Common Small Business Mistakes

Not Getting an Experienced Corporate Attorney
Every growing business faces issues that require the services of an experienced attorney. Issues such as stock-option plans, employee negotiations, state and federal tax rates and intellectual property rights all require a corporate lawyer experienced in representing start-up and emerging companies. And though such attorneys charge more than generalists do, the money you spend on experience will save you time, aggravation and money in the long run.

Ignorance of the Law
Just because laws are numerous and complex doesn't mean your business can ignore them. Learning a little about the following basic areas of the law can keep you out of legal hot water:

• Basic contractual rules
• How to protect your ideas and inventions (copyright, patent, trade secrets)
• Major employer-employee laws
• Securities laws affecting how you can raise capital for your business
• Governmental regulation of your industry.

Not Clearly Documenting Partners' Rights and Responsibilities
Founding shareholders or partners should have an agreement that answers the following questions:

• How much time and effort is each person expected to contribute?
• How much capital will each person contribute?
• What happens if the business needs more capital?
• What happens if one person leaves the business?
• What happens if one person dies?
• Will the stock or partnership interest be bought back from the estate of the deceased or from the person leaving the business?

Getting Involved in Litigation
Litigation fees can be astronomical, and they can quickly drain management time and resources. Consider alternative means of dispute resolution, such as mediation or arbitration. Or, if a reasonable settlement offer is available, think seriously about taking it instead of spending more time in litigation.

Ignoring Intellectual Property Issues
Even low-technology companies have intellectual property issues that may be important for the future success of the business. For example, do you require your employees and consultants to sign Confidentiality and Invention Assignment Agreements? Have you registered for a trademark for an important company logo or product? Do you put copyright notices on your written information? Are your trade secrets adequately protected?

Contact our Indiana Business Lawyers and obtain a free case review!

	Did You Know?
	Annual Budgets are a component in small business For an existing business, this is a realistic budget for the current fiscal year based on past income and expenditures. It includes anticipated changes in income and spending that may occur during the year. For a start-up business, this is a realistic projection of the income and costs of doing business for a year.