Tips for Small Businesses to Avoid Costly Mistakes
Idaho business attorney Wyatt Johnson highlights common mistakes small business owners make and how to avoid them. If you are looking to build an LLC, check out this video instead.
This is for small business owners who have already formed their LLC and are already out doing business. For example, you’re arranging flowers, building houses, digging ponds, so you’ve got your company, but are you doing ‘business’ as your company? If you don’t know, you probably need to come and see your business lawyer.
Let’s take a look at some of the things you can do to avoid costly mistakes as a small business owner.
Operate As Your Company
A properly formed company is a separate legal entity from its owners. That means that legally, that company is just as much a person as you or me. It’s really important that if you’re operating with that company, you operate as that company.
What does this mean? It means that contracts, agreements, and business must be done in the company’s name. One mistake that I see small business owners make time and time again is they have their company, but they sign off on bids, contracts, and proposals in their own name. They have bills made out in their own name, they pay bills in their own name. If you’re doing it in your own name, you’re not doing it in your company, and you’ve just lost all the benefits of that company.
Separate Your Personal & Business Finance
Another problem involves whose checking account you are using, especially in a very small business where you’ve got one owner. If you’re writing checks for the company and for yourself out of the same account, you may have problems with your company, and you may lose all the protections of your company.
Understand Liability
Another issue is who is getting into trouble. One of the reasons that you form a company is it’s a form of insurance. A limited liability company (LLC) is just that – it limits the liability of the company.
Say something goes wrong. It’s why you form the company. Life’s not perfect; something that you’re doing in your business goes wrong. Say it goes wrong in a big way; say the problem is big enough that you have to wind up the company and close it. If you’ve been working out of the company and were doing your business as the company when you did that, the disaster ends with the company, and you, the owner, can go out, dust off, pick up, and pick up, and start again. If not, the problem goes probably to the company, probably to you, the owner.
Get Assistance from a Small Business Attorney
Running a small business can be challenging, and legal issues can be complex and overwhelming. But don’t let that scare you. Paying attention to the legal aspects of your business is crucial. And if you’re not sure where to start or what to do, that’s where Johnson May Law comes in. Think of us as your legal check-up. Our experienced lawyers can review your forms, contracts, and business structure to ensure you’re operating in compliance and taking advantage of all the benefits available. Don’t risk making costly mistakes — come see us and let us help you protect and grow your business.
Contact our Boise or Twin Falls office, and we can help you make sure that your business is in order with the correct contracts and information.
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