Legal dangers are a real spooky matter for business owners. No-one likes to think about the dangers that could take a big chunk out of their business and embroil them in bitter legal arguments. Your best protection against them is being earnest. That is, making sure you have all the paperwork you’re going to need. Here, we’ll look at just some of them.
The most important right
Businesses owe due diligence to a lot of rights of employees. The most important and most frequently neglected is their right to safety. You need to do more than the due diligence in keeping them safe, however. You need to prove that you are, as well. For example, show proof of any safety training you’ve done and have a codified safety plan for the business. Take into account as many risks as you can. For electrical equipment, test and tag services can be that bit of third-party confirmation you need
If you share your business with other people, then you already have a real potential for contention. People will want to go in different directions or have different opinions of how much of what they have a stake on. It’s human nature. Even if you’re in business with your bestest of pals, don’t imagine that things will always go swimmingly. Instead, nail down the business with a Founder’s Agreement. Roles and responsibilities, equity ownership and vesting and intellectual property should all be covered. That way, if a dispute ever arises, you can just point to the agreement.
Dealing with employee disputes
The exact same can apply to whenever a disagreement arises with your employees. You might like to think that getting the best employees and being the best boss is enough to curb trouble. But human interactions can be tricky things. Harassment, discrimination, and termination are situations that invite a lot of trouble. So make sure you codify how you deal with them and keep transcriptions of interactions around resolving disputes. Have employees sign clauses that make them go through arbitration instead of litigation. You also need to think about protecting your business from the more ambitious. Consider making noncompete and nondisclosure policies part of their contracts.
The root of all evil and some legal troubles
Where there is money, there is a potential for some kind of trouble or another. We’re not telling you to avoid making money, of course not. Instead, we’re telling you the importance of keeping every single bit of money in the business documented. Keep records for money going in and coming out. Failing to disclose it when asked can land you in a lot of legal trouble. Similarly, if you have investors, they have a right to know exactly where their money is going. Don’t try to pull the wool over anyone’s eyes. It’s a lot of risk for short term gain.
The right paperwork is really going to solve a lot of headaches in advance for you. It’s going to have solutions to disputes before they start and give you the proof to show everything is on the up-and-up. So don’t get lazy with it.