Legal Risks Business Owners Should Avoid

When you start a new business, there is always some level of risk involved. However, it is wise to take every precaution possible to minimize the risks as much as possible. You can typically predict several of the potential liabilities involved in your industry or type of business, but there are also many that are unexpected and unpredictable.

The following are a few of the most common legal risks new business owners should avoid in order to protect the future of the company:

• Relying on verbal agreements. When you are first getting started in your business, you will likely have many people tell you they want to help you out. However, trusting an oral promise or even a handshake agreement is extremely risky. You can dig yourself into a hole by relying on this type of deal and it can negatively impact your business. Additionally, being able to prove that an oral agreement existed is very difficult. Thus, business owners should require all business contracts to be in writing.

• Unfair competition. As a new business owner, the idea of stealing away employees from competitors may be appealing. However, before you do so, you should confer with a lawyer regarding the applicable state’s unfair competition laws. In other words, you want to avoid litigation that results from a new employee providing your company with clients, customers or other valuable information from their previous employer.

• Intellectual Property (IP) infringement. Don’t make the mistake of thinking your new business idea hasn’t been claimed by somebody else because a Google search doesn’t turn up anything. You should have a business attorney conduct a patent, trademark or copyright search to ensure that your idea will not infringe on another party’s protected IP. You do not want your new business to be served with a “cease and desist” letter or, even worse, a lawsuit claiming you infringed on another party’s rights. It does not take much time or money to verify that the name of your business, its logo, and the products or services it will provide do not violate another party’s IP.

The above list is not exhaustive, so to learn more, contact us for an appointment. An experienced attorney at Nielsen Law Group is available to help with all your business matters. You can schedule your initial consultation by calling (480) 888-7111 or submitting a web request here.