I don’t know how many of you watched the TV series House, but if you are not aware, Dr. House initially had an immunologist, neurologist and a surgeon are on a medical diagnostic team. As you can imagine, whenever House asks the members of his team to give a diagnosis for the featured medical issue, the answers he received almost always reflected the responder’s specialty. Conducting the differentials to see which team member was correct made for gripping TV; but, it also proved how easy it is for people’s background to give them tunnel vision.
As an attorney that specializes in finance and contracts, I hardly ever offer litigation-based solutions. Understanding my possible blind spot, I was happy to get a fresh take on the most important small business legal issues from Aileron.
A quick look at Aileron's 10 point list shows some advice that we are all familiar with:
(1) We need to incorporate;
(2) We should follow all human resources guidelines; and
(3) We need to patent, copyright and/or trademark our proprietary information (if applicable).
Given my tunnel vision, the advice to:
(4) Always use a shareholder agreement is something that immediately drew my attention. After all, no one wants to deal with their business falling into chaos just because they failed to prepare a document that outlines what should occur when a major shareholder “leaves, dies or gets divorced.”
Much of the other legal tips, however, were not the ones you commonly run across:
(5) I did not know that there were issues with small business owners failing to remit payroll tax (or sales tax) to the government. So, this tip definitely put this issue on our radar.
There were also tips that highlight the legal risks we as business owners continuously face in this technologically advanced era:
(6) Want to trash talk your competitors or other individuals on social media? Well, be prepared to be sued for libel.
(7) Think that your employees should be focusing on work during business hours - and not be handling their personal business online? Sorry, you can’t stop them from doing that but you can, “[b]lock inappropriate sites to protect the company and other employees…[and] [f]requently monitor web site usage of company computers for proper use.”
(8) Does your company collect your customers’ sensitive information? Well, as the high profile security breaches we hear in the news (e.g. Target) show, you have an absolute obligation to go all out to protect this information. So, the advice about how to secure your site to prevent hacking is extremely solid.
These last two are just extremely good basic, common sense tips:
(9) Though you may believe you are 100% right about a dispute and you are itching to go court to get vindication, remember that lawsuits are time-consuming and expensive! Why not try to negotiate instead of litigate?
(10) Always, always do a thorough investigation of the investors you are inviting into your company? Yes, you may be desperate for cash in the beginning but are you willing to sacrifice your control of your business to get it?
So, what's the verdict? Is your business faithfully complying with all these legal tips? Since most of these are preventative measures that you can implement without much financial cost, now is a really good time to get on the right track.
