As a relatively new business owner, you know that you have to stay on top of every transaction that occurs with your company. You undoubtedly put up a lot of funds to get your business off the ground, and you do not want anything to jeopardize the operations you have going, especially until you can start turning a regular profit.

Unfortunately, some people know that new small businesses do not have a lot of extra money at their disposal. As a result, they may try to file frivolous lawsuits against your business in hopes that you will simply settle rather than facing the expenses of litigation. However, rather than immediately settling with someone over a frivolous claim, consider your legal options.

Dismissing the case

When conducting any type of business venture, having a contract is a must. These agreements can be verbal or written, but it is typically more advisable to have a written record of any business dealings. In particular, having a written contract may act as better evidence in the event that the other party involved violates the terms of the agreement.

Even with a written agreement, there is no complete guarantee that the other party will abide by the terms. As a result, your company could experience setbacks or other damages, some of which could be seriously detrimental to the company. In such a situation, you may need to decide whether taking legal action is necessary.

What type of contract breach took place?

Your company does good work, and you are proud when your completed project makes a client happy. However, nothing can diminish that feeling of pride faster than having to wait and beg for the money a client owes you for the work you did.

Running a small business is challenging enough when some days every dime counts toward keeping things going. Having to wait indefinitely for someone to pay you can make you frustrated and angry. There are steps you can take to improve the chances that a client will pay, but in the end, you may have to make some difficult decisions.

Setting the stage to get paid

Purchasing shares in a company is often a leap of faith, but it is not something you might do blindly. Certainly, you must believe in the company and its product or service. Additionally, you may expect the company to succeed and thus provide you with a sound and profitable investment. You also trust that those who make the decisions for the operations of the company will have your interests in mind and be your voice.

As a shareholder in a corporation, you do not control the way the business runs. Ultimately, the board of directors and the officers of the corporation handle those matters. However, it is their duty to make wise decisions about the direction of the company and the use of its funds since those decisions directly affect your well-being as a shareholder. This responsibility is known as fiduciary duty, and it is a legal obligation.

The board has a duty to protect your interests

When you decided to start your own business, you likely knew that there would be a lot of work involved. Even after you got your business operations up and running, you still had to take steps to keep everything in line. You may have created new business relationships, taken on employees, conducted various sales and carried out other related actions.

Because each aspect of your business is important and you want to protect your company, you understand the value of having contracts in place whenever a new relationship or arrangement comes into play. In fact, you may need contracts for certain areas that you may not have considered before.

When do you need a contract?