Many small and medium-sized businesses today are incorporated.
Most of them, however, are not able to employ their own in-house counsel to provide legal advice on a daily or ongoing basis. That means that businesses usually look for legal advice only when a problem has already appeared, whether in the form of a dispute with a supplier, a purchaser, a distributor, or even an employee, a partner, a director or a shareholder.
Business owners often try to solve these problems on their own but, without the proper legal advice, they can end up with a more serious legal problem on their hands, which usually means having to defend a lawsuit. Lawsuits are time-consuming and expensive not only because of the legal fees that have to be paid but also because of the cost to the business of diverting your attention and focus away from operating and building the business while you deal with the lawsuit.
To manage and reduce your legal risk for the future, you need the right amount of preparation. That preparation includes getting the appropriate legal advice from lawyers with experience in all aspects of the law that applies to your business. Consider the following:
- If you are not incorporated, and you are in business with other people, do you have a written agreement setting out your respective rights and obligations?
- If you are incorporated and you have other shareholders, do you have a written shareholders’ agreement, again setting out your respective rights and obligations? For example, do you know what will happen if a shareholder wants out or dies, or if some shareholders want another shareholder out?
- Do you use standard form contracts in your business? Have you ever had them reviewed from a legal perspective for enforceability?
- Do you have a business name, logo or slogan, or a business website that you consider part of the business property? Do you know whether this intellectual property is protected from use by others without your permission?
- Is there a business transaction you are considering but you are not sure whether you fully understand the written agreement that has been drafted?
- Do you know whether your contracts are out-of-date or whether they continue to reflect the applicable laws?
- Do you have employment contracts for your key management people, which set out important terms such as the basis for their remuneration (salary, commissions, bonuses), termination date, grounds for termination and the consequences both for the employer and the employee, etc.?
- Do you have policies in place that you are required to have by law, i.e. workplace bullying and harassment policies?
If you have any questions about your legal ‘preparedness’ on any of these issues, Railtown Law has answers. Contact us.