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Tops reasons that small businesses get sued

| Apr 26, 2021 | Business Formation |

When it comes to being a South Carolina small business owner, you have a lot on your plate. Most of your concerns are with cash flow, sales, and properly managing your employees. In reality, you should also be concerned with minimizing your threat of being involved in a legal suit.

Small businesses do get sued

One of the biggest misconceptions that small business owners have is that only the big corporations get sued. In reality, 43% of small businesses throughout the U.S. become engaged in litigation at some point or another. Any involvement in litigation can be financially disruptive for a small business as they do not have the financial fallback that a corporation does.

One of the best things that you can do to help protect yourself from being personally liable for any business lawsuits is to speak with an attorney about your business formation. This way, you can set your business up in a way that exempts your personal liability from any business liability.

Why do small businesses get sued?

One of the most common reasons that small businesses get sued is not properly paying employees. In many of these cases, the employer simply did not realize that they were violating wage and salary laws. This could be as simple as paying an employee the federal minimum wage when the state minimum wage is higher. This simple misunderstanding can result in some severe financial costs for the business.

Another common reason small businesses are sued is due to customer discrimination. If a past customer felt like they were discriminated against based on their gender, race, or even age, they may take up a legal suit against your company. It’s important to be prepared for this scenario by having an attorney by your side.

While many small business owners believe that only the big corporations are the ones that have to deal with legal suits, that’s far from the truth. As a small business owner, it’s likely that your business will be sued at some point throughout its operations. For this reason, it’s important to speak with a lawyer about your business operations to ensure that you’re doing everything possible to avoid a lawsuit.