Top 8 Business Law Mistakes According To A California Business Lawyer



There are many errors committed by some business entities. Initially, it may not appear to be adverse enough but can back-fire later on according to business lawyers.

A trader, being an employer too can reduce employment-related liability as there are several laws and protections on employment and business matters from a proactive position instead of a reactionary position. 

A California small business lawyer has given an insight into 8 common business law mistakes. 

  1. Not Deciding on a Business Structure

As you are conceptualizing your startup business, you may lose focus from structuring your business. Establishing your business as an LLC or a corporation from the outset can save your money on taxes and facilitate you to simplify your ownership structure.

Figure out some time to consider your options. It could be a sole proprietorship, partnership, LLC, and corporations. Choose the option that suits your organizational goal. Structure in such a way, so that you can accommodate your big plans. Before starting an LLC or partnership, be sure that members or partners agree. Accordingly, everyone's role and share are clearly mentioned.

  1. Not Registering Your Name

Whether you wish to be a sole proprietor or a corporation, always ensure that no one else is using an identical name you have chosen for your organization. When you register a limited liability company (LLC) or a corporation, a name check is mandatory. Be sure about the availability of the name before your website development. Be extra cautious during logo designs or printing of business cards

  1. Lack of a Standard Contract

According to a team offering small business legal services, when you begin your business you don't have many customers, but as you aspire to grow, you must frame a standard contract to use with all of your customers. This will clarify disputable clauses and ensure your protection. Have a look at the contracts of your competitors. Draft a comprehensible contract. Take the help of an attorney to prepare a contract, suitable for your business and fair to your customers.

  1. Flawed Recruitment

Many startups are keen to find the appropriate employees than they are on following proper procedures. Recruiting suitable employees is the focal point of your success while commencing a small business, and equally crucial is proper documentation during the on-board process. These comprise of USCIS Form I-9, IRS Form W-4, offer letters, noncompetes, employee handbook, and benefit forms, as well as standard operating procedures for jobs and tasks. Take your time out to prepare these documents while starting your company. It is mandatory if you wish to protect your business.

  1.  Lack of a Nondisclosure Agreement

As you are planning to start your business, it is most likely that you’ll interact with many people and part with a lot of information regarding your business concept. A nondisclosure agreement, or NDA, will help ensure that the information you share with others remains confidential.

  1. Ignoring Securities Laws

The lawyer who also offers small business legal advice in California cautioned that while initiating a business, it is alluring to wish to hand out stock to your close associations and investors. As you're excited to begin your own business, you wish to include them in your plans. Issuing stock must be done diligently and in compliance with securities laws. Speak to a lawyer who can assist you with mandatory disclosures, filings, and forms. Committing a blunder with stock may result in expensive penalties for your company.

  1. Neglecting Intellectual Property

Availing copyright, patent, and trademark protection should be first-line protection that you must prioritize to protect your company's intellectual property. Though you can trademark at the state and federal level, patents and copyrights are federal procedures.

  1. Lack of Business Lawyer or Legal Advisor

The engagement of a business lawyer, having the requisite expertise, experience and passion to secure the business is an investment in the company. There are bound to be many challenging situations in which you will seek legal advice. It is suggested to have an advisor who will help you take crucial decisions and commit to legal agreements.

If you can refrain from committing these eight top mistakes, you and your business will enjoy a much smoother launch.
Location: United States

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