to prepare them for you from scratch.