DIY Legal Health Checklist for Business
Running a business is difficult enough--then add Legal requirements. Use this checklist to help identify some opportunity areas and to avoid bigger issues down the road. As Benjamin Franklin once said, "an ounce of prevention is worth a pound of cure." Hope this helps!
This form will take you about 15 minutes to complete. Ready to go now?
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One More Note :)
As you complete this checklist, if you reach areas that raise questions, feel free to write in "I don't know" or "unsure" and we can have a quick chat to discuss if that feels helpful. Good luck!
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Obligatory Disclaimer
We're providing this DIY checklist by way of information only. We have a policy of entering into attorney-client relationships only in accordance with certain procedures including (1) completing a conflicts check and (2) executing an engagement letter. We've provided this form to serve as a self-help, "fill in the blank" form. The form is generalized and may not pertain to the specific needs you face; therefore, you should not act or refrain from acting based on the form I've provided here without first obtaining advice from professional counsel qualified in the applicable subject matter and jurisdiction. You acknowledge and agree that an attorney-client relationship has not been formed. The tool here is provided for your reference only and has been developed for companies formed and operating in Utah.You acknowledge and agree that this tool does not and shall not create any attorney-client or other confidential or special relationship between you and us. It does not constitute the provision of legal advice or other professional advice by us. You should seek advice from an attorney licensed in the relevant jurisdiction(s), as well as a tax professional, before relying on the tool. The questionnaire and tool may be considered Attorney Advertising under the ethical rules of certain jurisdictions.Additionally, the information provided in the tool and the questionnaire does not constitute tax advice. Any discussion of tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code (or equivalent in the relevant jurisdiction) or promoting, marketing or recommending to another party any transaction or matter.You further agree and acknowledge that the tool has not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and does not constitute tax advice. If you rely on this tool, you assume all risk and liability that may result. You should not use the tool and you should consult your tax, accounting, and/or legal advisors in the event your business has material existing assets, liabilities, or operations.
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The Basics
When running a business, we either (1) put our personal assets at risk in case of a lawsuit or failed business or (2) we've limited our liability through any number of business organizations. Some of the key considerations are here.
To help limit or avoid potential personal liability for the owners and/or operators (and loss of personal assets), our business . . .
Is an active Corporation or LLC, registered with the Department of State
Has enough funding to operate
Has an EIN ("Employer Identification Number")
Has its own, separate bank account(s)
Observes a separate existence/corporate formalities
Has a shareholder agreement (for Corporations) or Operating Agreement (for LLCs) that we follow
Maintains accurate business records (financial and governance)
Is not treated as a mere "alter ego" of owners (decisions are made in the best interest of the business)
Other
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Next: Laws & Regulations
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Laws and Regulations
It seems like there's a law or regulation covering every possible aspect of business. There are laws, permit requirements, licenses, and regulations...both known and (sometimes) unknown.
When it comes to laws and regulations, our company . . .
Checks from time to time to make sure we're complying with relevant laws and regulations
Has all of the permits required to operate our business legally and they're all up to date
Doesn't engage in false or misleading advertising
Maintains proper workers' compensation insurance and/or 1099/independent contractor practices
Registers as a business in other states where we start to do business
Considers whether new laws apply when we engage in new business
Other
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Next: Contracts
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Contracts & Agreements
Promises and handshakes are great--a written contract, however, is typically a best practice in business, and may be required to avoid unintended consequences or violations of an agreement. And when it comes to signing contracts, third parties can have long and difficult to understand contracts. The short of it: get a contract (preferably your own) and understand what you're signing when you sign (or when you click "Agree").
When it comes to contract and agreements, our company . . .
Has our key agreements and ways of doing business set out in clear, effective contracts
Has a system in place to keep track of our obligations and third party obligations and deadlines
Has contracts that limit our business and personal exposure to liability in case agreements are broken
Uses clear, understandable language to avoid confusion
Protects itself from potential liability for defective or poorly manufactured products
Protects itself from potential liability for services rendered poorly
Tends to "under-promise and over-perform" to make sure we can do what we promise and avoid breaching
Guarantees itself a reasonable time to fix any breaches to avoid a breached contract
Other
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Next: Disputes
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In Case of Disputes &/or Litigation
Things don't always go to plan. And some people are unreasonable. Regardless of "why" it happens, you may end up in a dispute at some point.
If a dispute arises, our company . . .
Requires parties to submit disputes to a specific state's courts and apply a specific state's laws
Defines the right of third parties to sue us--limiting loss of profit and other indirect types of claims
Has considered whether arbitration is a good option for us and adjusted our contracts accordingly
Limits the time to make a claim against us for a breach of contract
Other
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Intellectual Property Rights (Logos, trademarks, social media, copyright, etc.)
You might not have anything as iconic, valuable, and global as a "swoosh" or golden arches (yet!), but we hope you eventually do. As a business owner, you know how valuable and important your name, logo, and written materials are. Proper protections can secure your valuable assets and avoid bigger issues later on.
Our company has . . .
Confidentiality and/or Non-Disclosure Agreements with current or potential commercial service providers or partners to protect our valuable information and trade secrets
Checked to make sure we aren't infringing on another company's rights
The rights to our company name
The rights to any brand names we use in connection with our product(s) or service(s)
Protected our company name against unauthorized use by others
Protected our brand names against unauthorized use
Protected our trade secrets from theft and/or use without our permission
Secured the rights to any work done for us by non-employees, using a work for hire agreement
Had third parties assign intellectual property rights to us in writing
Secured domains related to our business and checked for "squatters"
Secured social media fan pages related to our brand and/or company
Checked for would-be or currently infringing copycats--on social media and on domains
Actively ensured the quality of goods and/or services associated with our trademark(s)
Considered or filed for Patents, Trademarks, and/or Copyright protections as relevant and valuable to the business
Other
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Employees and Independent Contractors
Employees are a business's greatest asset. They can also be a huge PITA if not approached properly. They'll have access to your trade secrets, best practices, and will likely contribute valuable ideas over time.
With respect to our employees and/or independent contractors, we have . . .
Verified that all employees are legally permitted to work for us
An employee handbook with policies and procedures laid out clearly
The proper unemployment, workers' compensation, and payroll details covered
Policies in place to avoid discriminatory hiring, firing, and employment practices
Posted all required workplace notices (state and federal)
Properly classified team members as employees or independent contractors
Independent contractor agreements in place to avoid imputed employees
Non-competition, confidentiality, and intellectual property terms for employees and independent contractors
Trainings from time to time to reinforce policies
Other
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Tax Planning (not our expertise--but we know enough to take Tax Planning seriously)
Regarding taxes, our company . . .
Has adopted strategies to reduce unemployment and other federal tax programs costs by separating guaranteed wage payments from dividends/distributions to owners
Manages our expenses in a way to maximize tax value
Takes advantage of tax credit and rebate programs, including R&D credits
Has a trusted accountant to help us stay compliant and avoid audits
Has properly addressed employee expense accounts and non-compensatory benefits
Other
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Property (Leases, typically)
You probably have a lease or a mortgage to allow you a place to work (or you will soon). Or you might be working out of your garage, basement, or home office. Commercial property leases can be complex and challenging to navigate--especially if they're long-term leases. And, if they're long-term, it's important to plan far in advance in case of unexpected cashflow challenges.
Our company's property arrangement . . .
Is flexible, allowing us to terminate early with limited notice
Allows us to terminate early with no (or limited) continuing payments
Is clear enough to allow us to know our exact lease costs
Isn't documented right now, but we could document it to observe a bit more "corporate formality" to better avoid potential liability through a plaintiff "piercing the corporate veil"
Other
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Insurance
For a business owner, insurance can be a great way to help you sleep better. With all of the close planning you engage in, it's nice to know that your business isn't on the line for any little mistake.
As a company, we . . .
Have a general commercial liability policy to protect us
Have specific lines of insurance relevant to our business (Errors & Omissions, Professional Liability, etc.)
Have a Directors and Officers policy in place to cover against D&O acts and omissions
Have Key Man insurance to cover against unexpected tragedies impacting key team members
Other
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My Business is Facing a Specific Legal Question Right Now
Business legal questions can be both complex and stressful. We're here to help. Please share a little more information with us. Please select from the following:
Start a business
Business compliance with laws
Operating Agreement
Shareholder Agreement
LLCs and Corporations
Advertising and marketing laws
Employees and independent contractors
Internet laws
Government agencies
Securities and capital raising
Patents
Trademarks
Copyright
Joint ventures
Insurance
Consumer Protection Claims
Other
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Last Name
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Format: (000) 000-0000.
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The more details, the better our attorneys can be prepared for your initial consultation.
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