At some point, you will encounter disputes or issues while running your business. If not handled correctly, you could find yourself facing a lawsuit.
Commercial litigation is complex and time-consuming, and without the right resources, you could watch your business struggle as you cope with the challenges. However, a little awareness goes a long way in protecting yourself from legal troubles. These are a few of the more common issues that end up in commercial litigation.
1. Shareholder disputes
You may run into disagreements with your partner, shareholders or LLC members over company funds, mismanagement or fiduciary roles. While bylaws and agreements set the standard, unresolved issues often end up in court.
2. Breach of contract
Your business operates with vendors, employees, licensees and others, making contracts an important part of your business dealings. Breaches or claims of them, no matter how minor, can wreak havoc on your business.
3. Employment issues
You can help protect your business from a lawsuit with clear employment agreements, policies and procedures, but not everyone follows the outlined expectations. Discriminatory practices are just one of the common employment concerns that often lead to litigation.
4. Intellectual property
Patents, trade secrets, copyrighted materials and trademarks are important to the success of your business. Yet, with the licensing out for marketing or manufacturing purposes, you could see this information mishandled. The misappropriation of trade secrets is another area of concern, even with confidentiality agreements in place.
It is impossible to avoid all disputes, but due diligence can help reduce the frequency of lawsuits. Documentation and paper trails are important for setting the standard of expectations.