Entrepreneurs are often eager, motivated and organized when starting a business. However, with all the responsibility on a business owner’s shoulders, some mistakes are inevitable. Some basic legal, small business blunders can have costly effects but avoiding the following errors can help get your business off on the right foot.
First, make sure you have solid employment agreements in place for any employees. It is important to have binding documentation of an employee’s job expectations and terms in case a disagreement surfaces later on.
Don’t procrastinate on incorporation. It can be tempting to put off the paperwork and expense of formally incorporating but failing to do so could cost you your business down the line. Consider consulting an attorney to make sure everything is in order.
Make sure you secure any necessary licenses or permits for your business. The New Jersey Secretary of State’s office can provide information on license requirements and what businesses need licenses. Operating without the necessary permits can result in a steep fine.
Don’t try to write business contracts on your own. Even if you have previous business experience, it is easy to miss important provisions of contracts. This can be a serious problem down the road especially if a loophole prevents you from getting paid or pursuing any appropriate claims for unfair conduct. Have a professional take a look at your contracts to make sure they are thorough and binding.
Lastly, don’t ignore intellectual property. Consider a twofold approach to intellectual property issues: first, make sure you are not infringing on someone else’s IP. An accidental copyright violation can cost your business money and valuable resources in any disputes. Secondly, defend your own IP rights by registering any trademarks or patents to ensure no one else violates them.
If you are forming a small business or have questions about business administration and related legal obligations, consider speaking with an experienced business law attorney. They can help address your concerns while ensuring that your business is on sound legal footing.
Source: Free Enterprise, “5 Legal Mistakes That Entrepreneurs Make,’ Deanne Katz, Dec. 4
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