Starting a new business can be very risky, but also very lucrative. However, a lawyer can help a new business owner reduce their potential exposure if they become a defendant in a lawsuit. Here are a few practices a new business owner can take to reduce possible liability during a lawsuit:
New business owners should form a corporation to separate their businesses from their personal assets. Incorporation can limit the cash, assets, and property that may be vulnerable if the business or business owner is sued. The process may require extra payments and paperwork initially, but will save substantial time and money in the long run.
After the business is incorporated, the distinction between business and private assets must be upheld. The corporate veil may be dissolved if the distinction between the owner and the corporate form is not a meaningful one. If personal and corporate assets are commingled, a court may order the corporate veil dissolved anyway.
Drafting a Non-Disclosure Agreement
New businesses must keep their intellectual property and company secrets safe from competitors, but maintain access for their employees and vendors to use and share. Non-disclosure agreements can permit employees to speak and share documents freely without risking confidential business information. Non-disclosure agreements need to be specific enough to determine who it covers, what information is confidential, and how long it needs to last. However, non-disclosure agreements cannot prevent a former employee from changing jobs in the same field. Non-disclosure agreements must be written precisely so that they are enforceable.
Maintaining Written Standards and Procedures
The most common lawsuits typically involve negligence for personal injury. Businesses are liable for a slip and fall accident when it was supposed to take action but failed to do so. Businesses should keep written procedures for employees to follow to keep customers safe while avoiding a potentially expensive lawsuit. Businesses should have new employees sign acknowledgment forms and have employee handbooks in place to ensure these policies are complied with. Employees should also keep written records of any inspections they make.
Should I Hire a Florida Business Lawyer?
Business law can be very complex. A skilled Florida business lawyer can help you start, merge, or dissolve your business. There are many different types of laws and regulations that apply when running a business. A local Florida business lawyer will help to ensure that you and your business are compliant with all state laws, that your contracts are enforceable, and that you have followed the proper procedures to run your business.