5 Ways to Proactively Protect Your Business

It’s no secret that starting a business takes dedication, and there are lots of hoops to jump through before you can begin operations. Many new business owners, however, aren’t aware of the challenges and risks they could face until it’s too late to protect themselves.

Fortunately, there are several strategies to help you get ahead of risk and proactively defend your small business. If you have questions about any of the following considerations and how they could affect your business, The Law Group of Northwest Arkansas PLLC is here to help.

Call 479-316-3760 today or contact us to learn more about our business law services.

1. Choose the Right Business Structure

Protecting your business begins with choosing the right structure. While many small businesses begin as sole proprietorships or partnerships, these structures can leave business owners open to major risks, including putting personal assets on the line. This means if you’re sued or owe a debt as a sole proprietor or partner, you may be personally liable.

However, other business structures offer more protection to business owners. For example, limited liability companies (LLCs) are a popular option for small businesses because they exist separately from their owners. With this type of entity, you enjoy limited liability, protecting your personal assets from debts or legal action against the company. Corporations are another good option to shield you from personal liability.

2. Obtain Necessary Insurance

Choosing the appropriate structure for your business can protect you from risk, but it doesn’t totally shield you. Business insurance can protect you from financial losses resulting from unexpected events such as lawsuits, property damage, natural disasters, or other situations that can lead to lost income and cause business interruptions.

Business insurance is an added expense but is tax-deductible in many cases. In addition, you may be required to carry certain kinds of insurance depending on the size and type of your business. For example, the federal government requires businesses with employees to have workers’ compensation, unemployment, and disability insurance. In Arkansas, business owners must carry workers’ compensation coverage if they have more than three employees.

What Kind of Insurance Do You Need?

With so many types of business insurance available, it can be difficult to know how much coverage you need for your business. Talk to an attorney and shop insurance companies to find the best policy for your needs; consider coverage for things like:

• General liability
• Product liability
• Professional liability
• Property damage
• Commercial property protection
• Workers Compensation
• Cyber Insurance

3. Register and Defend Your IP

Intellectual property, such as your brand, business name, and business processes, are some of your most valuable assets. Leaving them unprotected could open the door to potential litigation which can take time to resolve. The best way to protect your IP is to secure patents, trademarks, and copyrights for all of your original works. Protecting your IP gives you the exclusive rights to use, reproduce, and profit from your creations while protecting you from unauthorized use or infringement by others.

While you don’t need to know the ins and outs of IP law to protect yourself, it’s a good idea to understand the differences between terms, if only to keep from accidentally copying someone else’s work. A business lawyer can help you put IP protections in place and handle the more technical aspects such as monitoring for potential infringements and taking legal action against infringers.

4. Maintain Business Compliance

After you’ve formed your business, you must maintain good standing with the state in which your business is registered. In Arkansas, your business is considered to be in good standing if you’ve complied with all state requirements and paid all necessary taxes and fees.

A certificate of good standing from the state is very often required to obtain a loan or other type of financing for your business and is beneficial if you’re seeking to do business with another company or a government agency.

Keep Good Records

Detailed and organized record-keeping strongly supports your compliance efforts and should make it easier to remain in good standing with the state. Good records streamline tax preparation and provide financial clarity, so you can make informed decisions about the best course of action for your business. Just as importantly, keeping track of documents and agreements can be crucial to helping you avoid a lawsuit.

5. Work with a Business Lawyer

Working with an experienced business lawyer in Arkansas is one of the first and best steps you can take to proactively safeguard your business from a legal standpoint. From forming your business to providing ongoing support, an attorney can be invaluable in reducing your risk, reviewing contracts and other documents, and helping you navigate industry-specific regulations.

If legal challenges arise, your lawyer will represent your best interests when resolving disputes to minimize disruption to your business operations.

Want to Protect Your Business? Call TLGNWA Today

With so many demanding aspects of running a business, it can be overwhelming when an unexpected obstacle comes up. Though you can’t plan for every possible scenario, having a knowledgeable, experienced business attorney in your corner will help you create a strong safety net saving you time, money, and stress.

The Law Group of Northwest Arkansas has years of experience advising business owners like you. We’re here to provide personalized counsel, answer your questions, and guide your business toward success.

Call 479-316-3760 or contact us today to schedule a consultation.