Establishing a business helps to create economic opportunities for owners, investors, and workers alike. It takes more than obtaining a business license and a location to be successful. Proprietors of any type of businesses are susceptible to making legal mistakes that may seem minor, but can be detrimental to the business.
Whether your business is new or established, the following are five types of legal trouble that you should do your best to avoid.
Choosing the Wrong Business Structure
Establishing a formal business entity with a legally recognized structure can help you to protect your personal assets. The four most common business structures are:
- Sole proprietorship
A sole proprietorship will not protect your assets against business liability where an LLC or a corporation might. A partnership might leave you vulnerable to liability, but an experienced business attorney could help you to ensure that it does not.
Not Paying Taxes
Businesses must pay taxes to federal, state, and many local governments. A variety of business taxes could apply to your enterprise. If you do not pay them, a tax collector might force your business to fold and claim its assets.
A business attorney can help you to understand business tax liabilities and help to ensure that the business pays them.
Ill-Prepared for Employment Issues
Job providers must do their best to fully prepare for possible worker injuries, complaints, and other commonly occurring employment issues.
Obtaining workers’ compensation insurance is required by law and helps to protect you and your business against injury liability. If you do not have it, your business is vulnerable to potential lawsuits filed by injured workers.
Establish formal workplace rules, accepted practices, and safety procedures. Regularly training your workers can help you to prevent accidents and complaints regarding workplace harassment or discrimination.
Ensure workers are paid properly for hourly wages and any overtime that they might accrue. Failing to pay in accordance with state laws could trigger a wage complaint and lawsuit.
Stay on top of your business paperwork and keep it organized. If your business records are in disarray, so is your business. A professional record-keeping or bookkeeping service could help you to prevent bad record-keeping from wrecking your business.
No Succession Plan
An enterprise with a strong business model could last beyond the working career or lifetime of the owner. You should ensure your business has a succession plan that enables a smooth transition of ownership and power to an acceptable individual or party. A clearly defined and detailed succession plan can help your business to succeed after you cease your ownership due to retirement or passing on.
Philadelphia Business Attorneys at Sidkoff, Pincus & Green Help You to Avoid Legal Issues
The experienced Philadelphia business attorney at Sidkoff, Pincus & Green P.C. can help you to best manage your business’ legal risks. You can contact us online or call 215-574-0600 to schedule an initial consultation at our Philadelphia law office. We represent clients in South Jersey, Pennsylvania, and New Jersey.