Contributing Author: Kristine M. Custodio, Advanced Certified Paralegal
Has your small business grown over the past year? According to the Small Business Administration (SBA), you are not alone - in the second quarter of 2016, California's economy grew at an annual rate of 2.2%, which was faster than the overall US growth rate of 1.2%. Many entrepreneurs and small business owners wear multiple hats when running their businesses and companies, especially during the beginning. As the business grows, so do the potential issues that surround such growth. I will discuss some of the common small business issues, below.
1. Written business plan and operation agreement
Document, document, document. You may have heard this time and again, but, documentation, such as defining roles and responsibilities of co-founders and partners, salaries, and future compensation, may stave off future litigation or disputes with regard to business administration and operation.
2. Deciding on what entity suits your business
Entity formation, is critical to future business success. The right entity formation impacts potential business litigation and taxation, among other key areas to run a successful business. In my previous blog post, I discussed the Differences in Filing as an LLC, Partnership, S Corp, Sole Proprietorship and Independent Contractor).
3. Protecting your work
Not obtaining trademarks, patents or copyrights to protect your work can cost you in the long run. The SBA Small Business Patents, Copyrights and Trademarks' blog provides an overview of how small business owners can protect their work.
4. Using standard form contracts
My colleague, Corey Schechter, recently blogged about Using Standard Form Contracts May Hurt Your Business. The main point of Corey's blog was this: An experienced business attorney will help you create a contract that is appropriate for your business setting, protect your interests, and conform to the law. This initial investment will give you peace of mind and may save your company from expensive litigation down the road.
Some of the most common business disputes involve contract issues between employees and employers, buyers and sellers, or lessors and lessees. Many of these contract disputes involve the use of standard form contracts that do not adequately represent the business owner's interests. These disputes may be avoidable with a contract that is tailored to the business and its specific goals.
5. Employment issues and failure to keep employee documentation
Once you hire your first employee, it is essential to follow and comply with state and federal employment laws. Cutting corners to save a few dollars usually ends with disastrous, expensive results. Be sure to know, understand, and follow regulations for your small businesses success.
If you have any questions about your small business, Butterfield Schechter LLP is here to help. We work for your success. Contact our office today with any questions you have on how we can help you and your business succeed.