Amy Toepper is the founder and principal of the Law Office of Amy M. Toepper. With over fifteen years of experience, Amy has assisted business owners of all sizes get their legal dealings in order.


amy toepper Company Housekeeping: 5 Ways A Business Can Keep Their Legal House In Excellent Order

Amy Toepper
(Photo courtesy of Amy Toepper)



Amy is often asked about some of the most important legal steps small business owners can take to make sure what they’ve built remains protected.

What are the top five things a business can do to keep their legal house in order?


1. Form your business entity and act like it

Businesses should ensure that they form the correct legal entity so as to separate and protect the assets of their business from their personal assets. One of the central benefits of incorporating or forming an LLC is that your business becomes a completely separate entity from you and any other shareholders. In the event that your business is sued, a judgment against your business or the money you are required to pay doesn’t extend to assets other than those invested in the business. Additionally, that means that if you talk the talk, you have to walk the walk. Don’t commingle funds. Don’t use your business credit card for Christmas gifts. Don’t take out money from your business account to pay for a house repair.


2. Written contracts

If it’s not in writing, it didn’t happen. I counsel business owners all the time about having good agreements memorialized in writing. Even under the best circumstances, relationships can sour, and partners will go in different directions. If there is a road map at the outset, that provides mechanisms for companies or partnerships to amicably wind down or separate.


3. Non-disclosure agreement (NDA)/confidentiality agreement

If you build it, then protect it! Even if you are in the process of putting together a business, an idea, a product or a new service, that development stage still needs to be protected. As such, I often recommend that my clients have non-disclosure agreements on hand. Before you share your idea with a consultant, employee or even a friend, have them execute a confidentiality agreement so that if ideas are appropriated, you will have recourse.


4. Hiring independent contractors

Hiring a new employee is a big commitment. For many small businesses, it can be too much to guarantee a certain amount of hours to an individual or to afford to pay benefits.  As such, independent contractors are an alternative to get the extra help you need. Caution: If you have independent contractors, make sure they are truly independent. The government agencies that enforce wage and hour laws, the IRS and the Department of Labor, are always on the lookout for employers trying to evade proper payment.


5. Take action

The worst thing that any business owner can do is nothing. I have counseled too many clients who believe that there may be a problem with an employee or worried about potential liability with a contract. However, instead of picking up the phone to call an attorney, they chose to stick their head in the sand. Inevitably, that lack of action leads to higher penalties, attorney’s fees and lost business.

This article was written by Michelle Guilbeau for Small Business Pulse


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