Business Risks and Responsibilities

By Sponsored Content

I’ve always dreamed of starting my own business. To me, it seems ideal–I get to be in charge, be my own boss, and set my own priorities. But I have to admit that I’m also kind of scared by the idea. I know that running a business comes with a lot of responsibilities. In particular, I’m kind of worried about the legal obligations I’ll have as a business owner. I think I’m good enough with money and business to get things off the ground financially, but I’m worried about what will happen if, for instance, someone slips on the ice outside of my store and sues me, or if my company gets big and I have to make sure that some low-level employee I’ve never met doesn’t ruin everything with misconduct of some kind. I love the idea of being a boss–except when it comes to being the person to blame for all of this stuff! I don’t want to get sued or have my company derailed by something I can’t control. Experts, what can you tell me about what business owners are responsible for (and what they aren’t)? And what can you tell me about protecting my company and my work if I pursue my dream?

 

Founding and running a company isn’t easy–far from it! The business side of things alone is more than many entrepreneurs can handle: half of all businesses fail in their first year. And you’re right to note that a business’ profits and losses are not the only things that matter. Businesses also have legal concerns, and businesspeople must stay on top of those responsibilities. There are laws that regulate businesses in general, laws that govern specific industries, and laws that allow for criminal and civil consequences when parties (including businesses) cause injuries to others.

 

Fortunately, there are also ways to limit the risks your business is exposed to. And, even more importantly, there are ways to protect yourself as an individual. Below, we’ll take a look at the risks and responsibilities that come with running a business. Then, we’ll go over some of the steps that you should take to secure a brighter future for you and your business.

 

Let’s start with something you mentioned specifically: lawsuits. Lawsuits are part of our civil law system. That’s distinct from criminal law: in criminal law, the government prosecutes crimes. In civil law, individuals and groups of all kinds can seek compensation from others for injustices. Broadly speaking, this is how things work in most legal systems that (like ours) can trace their roots to English common law, a personal injury lawyer Vancouver explains.

 

So what constitutes an injustice? Civil cases generally have to prove damages–something that the person suing has suffered. That alone isn’t enough, of course: a winning case should also prove that the damages stemmed from action or inaction on the part of the person being sued, and that the action or inaction in question was negligent, explains an Injury lawyer in California.

 

Let’s take the example you laid out: a person who slips and falls on ice outside of your business establishment. This person would have to prove that they suffered damages because of this–an injury that cost them money, for instance. They’d have to prove that your company was negligent, which in this case would mean proving it was your company’s job to clear the sidewalk of ice, and that your company failed to do it (or failed to do it properly). And they’d have to prove that this negligence was the reason they fell in the first place and suffered those injuries. Put it all together, and this might be a higher standard than you’ve imagined. If you’re running a business in a municipality where you are responsible for clearing your own sidewalk of ice, you’ll presumably know that you have said responsibility, and you will make sure your employees are clearing the ice!

 

But, of course, injuries to passersby and customers are not a business’ only concern. You also have to take reasonable steps to protect your assets–including the most important assets of all, which are your employees. Security is more important than ever these days, say the developers behind one trusted visitor management system. Unauthorized persons in your business space could put you at risk of corporate espionage–or far worse things.

 

The business side of things has risks that extend beyond your immediate business space, too. Your company is responsible for your products and services. You already know, of course, that poor service or shoddy products will result in hits to your company’s reputation. And, in extreme cases, these things can also generate legal risks. That negligence-causes-damages calculus used in personal injury cases can be applied when poor work or dangerous products injure customers, too.

 

Add it all up, and you have a lot of legal risks as a business owner–but, fortunately, there are many things you can do to protect yourself and your business.

 

The first and most important thing you can do is to hire a lawyer from the start and set up your business with a sensible legal structure. From the very smallest businesses (including sole proprietorships) to the very largest, it’s possible to insulate your personal risk from that of the company. Hopefully, everything will go well for your company–but, in case it doesn’t, you want it to be possible for your company to go bankrupt without you personally going bankrupt with it, and you want your company to be able to be sued without it meaning that you personally are being sued. A lawyer who specializes in business law can help you make this happen.

 

You’ll want to keep relying on lawyers as your business grows, too. One way to limit the risk of poor products is to provide warranties and guarantees, say experts in selling and buying wholesale electronics. And properly managing returns, recalls, customer warnings, instructions, and warranties means relying on legal pros to limit liability as much as possible. Lawyers are also useful (and sometimes mandatory) for a wealth of other essential business tasks, including filing taxes, hiring employees, offering stock, and more.

 

Another key line of defense for your business is insurance. You can do a lot to limit risks to your business, but you can’t eliminate it entirely, so make sure that you have insurance that covers common risks–including those lawsuits you’re worried about.

 

We can’t tell you that running a business is easy or risk-free, but we can tell you that legal concerns can be managed in a way that will let you focus on the parts of business that you know best. It’s true that business leaders can be ousted for causing legal risks–just ask Uber’s Travis Kalanick–but such cases involve real mistakes and misconduct, and are not the result of CEOs taking the fall for the actions of a minor employee. If you rely on insurance and sound legal advice, and if you take the basic common-sense steps that all businesses should, you should be able to limit the risks to your business and to your personal success.

 

“It’s not about ideas. It’s about making ideas happen.” — Scott Belsky

Hang on for a minute...we're trying to find some more stories you might like.