Are you scaling your business from being your side hustle to your primary source of income?
If you are one of the many entrepreneurs who started a side hustle during the pandemic to see it become your main source of income, then there are a few legal essentials that can help protect your growing business.
1. Business Structure
Many entrepreneurs operate as sole traders which may be problematic should there be legal disputes in the future as your assets (such as your car or house) can be at risk. The way you structure your business can impact taxes, liabilities, your control over your assets.
Setting up other business structures can limit your personal liability, for example, you can set up a trust or a company. Both have a cost to establish and have certain reporting requirements. Although more complex to administer, these structures may separate your business from your personal assets.
If you have a business partner, a legal partnership agreement may be required to safeguard you in case of a dispute between you and your partner.
2. Insure Your Business
Whether you are a personal trainer training clients in your garage, an entertainer singing in public spaces or a marketing professional working from home you need to understand your insurance requirements. If an accident occurs in your premises, or in the area where you are entertaining in a shopping centre – a claim can be filed against your company arising from an injury.
Professionals are also not immune from claims filed against your business. So obtaining the right insurance for your business will provide you peace of mind in the long run.
You can also build liability protection into your own contracts with suppliers. Your small business lawyer can assist you in creating contracts to protect your business.
3. Workplace Relations
Even if you have only one part-time staff member, it is best to establish your business culture and values when you make your side hustle your main hustle. How you would like your staff treated not only by you but also by other staff members is essential to avoid being sued for workplace harassment, discrimination, violation of privacy or unfair dismissal.
Employment contracts not only safeguard you legally but also establish your joint commitment as an employer with the employee.
4. Be mindful with your words and actions
You may be marketing your business on one or many social media platforms. These platforms are fantastic marketing tools but must be treated like any piece of material from your company. These are shareable content that can go viral very quickly for all the wrong reasons.
Similarly, conflicts of interest can also draw prying eyes to your business. Try and limit any situations where your integrity as a business owner can be questioned legally.
5. Obtain legal advice
It is best to hire a lawyer and one who understands SMEs at the beginning of your business venture instead of when you are in the middle of a business dispute. You can download a ‘do it yourself’ contract or blanket terms and conditions, but there is no one-size-fits-all legal paperwork just like clothing.
There are lawyers aplenty. So when choosing the right lawyer for you, look for one who offers small business legal protection, understands commercial litigation, is an experienced debt recovery lawyer and is transparent in providing you small business legal advice.
These five small tips are only the tip of the iceberg. To find out more on how to legally protect you and your business, contact our small business experts at TY Lawyers today.