For those who are building a start-up business, whether it is your first or your tenth, growing the business is likely your number one priority. However, part of being successful in business is being able to avoid lawsuits. As we have noted in prior posts, litigation can be an expensive and time consuming undertaking; and you may not obtain the results you wanted even after a hard fought lawsuit.
Nevertheless, there are several mistakes that new businesses make that can lead to lawsuits when things go bad. This post will identify a few of them so that you won't make them.
Failing to incorporate - The tax benefits alone should be incentive enough to incorporate one's business, but it may be surprising how many start-up businesses are being run as sole proprietorships or partnerships without any corporate desgination.
Not having an employee handbook - Employee management decisions should not be made on an ad hoc (by each situation) basis. This may not only lead to resentment, it could also lead to a lawsuit.
Not protecting trade secrets - Indeed, you may not be able to get a patent or a registered trademark, but taking basic steps to protect a trade secret is an essential move in ensuring what is a secret to the businesses
Not paying taxes - The IRS is uncompromising when it comes to the payment of employee taxes and payroll taxes. To avoid this scenario, try working with a payroll agency that is ready to make sure that all taxes are paid.