Every entrepreneur dreams of growing their business and of making it reach new heights. Growing a business can be a tricky thing, especially for someone who does not come from commerce or legal background.
Hence, awareness is important for any entrepreneur who wants to grow their business, it can help them avoid legal issues with regard to their business in the future.
Below is a comprehensive list of 5 legal mistakes that one should avoid while growing one’s business:
1. Not getting appropriate legal advice at the right time
When starting a new business, one might be keen on cutting costs. Although a good practice in general, if one starts to cut these costs with regards to an attorney fee then one might be committing a big mistake.
If one plans on using just the online sources for drafting business-related contracts without the advice from a professional attorney then that can be detrimental. In such a case, one might even end up accidentally putting unfavorable terms for oneself and the company in the documents.
An attorney can help draft favorable contracts per the company’s specific requirements, which can prove beneficial in the long run. One can even appoint good attorneys from online sources such as mentioned here.
2. Taking loans that do not comply with securities laws
Securities laws are such laws which can help you in providing relief from excessive interest to be paid on loans. If you decide to take a loan for your company, make sure that the loan complies with securities laws, this will ensure that you are not bombarded with a heavy interest rate that can sometimes even extend up to thrice the amount of the loan taken.
3. Not establishing a clear idea about the role and equity of the co-founder
While establishing and growing a business, it is important to clearly establish the role, rights, and liabilities of all the co-founders in writing. Many family businesses and businesses started with friends tend to skip on this but it can cause huge ownership issues in the future for the business as well as the parties involved.
Hence, to avoid such a mistake one should have clear documents stating the role, kind of partnership, and the equity division between the parties.
4. Opting for litigation instead of alternative dispute resolution methods
Litigation is an expensive and a time-taking process, so in case your business is in a conflict with some other party, going straight for litigation can be a bad choice. Before opting for litigation, it is always advisable to explore other methods of conflict resolution like mediation and negotiation with the disputing party.
5. Not having a set of established terms and conditions
When selling any goods or services to a customer, businesses should ensure that they are making the customer agree to some established terms and conditions favorable to the business but also not very disadvantageous to the consumer. Having such terms and conditions agreed to by the customers is a great way to escape huge lawsuits for trivial reasons.