Betty, Neuman & McMahon, P.L.C.

Protecting your business from crippling litigation

Since you founded your new business, many concerns may keep you awake at night, and some of them are out of your control. For example, depending on your business, a natural disaster or turn of bad weather may have a negative impact on your services. The economy may drive your sales down. Certainly, a change in the laws regarding your industry could affect the way you do business.

You may also consider a lawsuit something over which you have no control. While there may be no way to eliminate the possibility that someone will file a frivolous suit against your company, there are steps you can take to minimize the chances that you will open the door for those claims.

Common lawsuits you may face in your business

While you may be diligent about keeping your property and products safe from mishaps that may cause injuries, personal injury lawsuits may not be the only legal action someone can take against you and your business. For example, anytime you are dealing with contracts, there is the chance a client, vendor or employee will accuse you of breaching your agreement. Seeking professional counsel when preparing your legal documents is one way to be proactive about preventing contractual issues.

Other areas that may leave you vulnerable to lawsuits include the following:

  • An employment candidate complains that you did not hire him or her for some discriminatory reason.
  • An employee sues for harassment or wrongful termination.
  • Another business owner takes action against you for stealing intellectual property through plagiarism or other methods of copyright infringement, even if it was unintentional.
  • Customers accuse you of fraud through misleading advertisement or unethical business practices.

Fraud implies intentional and malicious behavior on your part or the part of your employees. Of course, the best way to prevent these kinds of lawsuits is to maintain a high level of ethics within your company and establish an atmosphere where integrity is the only acceptable standard. This may begin with careful hiring and training of employees as well as having access to legal counsel for gray areas.

In addition to avoiding any behaviors that may make you vulnerable to legal action, you may consider establishing your business as a limited liability corporation. This business structure can protect your personal assets in many cases if your business faces a lawsuit. Your Iowa attorney can help you determine if this formation is appropriate for you as well as stand by you in the event that someone takes legal action against your business.

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Betty, Neuman & McMahon, P.L.C.
1900 East 54th Street
Davenport, IA 52807

Phone: 563-326-4491
Fax: 563-326-4498
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