New Business? Don’t Make These Mistakes

If you’re starting a new business, your mind is probably on the business itself, and how to make it financially successful. That makes sense. Your mind probably isn’t on things like “how can I stay out of legal trouble.” But many businesses do make crucial legal mistakes early on in their business—mistakes that can cost them later on.

What Kind of Company?

A common mistake happens when you first file your corporate entity—businesses often don’t consider the various corporate entities that they can be. LLCs, corporations, partnerships and others, all have their own pros and cons. And some may be better suited for your business, or your management style (not to mention, may have tax benefits that also work better for you).

Similar to picking the wrong type of business entity, you may pick the right one—but then not have thorough and complete corporate documents, like corporate bylaws or operating, management or partnership agreements.

Many people use forms that they get online or in stores. These don’t cover everything that you need. There are details, like rules for meetings, breaking tie votes, emergency bylaws, and other situations, that need to be addressed in your corporate documents.

Intellectual Property and Marketing

Many companies, in an effort to expand branding and marketing, will come up with logos and slogans and characters, all to use in their marketing campaign. And then they realize—they never checked to see if they can actually use all of those pieces of intellectual property, or whether they infringe on someone else’s intellectual property.

Even if you’re not sued for infringement—the task of rebranding, throwing away costly marketing campaigns or having to abandon established logos or sayings, can be devastating to a business.

And even if you do own your intellectual property—is the domain name or social media pages available for your company name? The government may see that you own your company name, slogan or saying—but that doesn’t mean you own that page on Facebook, Instagram or other social media sites, or that you have the right to take the URL from someone who already owns it.

Employment Laws

Do you have the required notices, and posted signs, that are required by a myriad of federal and state employment laws? Do you know who you have to provide workers compensation for? Do you have established policies and procedures, that are known by your company employees, to handle, investigate and deal with sexual or racial harassment claims?

Many people when they start a business don’t give much thought to employment laws. But these can be costly mistakes to make, and can get your business in bad and serious financial trouble.

Creating and Keeping Records

Your company needs to have things like meeting minutes, copies of contracts, records of shareholder agreements, purchase orders, and discrimination policies. Many companies get sloppy about keeping these records, especially early on.

Don’t make crucial legal mistakes when starting your new business. Call the West Palm Beach business litigation attorneys at Pike & Lustig today.

Sources:

forbes.com/sites/allbusiness/2020/02/01/legal-mistakes-made-by-startups/?sh=19d1a85c22a6

crowdspring.com/blog/legal-mistakes/