Managing a business is not an easy task. Even the smallest mistakes can severely impact a company’s profitability and success–especially legal mistakes. With the right knowledge and guidance, businesses can avoid legal mistakes to protect their employees and their competitive edge. Our Rockford business law attorneys have put together the most common legal mistakes businesses make and how to avoid them.
If your business is facing legal troubles, or you want to avoid legal issues, contact our team at (779) 235-9115 to schedule a consultation!
#1: Failing to Draft a Partnership Agreement
One of the biggest mistakes that business owners make is failing to draft a partnership agreement. Unfortunately, it’s far too common for business owners to disagree on major company decisions and end up dissolving the partnership. To avoid future partnership issues, business partners should draft a clear agreement. The agreement should explain how the equity should be split among the partners, their percentage of ownership, their salary, what would happen if one of the partners leaves, etc.
#2: Not Choosing the Right Business Structure
One of the first steps to establish a new business is choosing a business structure. The business structure you choose will determine what legal form your business will operate in. The business structure you choose for your business will determine the types of taxes you will have and how liability will be handled.
It is essential that you speak with an attorney before choosing a business structure to ensure that you select one that best suits the business. Many small businesses believe that sole proprietorship is the most appropriate form of business. However, that business structure can result in higher tax rates, and if you incur liabilities, you and your business will both be liable.
#3: Not Consulting With An Attorney
Small businesses and partnerships make a mistake in believing that they don’t have the same legal obligations as larger enterprises – but that is far from true. Failing to consult with an attorney before making major business decisions can cost you your business. Getting an attorney to help you early on can save your business in the long run.
#4: Not Creating Appropriate Contracts with Suppliers
If you have external partners that are essential to your business, you need to create a contract that will protect you in case the contract is breached. Business hardly goes as planned, so it’s vital that you plan ahead and prepare your business for legal issues with suppliers.
You might even need a specific type of contract, depending on the type of supplier relationship you have. A good attorney can draft those contract templates for you.
#5: Not Protecting Intellectual Property
A company’s research and development, logo, and products are what gives a business its competitive advantage. When a company fails to take the right steps to protect its intellectual property, they become vulnerable to another party stealing its name and product. An attorney can review your intellectual property and ensure that it has the legal documents necessary to protect your business from competitors.
Call Our Rockford Business Law Attorneys
If you want to avoid litigation and common legal mistakes, contact our Rockford business lawyers. We have 100 years of experience helping businesses resolve and prevent legal issues. Our legal team has the knowledge, skills, and experience needed to become an essential and valuable addition to your business process. We understand the issues and opportunities facing businesses of all sizes or at any stage of a company’s life cycle. Let our team guide you through the launch of your business and beyond.
We are here to help you. Contact our Rockford business lawyers today at (779) 235-9115 to schedule a consultation!