In the old days, it was customary to take your car in for a tune-up. A tune-up is an out-dated way of replacing key parts so that the ignition and fuel systems of the vehicle will reach optimal performance and efficiency. Today's remaining “tune-up” services include new spark plugs and replacing the cabin air filter. These items are part of your vehicle's maintenance schedule, just like checking tire pressure or getting an oil change. Modern “tune-up” services are basically a checkup for your car.
If you're a small business owner, then your business probably needs an annual legal “tune-up” or checkup. Here are seven (7) areas which should be included in your small business's annual legal tune-up:
1. Entity Structure & Maintenance
If your small business is set up as a limited liability company (LLC), then it would be wise to have your operating agreement reviewed annually to ensure it accurately reflects your business structure and operations. Likewise, if you're incorporated, your bylaws and shareholder agreements should also be annually reviewed. At the same time, you should make sure you're up to date on any required annual filings, licenses, and registrations, and make sure you are holding required annual meetings of your shareholders and boards of directors. You should also have a written plan in place for your business in case you are incapacitated or die.
Each time you sign a contract, you enter into a legally binding agreement on behalf of your small business. Unfortunately, a contract may have unfavorable terms, or may not be legally enforceable. A prospective client came to me once asking me to draft a lease against a defunct entity. I refused to do so because it would not be enforceable. An annual legal checkup ensures that all transactions and contracts for your small business are properly documents and in writing. In addition, your small business should have a written contract in place with every vendor.
3. Employment & Hiring Practices
The Internal Revenue Service (IRS) requires you as a small business owner to properly classify any people who work for your business as either an independent contractor or an employee. If you have employees, then you need to ensure they are classified further as exempt or non-exempt, which would determine your obligation pay them overtime. This is also a good time to review any independent contractor agreements, employment agreements, and make sure you have a policies and procedures handbook for your small business.
4. Commercial Leases & Real Estate
As part of reviewing your contracts, you need to review any commercial lease agreements which your small business is a party to, and also review any real estate transactions. If you own any property, now is a good time to review your properties to make sure the legal needs are satisfied for any properties which are owned by your small business.
This is a good time to also review your business liability insurance coverage. If your small business exists at a physical location or physical office, make sure you have adequate coverage for a general business liability insurance policy. Also, if you are incorporated, you should consider Directors & Officers insurance for members of your Board of Directors. As a small business owner, you should consult with a licensed insurance agent to discuss specific coverages and amounts.
6. Pending or Threatened Litigation
This is also a good time to asses any litigation needs. Has your small business received a demand letter? Or maybe your small business is having trouble collecting payment from its customers? These are items which should be reviewed as pending or threatened litigation.
7. Debts Owed or Owing
Lastly, a legal checkup should include an assessment of business debts, including any debts owed by your small business, or debts that are owed to your small business. If your small business owes debts, now is a good time to see what can be done to getting those debts paid and avoid collection activity and litigation filed against your small business. If your small business has problems collecting payments from its customers, or has other debts that are owed, now is the time to consult with an attorney to discuss what solutions and legal remedies might be available.
At Liberty Legal Solutions, LLC, we offer small businesses an annual business legal checkup for a flat fee of $1,500.00. We also offer our clients outside general counsel services on a monthly basis starting at $150 per month. For more information regarding either an annual business legal checkup, or outside general counsel subscription services, please contact me at [email protected].
Also, if you are interested in starting a small business anywhere in Oklahoma, or if you have a small business and you are looking to grow, please feel free to contact me at [email protected]. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com.