9 Reasons Your Small Business Needs a Contract Lawyer
As a small business owner, you must divide all potential expenses into at least three categories: unprofitable, necessary, and nice-to-have. The unprofitable expenses are those you should cut because they are costing you money. The necessary expenses are those that your business depends on – the ones that you can’t do business without. Finally, the nice-to-have category are the expenses that will make your business easier, help it to grow, and even potentially make it more profitable – if you can afford them.
Many people think a contract lawyer belongs in the nice-to-have category, but here are the reasons why you should put them in the necessary category.
Get All Necessary Contracts
One of the biggest dangers of contracts for your small business is not knowing when you need one. There are many potential business interactions where a contract can make a big difference for your business. But which ones need a contract, and which ones can you handle as a simple transaction with just a handshake and/or passing money over the counter?
Not using a contract can expose your business to some situations that can destroy it, while using a contract for every transaction can irritate people and cost you business opportunities. A contract lawyer knows which situations demand a contract.
Identify Potential Risks
Since we mentioned risks, it’s important to understand that contracts are potentially a double-edged sword. While contracts can potentially protect you from risks, they can also create risks if you sign a contract with unfavorable terms.
A contract lawyer can look at a contract to see if there are potentially dangerous terms in it. They will highlight these terms so that you can understand whether the risk of the contract is worth the benefit.
Protection of Your Interests
If you don’t know how to write or read a contract, it’s possible to give away far more in the contract’s terms than you mean to. You might make unreasonable promises, give away intellectual property rights, or fail to secure proper payment terms. The problems with the contract might be as much what is unwritten as it is what is written, so it takes more than just the ability to read and understand a contract – it depends on knowing what a contract should contain.
A contract lawyer can look at a contract and help you understand what it means in plain terms. That way, you can decide whether the contract is reasonable for your business or not.
Negotiate Better Terms
Once you’ve identified terms in a contract that aren’t in your best interest, you can start to negotiate better ones.
A contract lawyer knows what’s reasonable to ask for, and what you’re unlikely to be able to get. They can help you understand how to ask for what you want, which may be asking for more than you need so you have a good middle ground to settle on. Sometimes a contract lawyer will do the negotiating for you, or they can simply advise you on how to perform the negotiation, depending on your preferences and theirs.
Enforceable Contracts
Just writing terms into a contract doesn’t make them enforceable. One potential danger of a contract is that you might think you have one that protects you, but the terms of it make it unenforceable. Sometimes, unethical businesses might deliberately use unenforceable contracts to avoid having to comply with any terms.
A contract lawyer can look for common terms that might make a contract unenforceable. Standard boilerplate contracts online are full of these potential terms, especially since the law changes, and what was a good contract just a year ago might not be useful anymore.
Fewer Lawsuits
One of the benefits of contracts is that they can save you from lawsuits and other contract disputes by spelling out specific terms and expectations from each party. However, poorly written contracts can do the opposite by providing muddied terms that cause disputes and lead to lawsuits.
By clarifying the language of contracts, a contract lawyer can help you avoid the risk and expense of lawsuits.
Peace of Mind
Peace of mind is invaluable when you’re running a small business. You’ve got enough to worry about:
Can you trust that new manager to run the business properly?
Will you be able to pay your lease this month?
How many people will buy the new product you’re launching?
Being able to put contracts and lawsuits out of mind will make it easier for you to enjoy your days and sleep easy at night.
Free Yourself to Focus on What You Love
Contract law is a complicated area. It takes time to study and learn enough to be able to review your own contracts. Plus, going over your contracts in the degree of detail they demand can also take a lot of time and effort.
If you wanted to spend your time studying contract law and reviewing contracts, you probably would’ve become a lawyer. But you didn’t. Instead, you became a small business owner. Letting a contract lawyer handle the contracts will give you more time to devote to the business that you love.
This is often more than just a question of joy, too. You probably started this business because you have the talent to do things that nobody else can do. Your business depends on you having the time and energy to do that, rather than spending time on contracts.
Save Money
Many people think that hiring a lawyer to do anything is expensive, but the truth is that having a contract lawyer is likely to save you money by:
Avoiding lawsuits
Avoiding penalties
Getting better terms in your contracts
Protecting intellectual property
Helping you get paid
Freeing you to work on the things that only you can do
There are many situations where a poorly written contract will cost you money. A contract lawyer will help you avoid them, which can lead to considerable savings.
Help with Small Business Contracts in Denver
Since 2010, the Law Office of E.C. Lewis has been helping small businesses in the Denver area with their legal needs. This includes comprehensive help as a contract lawyer. She can help your business write contracts, review contracts, and negotiate contracts.
Elizabeth Lewis is dedicated to building relationships with clients. She knows that your small business is a very personal matter for you, and she is very attentive to your needs. Elizabeth will work with you to develop innovative solutions to legal problems that facilitate you running your business the way you want.
Some lawyers may not take your small business seriously, but Elizabeth is a dedicated small business lawyer. That’s her focus, and she has considerable experience with the specific needs of small businesses. She takes a very results-oriented approach and will work hard to ensure your business thrives with strong, well-written contracts.
Please contact the Law Office of E. C. Lewis today to schedule a consultation. We serve clients in Denver and throughout Colorado.
7 Ways to Protect Your Small Business from Lawsuits and Disputes
Building a small business up from nothing is a lot of work. Not only that, but it’s a lot of dreams, and it can be hard to see all your work and dreams destroyed because of a lawsuit or other dispute.
If you are trying to make a small business successful, you should protect it by taking these steps to head off expensive and time-consuming lawsuits and other disputes.
Consult with a Lawyer at Formation
The good news is you can head off many lawsuits and disputes right from the beginning. Consult with a lawyer when you are forming your business about the structure that best suits your situation and goals. At a minimum, a limited liability company (LLC) can protect your personal property from lawsuits directed at the business. Sometimes, though, a corporation is the best structure for getting investors involved, and it can help you avoid disputes by establishing a clear leadership structure and payment schedule for investors.
Your lawyer can also help you lay out important issues like who owns intellectual property that each person brings to the business, and how you determine ownership of intellectual property going forward.
Get Regular Legal Audits
Potential legal issues can come up at any time when you’re operating your business. It’s a good idea to check in with your small business lawyer about the progress of your business to make sure that you have a handle on all the potential legal repercussions of your actions and plans. It’s a good idea to check in at least once a year, but if the conditions of your business are changing fast, you might need to talk more often.
At a minimum, schedule a consultation with your lawyer before you make major changes in the business, such as hiring your first employee, buying commercial property, bringing on a partner or major investor, and more.
Have Your Business Lawyer Review Contracts
In addition to regular legal audits, it’s important to have your business lawyer look at all your contracts before you sign them or ask others to sign them.
Any contract you sign is full of potential grounds for disputes and lawsuits. Letting your lawyer look them over will help you understand what the contract is saying you can be sued for. Then you can decide whether that’s reasonable, and, if it is, make a plan to avoid getting sued for that.
In addition, contracts can be a way to avoid lawsuits. Contracts make expectations clear between you, your business partners, customers, suppliers, employees, and more. This helps avoid disputes caused by people having different expectations about how things should be handled.
Comply with Regulations
Failure to follow regulations can get your company slapped with fines and potentially shut down. It can also lead to lawsuits and other disputes. Failure to build to code, for example, can not only get you in trouble with regulators, but can lead your client to sue you for work that doesn’t meet standards.
We understand that regulations are complicated and understanding which ones apply to your business can be hard. That’s one of the reasons why you should consult with a small business lawyer regularly.
Follow HR Best Practices
Employees are another potential source of disputes and lawsuits. There are many things that can spark disputes with employees, including pay, benefits, hiring, firing, promotions, and more – not to mention the disputes employees have with each other that you can get roped into.
There’s probably no way to completely eliminate these types of lawsuits and disputes. However, following HR best practices can minimize your risks here. Make sure you treat everyone as equitably as possible, and make sure that everyone knows the policies when hired or as soon as you implement them.
Keep Good Records
Another way to head off lawsuits and disputes is by keeping good records. Keeping good records can help you make sure that you are complying with all your obligations to employees, customers, suppliers, and even regulators.
Having good records to reference will also help you avoid disputes. If someone claims that you didn’t fulfill your obligations, you can show them your record of what happened to make it clear that you actually did. Showing people you do business with that you keep careful track of things will make them less likely to try to cheat you, and more likely that you can easily resolve any honest dispute without it turning into a major confrontation.
Likewise, it’s important to keep good records when it comes to dealing with your employees. Keep records of their performance, any praise of them, as well as any complaints about them. Have a record of when you informed them (and potentially reminded them) about any important policies. That way, you can have good support for your actions in terms of promotions, firing, bonuses, and more.
Be a Good Person and Work with Other Good People
It would be naïve to suggest that you can avoid getting sued by being a good person, but the truth is that it can’t hurt. If you treat other people fairly, never try to take advantage of them, and on top of it you are nice to people at the same time, you are less likely to be sued.
If you cheat people, try to cut corners, or try to get more out of a transaction than you are contractually due, people are going to catch on, and then they will come for what they are owed. Being nice also helps – business partners are more likely to let you slide every now and again if there’s some reason why you can’t deliver what you promised.
At the same time, pick your business partners carefully. Do business with people who aren’t constantly looking for a way to hold you over a barrel, and you’re less likely to be sued.
Protect Your Business from Lawsuits
When it comes to avoiding lawsuits and other destructive disputes, a small business lawyer can be your most reliable partner. They can help you understand the potential legal pitfalls of any of your actions, and they can help you avoid them or position yourself for a favorable outcome.
Since 2010, the Law Office of E.C. Lewis has been helping small businesses in and around Denver to navigate the complexities of formation and growth. Elizabeth Lewis is dedicated to developing relationships with her clients and has seen many of them grow from one-person operations into major corporations. Elizabeth is focused on the needs of small businesses, and she can provide the guidance you need to help your business avoid costly lawsuits and disputes.
If you are looking for legal assistance with your small business, please contact the Law Office of E. C. Lewis today to schedule a consultation. We serve clients in Denver and throughout Colorado.
Starting a business online is becoming very popular. People like the relative freedom to locate their business in a convenient place while reaching a worldwide audience. There are also opportunities for reducing your overhead by not having a physical customer-facing storefront.
However, if you are considering starting an online business, you need to be careful not to cut too many corners, as this could get you into trouble. In particular, running afoul of online business laws can be expensive, so it’s still worthwhile to work with a small business attorney for your online business. Here are some of the laws that your online business needs to be aware of.
Sales Taxes
If your business is selling merchandise (and, in some cases, services), you will need to collect sales tax. How much sales tax? That depends on the local laws of where your customers are. Most US states require that online businesses collect sales tax for sales; however, the specific thresholds that trigger the requirement differ. For most states, you must accumulate $100,000 in total sales before you are required to collect sales tax, but often the requirements are different if you are selling to customers in the same state.
If you don’t know what the sales taxes are for your online business, you might end up with a hefty, unexpected tax bill and could face criminal charges.
Secure Payments
Online businesses are required to make sure that their transactions are sufficiently secure to protect customers’ payment information. The industry standard for this is using a payment gateway to provide for secure payment. These are included in most e-commerce platforms, and you don’t need to know too much detail unless you are trying to build your own e-commerce payment gateway.
Data breaches can be very costly for your business, leading to a major fine. In addition, you may be held liable in civil lawsuits if it turns out your negligence contributed to the data breach.
Privacy Protection
It’s not just payment information that you need to protect. Customers have a reasonable expectation that you are going to protect any and all information that they give to your website, either intentionally or unknowingly as you collect data about their visit.
You need to provide customers with information about the data you collect from them and how you use that data. You will also need to provide options for opting out of some types of data collection. Exactly what form the disclosures and opt-out forms take can depend on where you’re doing business, where your customers are, the information you’re collecting, and the type of business you have. Anything that might be considered a medical business, for example, must meet very strict privacy requirements.
Age Restrictions
In addition to privacy protection for all customers, you must be aware of limitations on collecting information from children. In the US, online businesses are banned from collecting personal information from children aged 13 and under.
If you are going to collect personal information from customers, you need to have an age field that either prevents children from filling out personal information forms or ensures that the data from those forms will not be collected. Otherwise, your business might face stiff penalties.
Home Business Restrictions
We mentioned that many online businesses reduce overhead by not having a physical customer-facing location. Often, people will run these businesses out of their homes. However, it’s important to be aware of laws restricting businesses in residential areas. There may be limitations about how much of the house can be given over to the business, how many people or delivery trucks you can have coming and going from the house, and other possible restrictions.
Failure to comply with these regulations may lead to fines and criminal penalties, with the potential of getting your home business shut down.
Marketing Restrictions
Many people think that the way to market their product is to make amazing claims about what it is and what it can do. While doing this may help you move more product, it can also get you into trouble.
Making false claims about your product can lead to heavy fines from numerous government agencies and potentially expose you to civil lawsuits as well. This is especially true if your product falls under the jurisdiction of the Food and Drug Administration (FDA).
Terms and Conditions
Many online businesses will want to have strict legal contracts that define their relationship to their customers. This is true whenever you are engaging in a relationship for any sort of subscription service, long-term commitment, or expensive service or merchandise.
However, every business should have a sort of informal contract with customers, which they describe in their terms and conditions. This describes what responsibility you take (or don’t take) for customers who visit your website or purchase your merchandise. It also stipulates things like your return policies and what warranties you offer for services and merchandise (if any).
If you fail to make these conditions clear, customers and website visitors may allege that you are failing to meet implied warranties or common law duties of care, leading to potentially expensive lawsuits. You might also be liable for fines and penalties, depending on local laws.
Business Formation Documents
Just because your business doesn’t have a physical location, that doesn’t mean it shouldn’t have business formation documents. In particular, if you want to protect your personal property with a structure like a limited liability company (LLC) or some type of corporation, you need documents drawn up to that effect. These will need to be filed with local authorities. Sometimes, these documents might need to be filed in any state where you are doing business, or, at least, enough business to qualify for sales tax.
Get Help with Online Business Laws
Although starting an online business can be simpler and easier than starting a physical store location or other in-person business, there are still many legal tangles and requirements that you have to be aware of if you want to avoid expensive legal problems. The best way to make sure your business is compliant with local, state, and federal business laws is to consult with a small business attorney.
Let Elizabeth Lewis handle the legal complexities of your online business. Since 2010, she has helped many businesses in Denver to understand the complex legal dimensions of their business. Elizabeth is dedicated to relationships. She wants to develop a long-lasting relationship with your business so that if any legal issues arise, you will know who to contact. She is focused on the needs of small businesses, which are very different from those of larger businesses. With her results-oriented approach, she has helped many small businesses get through their difficult early stages, and she is ready to help your business, too.
To learn how Elizabeth can help your business, please contact the Law Office of E.C. Lewis today for a consultation. We serve clients in Denver and throughout Colorado.
Federal Injunction Currently Suspending Corporate Transparency Act Reporting Requirements
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction on enforcement of the Corporate Transparency Act (CTA). This was overturned on December 23 and filings were resumed with a later date for compliance. And yet again, this was overturned resulting in another stay. Where is it now? In the hands of the Supreme Court. So, if you haven’t filed yet, keep your eyes and ears open to see what happens in the highest court in the land because if you’re a business that was initially required to file a beneficial ownership information (BOI) report based on the terms of this law, the legal battle will impact your filing requirements.
The Financial Crimes Enforcement Network (FinCEN) has issued the following statement on the BOI Report filing page on their website: “Please note that beneficial ownership information reporting requirements have been affected by a recent federal court order. The Department of the Treasury is appealing that order. In the meantime, reporting companies are not currently required to file a BOIR and are not subject to liability if they fail to do so while the applicable order remains in force. However, reporting companies may still opt to file a BOIR.” If you are a legal junky, there is more information available at https://www.fincen.gov/boi that goes through all of the court cases that are currently pending throughout the country in regard to the CTA.
If you own a business that has been impacted by this injunction, it’s important to pay attention as the appeals process plays out. While it may take several months – or potentially longer – for this process to resolve, it’s possible that the Supreme Court may overturn the injunction. Depending on the resolution of this injunction, reporting requirements and all associated deadlines may change at a moment’s notice. Timely response to new requirements may be necessary to avoid potential penalties for noncompliance.
What Businesses are Impacted by the Corporate Transparency Act?
Corporations, LLCs and other business entities that were required to file a document with a Secretary of State or a similar office at their time of establishment were required to file a BOI report under the terms of the Corporate Transparency Act unless the business qualifies for an exemption. While there are several different exemptions delineated by the original law, it’s important to understand that most small businesses are not considered to be exempt. Businesses covered under this law won’t need to file until the appeal on the injunction is resolved.
How Should My Business Proceed While this Case is Pending?
It’s important to be aware of the implications of this injunction and pay attention to when it is resolved to know whether you will need to file and how soon the deadline will be. Keep in mind that you’re still able to file the BOI report for your business while the injunction is in place and in some situations, it may make sense to just file the report now.
If you don’t have a problem making the ownership of your company known to the government, then go ahead and file the BOI report now to avoid the risk of costly fines if the injunction is lifted and you fail to file in time afterwards. But if you need to keep the identity of the ownership of your company private, you should hold off on filing until the injunction is resolved and any changes to the law due to the new presidential administration and Supreme Court rulings are finalized.
Elizabeth Lewis Can Help Ensure You’re Compliant with All Laws Impacting Your Business
The BOI reporting injunction isn’t the only legal matter impacting your business. There have been several other changes to Colorado laws impacting businesses in recent years, and it’s important to work with an experienced small business attorney who can ensure you remain compliant. If you haven’t had your company documents, contracts and employment agreements reviewed by a small business attorney recently, it may be time to check in with a lawyer and make sure your business is still compliant with all current laws.
Elizabeth Lewis is a small business attorney providing comprehensive legal services for businesses in Denver and throughout Colorado, and she can help you remain compliant with all state and federal laws. Elizabeth is closely monitoring the latest developments with the Corporate Transparency Act injunction and will keep your business informed as the case progresses. This ensures you’ll remain compliant in the event that filing requirements are reinstated. Elizabeth can also review all your contracts and business documents to ensure they’re adhering to the most recent changes in Colorado law. This will provide you with peace of mind that you’re in compliance and won’t incur costly fines that could easily be avoided.
Contact us today to schedule a consultation. The Law Office of E.C. Lewis serves small and medium-sized businesses in Denver and throughout Colorado.
The success of your business depends on the talent and hard work of your employees. However, working with employees can also represent a legal minefield. There are many situations where you can get into legal disputes with your employees, which can create an unhealthy working environment. Employment law disputes may be expensive, too – many small businesses may not have enough revenue and reserves to survive these types of disputes.
Due to the serious consequences associated with these types of disputes, it’s best to consult a lawyer beforehand to design contracts and procedures that will minimize the risk of trouble and put your business in a favorable position should an employment law dispute arise.
Discrimination
Discrimination disputes occur when an employee alleges mistreatment because they belong to a protected class, including:
Race
Gender
Sexual orientation
Disability
Age
Religion
Employers should understand and comply with federal and state anti-discrimination laws to avoid even the perception that they are discriminating against employees in these categories. This is one of the few situations where you might get into an employment dispute with someone who isn’t even an employee yet. It’s important to review your hiring practices and establish robust objective hiring criteria that you always adhere to and can cite if a potential employee claims discrimination.
It’s also important to monitor discourse in the workplace. If you permit the free use of sexist and racist language, these can make employees feel discriminated against whenever things don’t go their way and provide evidence of a discriminatory workplace in the event of a dispute.
Harassment
Harassment is when a person is subjected to hostile, insulting, or discriminatory treatment because of a protected category.
Sexual harassment is the most familiar type of harassment. It occurs when a person is subject to sexual comments, unwanted touch, or an expectation that they will provide sexual favors in exchange for promotions, raises, or other favorable treatment in the workplace.
However, people can claim harassment on the basis of other protected categories, so it’s important to control the workplace environment so that everyone feels safe, protected, and welcome.
It’s a good idea to establish a way for employees to bring up their concerns without going to a direct supervisor, who may potentially be the source of harassment.
Salary Disputes
As much as people might love their jobs and love working for you, everyone wants to get paid a fair salary for their labor. Getting paid is the main reason why people work in the first place, so it’s not a surprise that salary disputes are common.
People might dispute whether their salary conforms to federal, state, or municipal minimum wage laws. You will have to show that either their position isn’t covered by those laws or show that their salary actually does conform to the requirement.
People might also claim that they’re not being paid overtime properly. This is one of the most common wage disputes, and it comes up regularly. Make sure you know when your employees are entitled to overtime and be prepared to pay it when appropriate. When you discover that you’ve made a mistake and didn’t pay overtime when you should have, credit it to your employees before they start a dispute.
Employees might also allege that you haven’t calculated their salary properly. Listen to their complaint and check your math. This might be as simple as not understanding how your payroll software works – if you’re a small business owner, you’ve got a lot on your plate and mistakes happen. If it is an error on your part, admit the mistake and pay what’s owed.
Whenever there’s been a mistake in wages, check to see whether you might also owe your employees additional compensation such as interest to get compliant in the eyes of the law.
In addition to wages, people might dispute whether they are getting the benefits you promised. Make sure comprehensive education about benefits is part of your onboarding process. If people have questions, answer them in a non-confrontational environment.
Wrongful Termination
When you fire an employee, you need to make sure that you are complying with federal, state, and local laws. In particular, you need to make sure that you clearly document the reasons for termination so that you can show that an employee was fired for clear reasons that were made plain to them and not because they belong to a protected class.
One common allegation in wrongful termination disputes is that termination is in retaliation because a person is a whistleblower. If a person alleged fraud, unsafe conditions, or a discriminatory workplace, bringing their concerns to an outside authority, you must act very cautiously before you terminate them.
Noncompete and Nondisclosure Agreements
Noncompete agreements are intended to protect you from losing valuable expertise and knowledge when employees leave your company to go work for a competitor. These agreements have become very popular, but they are also highly contentious. Courts have given different verdicts on what terms are enforceable in noncompete contracts. Upcoming rule changes might make these agreements even harder to enforce.
A similar type of contract is a nondisclosure agreement, often called an NDA. These are also intended to protect your company’s secrets and are generally more enforceable.
In either case, it’s recommended that you work with a small business lawyer when drafting contracts to make sure they will function as intended.
Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) is a well-intentioned but complicated piece of legislation that allows a lot of opportunities for misunderstanding. It’s very common for employers and employees to have different interpretations of what the law does and does not require of each party. As a result, it’s common for parties to allege a violation by the other party.
Work with a lawyer to understand the law and develop a clear brief for your employees so they understand the law, too. This will help head off any disputes.
An Employment Law Attorney Can Help You Avoid Disputes
Colorado employment law attorney Elizabeth Lewis understands that it’s much better for your business to avoid disputes than to try to resolve them once they arise. Since 2007, Elizabeth has been using her results-oriented approach to help small and medium-sized businesses succeed. This includes a diverse array of legal services, including employment law.
Elizabeth can help you and your employees understand the law so that you can avoid disputes. Once disputes arise, she can help you resolve them without having to resort to an expensive courtroom battle.
To learn how Elizabeth can help your business, please contact the Law Office of E. C. Lewis in Denver today.
Small businesses struggle to balance their revenue and expenses. When you’re running on a narrow profit margin, the sudden addition of fines and penalties can sink your business. When these penalties come up, you may not have the thousands or tens of thousands of dollars you are being asked to pay, especially when you are given a short period to make the payment.
It’s important to avoid small business fines and penalties, but how do you do it? Here’s some advice for keeping your business on the right side of the law and avoiding major fines and penalties.
Research Your Requirements
Before starting a business, you should research the requirements your business will need to meet to avoid fines and penalties. Ignorance of the law will not protect you from meeting its requirements. Only understanding what regulations affect your business will help you comply and avoid penalties.
Some of these requirements are going to be general. Any business that plans to operate in a certain area will have general requirements related to taxes, incorporation, and reporting its beneficial owners. However, there are also specific requirements based on the industry you will be in. Try to understand these issues as best you can.
You don’t have to do all this research yourself. The Small Business Association (SBA), your local Chamber of Commerce, and even city and state officials can help you understand the regulations that will apply to your business and how to meet them.
Consult a Lawyer
When it comes to important business regulations, don’t trust your own research exclusively. Also know that the people you talk to in various places might give you incomplete or inaccurate information. If you want to make sure you really understand all the requirements your business must comply with, talk to a small business lawyer.
An attorney who is specifically trained in small business law will be your best resource for identifying requirements and achieving compliance.
It’s also a good idea to have an attorney available for consultation as your business grows and changes, as this can lead to changing requirements.
Get the Appropriate Licenses
Although some people get fines and penalties because they don’t know the law, many other small business owners know that they are operating their business without the appropriate licenses for their industry.
We understand: the licenses for your business seem overly expensive. It’s tempting to just do without. However, the cost of getting the proper licenses is typically much less than the penalties you will face for not being licensed.
There are also business benefits to being licensed. It will allow you to get the proper insurance for your business without paying exorbitant rates. It will give you access to better-paying clients who are looking for properly licensed professionals. Plus, it protects you from liability in some situations.
Not to mention the fact that you won’t always be looking over your shoulder and wondering which client, employee, or competitor might be considering reporting you as an unlicensed professional.
Pay Your Taxes
This might seem like an obvious piece of advice, but tax infractions are among the most common reasons why businesses face fines and penalties. In part, it’s because the tax payment requirements for businesses can be a little different from individual taxes. Many businesses are expected to pay estimated taxes throughout the year, and failing to pay these on schedule can lead to fines.
There are also additional taxes you might have to pay for payroll and other situations. Make sure you know the taxes you have to file and the schedule for payment, then follow it to avoid fines and penalties.
Set HR Up Right from the Start
One place where small businesses can get into trouble is when they start hiring employees. Like getting professional licenses, some small businesses look at the legal requirements for having employees and think they would rather avoid those requirements, such as registration and getting workers’ compensation.
Some small businesses try to skirt these requirements by treating employees as contractors, but this will lead to trouble in the future if employees can’t meet all the tests to be considered contractors. Again, it’s expensive and complicated at first, but it’s better than risking the penalties you might suffer otherwise. Take the responsibility of setting up your HR department right away, even if it’s just you doing it. This will make it easier to add new employees in the future and can improve the profitability of your business in the long run.
Track Major Business Changes
As your business changes, so will your legal requirements. Keep a running log of the changes your business is going through and talk to a lawyer about them on a regular basis to make sure you’re staying compliant.
How often is regularly? During your initial consultation, your lawyer will likely flag key events that might require changes within 30 days or so. Otherwise, a quarterly or even semi-annual consultation should be sufficient.
Get Help from a Small Business Lawyer in Denver
If you are starting or running a small business and are worried about the potential for fines and penalties, let Denver small business lawyer Elizabeth Lewis help. She’s been helping small businesses to establish themselves and grow since 2007. Elizabeth is dedicated to the success of her clients and is prepared to give you the personal attention you need to truly be successful. Elizabeth has been working exclusively with small and medium-sized businesses and understands how their needs differ from those of larger entities. She is focused on results and knows what it takes to help her clients achieve their goals.
For help avoiding fines and penalties in your business, please contact the Law Office of E.C. Lewis today. We serve clients in Denver and throughout Colorado.
