Top 10 Steps to Decrease Business Risk and Liability
As an owner or operator of a business, you have likely been advised to form a corporation or LLC (limited liability corporation) to protect yourself from risks and liabilities. While this is the most common way of limiting business risks and liability, there are a number of other steps a business owner or entrepreneur can take to reduce their expose to risks of operating a business regardless of the legal structure your business operates under.
Here are the top 10 steps you can take to decrease your risk of owning and operating a business – some of them don’t require hiring a lawyer:
- Use written agreements and contracts for all business dealings.
- Purchase insurance to limit your exposure to various risks.
- Prepare and follow an employee handbook.
- Have a clear social media policy.
- Set clear policies on who can bind the business to contracts, debts and obligations.
- Maintain accurate documentation and records.
- Keep personal and business records separate.
- Maintain and update all passwords and login information for systems, software, social media, website and banking. Provide access to employees on an as-needed basis only.
- Identify risks and implement procedures to minimize them.
- Schedule quarterly meetings with your lawyer and accountant to review any changes in your business and proactively address any concerns.
This article should not be relied upon as legal advice - the comments may not be applicable to you and may not be up to date. If you have any questions, you should contact a lawyer.