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How to mitigate risk and liability when forming a business

It is always an exciting time when an entrepreneur embarks upon a new business venture. However, many in the Twin Cities may have discovered that there are layers of complexity and legality involved when establishing a new company. Most people who are establishing a new organization may want to understand how to protect themselves as much as possible from unnecessary liability.

First, it may be important to evaluate the various structures available when forming a new business. Depending on the number of people involved in ownership, the best option could be different. Secondly, having an appropriate insurance plan in place to protect the owners and/or employees against risks that are considered especially damaging can be essential in allowing a young business to get beyond initial hurdles.

In addition, reducing financial risk can be key in maintaining steady and healthy growth. This can be achieved by keeping accurate records and by putting controls in place, such as people who are authorized to make certain financial transactions. Identifying poor credit risks and implementing payment standards could also be important.

While this is a deceptively simplistic description of a few things that new business owners in the Twin Cities may want to consider, most who establish new ventures seek the professional consultation of an attorney. Attorneys with practices that focus on business formation and business litigation could be the best place to start for a new proprietor. The ability to limit liability and maximize a start-up business’s profits could mean the difference between success and failure for a nascent enterprise.

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