Running a business can be challenging and exciting at the same time. Many business owners find the legal aspect of their business very complicated and difficult to navigate. While business laws and strategies can be complex, it is a vital part of running a successful business.
Many business owners think they don’t need to know about the legal issues concerning their business. This is not true and can be very harmful to the business in several ways. While business owners do not need to have a law degree or understand every aspect of business law issues, it is very important for owners to use business laws to their advantage to protect their company.
There are many legal myths business owners believe and they may be putting their company at risk in the process. Below is a list of the most common legal myths business owners face and what steps to take instead:
Myth 1: Business entities protect your assets. Forming a LLC or corporation offers some protection for your personal assets but your assets are still subject to litigation in most cases.
Myth 2: Business contracts need to have legal and complicated language. It is better to have contracts that are simple and easy to understand for all parties involved.
Myth 3: Liability insurance covers all injuries on your property. This is not true. Businesses can be held liable for injuries on their property if they were negligent, intentionally or not, and insurance policies often have stipulations about what they will cover.
Myth 4: Attorneys should only be a last resort. Businesses should consult a business law attorney to help with business plans and strategies. Business owners should not just use attorneys when a legal issue arises. Instead, consulting attorneys when planning will help prevent future lawsuits and other legal issues down the road.
These are just some of the common myths business owners believe and they may be putting their business and personal assets at risk. Understanding the way business laws will impact your business will increase the chances of your business being succesful in the future as well as deter potential legal problems.
Source: Inc., “Be as Sharp as Your Lawyer: 10 Legal Myths,” Steve Tobak