(612) 206-3701 info@lucerelegal.com

New or Established, Your Business Can’t Afford these Four Mistakes

Lucere Legal helps small business owners avoid common mistakes

It doesn’t matter if you only just finished your business’s ribbon-cutting or have decades of experience under your belt, the complexity of the legal system practically ensures that some business will blunder into legal hot water. Have you taken the steps necessary to ensure that it not be yours?

My years as a small business attorney have handed me countless cases of well-meaning business owners that made genuine mistakes, giving me first-hand experience in not only cleaning up the mess after the fact, but how to ward against it, too. With that in mind, here are the four most common legal mistakes that even the most seasoned entrepreneur might fall victim to:

  • Mixing Oil and Water

    Okay, the analogy isn’t perfect–your business and personal finances do mix extremely easily. In fact, many small business owners get their start and achieve all of their early growth with personal and business assets not just intermingled, but practically indistinguishable. But the consequences of this can be dire.

    Particularly as the business gets its footing, it is essential to form a legal business entity—a Limited Liability Company (LLC) or Corporation, for example—that will guard your personal assets from any lawsuit against your business. An LLC is especially well-suited to many small businesses for the relative simplicity of its operations compared to the various corporate entities.

    If you plan to pass ownership on to your children or business partners at some point, a business that is organized as an LLC or a corporation is easier to transfer and is more attractive to potential buyers.

  • Leaving Staff Agreements Unwritten

    All business matters are best kept fully documented, but one aspect that entrepreneurs routinely overlook is agreements with staff, whether they be employees or independent contractors. Those agreements accomplish several goals at once: the nature of the relationship is identified and detailed, they know what you expect from them, and they know what they can expect from you.

  • Failing to Comply

    Unfortunately, the multi-tiered nature of American government means the average business owner will be confronted by up to three sources of regulation: federal, state, and municipal governments. Even if you make a good faith effort to comply with one set, violating another can cause big problems, especially when it comes to business licenses.

    Operating without a license for your particular type of business risks more than simply losing your good standing in the community—hefty fines and even outright dissolution of your business entity, leaving you personally liable!

  • Forgetting to Exit Plan

    Many entrepreneurs want to see their business carry on after they are gone. Without the proper preparations, your business will die with you, or dissolve upon your retirement. Often, business owners rely on a business transition plan—if you plan to sell your business—or a business succession plan—if you would prefer to pass it on to the next generation.

Having a business attorney who understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper. If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today at 612-206-3701 or reach out via our online contact form to schedule a small business consultation session.

Image Courtesy of marin | FreeDigitalPhotos.net

Contact us to see how we can help you with Best Business Practices

You may also like . . .

The Six Steps to Take If a Client Files for Bankruptcy

Whether you call them customers or clients, you depend on them for everything. The money they put into your business is its lifeblood—and probably that of you and your employees, as well. But, just as a clog in an artery can lead to a heart attack, so too can the...

The 10 Essential Legal Tips for the Enterprising Entrepreneur

Fifteen years into the new millennium, the time is better than ever to set yourself on a new course by starting your own business. You have the idea, you have the experience, you have the determination--what else could you need? Well, a bit of advice on the plethora...

The plain-English guide for Minnesota small business owners

When it comes to business, ignorance isn't bliss; ignorance is risk.

There's a handful of legal topics that business owners should be familiar with, at least on a rudimentary level, to reduce the risk of having something horrible come out of left field.

This book is a legal guide to help you put the most common business legal issues on your radar, with enough information for you to be on the alert for when you may need to get some professional advice.

The intention in arming you with this information is so that you can proceed in business confidently and with fewer legal quagmires.

Do you have a cabin?

The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

If you haven’t done the planning in advance and made it legally binding, the family members (and their ex-spouses and new spouses) will have to work every detail out for themselves. If they can’t, what is likely to happen is a lawsuit called an action for partition that forces everyone to sell their interest. This lawsuit is expensive, and the costs of litigation will come out of the proceeds of the sale of the cabin, so to add insult to injury to those who wanted to keep the cabin but couldn’t afford to buy the others out, they are footing part of the legal bills in the lawsuit against them. Ouch!

It’s no wonder that family members stop speaking for years after the cabin conflict is “resolved.” You can’t make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That’s what cabin planning does, and it has the nice side effect of giving you peace of mind now.

That’s why Kimberly wrote The Minnesota Cabin Planning Guide and Workbook, and you can get a free electronic copy of her book on our cabin planning website, or you can find it in many county libraries in Minnesota, or you can get it on amazon.com.

Make An Appointment>

Join Our Mailing List

Subscribe to our newsletter list to get information and resources helpful to running your business and planning and managing your personal financial affairs delivered right to your inbox.

We don’t spam and won’t share your information with anyone, at anytime, ever.

Check out our podcast

The Small Business Buzz Podcast