Tips for Minimizing Legal Risks in Your Business

Is your business at risk? To minimize risks of liability and getting sued, follow these common sense tips:

  • Are your business licenses and corporate filings paid and up-to date? Make it easy on yourself. Set up electronic reminders from the State whenever possible so you know when licensing and tax fees are due. Failure to pay these fees may leave both your business and you personally vulnerable to liability.
  • How long does it take you to email your clients? Respond to your clients and employees promptly. Happy people are far less likely to complain.
  • Do you promise clients on the phone or in person? That may leave you short of an enforceable contract. Document promises in writing. When you agree to a price and then changes are made, be sure to have your clients agree to the work and fee changes in writing. That will lower the chance for disagreements when the job is completed. Have them initial work orders.
  • Are you hiring new employees or contractors or interns? Be sure to obtain citizenship or work visa verification, as well as other required paperwork. Classify your workers correctly. If they are truly independent contractors, be sure to send them a 1099 at year’s end. If they are under your direction and control and are employees, report them properly with the correct state and federal payroll deductions; send them a W-2 at the end of the year. Interns are there to learn from you, so teach them. They are not slave labor. For more info on independent contractors, check out my older post:

Remember the adage: “Penny wise, pound foolish”. If you have a legal question, consult with an attorney. Don’t ignore the problem until it explodes into an expensive lawsuit.