Running a small business is no joke. Small business owners have a growing list of questions to ask when starting a business. Should you use your own funds to get up and running, what happens in the event of a lawsuit, should I get
commercial insurance? We asked our legal team to answer a few of the most common small business legal questions. Please keep in mind; their responses are for informational purposes only. We recommend reaching out to your attorney for specific questions pertaining to your business.
Answers to Small Business Legal Questions
Q: Can I use my personal assets to run my business? A: Yes, you can use any legally obtained and available assets for your business. But, the use of any personal assets can increase the chance that your personal assets may be at risk in the event of a claim against your business (even if your business is incorporated).
Q: Do I need to trademark the name of my business? A: You are not required to register the name of your business as a trademark (either domestically or internationally). However, a properly filed and approved registration grants you certain protection over the trademarks, including permitting you to prevent others from using the registered trademarks name in the identified classes of business. Without registration, anyone – even a competitor – is free to use the name of your business.
Q: Before starting a business, what structure should I use? LLC, Corp, etc. A: The business structure that you use ultimately depends on your goals, as different business structures can provide different benefits and costs. Since a common goal is the protection of your personal assets, you should consider checking with an attorney for this important step to help make sure it accomplishes your objectives.
Q: How can I protect my intellectual property? A: Some intellectual property rights, like patents and trademarks, require registration with the appropriate governmental authority (e.g. the U.S. Patent and Trademark Office). Patents and Trademarks are complex filings that generally require the assistance of an attorney that is familiar with such filings. Copyright protection may also require filing depending on the jurisdiction. In the U.S., copyright protection generally applies to any original, fixed work without any additional acts on the part of the creator. However, additional protections are available with registration of the work. Trade secrets are generally maintained by the measures that the business takes to guard the trade secret.
Q: What are my risks of getting sued? A: Any business that deals with third parties, including customers or suppliers, has a significant chance of being sued someday.
Q: What happens if I get sued? A: Your first step is to make sure that a proper response is filed to the complaint – by either you or your attorney – to prevent a default judgment from being filed against you. Response times can be short, depending on the nature of the response and the jurisdiction in which the complaint is filed.
Q: What other risks should I be guarding against? A: Business risks are as varied as the types of businesses that exist. Consider working with attorneys, insurance producers, and other business advisors that are experienced in your field to get practical and effective solutions that can help you mitigate risks that are common for businesses like yours This is just a snapshot of the scenarios a small business owner will encounter as they are starting their business. Be sure to speak with your attorney directly to get advice pertaining specifically to your business.
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AmTrust Financial provides small business owners with a variety of property and casualty insurance options.
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This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.