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THE SSP FIRM BLOG
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Five Ways to Protect Your Business
Saturday, May 27, 2017
By Jeff Cornwell, Business Lawyer
As a business lawyer, I have encountered many business owners over the past decade who have had different trajectories, different struggles, and different stories to share. But they have also shared a few common mistakes along the road of entrepreneurship. Whether you are just starting up a business or have been in business for a few years, I wanted to share with you some common legal mistakes you may face and what to do about them.
1. Not setting up the right legal entity: Many business owners fail to establish the right legal structure for their company. A properly formed and maintained legal entity can serve as a crucial line of defense to help protect your personal assets.
2. Not having a written agreement: Any company with two or more owners should have a clear written agreement defining the owners’ rights and obligations. What will happen to business if one of the owners dies or gets divorced? Having a clear written agreement that anticipates life changes can eliminate stress and prevent unnecessary legal battles.
3. Failing to get legal advice when necessary. Some business owners try to save costs by avoiding hiring an attorney and instead search the internet for sample documents. Often these forms are not tailored to the owner’s true needs. Having the wrong document may be worse than having no document.
4. Not paying sales and payroll taxes: There will be times when cash is tight and business owners are tempted to skip a payment of sales or payroll taxes. While this strategy may get the owner through payroll, the owner is also exposed to personal liability for failure to make the tax payment.
5. Failing to plan: All too often business owners focus on day to day operations and forget about succession planning. Will you pass your business down to your children? Can they afford the taxes? Will you sell your business and defer taxes?
Bottom Line
As a business owner, you have a responsibility to your family and employees to protect your business by making good choices and avoiding, where you can, costly and harmful mistakes. I hope the above five tips help you pave a smother road on your way to success as a business owner.
Jeff Cornwell is a principal at the law firm of Stagnaro, Saba & Patterson, where he assists clients in a wide variety of matters, including business formation and planning, wills, trusts and civil litigation.
Published 05/25/2017: If you have any questions about any of the information contained in this blog, contact Jeff Cornwell via phone: 513-779-9900 or by email at jjc@sspfirm.com. Advertisement Only. Content in this blog was accurate and researched as of date published. This article is intended for general information only and not as legal advice. You should discuss specific details with your attorney to determine how legal developments may apply to your situation.
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