Key Tips on How to Prevent Business Litigation

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Key Tips on How to Prevent Business Litigation

Disclaimer: The contents of this article should not be taken as legal advice and should only be used as a resource to provide information about key tips on how to prevent business litigation. You should always seek for the services of a lawyer specializing in business litigation cases to give you a more in-depth view of this matter.

You have an interest in creating websites for different companies that’s why you’ve decided to start a business centered for that purpose. You’ve started with five people, and now you have twenty staff working for you. You’ve rented space in your area, and for the first couple of years operating the business, everything was going well. You’ve been able to gain a profit and help more companies. As an entrepreneur, you’d strive to keep the business up and running because you’ve exerted time and effort in this endeavor. However, many companies around the world face business litigation from employees, business partners, and other third parties – and you don’t want that to happen to you. Sure, you’re still inexperienced in this field, but you’re trying your best to stay out of that phase.

You would never want to experience business litigation. You know that this process is stressful and can become the reason for your business to crumble and eventually die. Aside from the precautions you’re doing in your business right now, listed below are some tips on how to prevent business litigations. These might seem like new concepts to you but these will be very helpful for you to run the business smoothly:

#1. Never settle for a firm handshake

Sure, once you shake hands with an applicant, you can be sure that he’ll be working for you and that he agrees with whatever policy your business has. But if you want to avoid litigation, you should change your ways and never settle for a mere gesture to seal the deal.

  • Everything that is agreed upon for the business, regardless of with whom, should be included in written contracts and should be reviewed by an attorney. These are important documents to support claims and to ensure that parties involved will not convey one-sided stories.
  • Contracts will also serve as a bible for the people you’re working with to determine what they should and shouldn’t do. By doing this, you’re protecting your right as an entrepreneur without compromising anything from the business itself.

#2. Manage disputes proactively

It’s impossible for your business to not have any disputes. Your business is running with the help of different people and these people will have different opinions over things. As a business owner, one of your jobs is to ensure that these disputes are contained and resolved internally.

  • Disputes are sometimes healthy because it’s evidence of how your people are willing to express their opinions about certain issues. But in times when disputes end up affecting the business operations, you should step in. You should take the time to resolve any disputes before they reach the point of business litigation.
  • When you’re settling disputes, make sure that you do this in the presence of an attorney so everything is duly recorded.
  • You can also consider implementing programs which aim to build stronger relationships in the company to prevent disputes from happening. Remember that your goal as an entrepreneur should not only be limited to settling disputes, but you should also create avenues for your staff to foster positive working relationships with each other.

#3. Keep good records of anything and everything

Documents are important no matter what type of business you’re running. These documents can serve various purposes and can be very helpful when court hearings take place.

  • Disputes can be avoided once you have a written document to tell you what to do or what was agreed upon by the consensus. Instructions given verbally are no longer enough when you’re in a business. A document should always be present to support your statement or another person’s.
  • Even if your business is still young, should be able to have a record retention policy. This will guarantee that important documents pertaining to business operations are kept in both electronic and hard copy.

#4. Train and manage staff

Most business litigations are filed by employees who were dismissed immediately from work without following any due process. It’s true that some employees might create problems in your business, but as an entrepreneur, you should follow procedures if you have plans in terminating a staff’s employment.

  • One of the things that you will be required to do as a business owner is to terminate the employment of non-performing staff. Yes, this can be challenging but someone has to do it and this case, it’s you. When you terminate an employment, make sure that you follow a procedure and that the other party is given an avenue to voice out their side. Do everything with an attorney so you’ll know how to better handle situations like these without compromising anything legally.
  • You should allocate resources from your business’ profit for your staff’s training. This can be expensive but think of this as an investment for you because you’ll be improving the skills of the people working for you. At the end of the day, your business will prosper because of their contribution.

There are several ways for you to prevent business litigation – some might require you to hire another person to do the job for you and some you can do on your own or with the help of a business litigation attorney. All of these things also seem overwhelming to you, given that you’re still new in the business arena, but doing all of these is only for the benefit of your business. It can be tedious to do, but you’ll be reaping what you sow in the future. Your business can operate for the longest time possible because you know you’re careful in what you do.

By |January 10th, 2018|Business|0 Comments

About the Author:

Cindy Dowling, part time writer who offers a fresh take on various law topics with the pieces she writes for local firms. Cindy enjoys a good cup of coffee and a good book whenever she has the time.

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