Does your business need a legal checkup? The nearly universal rule is that it almost always is less expensive to resolve a legal issue early on – such as through a proper contract prepared with professional assistance – rather than trying to fix the issue later through litigation.
Unfortunately, many businesses do not seek out legal advice until it is too late for an easy resolution. If your company does not have a regular, outside attorney that it consults regarding its legal affairs, it might be time for a legal checkup
Here are a few of the items that should be considered during a legal checkup:
- Has your business properly maintained its registration with the Secretary of State? It is surprising how many companies fail to maintain their annual registration and have been administratively dissolved. The result is no corporate shield against liability. Most of the time, reinstatement is possible, but you will need to act quickly.
- Does your business properly maintain its corporate records? Does it have corporate minutes or resolutions in lieu of meetings? Many businesses fail to maintain these basic records, which places the corporation at risk
- Does your business properly maintain separate financial and other records? Are loans from shareholders or members properly documented? Again, the failure to maintain separate documents for the business from your personal records can place the business and, in this case, you, at risk.
- Does your business properly document its contracts? Are they written? Do these documents protect your company against making warranties? Have the terms and conditions been professionally prepared? Have they been reviewed recently?
- Does your business have procedures in place for handling and documenting potential claims? Are potential claims reported to your insurance company? Unfortunately, many insurers seem to look for reasons to deny a claim. If you don’t comply with the notice provision of your policy, you may be taking an unnecessary risk.
- Do you have procedures in place to comply with legal obligations regarding employment? Do you have a company handbook? Do you have procedures for dealing with employee complaints?
Please note that this is not intended to be a complete list. There are other issues that apply generally, and many others that may apply to your company’s particular circumstances.
How do you have a legal checkup? Find a good business attorney and schedule an appointment. Expect to spend some money to have it done correctly. Although not an insurance policy or guarantee, a legal checkup will probably save you large amounts of money in the future.