To protect your business from potential litigation or other issues, you should consider the following proactive measures:
Choose an appropriate business entity: Select an entity that provides a corporate shield, such as an LLC or an S-corp for a small business, or a corporation for a larger business. Ensure that you operate your company properly and follow the law to maintain this protection.
Follow formal requirements: Adhere to the required annual minutes, meetings, and other formalities specific to your chosen business entity.
Obtain insurance: Purchase adequate insurance coverage to protect your business from potential liabilities.
Adopt best practices: Educate yourself on the rules and regulations of your industry, and ensure you are following them. This includes understanding labor laws, overtime policies, and other relevant regulations.
Consult professionals: When necessary, consult attorneys, consultants, or other experts to review contracts, leases, or other documents to ensure you are protected and operating legally.
Capitalize your business properly: Ensure that your business has adequate financial resources to cover insurance, continuing education, and professional advice when needed.