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Potential Legal Issues Washington DC Small Businesses May Face

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Small business owners can feel overwhelmed when forming a new business. It pays to be prepared, not only when starting your business, but in how you handle day to day operations. It’s also important to understand potential legal issues you may face as a new small business owner. Consulting an experienced Washington DC small business lawyer can help you prepare and eliminate potential risks to your new business.

Wrong Business Organization

Some small business owners set up the wrong business type for their needs, and their business may fail or become entangled in legal battles.  The legal battles could lead to you having to file for bankruptcy or incurring personal liability. Without establishing the appropriate legal rights, you could lose everything. This is why it’s important to explore whether a corporation, limited liability company, sole proprietorship, or partnership is the right business organization type for you.

Intellectual Property

There are a number of different issues that can arise around intellectual property. It can start with infringing on someone else’s trademark, copyright, or patent. You could face litigation if you use someone else’s trademark which is not a great way to get your business off the ground. In addition, if you don’t take the proper steps to protect your own intellectual property, you run the risk of a bigger company taking your ideas and filing first.

There is something also called a “patent troll.” These are people who troll small businesses looking for the use of products that are from a patent. They file lawsuits for compensation knowing the business will likely settle and pay something rather than proceed with a costly lawsuit. Your attorney can quickly determine whether it is a simple issue or something that is worth defending in litigation.

Litigation Costs

Don’t assume that potential litigation in a small business is limited to business disputes with vendors or other businesses. You could have an employee who makes a claim, or a customer/client that files a lawsuit. If you can afford to have a lawyer on retainer, it will help keep your overall legal costs down, as a skilled business lawyer can help resolve business disputes early on rather than you trying to figure things out while racking up expenses.

Competition

Small business competition can be fierce. This is likely to occur in your local neighborhood. You may run into issues with a competing business who tries to make trouble for you or turn you in for potential violations of local city ordinances. Check zoning rules to make sure everything is proper and by the book, so you can minimize the potential for someone else trying to derail your startup. In addition, all your employee hires should be legal, i.e., not underage or ineligible to work in the US, so you don’t’ give the competition another avenue to try and shut down your business.

Inadequate Liability Coverage

Being underinsured can be an expensive mistake for small business owners. You should always look to purchase higher limits than the required minimums, as you could have a host of potential situations where you need a good liability policy. If your business sees clients or customers, you are also at risk for a premises liability claim.

Retaining a Washington DC Small Business Attorney

If you have a small business or are in the process of starting one, it’s the ideal time to speak with a skilled small business attorney. Contact the team at Tobin, O’Connor & Ewing at 202-362-5900 to schedule an initial consultation.

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