In case you hadn’t noticed, tomorrow is Halloween and, while it is a time for tricks, treats and making fun of what’s frightening, small business owners would do well to remember that there are real fears which can threaten what they have worked so hard to build.
Running your own enterprise can give you no shortage of things to fret about — especially when it comes to legal issues. While they may not be the same as those found in haunted houses, they can still sneak up and spook you if you aren’t careful.
Here are some common small business fears and advice on how to overcome them this Halloween:
Fear 1: Failing to consult a lawyer before naming my company can lead to trouble down the road
Believe it or not, there are more than 4 million small businesses in the U.S. alone, so the odds are good one of them already has your name. Picking a name legally protected by another company can lead to legal battles that deplete resources that could be better spent on growing your business.
Even if you think you’ve done your homework and double checked your brilliant business name idea, it is always best to consult a legal professional to take preventive measures that ensures it has not been used, and then legally protect it.
Fear 2: Obamacare will force you to provide health insurance for employees, or face painful penalties
With all the political squabbling in Congress over the Affordable Care Act, better known as Obamacare, many small business owners have been led to believe that they will now be required to provide health insurance to their employees, or face stiff penalties. If you are part of the 97 percent of U.S. small businesses that have fewer than 50 full-time employees, then this is one fear you can forget about. The Obamacare employer mandate only applies to companies with more than 50 full-time workers.
Still qualify? Relax, the mandate does not go into effect until 2015 and businesses with over 50 full-time equivalent employees are exempt from the fee on their first 30 full-time workers.
Fear 3: Small business assets are not always protected after incorporation.
This is something you should be afraid of. Incorporating your business does not automatically void all responsibility for the assets you acquire. In many cases, you will need to co-sign and, if you default your wallet will experience its own horror story. Ever seen Texas Chainsaw Massacre?
To avoid this, be careful not to commingle funds — using company money for personal items can expose your personal assets to creditors by giving them the chance to ‘pierce the corporate veil’ and claim that your firm is really just a ‘shell’ of yourself. Make sure to school yourself on corporate formalities such as reading your bylaws and operating agreement, and follow exactly what they say. If you fail to do so, you also run the risk of creditors piercing the corporate veil and losing corporate protection.