Juneau business owners know how and when to take on risk to stay ahead of the game. Remaining competitive means taking a gamble to win one. But it is the unseen potential for risk that can create unnecessary liability, whether it is within the company between partners, shareholders or in employment relations, or outside from consumer complaints, regulatory or government pressure, or the Internal Revenue Service (IRS).
Avoiding messy entanglements will involve taking a long view of the business structure, current company policies and written agreements, and an overview of where things stand to spot potential problems. Discovering tips now will help you to avoid future liability and to protect your interests and those of your business.
The most common relationship risks to a business
Every business owner knows that the intricate web of relationships between partners, investors, clients and employees is a delicate balance that can easily become unbalanced when one side is dissatisfied. Problems can arise from:
- Consumer charges of privacy violations or false advertising, or civil claims of injury or harm.
- Employee allegations of discrimination, unfair hiring practices, or wage theft violations.
- Shareholder disputes or ethics violations among higher-ups in the company.
- Unwise tax exposure from tax code violations.
- Investor dissatisfaction from poor market conditions.
- Legal problems from a contract breach or risky purchase or lease transactions.
Business owners must be able to anticipate risk from these and other issues and take preemptive measures to ward off trouble later on.
Steps to anticipate risk and reduce liability exposure
Retaining corporate counsel will not only help in understanding how current laws, as well as regulatory compliance issues, may impact the business, but will also assist by providing a periodic review of contracts to make sure they are relevant to the business’s current needs. Many businesses take advantage of commercial general liability insurance to shield the company from unwarranted lawsuits.
Reviewing company policies and employee handbooks will ensure transparency in employee matters and clarify the obligations and ethical standards of upper management. Taking a look at the business structure of the entity will also keep the business owner aware of potential tax exposure and liability, including personal liability, as well as any advantages the structure may provide from these issues.