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How to prevent business litigation and disputes

Business owners know the ins and outs of their companies. Some business owners built their companies from scratch, which is why it is important for them to safeguard the integrity of their businesses. Here in Denver, Colorado, business owners try to avoid disputes that can harm their companies' reputation and disrupt their daily operations. Business disputes include breach of contract, confidentiality agreement disputes and other deceptive trade practices. Here are some simple tips than can help prevent legal woes for business owners.

There are different types of business structures: sole proprietors, partnerships, corporations and limited liability companies. LLCs and corporations protect their owners from personal liability, while a person who solely owns a company is not safe from legal claims. Business owners should understand that extensive litigation can seriously harm a business.

It is important for owners to settle disputes through arbitration or mediation in order to cut down on the costs or achieve a favorable settlement. It is also important for business owners to safeguard confidentiality and intellectual property including patents, confidentiality agreements, copyrights and trademarks. Business owners also should review contracts before signing them. A minor gap can result in a dispute and seemingly endless litigation. Lastly, it is important for a business to comply with corporation law requirements. A corporate record must show that the company is operating separately from the owner, while still complying with the mandates of the corporate board and other requirements.

If business litigation is imminent, then the business owner has no other option but to protect the best interests of the business. A firm may choose to contact a knowledgeable legal professional who can review the case and determine which option best suits the unique circumstances of the company.

Source: Democrat & Chronicle, "Steinbrenner: legal woes can take down a business," Carl Steinbrenner, June 25, 2014

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