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6 Ways to Protect Your Business from Legal Problems

You've heard that knowledge is power. And when it comes to protecting your business from legal problems, knowledge of the law and how it affects you is essential. The following six tips will help you protect your business from potential legal issues and ensure that your business is able to run smoothly.

Make sure your contracts are clearly written, with all details spelled out.

One of the most important things you can do to protect your business is to make sure that all contracts are clearly written, with all details spelled out. This will help prevent confusion and allow everyone involved to understand exactly what they are getting into.

Contracts should also be signed by both parties and should include:

  • The names of each party involved in the transaction (including yourself)

  • A clear description of what services/goods will be provided by each party

  • The total cost for those services/goods

If possible, have an attorney review any contracts before signing them so that you don't inadvertently agree to something that could cause problems down the road!

Keep careful records of all financial transactions involving your business.

As a small business owner, you're likely to encounter many situations where you need to keep careful records of all financial transactions involving your business. For example:

  • If the IRS audits your return and finds that some deductions are incorrect or missing, it could mean additional taxes for you. If you have been keeping accurate records, you can easily avoid this kind of situation.

  • If there's ever a dispute between two parties over whether they owe money or have been paid in full, accurate records will help resolve any disagreements quickly and efficiently (and without going through lengthy court proceedings).

  • When preparing for an audit by state tax authorities or local government agencies that require businesses within their jurisdiction to submit financial statements as part of their annual compliance requirements, having good documentation makes it easier for auditors who are unfamiliar with your accounting practices to make sense out of what they see on paper - which reduces errors on both sides during this process!

Finally, keeping accurate records of financial transactions helps you to make better business decisions. For example, knowing the amount of cash on hand at any given time and how much revenue you’ve generated over a given period of time can help you evaluate whether or not your business is on track to meet its monthly or annual goals.

Get a lawyer to review any type of contract you're planning to execute, such as those for advertising or other services.

If you're not sure about the contract and its terms, get a lawyer to review it. A lawyer can also help you write contracts for services that you do understand. A lawyer will be able to explain any legal jargon in a contract and make sure it protects your interests as well as those of any other party involved with providing services or products on behalf of your business.

Lawyers are also trained in drafting documents that meet state laws and regulations regarding how contracts should be written, so having one look over any type of agreement can save you time and money down the road if there are issues arising from an incorrect document being used for contracting purposes.

Avoid doing business with people who have a bad reputation or who have not paid their bills in the past.

Don't do business with people whose reputation for honesty and integrity is questionable. If you have any doubts about whether your new client will pay their bills, then don't take them on as a client!

Know your rights when it comes to hiring and firing workers, and make sure they're covered in writing in their contracts.

If you're hiring a freelance worker, make sure the contract includes a clause that specifies how much you will pay them and when. Also, make sure they have signed off on this agreement before they start work.

If you're hiring an employee, make sure their contract stipulates what hours they'll be working and what benefits they receive. If you're firing someone, make sure they have been paid in full before they leave. If an employee has not been paid, then you may be liable for their salary as well as any other benefits stipulated in their contract, otherwise it could become a legal case.

Don't skip going to court if you ever find yourself in a court case situation

If you're sued by a customer or another company, don't skip going to court. It's better to face an issue head-on than let it drag on without any resolution or compensation for damages.

If you do decide to settle out of court, make sure that all parties are in agreement on terms before entering into an agreement with them. Also, make sure that you have consulted with an experienced lawyer who can help guide your business through this process and ensure compliance with local laws and regulations regarding such agreements.


We hope that these tips will help you prevent some of the most common legal problems faced by small businesses. If you want more information on how to protect yourself from lawsuits and other legal issues, contact a lawyer who specializes in business law. They can help you develop the best strategy for dealing with any potential problems that may arise in the future.

You can also subscribe to the Blaze Mastermind on our TablexTribe app to get access to our legal partner (at an exclusive rate), who can help you strengthen your business' legal standing.


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