Top Ten Tips

Start with a solid foundation.   Don't begin operations without creating the appropriate business entity for your operation.  Whether the right choice is a corporation, a partnership or a limited liability company, choosing the appropriate entity can reduce liability of the business's owners and officers, reduce the business's taxes, and reduce the potential for disruption of the business in the unfortunate event that there is a conflict among the investors. 

Employment.  Every small business should have a definitive employee policy manual that contains all essential employment policies, such as the employer's right to terminate employees at will, family and maternity-leave, confidentiality, sick leave, vacation, sexual harassment and document retention.  If your business doesn't have a policy manual, it is time to get one.  If it already has one in place, you should make sure that it is current and comprehensive.

Get it in Writing. Oral agreements are difficult to enforce – if enforceable at all.  Furthermore, each business is unique. As a result, few "boilerplate" agreements ever provide the quality of protection as an agreement tailored to fit  the particular needs and circumstances of a business.  Planning ahead by customizing your contracts allows you to decide the most important aspects of your business: Will you offer warranties? Who will suffer the loss if goods are destroyed or damaged in transit?  It may even allow you to dictate the venue and jurisdiction of a lawsuit if you are sued or need to sue on the  contract.

Don't Promise Employees Continued Employment. In Texas, nearly all employees are legally considered "at will."  Generally speaking and barring any illegal or prohibited employment practice, this means an employee can be terminated at any time for any reason or for no reason. However, promises of guaranteed employment might alter the otherwise "at will" status of an employee, seriously hampering your business's ability to adapt to changing conditions and exposing the company to a lawsuit by a former employee.    If you do offer employment contracts, it is prudent business to make sure that the agreements are providing your company with the all of the protection available to it.

Take the time to document employment decisions.   Whether it is a complaint by an employee or a reprimand of an employee, carefully document the incident in writing immediately. If there is an employee complaint, take the time to properly investigate. Make sure to document this follow up activity as well. Documentation of this sort may help reduce any "he said/she said" allegations down the road.

Be aware of external technology issues (e.g. the Internet).   The Internet has forever changed the way companies do business, allowing you to market your products in locations that would have been impractical or impossible just a few years ago.  But, with the good comes the bad.  Broadening your company's exposure requires that you answer questions like: do you need to comply with the differing laws of all 50 states due to Internet business?  Additionally, if you are using the Internet to market your product to the entire country, you could find yourself sued (or even criminally prosecuted) in a state and jurisdiction that you and your employees have never even visited. 

Internal Technology Issues (e.g., e-mails, voice-mail and employee use of the Internet):   Make sure you have company policies and procedures in place to protect your business from the day to day risks that technology poses.  The size and makeup of your business entity may dictate your company's duties with respect to document retention requirements.  Additionally, with the numerous electronic tools available to businesses, it is safe to assume the e-mail you draft today, could be used in a lawsuit against your business  next week, next year or even later.  Employees need to be made aware of the inherent risks of spontaneous electronic mail or other electronic communications.  Bellinger & DeWolf can consult with your business and its employees to ensure that operations are conducted responsibly and in a legally compliant fashion.

Be on the lookout for delivery of legal documents.   No one likes to be sued or served with a subpoena.  However, the best policy is to be proactive and immediately contact an attorney for help.  In some instances, a Defendant can have as little as 10 days to make an appearance in a lawsuit or face the risk of a default judgment against him/her.  Similarly, even where you have not been personally sued, failure to timely answer a subpoena can seriously limit your ability to object to the scope or amount of information being sought.

Injuries and Accidents.  It goes without saying, if you or your employees are ever involved in an injury or accident, make sure that you gather and preserve evidence.  Document, document, document.  Get pictures as well as the names and addresses (and other contact information) of everyone involved in the accident and any witnesses.  Don't be afraid to use your camera phone to document the injury or accident scene if you have to.  Additionally, make sure that you train any employees on how to keep track of evidence and how to report any such accidents and injuries.

Make sure your will is current.   This is especially important if there has been a recent change in your  life or your family situation such as a new birth, a death, a marriage or even a divorce.  Texas law provides for the dispensation of property where a will is out of date.  However, there is no guarantee that these statutory guidelines will coincide with your wishes.