How To Protect Yourself When Starting Your Own Business
Starting a new business can be difficult, especially if you don’t have a business background. There are various things that you can do to protect yourself and your business if things don’t work out exactly the way they should, including separating your personal assets from your business ones.
In this article we’ll have a look at a few of the simplest ways to protect yourself and your new business. However, it’s important to realise that the tips listed below are to be used for general guidance only – you should always speak to a decent commercial lawyer before making major business decisions that could have long term consequences.
With this in mind, here’s a few ways that you can look after yourself when you start a business:
- Make Sure You Have A Partnership Agreement
If you’re planning on working alone, you don’t have to worry about this. However, if you’re planning on working with one or more business partners, you need to make sure that you put a high quality partnership agreement together.
A partnership agreement should always be drafted with the aid of a decent lawyer. It should include a range of points indicating the assets and responsibilities of each of the partners. Make sure that it specifies the assets and contributions of each partner to the startup, and make sure it touches in what happens if the business fails.
- Get To Know A Good Lawyer
Lawyers are expensive, sure. However, if you’re planning on starting a successful business, you will probably need to deal with them from time to time. It’s a good idea to get to know a good commercial lawyer early on so that you can call on them if you have any problems during the general running of your business.
- Separate Your Business & Personal Life
A lot of first time business owners make the mistake of not separating themselves and their business. If you make this mistake, any problems with your business may be transferred to your personal life, creating a risk of financial ruin.
However, if you successfully separate your business from your personal assets – for example, by creating a trust and having it own the business – your risk levels will be reduced. If something happens to your business and you get sued or go bankrupt, you won’t be at risk of losing your personal assets as well.
There are plenty of different things that you can do to protect yourself when you start your first business. It’s important to discuss things with an experienced commercial lawyer, as they may be able to identify issues or weak points in your business plan that you hadn’t even thought of. Make sure that you take the time and money to do things properly, otherwise you will almost certainly run into problems in the long run.