When forming a new business, you have decisions to make and risks to evaluate. Many entrepreneurs tend to focus on financial risks, but those are not the only hazards that might threaten your operations.
Legal risks are present from the formation of a business throughout its entire lifecycle. Mitigating these risks early on can help your company get a good start toward success. Let’s look at two examples of legal risks new businesses often face.
Using boilerplate contracts and agreements
Downloading contract templates and filling in the blanks is easy, but boilerplate legal documents may pose more problems than they solve. One problem is they fail to address the unique needs of your business.
A possibly bigger problem is that they may be outdated and not reflect the most current laws, opening your company to liability issues. For example, contracts that do not clearly define your responsibilities could leave you open to a breach of contract claim.
Having insufficient employment law knowledge
Your company might not need employees at first, but it is wise to plan for an eventual staff when forming the business. Once you begin recruiting employees, remember your duty to treat them fairly from the job marketing stage throughout their tenure. Unfortunately, it is easy to violate employment laws if you don’t know enough about them. For example, using certain language in job ads or during the hiring process could invite discrimination allegations before you even open your doors.
Contract and employment law problems are among the top legal risks new Georgia businesses undertake. Knowledge and legal guidance during business formation may help you minimize your risks.