Schedule a check up for your business
Preventative measures reduce costs, minimize risk
Tom Bolt
A business check up can help avoid disputes, injuries, damage claims and even strengthen your defenses when lawsuits are unavoidable.
Just as regular medical checkups can spot potential problems, periodic “business checkups” can help small businesses anticipate, and guard against, legal liabilities, and excessive costs.
During a legal checkup, your lawyer examines business records and practices and recommends steps to protect the legal health of your business.
This check up may uncover problems that should be corrected. For example, it may reveal you should revise sales contracts to limit warranties and liabilities or revise the employment application process.
Here are some things to consider:
- Legal handbooks ensure compliance.
Legal handbooks inform you about the laws governing day-to-day activities and help companies comply with territorial and federal regulations.
They usually summarize the law and contain compliance checklists. Compliance failures can result in bad publicity, distracting lawsuits, and costly fines.
The most popular legal handbooks cover areas that can be hazardous to a company’s legal health—compliance with antitrust, consumer protection, labor, and product liability law.
Your lawyer can recommend inexpensive legal handbooks, which are available.
- Contracts prevent legal problems
Your lawyer can help you negotiate contracts,which will protect your rights and help avoid disputes with suppliers and customers.
Your lawyer can help prepare a letter of intent that avoids unintended liabilities.
Letters of intent are frequently used when negotiations are beginning to document the basic terms of the business deal and simplify further negotiations. It is important to consult your lawyer before signing a letter of intent to protect your bargaining position in later negotiations.
It is crucial to review contract documents to make sure they reflect the business deal. They should cover contingencies that may not have been discussed during the negotiations and “preventive” provisions like remedies for default, procedures for handling disputes, provisions limiting your liability, and provisions indemnifying your company against injury and damage claims.
- Lawyers minimize risks
Your lawyer can help your company adopt proper procedures to take upon receiving legal documents, and provide checklists of “do’s” and “don’ts” for handling disputes. Checklists can be prepared for various situations, such as when a business deal goes sour, when an employee is injured, when a customer complains about a product or service, or when a government investigator calls the company.
- Spotting legal trends
Advance knowledge of trends enables you to increase revenues and control expenses. Business laws are sometimes liberalized or enforcement relaxed, with new programs enacted — sometimes opening strategic opportunities for businesses. On the expense side, toughening of laws and tightening of enforcement may lead to unexpected costs. Your lawyer can advise you about “positive” and “negative” trends so that you can take appropriate action.
- Monitoring the laws
To focus your preventive efforts, consider laws that deal with antitrust, consumer protection, labor and product liability.
Your lawyer can help you to think preventively, show you strategic legal opportunities and suggest remedial steps to reduce legal expenses and keep your business healthy.
Tom Bolt is Managing Attorney of BoltNagi PC, A U.S Virgin Islands law firm concentrating on business, real estate, tax and estate planning.
Print this Article
Click Here to Add a Comment