Tuesday, August 20, 2013

Do's and Don'ts of Starting and Operating a Business

       Many small business owners set up their business under the umbrella of a corporation or limited liability company to protect their personal property from risk or exposure.  However there are some things that must be done to maintain this shield of protection in using such entities.  The following are some things that should not be done and some things that should be done in maintaining this shield of protection from personal liability:

DO limit your liability to your investment in your company by incorporating your business in a corporation or organizing it as a limited liability company or corporation.
DO follow the "corporate formalities" to which you must adhere in order to preserve the limited liability afforded to you by virtue of having incorporated your business (annual meeting with minutes, maintaining a separate corporate account, signing contracts properly, etc.).
DO have a written buy-sell agreement with your business partners setting forth what will happen if one of you die or want to sellout.
DO have a written employee handbook and written employment agreements containing confidentiality and non-competition obligations if necessary.
DO apply for a federal tax identification number for your business as soon as your business has been incorporated.
DO set up a bank account in the name of this corporation or LLC and run all of the business revenues through this account (no intermingling of personal funds in the account).
DON'T ask or permit your employees to breach confidentiality or non-competition agreements with their previous employers.
DON'T sign company contracts in your individual capacity. Rather, sign them on behalf of the company as an officer of the company.
            DON'T put off buying insurance.

       The Williams Law Group can assist you in setting up your corporation or LLC properly and we can advise you on what needs to be done in order maintain this protection as you operate your business, such as preparing minutes and corporate resolutions.  Just give us a call at 479-633-8421 to speak with an attorney today. 

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