Complete Your Small Business Legal Checkup Today
Risk taking is an essential part of the entrepreneurial spirit.
Success is about knowing which risks to take and which to mitigate. The real danger is that the greatest risk to your business may be something you never considered. A legal checkup helps you identify potential liabilities. As a LegalShield small business member, you have access to attorneys who can help you limit risk and plan for challenges. Carefully review the following questions and call your LegalShield provider law firm if you need legal assistance.
- Is your business structure the right fit?
There are several types of business entities to choose from when starting a business. It is important to consider tax treatment and benefits, sale of interest in the business and limiting your personal liability. For example, sole proprietorships put your home, personal savings and other assets at risk in the event your business is sued or cannot repay a debt. Partnerships expose you to greater liability because you are also responsible for certain actions of your partner(s). LLCs and corporations may protect you from certain liabilities but they have specific tax and reporting requirements. Talk to your LegalShield provider attorney to determine the best fit for your business.
- Are your workers properly classified?
It is your legal responsibility to establish whether someone working on your company’s behalf is classified by the IRS as an employee or an independent contractor. Making the wrong determination can have serious financial and legal consequences. Visit the IRS website to learn more about the guidelines for classifying workers.
- Are you compliant with wage and hour laws?
Once you have determined that a worker is an employee you must also determine whether or not they are exempt from wage and hour laws established by the Fair Labor Standards Act (FLSA). The FLSA also governs the payment of overtime, which is a frequent point of contention in labor disputes. The DOL offers valuable information on employee classification via their website. Keep in mind some states and localities have different wage and employment laws that may exceed FLSA standards. For example, some states and cities have higher minimum wage requirements. Contact your LegalShield provider law firm if you need more information on the laws where your business operates.
- Do you have adequate insurance coverage?
There are many insurance options for small businesses, including general liability, professional liability, product liability, commercial property, and home-based business insurance. It is important to carefully examine your potential liabilities and make sure you have the right coverage. Your LegalShield provider law firm can help review the policy before you sign to make sure you understand the fine print.
- Have your contracts received a thorough legal review?
Small business owners frequently sign contracts with employees, vendors, banks, and contractors. It is important to make sure your contracts are enforceable in a court of law and are free of potential surprises. One of the greatest challenges LegalShield provider attorneys face is attempting to resolve problems with a contract that has already been signed. Have your LegalShield provider law firm review any new contract before you sign.
- Are your records up to date? No matter the size of your business it is important to accurately maintain your records. Keeping copies of contracts, sales receipts, employment records, and invoices will help you stay organized and keep you on the right side of the law. Well-maintained records will also help you accurately prepare your tax filing.
- Is your intellectual property protected?
The best way to protect your innovations and creations is through effective enforcement of intellectual property (IP) law. Copyright laws protect the intellectual property of artists including written text, photographs, paintings, and designs. A copyright is established when a work is completed. Trademarks protect the design, name, words, and phrases used to identify your business and products. Patent law exists to protect innovations or inventions from reproduction without permission or compensation. Both trademarks and patents require registration with the United States Patent and Trademark Office. Visit the USPTO website or call your provider law firm for more information.
LegalShield provides access to legal services offered by a network of provider law firms to LegalShield Members through member-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract at www.legalshield.com for specific state of residence for complete terms, coverage, amounts, and conditions. This is not intended to be legal or medical advice. Please contact a medical professional for medical advice or assistance and an attorney for legal advice or assistance.