Fatal Mistakes Made by Business Owners

Arizona attorney Scott Gibson (Twitter profile: @Tradesecretlaw ) recently published a list of 10 Fatal Mistakes Made by Business Owners. I encourage you to go to his Twitter profile and check them out. You may need to dig a little bit because Scott is continually updating his profile to provide helpful information.

I wanted to address two of the fatal mistakes on his list.

No. 5:  Failure to Set Up a Buy-Sell Agreement. More often than not, this is a major reason why business partners end up in litigation. Every business that has multiple owners should consider having a buy-sell agreement. The typical buy-sell covers how an owner can sell shares and how to value those shares. A good buy-sell will also set forth what happens in the event of death, disability, retirement, divorce, bankruptcy or other considerations. Without a buy-sell agreement, owners may end up in court and business may suffer.

No. 8:  Failure to Follow State and Federal Employment Laws. Want to end up with a lawsuit quickly? The failure to abide by state and federal employment laws is perhaps one of the the easiest ways. But maybe even more important is how the employer actually interprets and administers its own policies and procedures. While it is technically not a "legal requirement" I have long suggested that treating employees with respect is the best way to avoid employee lawsuits. Treating others as you want to be treated is a concept that even young children understand. But while the concept is easily understandable employers often have a difficult time being fair.

In building on Scott's thought about fatal mistakes made by business owners, you may want to check out my post on Five Ways to Avoid Lawsuits Against Your Business. I wrote it some time ago but it is just as applicable today.

Comments

[Scott F. Gibson]

Thanks for publishing the information on "Ten Fatal Mistakes." Go to http://www.gfrlaw.net/firmpublications.aspx if you would like to download a free copy of the complete e-book.