It’s the New Year—Resolve to Give Your Business a Legal “Check Up”
By Meg McEvoy, Compton & Duling LC
With the ringing in of 2016 came New Year’s resolutions – many people resolve to eat better, sleep more, get organized, or exercise. If you’re a business owner, 2016 should come with some business-oriented resolutions, too. Below, the five best things you can do to make sure your business is on-track for a prosperous, issue-free new year:
- Think about your organizing documents. Maybe when you started your LLC five years ago you were a sole member, and you have since taken on some partners. Or maybe you started out as a partnership with you and your best friends, but the stress of doing business together has taken its toll, and now you’re wondering what would happen if someone wanted out. Maybe you’re a corporation, but you haven’t kept annual minutes or held elections since you can remember. The New Year is a great time to review your organizing documents and corporate records and understand what they say. If you’re not sure, a lawyer can help you review and amend if necessary.
- Review your insurance coverage. Did you recently expand into neighboring commercial space? Take on new types of employees and/or contractors? Buy some new business vehicles? Great! All are reflections that your business is changing and expanding, and perhaps so should your insurance coverage. Review any outstanding agreements you have that require you to maintain insurance coverage and make sure you’re in compliance with those. And, talk to your counsel or insurance agent about whether your insurance fits your business as it stands now.
- Review your contracts. Are you a business that provides services? If so, do you have clients sign agreements that outline the scope of your services? What about agreements with suppliers, contractors or employees? What do these documents say regarding your liability, if anything? Who collects attorney’s fees in case you end up in court over the agreement? An attorney can review these matters and make sure you are in the best position possible should a dispute arise.
- Secure your intellectual property. Most companies are bound to experience employee turnover from time to time. If you’re a company that operates on customer lists and goodwill, be sure you’re securing that as company property via non-compete and non-disclosure agreements. If your company has a presence on social media, make sure it’s clear via policies and agreements that the accounts are the property of the company, not of the 22-year-old new hire who started the account. You don’t want any employees walking out the door with the passwords and claims that they own your company’s pages.
- Learn about any new regulations that apply to your industry. If you are, for example, a healthcare company, you are used to staying apprised of ever-changing regulations. But even businesses that aren’t in heavily-regulated industries should keep their ears open. Two examples: Under the Affordable Care Act’s Employer Shared Responsibility Provision, employers that have 50 employees for more than 120 days per year will be required to provide health insurance to 95% of their workers in 2016 or face penalties. And, if your business holds sensitive client information electronically, Virginia’s data breach notification statute applies to you. In the event of unauthorized access of certain types of client information that could lead to fraud, notification is required by Code §18.2-186.6.
It’s a legal jungle out there; be sure you’re in a good position to steer your business in the right direction in the New Year!
Meg McEvoy is an attorney at Compton & Duling, LC, who practices in the areas of real estate and business law. You can contact Compton & Duling at 703-583-6060.
The materials available in this blog post are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.