Whether you have been in business for decades or are just starting a new business , there are some legal issues you need to consider periodically to make sure your hard work and success are adequately protected . As the son of two small business owners in Houston , Texas , I ’ ve seen first-hand the importance of planning ahead and learning from the experience of others . A trusted attorney is an invaluable resource for business owners who want to protect their employees and their investment in time , energy , and money . Failing to Properly Protect the Business Under Texas law , there are many types of business entities : corporations , limited liability companies , limited partnerships , limited liability partnerships , etc . Each offer various benefits to the business and its owners , including tax advantages , management options , and liability protection . Failing to file the proper documents with the Texas Secretary of State , beginning work prior to filing the documents , or choosing the wrong entity structure can harm the business and expose the company and its owners to unnecessary risk and liability . While it may be less expensive to use do-it-yourself legal services to form business entities , failing to choose the appropriate entity form and failing to ensure all documentation is properly prepared can have severe legal consequences .
Failing to Read the Contract
Most everyone has signed a contract or clicked “ accept terms ” on an internet website before fully reading the contract terms , but this can be a significant mistake for business owners . As a trial lawyer , I routinely represent companies involved in disputes over contracts , the terms of which often surprise the business owners . For example , arbitration clauses can limit a company ’ s ability to bring a lawsuit in court , certain waiver provisions may prevent a company from recovering particular types of damages , and attorney ’ s fees provisions may affect the company ’ s ability to recover legal fees .
It is important to have an attorney review lease agreements , employment contracts , purchase and sale agreements , significant vendor contracts , master service contracts , deeds , and other significant legal contracts and documents .
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The terms of those agreements will most likely govern how the parties conduct themselves , and in the event of a dispute , how the issues will be resolved . It is less expensive to have a competent attorney review important legal documents before they are signed than it is to find yourself in a lawsuit after the fact because you failed to read or understand the terms .
Failing to Evaluate Risk Many people dream of starting a new business or expanding an existing business into new growth areas , but few people plan effectively to make those dreams become a reality . It is important to have a business plan with achievable goals , clear timelines , and an accurate evaluation of the risks associated with new ventures . When evaluating risk , you should consult with an attorney to fully understand the potential liabilities and harm that could occur if the venture does not go as planned . For example , if the new venture involves a formal or informal general partnership , the partners will be jointly and severally liable for all the debts and liabilities of the partnership under Texas law . There are ways to limit such exposure , but if you are not aware of the legal issues and potential liabilities , you will not even know you have an issue that should be addressed . A qualified attorney can help business owners evaluate risks and suggest alternatives to help minimize them before problems arise .
Failing to Manage the Details
The nitty gritty details of bookkeeping , hiring and firing personnel , making sure all federal and state taxes are timely and properly paid , ensuring all employee pay is lawful under the federal Fair Labor Standards Act , and protecting important business information such as customer lists , business volume by customer , and pricing information , are often overlooked aspects of business ownership . But , these issues can lead to substantial legal problems when not effectively managed . Again , solutions exist for all these legal issues . The key is to seek legal advice before problems arise .
Failing to Protect Data
A company ’ s most valuable asset is often its network of customers , referral sources , and contacts . In building
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Brent R . Doré
these networks , companies accumulate invaluable data that should be protected . According to the Identity Theft Resource Center , there have been 556 data breaches exposing over 17 million records in the first six months of 2018 . Failure to properly protect consumer data can expose companies to significant litigation . Additionally , new data protection laws are imposing ever-increasing legal duties and responsibilities on businesses . It is imperative that companies discuss their technology needs with an attorney and other professionals to ensure proper steps are taken to safeguard against breaches . If you are starting a new business , evaluating next steps for an existing business , or simply enjoying the fruits or many years of hard work after having developed a successful business , consider hiring competent legal counsel to help you evaluate legal risks and make recommendations as to how best to avoid them . In 1735 , Benjamin Franklin penned , “ An ounce of prevention is worth a pound of cure .” The same is true today when it comes to preventing mistakes that can result in significant legal problems .
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This article is for informational purposes only and not for the purpose of providing legal advice . You should contact an attorney to obtain advice with respect to any particular issue .
Brent R . Doré is an attorney with Harris , Finley & Bogle , P . C . He is a member of the Texas Bar College . His practice focuses on commercial litigation , oil and gas , contracts , and fiduciary litigation . He can be reached at bdore @ hfblaw . com or at 817-870-8754 .
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JULY 2018 PARKER COUNTY TODAY
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