Starting a small business comes with a lot of responsibilities and legal hoops to jump through. Managing day-to-day tasks while also working to expand the business for the future. When you run a small business on your own and it provides income to your family, getting sued can be detrimental. Even small missteps can lead to legal battles or bankruptcy when not handled appropriately. 

You can avoid getting sued as a small business when you prioritize honesty and plan for the future. Working with a trusted legal team throughout different stages of your business can also help reduce your risk. Below are some ways you can protect your small business from legal ramifications and lawsuits. 

1- Choose The Right Business Structure

In order to build your business on a strong foundation, you will need to choose the right structure for your company. Sole proprietorship, LLC, or corporation are the common legal structures for a small business. LLC offers the most protection for your business and helps keep personal finances separate from the business. If you are operating outside of the bounds of your structure, another business or private entity could sue you for financial fraud.

2- Keep Everything In Writing

Keeping detailed records is essential for a functional business and can help you avoid legal disasters. Employment records, safety procedures, and transactions should all be written down and kept in physical form, just in case you need them for the future. Communications inside the business also need to be saved for legal considerations. Emails, internal communications, and notes from meetings may also come in handy if you get sued as a small business. 

3- Comply With Employment Laws

Each state has different employment laws and regulations that a business needs to follow. Wages, hiring age, and avoiding acts of discrimination will need to be followed by any business. Employment-related lawsuits are common for small businesses, so it is important to provide a safe work environment, create a clear employee handbook, and follow wage and hour laws your state has implemented. Hiring an HR manager or employment attorney can help you stay compliant.

4- Practice Honest Advertising

Misleading ads, scam marketing, or other false offerings can lead to legal problems for a business. Honest advertising will help boost your business, help you sell products, and keep your customers happy. If you falsely advertise a service or product, a customer could sue you for being deceptive. Businesses need to honor the promotions and guarantees to a letter in order to prevent unnecessary lawsuits. If someone doesn’t recieve what they thought they were paying for, they could take legal action to get what they’re owed.

5- Keep Personal Finances Separate

Mixing personal finances with business finances can put you at risk of financial fraud. Mixing expenses and financial documents could be messy when it comes time to file taxes each year. Opening a separate business bank account, using a company credit card, or keeping business financial records secluded in the office will keep your personal assets protected and business expenses above board. 

6- Practice Quality Customer Service

When running a business, committing to customer service will keep people coming back for your products and services. Unhappy customers are more likely to sue your business due to unresolved issues or low-quality products. Providing customers with an apology or help to make the situation right will de-escalate the situation and avoid you getting sued. Quality customer service doesn’t mean your business has to take a financial hit, but issuing a refund or replacement when necessary can provide a better future for your company.

Small Business Help From Our Legal Experts

Small businesses can be overwhelming when you are trying to handle everything on your own. Legal considerations, creating products, and managing customer concerns can fall through the cracks without professional help.
Our experienced business lawyers know how frustrating it can be for a business to go through a lawsuit. WW Partners can help you keep your business compliant and financially sound. Whether you are starting a small business or have a large corporation, we can help ensure smooth operation and compliance with local laws. We have tailored solutions for every client’s unique needs to help you avoid being sued in the future. Reach out to WW Partners to schedule a meeting and get better insight into business operations.

Instead of jumping right into a court process and suing another business, there is a lengthy process that you must go through to yield the best results. In fact, business litigation may not be the best solution to solving legal issues because of the lengthy process. Understanding the phases of business litigation will help you know how to complete the process with ease. We will take a deep dive into different phases in this blog. 

Pre-Filing And Investigation

The first phase in the process starts after you have exhausted other negotiation options. Once you decide to file a lawsuit, you and your lawyer will create a package of legal claims and begin to back them up with evidence. A team will need to gather sufficient evidence in order to make a case and defend your stance in court. You may proceed further in the business litigation process. 

Attorneys may also work to establish a settlement during the early stages to avoid going to court. Exploring possibilities to settle outside of court proceedings will save you time and money.

Pleadings Process

If lawyers determine the case should go to court, the plaintiff will then make an official complaint report. Next, the defendant will have a short period of time where they can answer and may even come back with counterclaims. This is also the stage where either party can bring more people into the lawsuit, whether it be those affected or witnesses. 

Discovery

Of all the phases of business litigation, the discovery phase is the most crucial. This is where all information and evidence are shared with both parties. All documents, interviews, evidence, and testimonies will be used by each party to build their court cases and defenses to be presented in front of a judge or jury. Discovery will help bring the strengths and weaknesses of the case to light and give teams a chance to motion to protect certain details of the case. 

Pre-Trial Motions

Before the case goes to trial, parties may find an indisputable fact that could turn the ruling in their favor. These summary judgments or other methods of mediation could put the case off from going to trial on the scheduled day, or altogether. Motions that have merit and are agreed upon by all parties could be the last phase of business litigation. If a motion is not accepted during pre-trial, the case will continue in court.

Trial

In this phase, all findings will be presented to the judge and jury, directed by lawyers. Parties may be called to the stand or asked questions by the opposing party. The trial will be a collective effort to come to a legal and equitable solution. Depending on the case, the phases of a trial for business litigation can be complex. It may take days, weeks, or even months to come to an agreed-upon terms, or for a jury to make their final decision. Proper preparation is crucial to making sure a trial goes smoothly and the jury truly hears your case. 

Another aspect of a trial that could extend the delivery of a verdict is the jury. Members of a jury in the United States are volunteers who have been screened and vetted for the specific case. While they are willing to serve, differences in background and opinion may cause them to be split on a final decision. A hung jury or even one that debates for many days can be stressful for a plaintiff and defendant.

Post-Trial Motions And Appeals

If a trial ends and you are not satisfied with the results, you can file motions or appeals to bring more evidence or fresh eyes to the case. If the court has made any errors or didn’t have enough time to sufficiently examine the case, your appeal may be accepted. It is important to note that once a post-trial motion or appeal is accepted, you have to go through all the phases of business litigation again. While the facts of the case are not reconsidered, bringing up the topic of mistakes or interference will be another lengthy process. 

Legal Insight From WW Partners

Our lawyers at WW Partners specialize in business dealings. We know that litigation is a tiring process for businesses of any size, which is why we do our best to help our clients have a fair and speedy trial. We can also help you look for out-of-the-box solutions to help mediate spending and hours spent in a courtroom. If you are looking for comprehensive legal help in Utah, please reach out to us by calling 801-699-0059.