Starting a Business? Avoid these Pitfalls

Handshake and teamworkEntrepreneurs make a wide variety decisions when starting a new business. It is important to make the right decisions and get your entity off to a successful start. If you are a first-time business owner, you must understand the legal risks involved in each of your decisions. Below are a few common pitfalls you should avoid:

  • Relying on verbal promises. When you first start your company, people will make you promises that you want to rely upon, but you shouldn’t. Even if you have a personal relationship with the other person, you should still get the agreement in writing. You should not rely on your ability to work out any disputes later. Having a written contract in place can not only protect both parties, but it can also help preserve your relationship.We like to think that a contract is like a good fence. Good fences make good neighbors and good contracts keep partners honest and clear on what is expected. A buy-sell agreement between partners is critical to success.
  • Patent infringement. If your business is going to be based upon a certain idea, it is imperative that you conduct a search to ensure the idea doesn’t already exist. Being sued for patent infringement can be very costly. You also don’t want to invest in your idea until you are certain it belongs to you. A patent or intellectual property attorney can conduct a search to determine if your idea has been patented already or if you should take action to obtain a patent to safeguard it.
  • Unfair competition. Recruiting your competitor’s employees can seem like a good strategic move, but it could also result in litigation. You do not want to hire an employee to convert business from the competitor in violation of unfair competition laws.
  • Form of Business Entity. The type of business entity and tax elections for that entity are crucial decisions for a new company. Many people think that they can make those decisions later. But the formation of the company is the best time to make these decisions.

The business world can be full of legal pitfalls, so one of the most important actions you can take is to retain an experienced business attorney to help protect your best interests. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, business law and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.