Misleading Small Business Legal Advice to Avoid

Small business owners receive a lot of advice—solicited and otherwise—on many aspects of their business. However, not all of that advice is good advice. It is important to take the good advice and leave the bad, especially when it comes to legal issues.

The following pieces of “advice” sound good in theory, but in practice they will almost certainly cause disaster. Tread carefully and consider legal advice before you go about following it.

When starting your business: “Just do it and worry about the technicalities later”

This advice is hard to believe. The thought process follows that it is prudent to delay filing paperwork and incorporation filings that have fees associated with them until you have sufficient income, softening the blow of these fees. While it might sound appealing to avoid these fees, the problem is that failing to incorporate will leave you personally liable for injuries and damages.

Any type of lawsuit that may come from an accident related to your business could seriously cripple your personal finances and even force you into bankruptcy.

Forget attorneys: get your legal advice online

We understand the irony here, but the Internet isn’t the most reliable place to get your legal information. While there are certainly reliable sources online where you can find legal advice, reaching out to a trained legal professional is still the best option.

The advantage of hiring a lawyer is the opportunity to work with a real person with legal experience. While some Internet sites can act as a proxy for this type of advice, a real lawyer looking over your paperwork and understanding the context of your business’s situation will let your attorney alert you to issues you weren’t even aware of. You can create a proxy for experience.

Mark your employees as independent contractors to save money

This is another situation where saving money can easily cloud one’s judgment. Classifying your employees as independent contractors when they are in fact employees of your business is a form of misclassification that can lead to several legal headaches—taxes, workers’ comp, and unemployment insurance are a few of the many situations in which this “advice” could come back and bite you in the butt.

Click here for further reading on from the NFIB!