Even with the best intentions, it’s not uncommon for a business owner to face legal trouble at one point or another. Whether it’s something that affected a customer or client, a stakeholder, an employee, or otherwise, you should recognize that there is a serious potential for you to protect yourself in the eyes of the law. If you have personal liability over your business, then business trouble can quickly become legal trouble, too. As such, we’re going to look at legal protections you need to have in mind so that, when the time comes, you can stand up for your rights.
Anticipate the chances of a lawsuit
In most examples, if there is a legal case against a business, it will be in the form of a lawsuit. Rather than being surprised by a big lawsuit against you, it’s essential that you’re prepared to face it as best as possible. This means that you should understand what responsibilities your business has, have a business lawyer that is ready to work with you when you need them (you should have them hired on retainer if possible), and keep copies of what correspondence you can. As such, you can muster the best case possible by following your obligations, having evidence at the ready, and having an expert who can help you carry out your legal strategy.
Be careful with your contracts
Many disputes between business and their partners and clients come not because any particular responsibility has been broken. Rather, a lot of them start with a contract that is, in one shape or another, broken. In other cases, it may be because a party has put an unenforceable or unfair clause in the contract and it has to be disputed. It’s a good idea to have some working knowledge of contract law, but more important still to have the right legal counsel when you’re writing a contract for the first time. There may be boilerplate contracts you can find on the net, but it’s a serious risk to inherent trust that they will meet your needs.
Consider outsourcing
Another way to prevent disputes from arising is to simply get rid of the source of those disputes. Some businesses need employees, full stop, and thus have to do what they can to follow employment law and their responsibilities as an employer. However, one way of managing risk is to outsource your labor rather than employ people to handle it. You still have legal obligations to your outsourced labor, but this typically follows whatever contracts you set with them, so the best way to be safe there is to follow the tips mentioned above, once again.
If you get arrested
In some cases, a legal accusation or investigation may be so serious that you won’t be summoned to a court by letter, but you may in fact be directly arrested by the police. Ensuring that you act as peaceably and reasonably during the arrest itself is crucial, but beyond that, you should make sure that you know who to get in touch with. Having a lawyer you can call after invoking your rights, and making sure that you talk to them first of all, is most crucial. For some financial protection, you may want to hire a local bail bond agent through your lawyer or loved ones as soon as possible, as well. This stops you from having to pay all the bail immediately, yourself.
Push for constant compliance
Simply put, if you want to make sure that you’re as protected from legal trouble with the business as possible, then you should take the time to find out where you are potentially vulnerable, and to stamp out any unintentional or neglectful noncompliance. For instance, if you have an accident in the workplace and the affected party wants to sue, then proving that your business is compliant by, for instance, having a safety audit and showing what concerns you addressed can help your case that the accident happened due to negligence on the part of the injured party, not the business. It’s not foolproof protection, by any means, but the best way to avoid being held responsible for non-compliance is to be as compliant with the laws and regulations as you can be.
Distancing yourself from the business
You are always going to be, in part, responsible for the failings of the business. For instance, if you own a business that faces a court case, you will be personally responsible for getting it the representation that it needs. However, you can mitigate your personal risk by, to some degree, untying it from the business. This is one of the main reasons that an individual would choose to make their new business a limited liability company rather than a sole proprietorship. Even a divorce in your personal life could be financially devastating for your business if you don’t get that extra layer of separation between you and your company.
Keep disputes out of court when you can
Litigation is something that, if possible, you want to avoid at all costs. It’s costly, it wastes time, and it can be terrible for your company’s PR. While you should follow the advice of your lawyer at all times, you should always try to think of ways you can keep potential disputes out of court. There are quicker, easier, and less public ways to address a range of disputes. For instance, you can arrange mediation or arbitration, having neutral third parties who either rule over proceedings and impose a solution based on the evidence provided or simply help parties resolve the dispute between themselves. This might mean paying out of court, but it can give you real savings when compared to going to trial.
Running any business will involve compliance with the law that, at some point, you may break even unknowingly or accidentally. To make sure that you’re able to bounce back as best as possible, you should consider the tips above seriously.