23 Quick Actions You Can Take Today To Provide Legal Protections For Your Business Forever

This blog post is all about taking action.business legal protection

I’m hoping to inspire you that it’s not that hard to take action to set up legal protections for your business.

What’s great about most of these steps is you can set them and forget them. You set them up once and you’re done, but you benefit forever. Pretty cool, huh?

Two of the biggest barriers to taking action are (a) time, and (b) not knowing what steps to take.

It’s no wonder a lot of business owners leave their business vulnerable, because it’s very confusing when you are a business owner to know what you need to do to protect your business.

I’m here to break down that barrier and explain what you need to do in clear and straightforward steps.

I took a lot of time to write down 23 different, discrete actions you can take today (or at least over the next week) to make sure your business is on stable legal ground.

You don’t have to do all of them, but make sure you do at least one, OK? Just one.

I know you can do it.

 

Action #1: Set up a LLC (2 to 8 hours)

Simple Steps:

  1. Research what legal entity is right for your business. The main forms are sole proprietorship, LLC, Partnership, and Corporation. I generally advise my clients that a LLC is the easiest, cheapest and most flexible form.
  2. Form the entity, either by using an attorney or by using a self-help website such as LegalZoom  or U.S. Legal Forms.
  3. Transfer ownership of any existing business assets into the new entity, open a new bank account in the business name, and run all future business in the name of the new legal entity (this is a key step which many business owners often forget.)

How this can change your life: A LLC can help protect your personal assets from liability, makes it easier to sell the business, allows you to spell out management powers if you have partners or investors, and gives your business greater legitimacy to the outside world.

Additional resources:

Disclaimer: Please note that the links for the LegalZoom and other websites in this post are affiliate links and California Law Report does earn a commission through any purchases that you make – which allows us to continue providing you with advice. If you do make a purchase, we appreciate it a lot!

Action #2: Copyright your content (2 hours)

Federal copyright registration helps you to establish a public record of your copyright ownership and allows you to file a lawsuit for copyright infringement in federal court if someone infringes on your copyright. You may also be able to get additional penalties such as your attorney’s fees if you are successful.

Simple Steps:

  1. Identify what content you want to copyright. Copyrights protect original works of authorship such as written content, books, songs, photographs, and other creative works.
  2. Register your copyright, either by hiring an attorney or by using a self-help website such as LegalZoom  or U.S. Legal Forms.
  3. Change your website, blog, and any marketing materials so that they identify your work as having been copyrighted in the year you copyrighted it.

How this can change your life: Copyrighting your content protects you against others who might take something you’ve written or created and try to use as their own. Copyrighting this work provides you with protections controlling how your work is reproduced, distributed and presented publicly.

Additional Resource: 5 Reasons to Register Your Copyright

 

Action # 3: Trademark your business name (2 hours)

A trademark is a legal protection for your business name. It can also be used for your business slogan, logo or symbol.

Simple steps:

  1. Identify what you want to trademark. If you are using your personal name in your business name, you may not need to register a trademark.
  2. Register your trademark, either by using an attorney or by using a self-help website such as LegalZoom  or U.S. Legal Forms.
  3. Change your website, blog, and marketing materials to indicate that your business name has been trademarked.

How this can change your life: Your business name, logo and slogan may be one of your most valuable assets. You may have put thousands of hours into building your business name, and not only should someone else not be allowed to benefit from that effort, but someone could use your business name and make you look bad, which could hurt your business.

Registering your trademark creates a public record of ownership of your business name, slogan, logo or symbol and gives you the right to file suit in federal court, if necessary.

Additional Resource:  How to Trademark Your Business Name

 

Action #4: Set up a separate bank account for your business. (30 minutes)

Simple steps:

  1. Shop around to a couple of local banks which offer business checking, and compare their offerings. Visit the bank where you want to open a business bank account. Although you may be able to open a business bank account online or by phone, you can make the process simpler by showing up in person to open the account. Many banks require photo identification or business documentation, so by showing up in person you can get these items out of the way.
  2. Make an initial transfer. After you have opened the account and made your initial transfer, you should start using this account religiously and should no longer use your personal account for business purposes.

How this can change your life: Separating your business affairs and your personal affairs is a key step to protecting your personal assets from liability. If you commingle your business and personal assets using one bank account, there is a risk that a court would treat that business as an extension of you personally, leaving your personal assets like your car and your home vulnerable.

Additional Resource: America’s Top Small Business-Friendly Banks (from Entrepreneur.com)

 

Action #5: Call Your Insurance Broker to Make Sure You Have Enough Insurance Coverage For Your Business (30-45 minutes)

Simple Steps:

  1. Call your insurance broker and schedule a time to speak with him or her. If they are local, you may want to sit down at your office or a coffee shop.
  2. Explain everything your business does and make sure you are covered in case of liability.
  3. [Optional] Sign up for personal “umbrella” coverage which provides an over-arching policy that covers you in case another policy does not, sign up for long-term disability coverage, and sign up for business interruption or income insurance.

How this can change your life: Making sure you have adequate insurance is relatively cheap considering the protection it provides.

Although the last three types of insurance are optional, as a business owner or entrepreneur, these are three areas you can’t afford to pass up. Business Interruption or Income Insurance is disability insurance for your business. It provides coverage if there is a temporary disruption in your business’ income.

Additional Resource: Types of Business Insurance (via the U.S. Small Business Administration).

 

Action #6: Hire a bookkeeper. (2-4 hours)

Simple steps:

  1. Read about the general framework of how to hire an employee.
  2. Place an ad on Craigslist or Elance for a part-time bookkeeper. Depending on the size of your business, you may or may not need someone full time.
  3. Interview and hire the bookkeeper.

How this can change your life: One of the most difficult aspects of running a business is keeping track of accounting details throughout the year. Yet if you ignore your bookkeeping, you will be on the path to disaster. Hiring a bookkeeper will free up your time to focus on more important details, such as finding more customers, expanding your services, or growing your business.

Additional Resource: Hiring a Bookkeeper or Accountant

 

Action #7: Get One Form Contract And Stick to It. (60 minutes)

Simple steps:

  1. Pull out a copy of a recent contract you entered into between you and a customer. If you haven’t used a contract before, or if you are new to the business, ask around to competitors who are in the same line of business. Although some may refuse, citing competitive advantage, you may find a competitor who is happy to help you out. You can also try networking groups through LinkedIn.
  2. Read through the contract, cover to cover. Is everything relevant? Has your business changed over the years and you need to update your contract? Make any changes that need to be made.
  3. Contact an attorney and see if they will agree to review the contract for a couple of hours of their time. A couple of hours of lawyer time (even if it’s really expensive!) is a great investment for your business.
  4. Use this form contract for every new customer in the future.

How this can change your life: Most businesses can get by with just one form contract for most of their customers.

One form contract is not as good as having a customized, tailored contract every time you enter into a new contract, but it’s better than nothing.

Having a written contract with your customers will decrease the chances of a misunderstanding, will improve your chances of getting paid on time, and will improve your clients’ overall satisfaction.

 

Action #8: Make sure you have obtained all necessary city, county, state and federal licenses and permits

Simple steps:

  1. Research what business licenses and permits you are required to have for your business. You can start by calling your local city and/or county clerk’s office. Sometimes the Secretary of has a handbook for business owners.
  2. Depending on your business type, there may be additional requirements for licenses or permits. If your industry has an industry association, they may be a good source of information about what is required.
  3. Pay for any and all licenses and permits.

 

How this can change your life: If your business does not have all of the licenses and permits it may need, it can land you in a heap of trouble.

Of course, no one likes paying additional fees to obtain licenses and permits, but that is the price of doing business.

Cities or counties may have stiff fines for non-compliant businesses. It’s a headache you don’t need in your life.

Additional Resource: California Secretary of State’s Starting a Business page

 

Action #9: Review your internal and external legal requirements when issuing stock certificates, holding board meetings, recording minutes, electing directors, and/or filing documents (2-3 hours).

Simple steps:

  1. Gather up all of your company’s Articles of Incorporation, Articles of Organization, and bylaws. Whether you paid a lawyer to incorporate or form your business, or if you used an self-help website, you probably also received a closing letter which spelled out in plain English how you should manage your business throughout the year.
  2. Review the requirements to be sure you have been in compliance with the requirements.

How this can change your life: If you are not complying with your business entity formalities, then you are putting your personal assets at risk. In the event you are sued (and of course we certainly hope you never are), then you risk having a court treat your business entity as if it didn’t exist – like it was an extension of you personally.

By reading through your company’s foundational documents, and making sure you are following your own internal rules, you will hopefully put an end to any mistakes.

Additional Resource:

 

Action #10: Draft a Terms of Service Agreement (3 hours).

Simple steps:

  1. Research what other companies in your industry use as their Terms of Service Agreements.
  2. Either adapt a similar Terms of Service Agreement or ask your attorney to draft a Terms of Service Agreement for your business.
  3. Incorporate your new Terms of Service anywhere you can – into contracts with clients, into your website or blog, into literature which you give to clients, etc.

How this can change your life: A Terms of Service agreement won’t prevent you from being sued, but it will help establish that your customers or readers were fully informed.

Additional Resource: 8 Things You Should Include in your Terms of Service Agreement

 

Action #11: Fire your bad clients

Simple steps:

  1. Take out a list of your clients and identify at least three clients who are a constant source of trouble for your business, either because they demand an excessive amount of resources, or because they are extremely nit-picky, or because it is a constant struggle to work with them.
  2. Add up the amount of time, energy and resources these clients consume, and compare it to the amount of revenue they bring in to your company. Chances are they take up much more energy and effort than they should.
  3. Figure out whether you could survive financially without these bad clients.
  4. If you could survive without these bad clients, call them up and tell them you are “streamlining” your business services, you can no longer provide them with the level of service they deserve, and therefore you can no longer provide them with services from your company. Be apologetic and never burn a bridge.
  5. Send a letter confirming your conversation in writing.

How this can change your life: Bad clients not only make your life miserable, but they also are a potential source of liability. You should trust your instincts.  If you have a really bad feeling in your gut about a client, and they are taking up more time than it’s worth, it’s better to part ways with them than to wait for the ticking time bomb to explode.

Chances are this client isn’t worth the money, or the time, or the energy they consume. Firing these bad clients will give you more time to find new clients and decrease the chances of your business being exposed to a “bad grapes” lawsuit from a disgruntled former client, which would really take up your time and energy.

Additional Resource: Top 10 Ways to Fire the Client From Hell

Action #12: Ask a Business Attorney to Meet with you for a 60-minute Check-Up (1-2 hours)

Simple Steps:

  1. If you have an attorney already, call them up and ask for a 60-minute checkup to make sure you are running your business in a way that protects you and your business.
  2. If you don’t have an attorney, ask around for recommendations of a good business attorney in your area. Research the attorney’s website, blog, writings, etc. to see if they are a good fit for you.
  3. Go in to meet with the attorney and bring a list of questions.

 

How this can change your life: You go see the dentist every year for a check up, don’t you? (OK, maybe you don’t but you know you are supposed to, just like you are supposed to floss.) If your teeth need a check up, don’t you think your business could use a check up as well? You will probably get at least one piece of advice that will save you whatever the attorney charged you to meet with them. That will make the whole visit worthwile.

Additional Resource:  Top 10 Rules for Finding the Right Small Business Lawyer For You

 

Action #13: Research and stay current on tax issues that affect your business

Simple steps:

  1. Call up your Accountant or CPA and find out if there have been any significant changes to tax law which affect your business since you last met with them. If your business has a professional association, then you might want to check out the website of the organization for your particular field, which may have a legislative update.
  2. If there have been any changes to the tax law as it affects your business, work with your accountant or CPA to make whatever changes you need to make to be in compliance.

How this can change your life: Of course, no one likes paying taxes. However, taxes are a fact of doing business. The last thing you need is a big tax bill that was unexpected at the end of the year. Make sure this doesn’t happen by keeping up on changes in tax law.

Additional Resources:

 

Action #14: Get a Non-Disclosure Agreement.

Non-disclosure agreements (also known as confidentiality agreements) is a legal contract between you and another person preventing that person from sharing certain confidential information, such as trade secret information or proprietary information about a product offering.

Simple steps:

  1. Obtain a basic non-disclosure agreement form, either from an attorney, from a self-help website such as LegalZoom or U.S. Legal Forms, or out of a book such as Nondisclosure Agreements  (available used on Amazon for a few bucks).
  2. Draft the non-disclosure agreement (NDA), including a brief description of the information that you seek to protect.
  3. Before you meet with a person where you may discuss your proprietary information, ask them to sign a copy of the NDA. You may find that it’s easier to get someone to agree to sign the NDA if you keep it short and to the point.

How this can change your life: You should be doing everything you can to protect your business’ competitive advantage. At the same time however, it’s necessary to disclose some information about your company and its products or future plans in order to do business. Having a Non-Disclosure Agreement will prevent the chances that a person you are meeting with will disclosure your confidential information to someone else.

Additional Resource: Non-Disclosure Agreements (from Nolo Press)

Action #15: Trademark your logo (60 minutes)

A trademark can provide legal protection for your business logo. While it’s not necessary, it can protect your logo from someone else using it.

Simple steps:

  1. Identify what logo you want to trademark, and make sure it is eligible to be trademarked. To be eligible, your logo must be used, or intended to be used, in commerce to identify and distinguish your goods from other goods, and to indicate the source of the goods. If you aren’t using your logo in commerce or don’t intend to, then you may not be able to trademark it.
  2. Register your trademark, either by using an attorney or by using a self-help website such as  LegalZoom  or U.S. Legal Forms.
  3. Change your marketing materials and your website or blog to indicate that your business logo has been trademarked.

How this can change your life: Trademarking your logo won’t absolutely prevent another party from ripping off your logo, but it will give you a big “stick” to beat them off.

A federal trademark has a number of advantages, including it provides notice to the public of your claim of ownership, there’s a legal presumption that you own the mark nationwide, and the exclusive right to use the mark on or in connection with the goods or services set forth in the registration.

It also allows you to sue in federal court, if you choose to do so.

Additional Resource: How to Trademark a Business Name

 

Action #16: Develop an employee handbook (3 hours)

Simple steps:

  1. Research ways to draft an employee handbook by reading a couple of books on the topic. I recommend Nolo’s Create An Employee Handbook.
  2. Meet with a labor attorney to make sure you are providing your employees with adequate meal and rest breaks, paid time off, appropriate overtime, etc.
  3. Hire an attorney to create a handbook for you, or draft an employee handbook using the CD which comes with the Nolo guide. Select the provisions which are relevant to your business.
  4. Provide a copy of your business’ new handbook to all existing employees, and give a copy to new employees.

How this can change your life: Disgruntled employees can be a huge headache and liability for your business. They can even completely cripple your business.

Having an employee handbook will help you to defend against any angry employee who wants to pursue a claim that they defamation claim, harassment claim or discrimination claim, all of which can be common in business. You can reduce your risk of liability from employee lawsuits by having a clear employee handbook.

Additional Resource: Employee Handbooks from the Small Business Administration

Action #17: Add A Disclaimer to Your Website or Blog.

Simple steps:

  1. Research different types of website or blog disclaimers. A great resource is How to Write a Blog Disclaimer  which includes a long list of different issues you should consider, such as how you should draft your disclaimer if you are offering files or software for download, if you are using photographs that are not yours, and a statement regarding whether the website or blog reflects your personal views.
  2. Draft a disclaimer that includes all of the issues which are relevant to your blog. You do not need to reinvent the wheel.
  3. The more complex the blog or website, the more likely you should have a lawyer review your disclaimer.

How this can change your life: A disclaimer may or may not be important, depending on your blog topic. If you are blogging about your favorite parks in the Seattle area, then it probably isn’t very important. However, if you are giving advice which may lead your readers to make significant decisions which affect their financial future, you should have a disclaimer.

Having a disclaimer will not prevent you from being sued, but it will protect you and your blog by clearly communicating to your audience what services you are and are not providing. A disclaimer is your opportunity to explain to readers of your blog all of the reasons why they should not rely solely on your advice, and they should seek additional advice about their particular situation.

Additional Resource: How to Write a Blog Disclaimer

Action #18: Add a Privacy Policy to Your Website

Simple Steps:

  1. Download the Easy Privacy Policy Plugin (Note: you must have a WordPress.org blog to do this. If you don’t have a WordPress blog, read our previous post: How to Create a Blog for Business in Five Simple Steps).
  2. Choose from the various clauses you want to include in your privacy policy.
  3. Activate the policy and you’re done!

How this can change your life: There are a number of state, federal, and third party company requirements for privacy policies, so if you have a website or blog, you should have a privacy policy.

In addition to complying with the law, having a privacy policy increases transparency and will give you greater credibility as a honest and credible business person, which is a good reputation to have in business.

Additional Resources:

 

Action #19: Automate Your Bills So You Don’t Pay Them Personally (60-90 minutes)

Simple Steps:

  1. Make a list of all of the bills you pay for your business each month.
  2. Contact the bank you use for your business checking account and find out if they have free bill pay. If your bank doesn’t have free bill pay, then contact each of the companies who bill you each month, and ask them what you need to do in order to pay your bills automatically through them. You can start by logging in to your online account for each company; there may be a form you can download and fill out immediately.
  3. Make sure you schedule your payments to come out of your bank account on a date that you will have enough funds available!  It’s best to have your bills paid 2-3 days after you receive funds into your account.

 

How this will change your life: How does this step provide “legal protection” for your business? If you have automatic bill pay set up, you are less likely to miss a payment, meaning you are less likely a creditor will pursue you for unpaid amounts owed.

Additional Resource:

 

Action #20: Read 3 Chapters from a Self-Help Legal Book (60-90 minutes)

Simple Steps:

  1. Check out elf-help legal book from the library, or order one from Amazon. Pick a book relevant to your industry.
  2. Read through at least two chapters over the next two weeks.
  3. Take notes on a separate legal pad while you are reading through the book (especially if it’s a library book – you don’t want any fines now, do you?).

How this will change your life:  In this internet-connected world, we sometimes forget the value of sitting down with an old fashioned paper book. There is a wealth of knowledge to be gained from taking the time to read through self-help legal books, which are written in clear and understandable language so that they are easy to follow.

Additional Resources:

 

Action #21: Cancel a Monthly Bill (15-20 minutes)

Simple steps:

  1. Pick a bill. If your business pays for any newspapers or magazines that are unnecessary, these are the low hanging fruit.
  2. Call Customer Service – Look on your last over-priced bill and call the customer service phone number.
  3. Tell them you’re calling to cancel – Do not yield, they will be trained to talk you into staying.
  4. Ask for a confirmation number or code – Before hanging up, get a confirmation code or number that verifies your account has been cancelled. Write it down.

How this can change your life: Would you rather fire an employee, or reduce a cost? I suppose it depends on the employee. But too often businesses need to make layoffs even though they could avoid a layoff by reducing unnecessary costs.  Saving money by reducing bills will definitely put more money in your pocket.

Additional Resource: How I Cut my Comcast Bill by 33% (Without Losing Any Service)  (from GetRichSlowly.org)

 

Action #22: Make Sure Your Advertising Is Not Deceptive (15-20 minutes)

Simple steps:

  1. Look at all of your current advertising, either in print, on TV, or on the web.
  2. Make sure none of your current advertising is in any way deceptive, misleading, or false.
  3. If you have any advertising that is deceptive or even misleading, change it!

How this can change your life:  Most states have consumer protection laws against false or misleading advertising.  By reviewing your advertising periodically you will ensure you are not running any false or misleading advertising that could subject you to a lawsuit or state or federal fines.

An advertisement can be unlawful if it tends to mislead or deceive, even if it doesn’t actually fool anyone.

 

Additional Resource: Consumer Protection Laws and Your Business (Nolo Press)

 

Action #23: Be a Happy Business Owner (0 minutes)

Simple steps:

  1. Look in the mirror and remember why you ever wanted to own a business.
  2. Remind yourself that you are lucky to be where you are. If you do not feel lucky, then ask yourself if you would feel luckier working for someone else.
  3. Grab something that makes you happy. It could be a picture of your spouse or boyfriend/girlfriend, your son or daughter, or something related to a hobby you love. Keep that item close.
  4. Whenever you get in a down mood, look at the item that makes you happy.

How this can change your life:  If you are not happy, you will not give your business everything you got.  You will begin to become disgruntled and your quality of work will slip. Your business will slide.

Additional Resource:  Happy Business Owners are Successful Business Owners

*****
Now that’s a really long list.  I’m definitely not saying you have to do every item on this list.

Start small. Start with one. But pick something, and do it.

You will definitely be glad you did.

If you found this list valuable, please share it on Facebook or Twitter using the floating links on the left side of the page so that others can benefit as well.

Finally, do you have any great, quick action suggestions we missed? Please share your suggestion(s) in the comments below!

(I want to give credit to Adam Baker of Manvsdebt who came up with the original idea for the format of this post.)

 

Related Reading:

 Photo credit: Flickr/jurvetson

 

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