I would like to bring to your attention the most common legal mistakes in business.

Your trusted professional advisor has provided this information to you because they care.

As you read through this information, you will realise the implications and the affect that these common errors would have on your business.

My advise to you as a self-employed person running your own business, is to surround yourself with Trusted Professional Advisers that you can rely on.

Should you be unsure as to whether these matters have been addressed in your own situation, please contact the person that passed this information to you immediately.

Business owner dies without a will or becomes disabled:

This can result in all business accounts being frozen. 

Some mitigating actions include:

1. Having a will, which includes a business clause allowing a trustee to run your business. 
2. Having an extra person authorized to sign documents e.g. enduring Power of Attorney.
3. You should give serious consideration to having adequate life and accident insurance cover.

The Business is sued and the Personal Assets are at risk:

This is an important reason to ensure all that business operations are conducted through a purposely-designed Business Corporate Structure, which protects your Personal Assets.

Not mediating disputes early:

Lawyers are expensive and there is no guarantee you will win.

Litigation is also very stressful; in most cases it will probably be cheaper to resolve the issue as early as possible.

If you have no Assets at risk, either Personal or Business, an early settlement (if at all) is much easier.

Many a person has lost everything in proving their innocence.

No Shareholder / Partnership Agreement in place:

Nothing lasts forever, especially partnerships.

Having a buy / sell agreement in place from the outset of your business venture, will make later splits quick, cheap and acrimonious.

If you are in business with another person, you have an insurable interest in their life.

A buy sell agreement funded by cheap Term Life & Disability Insurance is an excellent way to address this problem.

Would you like to support your deceased partners heirs for the rest of their lives.

Without an agreement in place prior to death, that is exactly what you will have to do.

Business Agreement does not have terms and conditions:

Having the above agreement in place, without specific terms and conditions that are binding on the estate of the deceased is a total waste of time and money.

Failing to protect Intellectual Property:

If you have specific ideas, processes or products that are unique to your business, they need to be protected.

Failure to protect Business / Product Names:

Ownership of logos and / or business names should be protected.

No written Contracts with Employees:

Employment agreements should include a confidentiality clause and protection of your client database.

Placing limits on access to new employees within a certain area of your office and prohibiting the soliciting of your customer database is only a small area, which must be addressed by this agreement.

Contracts and Agreements are not read and understood:

Take responsibility to understand what you are signing – especially if it is an important document.

Ignorance is no defense once a document is signed.

If you found this information of benefit to you, please call the person that sent it to you and thank them.

I feel sure they would appreciate it.

Kind regards

  martinfs@bigpond.com

Tags: assets at Risk