Why protect your business, LEGALLY

I always hear people say they want to protect their business idea. But rarely do you hear them wanting to protect themselves and their businesses. These thoughts are totally different. Protecting yourself is about personal liability to lawsuits. While the other is about ensuring employees and other companies do not have a claim against the company because of the actions of the company’s agents.

Now, a lot of people don’ have the time or money to create businesses, file taxes, file trademarks, etc. However, I encourage anyone who is wanting to start a business or is ‘pseudo’ operating a business to consult with a lawyer. This is not a shameless plug to call or text me. It’s more about opening your eyes to the possibilities of the growth of your business.

When consulting with a lawyer, she should be able to tell you the legal ramifications to not filing proper paperwork, potential tax liability, and potential exposure to lawsuits. I know a lot of people who try to fast track to business without doing the necessary paperwork and end up getting hit with a lawsuit for some negligence on their part.

Difference between protecting yourself and your business.

The major difference is that protecting yourself is more about protecting your family and assets. Just because you have business, doesn’t mean you should open yourself to personal liabilities. As we all know, some businesses fail while other succeed. So, filing the proper paperwork for an LLC, limited liability company, limit your exposure to a lawsuit on personal assets as long as you do not use the company for personal use. If you do, you could be hit with a lawsuit. And the plaintiff can pierce the corporate veil. Piercing the corporate veil simply means that even though setting up a corporate business is to protect yourself from personal liability, if the court sees fit, they can bypass this and attach your personal assets.  

Takeaways:

Take time to consult an attorney about your business needs. Most attorneys provide free consultations. So, you want need money upfront. This consultation should provide a guidance of how to develop your business from a legal standpoint. Sometimes, a lawyer can provide insight from outside of the legal purview.

~  Attorney Ronnie O’Brien Rice, Ph.D.

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Website:  www.RonnieORice.com

 

Location: Birmingham, AL, USA

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