Small Business Big World Episode 31:
Small Businesses Legal Landmines and Compliance Essentials
This is Small Business Big World, our weekly podcast prepared by the team at Paper Trails. Owning and running a small business is hard. Each week we’ll dive into the challenges, headaches, trends, fun and excitement of running a small business. After all, small businesses are the heartbeat of America and our team is here to keep them beating.
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Running a small business is full of challenges, and one of the biggest hurdles is avoiding legal landmines that could threaten its very survival. In the latest episode of Small Business Big World, attorney Pat Brady from Bergen and Parkinson offers a wealth of knowledge to help small business owners navigate these risks. From maintaining corporate records to managing contracts and handling customer reviews, this episode is packed with actionable insights.
At Paper Trails, we understand the fears and headaches small business owners face, and we’re committed to helping them navigate these challenges with confidence. By reading this article and listen to this podcast episode, you’ll get a detailed look at the key topics discussed in the episode and learn how to protect your business from common legal pitfalls.
Understanding Corporate Housekeeping: Avoiding Legal Landmines
One of the first areas Pat Brady dives into is corporate housekeeping and record-keeping. Many small business owners might not realize just how crucial it is to keep their corporate documents—like bylaws and operating agreements—up to date. These aren’t just papers; they are vital tools that protect your business from liability. Brady highlights the importance of documenting significant decisions through consent resolutions and ensuring some documents have wet signatures.
Good corporate practice isn’t just about having these records; it’s about making sure they accurately reflect your business’s current operations and management. By keeping meticulous records, you not only comply with state requirements but also shield your business from legal landmines that could arise if these documents are ever called into question.
Contracts and Disputes: Navigating Legal Landmines
Next, the episode explores the critical area of contracts and disputes. Contracts form the backbone of every business transaction, and yet, they’re often overlooked by small business owners. Pat emphasizes the importance of managing contracts carefully, including having an attorney review them to reduce risk exposure. Even simple transactions, like buying a sandwich, can legally qualify as contracts, making it essential for business owners to understand how these agreements work.
Additionally, Brady discusses the importance of documenting any disputes or issues in writing if something goes wrong. By maintaining professionalism and keeping clear records, business owners can better protect their interests and avoid the legal complications that arise when things are left vague or undocumented.
Handling Customer Reviews Without Falling Into Legal Landmines
Another key area Brady covers is handling customer reviews, particularly negative ones. In today’s digital world, a single negative review can significantly impact a business’s reputation. Brady advises small business owners to respond thoughtfully to negative feedback without admitting fault or escalating the situation. By staying professional and balanced, you not only protect your business’s reputation but also show that you’re committed to customer service.
The Importance of Succession Planning: Avoiding Future Legal Landmines
Succession planning is a crucial but often overlooked part of running a business. Many small business owners delay this process, thinking they have plenty of time but effective succession planning takes longer than most people expect. Starting early and involving legal and financial advisors can help create a robust plan that ensures your business’s future success. This episode stresses that succession planning isn’t just about finding someone to take over; it’s about ensuring the business continues to thrive when the current owner steps down.
The Takeaway: Legal Landmines and How to Avoid Them
Corporate housekeeping, managing contracts, handling customer reviews, and planning for succession are all essential elements of running a legally sound small business. Pat Brady’s insights in this episode provide small business owners with a roadmap to navigate these areas successfully. Whether you’re just starting out or have been in business for years, this episode offers valuable information to help you steer clear of legal risks.
A major takeaway is the importance of maintaining a well-organized corporate book. Keeping all essential documents—like bylaws, operating agreements, and consent resolutions—in one place ensures that your business is meeting legal requirements and is prepared for any audits or disputes that may arise.
Brady also highlights that while some business owners may hesitate to involve attorneys due to costs, it’s often a wise investment. Properly reviewed contracts, with clearly defined terms, can prevent misunderstandings and legal complications down the line. This proactive approach is critical for any small business aiming to protect itself from unforeseen legal issues.
Lastly, the episode touches on managing customer feedback professionally. In the digital age, handling negative reviews is a delicate task. By taking a measured approach and addressing issues without admitting fault, small business owners can show potential customers that they care about their service and are committed to resolving problems.
This podcast is a production of Paper Trails. We are a payroll and HR company based in Kennebunk, Maine, and we serve small and mid-sized businesses across New England and the country. If you found this podcast helpful, don’t forget to follow us at at Paper Trails Payroll across all social media platforms and check us out at papertrails.com for more information. As a reminder, the views, opinions and thoughts expressed by the hosts and guests alone. The material presented in this podcast is for general information purposes only and should not be considered legal or financial advice. By inviting this guest to our podcast, Paper Trails does not imply endorsement of or opposition to any specific individual, organization, product or service.