Stay in Business with These Legal Tips - dummies

By Clive Rich

Part of Law for Small Business For Dummies Cheat Sheet

As your business expands, you can’t neglect the legal aspects. Your expanding enterprise is a bit like a teenager experiencing growing pains — getting bigger at a startling rate but experiencing unexpected aches and strains that slow it down, or just make you want to have a lie down. These problems include:

  • Trading risks from customers and suppliers who don’t pay on time or at all.

  • Disputes with trading partners, contractors or employees.

  • Pressures on cash as expansion costs outstrip your ability to pay your way.

While mopping your fevered brow as you sweat about these threats, here are the legal issues to add to your list of concerns at this stage of your business’s growth:

  • Having a credit control policy in place to make sure that people don’t owe you too much.

  • Implementing Terms and Conditions to deal with payment defaults by customers and suppliers.

  • Defraying risk by using invoice discounting or invoice factoring agreements to collect cash early.

  • Setting up insurance policies to mitigate risk (for example, insurance for employers’ liability and professional indemnity).

  • Knowing how to handle financial threats, such as statutory demands or attempts by bullying creditors to wind up your business.

  • Managing disputes effectively — whether through the courts or other channels, such as mediation, arbitration or simply smart negotiation.