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Guaranteed Ways to Get Sued
If you are in business, you are taking risks. The TOP TEN ways people get sued are listed
below. Learn the mistakes and avoid them. Remember, there are over 80 million lawsuits filed
in the United States every year.
below. Learn the mistakes and avoid them. Remember, there are over 80 million lawsuits filed
in the United States every year.
1) Being a SOLE PROPRIETOR
You might start off your new business as a SOLE PROPRIETOR, but don't stay that way long.
There is no protection for you and your family, not to mention the poor tax benefits. If your
company - (you) get sued, all your personal assets are at risk.
You might start off your new business as a SOLE PROPRIETOR, but don't stay that way long.
There is no protection for you and your family, not to mention the poor tax benefits. If your
company - (you) get sued, all your personal assets are at risk.
2) Being in a GENERAL PARTNERSHIP
Being in business as a partner is worse than being in business as a sole proprietor. You can
not control what your partner does, and everything he does, you can be held liable for, even
if your partner files for bankruptcy. If you want partners, create an LLC.
Being in business as a partner is worse than being in business as a sole proprietor. You can
not control what your partner does, and everything he does, you can be held liable for, even
if your partner files for bankruptcy. If you want partners, create an LLC.
3) Not staying COMPLIANT
Corporation work if you use them correctly. There are formal requirements. Don't take your
newly formed company and toss it on your shelf and forget about it. The IRS can audit you
as well and require you to pay back the taxes you thought you were saving.
Corporation work if you use them correctly. There are formal requirements. Don't take your
newly formed company and toss it on your shelf and forget about it. The IRS can audit you
as well and require you to pay back the taxes you thought you were saving.
4) PERSONAL GUARANTEES
For some loans, a bank will make you sign personally. If you can't negotiate a deal without
your personal guarantee, then refuse. And there is never a reason you should ever let
your spouse co-sign as well.
For some loans, a bank will make you sign personally. If you can't negotiate a deal without
your personal guarantee, then refuse. And there is never a reason you should ever let
your spouse co-sign as well.
5) Adequate INSURANCE
Insurance will protect you in most cases. If the insurance does not cover the claim, people
may go after your personal or unincorporated assets. Don't forget, insurance also acts as
your attorney if you are sued.
Insurance will protect you in most cases. If the insurance does not cover the claim, people
may go after your personal or unincorporated assets. Don't forget, insurance also acts as
your attorney if you are sued.
6) SEXUAL HARASSMENT at work
If you own a company with employees, Even if you are not the one harassing, you will be
held liable for the harassing environment. Make sure harassment is in your company
policies. Problems arise from picnics and parties.
If you own a company with employees, Even if you are not the one harassing, you will be
held liable for the harassing environment. Make sure harassment is in your company
policies. Problems arise from picnics and parties.
7) Using INDEPENDENT CONTRACTORS
The law presumes someone is a employee by these factors. Did they work your hours or
theirs? Did they use your tools or did they have their own? Do they work for other people
or just for you? Did you supervise their work? Did you pay him daily/weekly or upon
completion? Was there a written contract?
The law presumes someone is a employee by these factors. Did they work your hours or
theirs? Did they use your tools or did they have their own? Do they work for other people
or just for you? Did you supervise their work? Did you pay him daily/weekly or upon
completion? Was there a written contract?
8) Keeping DOCUMENTATION
The written work is the most powerful weapon in court. Always follow up meetings and
conversations with "Follow UP" letters. Failure to object to it's contents is an admission of
what the letter states.
The written work is the most powerful weapon in court. Always follow up meetings and
conversations with "Follow UP" letters. Failure to object to it's contents is an admission of
what the letter states.
9) Too much INFORMATION
If you are involved in what could become a lawsuit, keep your legal positions between you
and your attorney. Successful litigation involves some element of surprise. State firmly
that you intend to pursue your legal remedies, nothing more.
If you are involved in what could become a lawsuit, keep your legal positions between you
and your attorney. Successful litigation involves some element of surprise. State firmly
that you intend to pursue your legal remedies, nothing more.
10) All your eggs in ONE CORPORATION
An INC or LLC will shield your personal assets, but not the business assets. If you have
debt free equipment or real estate, spread the risk between several entities. Have your
business lease back the equipment.
An INC or LLC will shield your personal assets, but not the business assets. If you have
debt free equipment or real estate, spread the risk between several entities. Have your
business lease back the equipment.