Top 10 Questions asked by Small Business Owners
Should I Incorporate? There are two main reasons for incorporation, tax savings and limitation on personal liability. Your tax advisor should be able to tell you if there is any tax benefit in incorporating. As to liability, without incorporation you are personally liable for the actions of your business. This means that if you get sued, your personal assets could be at risk. By incorporating, you may avoid these risks.
Does a lawyer have to review every contract before I sign it? The short answer is no. However, if there are terms in the contract you don't understand, it would be best to consult an attorney. Also, do not rely on what a salesman tells you. Salesmen are paid to make sales. If it is not in the written contract, then the promises are not binding.
Someone got hurt on my business property, what should I do? Contact your insurance company immediately, many insurance policies do not provide coverage if the company is not notified within a reasonable time after an accident. Do not make any promises or admit anything. Do not make any statements to anyone other than a law enforcement officer or your insurance company. Try to get a written or tape-recorded statement from the injured person at the scene. Get the names and addresses of any witnesses.
A customer bounced a check to me, what do I do? When a customer bounces a check to you, they have committed a crime. You can take the check to the local police or the County Prosecutor's office and prosecute them. Quite often a letter from the Prosecutor will be sufficient to have the check made good. If this doesn't work, you can sue them for the money. If you sue them, you are entitled to receive the face amount of the check plus three times the face amount or $500.00 whichever is less plus Court costs and attorneys' fees.
What is a mechanic's lien and how do I get one? There are two types of mechanic's liens. The first, which is also known as a garageman's lien, is available to anyone who does repairs on a car. It says that they are entitled to hold onto the car until the repairs have been paid for and if payment is not received that they can eventually get title to the car. The other type of mechanic's lien is available to those who do construction, either new or remodeling, provided certain requirements have been met. These requirements are quite technical and you should talk to a lawyer about them.
A customer won't pay me, what do I do? This is one of the hardest decisions for most business owners. You've sent bills, written the customer and even tried calling, but nothing is working. Now the customer won't even take your calls. At this point you need to decide what you want to do, write the bill off or sue. If the bill is less than $3,000.00, you might try small claims court where you can represent yourself or you can hire an attorney. Many attorneys will accept these cases on a percentage basis. However, the only way you can get attorneys' fees is if that provision is in your credit agreement with your customer.
Do I need to have workers' compensation insurance? If you are in the construction business and you have one employee, the answer is yes. If you are in any other type of business, you must have five employees before you are required to have insurance. For purposes of the requirements, an owner who works in his business is an employee. However, the owner may opt out of coverage for himself. If you don't have insurance and an employee is hurt, the employee may go to the Missouri Division of Workers Compensation for coverage and then the State will look to you for reimbursement.
One of my employees claims that they were sexually harassed, what do I do? This is one of the most active areas of the law today. Long before this occurs, you need to have a written policy indicating not only that you do not tolerate such harassment, but establishing procedures for investigating it and taking appropriate action. You as an employer may be held liable not only for harassment by your employees, but also by your customers. When a report occurs, follow the procedures that you have established.
I have just been served with a garnishment on one of my employees, what do I do? First of all, do not fire them. Federal law prohibits firing a worker for a first garnishment and even if it isn't the first one, you may still have problems if you fire them. Garnishments take 25% of the employee's pay net of taxes unless it is for child support when it may take 50% or, if the worker claims head of household status, then 10% is taken. The most important thing you need to do is answer the interrogatories that come with the garnishment. These are written questions about how much money you withheld during the garnishment period. They must be sent to the court and the attorney who filed the garnishment within 10 days after the garnishment expires. If you fail to do this, the Court may hold you liable for the entire amount of the garnishment.
I want to fire an employee, may I do it? In Missouri, you can fire an employee for any reason or no reason at all unless you are retaliating for some action that they have taken such as filing a workers' compensation claim. If they are fired, they still get unemployment, but the period of disqualification is based on whether there was good cause for their being fired. Also, a fired employee may feel that they have been the victim of some kind of discrimination. Therefore, it is best to have documented your reasons for the firing along with your attempts to correct the situation before you fire anyone.
NOTE: The information contained in this flyer is of a general nature and is not intended for you to rely on in your own business. Each case turns on its own particular facts and circumstances. Therefore, you will need to consult your own attorney about your case.