Most democratic countries slowly become very inclined towards litigation. This can sometimes become a stumbling block for a business if you do not know how to manage your way around all the potential pitfalls that could land you in court on account of being sued for a loophole in the law that has been exploited.
Let’s face it, most of the time, business owners find themselves in court because they didn’t do enough homework on how they could protect themselves from harm or by not knowing enough to take advantage of the law.
Below are some tips that can help you as a business owner avoid finding yourself in court for one reason or another.
#1 Make use of good financial instruments and adhere to accounting standards
As a business, one of the most important things that you can do is to make sure that you keep accurate financial records that are in accordance with your countries financial standards. One of the biggest issues that holds back the observance and maintenance of good financial and accounting records is that transactions are not recorded on time, every time.
One way to mitigate this problem is to always ensure that payments are made by check or by credit card in order to allow easier tracking of transactions made. You could use the services of credit card companies to help you setup an online system to help you manage the transactions on your credit cards.
On the other hand, make sure that you issue receipts for any sales that you make. This way, you will avoid any allegations on financial mismanagement that could land you in court.
Each type of business structure has its purpose, advantages and disadvantages. It is important to know what the advantages and disadvantages of every business structure are, in relation to your particular business.
If you prefer, consult a lawyer in order to make the appropriate decision. You could choose from a sole proprietorship, a partnership, not for profit organization or one of the several different types of company structures.
#3 Ensure that all transactions, agreements and contracts are in writing and signed or stamped
According to the law, the most ironclad way to ensure that you can prove the terms agreed upon in any business engagement is to have it in writing and signed or accepted by both parties. This can help you prove your side of the story no matter what allegation is made against you or your business.
If you are going to create legal documents for your business by yourself, try and avoid too much legalese. Using too much legalese could open up loopholes that you are not aware of that could be capitalized on by your adversaries. On the other hand, it will be easier to enforce a legal document that is simple and to the point.
Other tips include the following: Make it clear to both customers and employees what your business policies are, get insurance and know the law and avoid any sort of dishonesty.