As an entrepreneur, starting a new business is an exciting time in your life. Making sure your business is legally viable is an important step.
Conducting a legal audit tests the legality of your business model and ensures that your business is operable. Audits also take note of legal scenarios your business might encounter to make sure your company will be acting according to business laws.
Examining important issues
Legal audits can cover many areas of your business. The important issues include:
- Employee compensation
- Intellectual property
- Insurance coverage
- Collection practices
Avoiding problems down the road
Making plans to have regular legal audits based on your legal team’s advice will help keep your business on track. If you choose not to have regular legal audits, you could be putting your business in jeopardy.
By not conducting legal audits, the following results could occur:
- You may not get the proper licenses and permits for your business, possibly resulting in penalties, fines or the government shutting down your business
- You could get into trouble with government agencies like the IRS because you weren’t complying with specific regulations and laws.
- Your company may go into default with investors because you weren’t monitoring your reporting requirements.
Being an entrepreneur comes with many responsibilities. Looking into legal audits could be a wise decision in the interest of keeping your business in good legal standing.