Business Lawyer: Avoid Costly Litigation

Starting and managing a business involves a series of challenges and responsibilities that go beyond the creation of innovative products or services.

For any entrepreneur, the prospect of facing a lawsuit for a significant amount of money not only represents a financial threat but could also have devastating repercussions that jeopardize the continuity and stability of the company they have worked hard to establish.

The current business landscape entails the existence of a complex and dynamic legal environment where lawsuits can arise for various reasons, ranging from contractual disputes to labor issues and regulatory matters. However, the good news is that entrepreneurs are not defenseless against these legal challenges.

Taking a proactive approach from the very beginning of operations can make the difference between survival and the abrupt closure of the company in the event of legal actions. This is something we demonstrate every day at our business law firm.

Hire a Business Lawyer

An experienced business lawyer provides a wide range of legal services that will be of great value, from the very beginning of the business. From the legal and administrative configuration of the business, explaining and considering the different types of corporate framing, up to the type of business to be registered that best suits your needs.

Business type selection

The choice of the right business type goes beyond mere administrative formality: it plays a crucial role in protecting against personal liabilities and in shaping a tax-friendly structure for entrepreneurs. In fact, the legal nature of the business entity can be decisive in how the company withstands potential legal disputes and optimizes its tax obligations.

Some business structures offer a higher level of protection against personal liabilities. For instance, corporations and limited liability companies (LLCs) limit the owners’ liability to the invested capital, meaning that entrepreneurs’ personal assets are shielded in case of legal disputes.

This aspect is crucial for safeguarding personal wealth in adverse legal situations and can be particularly beneficial in industries with inherent risks or when dealing with third parties.

On the other hand, sole proprietorships and general partnerships may more directly expose entrepreneurs’ personal assets to legal risks, as they do not provide the same level of separation between the business and its owners.

The choice of business type also directly impacts the tax burden the company bears. Some business structures are designed to provide significant tax benefits. For example, limited liability companies (LLCs) and corporations can benefit from tax deductions, special regimes, and other advantages that can reduce the overall tax burden.

Additionally, the ability to defer income, access preferential tax rates, and take advantage of specific tax incentives can vary depending on the chosen business structure.

Solid contracts for business stability

The drafting of solid and understandable contracts is a cornerstone in building strong business relationships and preventing potential legal challenges in the future.

Including specific clauses related to payments and billing is essential.

A contract should detail the responsibilities and obligations of each party comprehensively.

Clear policies in all areas of the business

First, establish clear and detailed policies. You should know that on many occasions, the origin of the litigation is the result of poor communication. Before conducting any commercial transaction, make a consultation with your business lawyer.

A lawyer can help you discern what you expect from that business transaction, and by virtue of this ensure that all the clauses of the contract reflect what is really expected of her/him and the agreement between the parties.

As for employment policies, for example, these should indicate clear rules regarding promotion opportunities, non-discrimination, assistance and other aspects related to labor standards.

A business lawyer can guide you correctly to ensure that your company complies with these laws. In the case of service contracts, they must keep a clear language regarding the forms of provision, time and delivery thereof, as well as detail what happens in case of any deficiency in the provision.

Alternatives to litigation

Before the imminence of litigation, you can consider alternatives and in fact that is always the recommended position as long as there are options.

Mediation, for example, is usually an excellent alternative to litigation, which offers the possibility of solving a problem between parties, thus avoiding the high costs of a trial and the loss of time and resources that a trial implies. 

Both parties, with the the assistance of a business lawyer can solve a conflict economically both in terms of money and time, which is definitely one of the most valuable resources of a company.