Advice from a lawyer: Protect Your Business!

August 25, 2019

 

 

Entrepreneurs are so interesting and impressive. They have an idea and they create an income producing service or product.

 

Definitely inspiring. 

 

One of the other skills they possess is that of wearing many hats. As a successful entrepreneur, you have several areas to manage including manufacturing, product or service development, sales, finance, profit, accounting, marketing, HR, processes, administration, legal and now the social media “division” of your business.

 

Again, impressive. 

 

Since entrepreneurs cannot be excellent at everything, we know that a successful entrepreneur picks the areas they excel in and then surround themselves with capable individuals to run the other area divisions. After all of this effort to create a successful business, protecting your business is as important addition to these divisions that make your business profitable. 

 

As an attorney that practices both estate and business law, protecting your business ( which is typically one of a client’s biggest assets) is a conversation all entrepreneurs should have with their attorney or business strategist. Here is a checklist for you to review with your counsel: 

 

How to protect the assets of your business:

 

✓ Insurance. It is a protection for the unexpected. Find a knowledgeable agent to review your insurance options in your industry. 

✓ Know the origin of your marketing content. Make it original or give credit where credit is due. A good rule of thumb is to perform a general search of your marketing content more often than not. This applies to words, paragraphs and photos to name a few. 

✓ Provide what you promise. Not only is this a good business policy but it also does not give your customers or clients a reason to consider litigation. 

  • Disclaimers. Add these to your digital material, products and to your contracts for service, if appropriate. Specific disclaimers are important for each industry, so research your industry. • Is your business incorporated? If so, this is a protection for your personal assets with a few rules such as only use your business account for business expenses. A C corporation, a S corporation or a multi member LLC are the typical entities entrepreneurs set up for their business assets. 

  • Make sure all of your expenses and all of your income transactions are handled in your business account. This ensures that you keep your personal assets separate from your business assets. If unexpected litigation occurs, an owner’s business assets are vulnerable not their personal assets. 

How to protect your personal assets from business issues:

  1. Is your business incorporated? If so, this is a protection for your personal assets with a few rules such as only use your business account for business expenses. A C corporation, a S corporation or a multi member LLC are the typical entities entrepreneurs set up for their business assets. 

  2. Make sure all of your expenses and all of your income transactions are handled in your business account. This ensures that you keep your personal assets separate from your business assets. If unexpected litigation occurs, an owner’s business assets are vulnerable not their personal assets. 

  3. Personal assets.  Annual Review. A plan for an annual review of your insurance, disclaimers, current marketing, current contracts and business structure is a good way to Protect Your Business. We suggest Valentines’ Day or the week of Labor Day so as an owner, you have time to adjust before year end.

 

Protecting your Business is well worth a day of review after you have poured your time and effort into its success. Keep up the inspiring work, Entrepreneurs! 

 

 

******************** 

Kelly C. Sturmthal is a senior partner of DSM Law, a solutions-oriented estate and bsuiness planning law firm, with nearly 20 years of experience in Estate Planning, Business Strategy and 15year/Succession Business Planning. Combined with years of practical experience in business ownership, finance, banking, real estate, estate planning probate and business strategy planning, Kelly brings real world and academic knowledge to address the legal and business needs of her clients. 

For more information visit www.kellyesq.com 

 

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