Conducting business can be a far more complicated task than many people realize. This is especially true when you consider the variety of legal issues that can arise for every enterprise. Yet, there are many people that are considering starting a business, and they may lack the information they need to properly protect themselves against some routine legal complications.
By refuting these myths about business law, you will be better prepared to navigate the various liabilities and disputes that you may encounter:
Myth: Incorporating Will Shield You From All Liability
Incorporating your enterprise is one of the best ways to reduce the chances that you will be personally liable for many problems that arise from conducting your business. However, there are some people that do not fully understand the limitations of this protection, and they may assume that they are always protected for liabilities.
Unfortunately, this is not the case, and there are many instances where you will be personally liable regardless of being incorporated. For example, incorporating will not protect you from criminal acts or instances where you sign legal documents under your name. In both of these scenarios, you will be fully liable for your actions. The exact laws governing this will vary from state to state, and you should consult with an attorney to determine the exact limitations of this protection your area.
Myth: A Contract Is Always Legally Binding
There is another myth that a contract can never be legally broken, and while it is true that it can be difficult to get out of a contract, there are instances where the contract is invalid. For example if the other party has misrepresented their offer or claim, this will void the contract because you were actively being deceived. Another example is if one party signed was forced or bullied into signing the document.
Regretfully, you will be facing an uphill battle if you sign a bad contract, and while your attorney may be able to get you out of this binding agreement, this can be an expensive task. To minimize your chances of encountering this problem, you should always allow your attorney to review any contracts before you sign them to make sure that your rights and interests are protected.
Understanding the legal issues that your enterprise will encounter is an essential step in being a responsible and informed business owner. By understanding the limitations of the protections offered by incorporating and that it may be possible to get out of a bad contract, you will be better able to minimize your enterprise's exposure to legal risks.