Whether it's about your cybersecurity plan or your business entity, you probably hear a lot of advice when it comes to running your business. But from a legal standpoint, what you hear isn't always true (or at least not anymore). Laws change, and what was once a sensible solution for your business may not do you much good anymore.
Below, six experienced chief legal officers and law firm partners from Forbes Legal Council share the most common pieces of legal advice business owners hear that no longer apply.
From top left to right: Anthony Johnson, Jeff Coppaken, Matthew Digesti, Victor Cardona, Linda R. Evers, Matthew Moisan. All photos courtesy of the individual member.
1. "Get Everything In Writing"
Many industries are built on the "handshake deal." If you own a startup or even a large corporation, paperwork can often kill the deal. Most lawyers cringe at this concept, but there are times that pragmatism trumps risk aversion. - Anthony Johnson, Johnson & Vines, PLLC
2. "You Won't Be Personally Liable With An LLC"
A limited liability company is just that: a limit on your liability. There are certain situations in which an LLC member or employer can be held personally responsible for their actions. A couple of examples include overtime wage violations under the Fair Labor Standards Act and the piercing of the corporate veil, which is commonly tied to fraudulent acts by the member or employer. - Jeff Coppaken, The Coppaken Law Firm
3. "Delaware Is The Best State To Incorporate In"
Delaware is a leader in corporate entity formation for many legitimate reasons. But not all businesses should be formed as a corporation, and not all corporations should be formed in Delaware. Many factors go into deciding what entity is best for a founder and what state is the most strategic place to file. Consult an experienced attorney to fully understand your options. - Matthew Digesti, Bristlecone Holdings
4. "You Can Use The Mail As A Poor Man's Patent"
According to an urban myth, mailing a new idea to yourself can provide you with a "poor mans' patent." If there was ever a good reason for this, it no longer exists. The first inventor to file (not the inventor who proves he was first) gets the patent. So if you were planning on using a postmark to protect you by proving you came up with your idea first, a second inventor can still beat you to the punch. - Victor Cardona, Heslin Rothenberg Farley & Mesiti PC
5. "Cybersecurity Only Involves Preventative Measures"
Sure, it is important to secure your network, but don't neglect your resiliency plan. How will you recover when a breach occurs? How will you notify employees and customers? What backup systems do you have in place? Consider and put in place the team of professionals you will need before the crisis happens, so you can quickly respond. - Linda R. Evers, Stevens & Lee
6. "A Corporation Is The Way To Go"
Entrepreneurs always come to us and say some form of, "Hi, I would like you to form a corporation for me." There are certain instances where forming a corporation is absolutely the correct avenue, but there are other instances where a forming a limited liability company is a wiser decision. I would encourage all entrepreneurs to review the differences between these two types of entities. - Matthew Moisan, Moisan Legal PC
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.
