All businesses in California, whether big or small, make many different kinds of legal mistakes all the time. Some of these mistakes can cause huge losses for the company, and may be difficult to recover from. Learn about the most common legal mistakes that businesses make so that you can avoid them. Read through this article.
Neglecting the Importance of Written Agreements
All important agreements made in your business should be put into writing. Agreements that were made orally are very difficult to enforce and they leave the company with no recourse for compensation or legal action. Have a corporate attorney prepare your written agreements or contracts so that you are protected from potential problems that may arise out of an agreement.
Failure to Keep Corporate Records Properly
When corporate records are improperly kept, problems with the IRS may arise and you may difficulty raising equity capital. This can result in personal liability. Small businesses are usually the ones who commit the mistake of not keeping records. It is important to document meetings of the board or directors and stockholders. You must also be able to record stock issuances and document stock transfers. To make sure that corporate records are kept properly, you need to have a corporate lawyer in Orange County contracted.
Getting Involved in Litigation
You can suffer huge financial constraints with litigation fees. As much as possible, avoid litigation by considering alternative ways of resolving a dispute, such as mediation or arbitration. If the other party is willing to settle over a reasonable offer, consider taking it instead of spending time and resources on litigation. To be safe, it is best to have a business attorney represent your company. A business attorney will not only be there for litigation, but will also give you appropriate legal counsel to avoid lawsuits.
Choosing the Wrong Business Entity for Your Business
There are businesses that start as a general partnership when they should be a limited liability business entity. Many States establish that partners are jointly liable for debts and obligations in general partnerships. If the business gets into a problem, all investments in the business, as well as your personal assets, are at risk. It is best to have a corporate attorney in Orange County, CA to assist you in choosing the right business entity in order for you company to avoid problems.
Not Having a Corporate Lawyer for the Business
A corporate lawyer in Orange County is needed by all businesses in California. There are many legal issues that businesses face, and competent legal counsel can help them deal with these legal issues. And if legal problems do arise, corporate attorneys can help these businesses through them. Have a competent business attorney in Orange County, CA contracted to protect your company from potential legal problems in the future.