Welcome to the fourth edition of the multi-part series on the topic of tasks you should be adding to your “start up to do list”. In past weeks we have discussed starting your small business checklist, organizing your startup, Are you sure you need to hire now?, and now our latest edition: Do you need a lawyer.
Every entrepreneur understands intrinsically – or learns very quickly – that a business is not an island. That is to say, a business cannot exist without interactions with outside parties in some form or another.
For example, a major part of running your business is receiving products/services from other businesses that will help in your daily operations. These interactions shouldn’t be taken lightly or handled in an informal manner.
While CFIB business counsellors do not offer legal advice, we are able to help set the stage for entering into what could be considered legal contracts. In fact, we previously published an article, Signing contracts and leases: how to avoid liability, here are some highlights:
A contract is a legal document; be sure you understand what you are signing, as it could be very costly to get out of and may even involve litigation.
- Do not accept any verbal changes. Make sure all changes are written into the contract.
- If you are not sure what your obligations are, get a lawyer to review the contract and advise you of any concerns.
- Check the contract for automatic renewal dates and be aware if you have to provide notice of cancellation. Some contracts require up to a year’s notice, in writing, should you wish to cancel.
- Look for clauses that allow increases in pricing without written notice.
- Check the term of the contract and make sure there is an option to cancel without penalty.
- Report any unscrupulous practices to the Competition Bureau at 1 800-348-5358 or online.
Do not feel pressured to sign on the dotted line on the spot. Take all precautions and due diligence to review and consult with your legal advisors, especially when you have to provide your banking or credit card information.
Our Business Counsellors hear of countless situations that could have been avoided if the above recommendations were followed. Remember, any business that presents a great deal should also provide you sufficient time for you to review agreements.
Your checklist of the week should also include the following very important topics:
☐ Be aware of the legal issues for small business
☐ Seek legal advice to ensure you select the right business entity
☐ Do you know enough about Trademarks and Patents?
☐ Keep informed of possible fraud attacks to your business
☐ Tips for leasing commercial property
More often than not, we get excited to start our business venture and simply hope for the best. We want you to have the best.
When in doubt, contact a CFIB small business Business Counsellors. We can offer specific advice and even let you know if and when legal counsel is required.
If you have been in business less than two years, you qualify to sign up as a member through our MyStartUp.ca portal. If you have been in business for more than two years, please click here to obtain further information from our CFIB website on how you sign up today!
Share our blog with your entrepreneurial community using: #MyStartUp #SmallBizChecklist
Cesar Gomez-Garcia has been with the Canadian Federation of Independent Business for six years. His current role at the CFIB is helping members with their questions on compliance. These questions can range from employment standards to health and safety, as well as complicated red tape situations that small businesses face. His passion is reading and writing about entrepreneurship. Learn more about Cesar via LinkedIn and follow him on Twitter @josuegomezg.