7 Legal Mistakes That Cost Small Businesses Big — And How a Business Lawyer Can Prevent Them

1. Choosing the Wrong Business Structure

One of the first — and most important — legal decisions you’ll make is how to structure your business. This isn't just about checking a box on a form. The wrong structure can expose you to personal liability, affect how much you pay in taxes, and limit your ability to raise capital or bring on partners.

Common Mistakes:

• Registering as a sole proprietorship for “simplicity,” but exposing yourself to personal lawsuits
• Choosing an LLC when an S-Corp might offer better tax benefits
• Overcomplicating things with a C-Corp before it's necessary

How a Business Lawyer Helps:
A qualified business lawyer analyzes your short- and long-term business goals and helps you select the structure that protects your interests and allows for future growth. At Empire Business Law, we guide founders through the entity formation process with clarity — not complexity.

2. Not Putting Contracts in Writing

Too many business relationships start with good intentions and a handshake. But when money’s on the line, verbal agreements quickly become unreliable — and unenforceable.

Common Mistakes:

• Relying on verbal agreements for partnerships or vendor services
• Using outdated or vague contract templates from online sources
• Failing to define terms clearly, leading to disputes

How a Business Lawyer Helps:
We draft and review contracts that make responsibilities, timelines, and payment terms clear — and enforceable. Whether you're hiring a contractor, closing a deal with a vendor, or entering a partnership, Empire Business Law ensures your agreements are legally sound and protect your business from risk.

3. Overlooking Intellectual Property Protection

Your brand is one of your most valuable assets. Yet many businesses wait until they’ve gained traction before thinking about intellectual property. By that time, your name, logo, or ideas could already be compromised.

Common Mistakes:

• Not registering trademarks for your company name or logo
• Skipping confidentiality agreements with contractors or employees
• Failing to protect copyrights or patents for original work

How a Business Lawyer Helps:
We help you identify what intellectual property you own and secure the legal rights to it.

Empire Business Law not only registers your trademarks and IP but also builds proactive strategies to defend them. Because if you're not protecting your brand, someone else might try to profit from it.

4. Hiring Without Legal Guidance

Adding people to your team is a huge step — but it's one of the easiest places for legal mistakes to creep in. Misclassifying a worker or skipping legal documents can lead to fines, lawsuits, or compliance headaches down the line.

Common Mistakes:

• Misclassifying employees as independent contractors
• Hiring without written employment agreements or NDAs
• Violating wage, hour, or termination laws

How a Business Lawyer Helps:
We create compliant hiring documents and policies that reduce your legal exposure. Empire Business Law ensures you onboard team members the right way, helping you avoid labor law violations and employment disputes before they start.

5. Waiting Until a Problem Arises

One of the most expensive legal mistakes is waiting until you're already in trouble to bring in a lawyer. Litigation, disputes, or government audits can cost tens of thousands of dollars — and most of them could have been prevented with proactive legal oversight.

Common Mistakes:

• Calling a lawyer only after a dispute escalates
• Ignoring compliance issues until penalties are imposed
• Rushing to close deals without contract review

How a Business Lawyer Helps:

At Empire Business Law, we act as your ongoing legal partner — not just a 911 call. With general counsel services, you get regular contract reviews, compliance checks, and strategic legal insight, so you can stay ahead of issues instead of scrambling to clean them up.

6. Inadequate Planning for Growth or Exit

Whether you're expanding, selling, or seeking funding, your business must be structured correctly from day one. Unfortunately, many entrepreneurs don't think about the legal side of growth until a deal is already on the table — and by then, it may be too late.

Common Mistakes:

• Poor shareholder or investor agreements
• Missing documentation required for due diligence
• Lack of planning for ownership transitions

How a Business Lawyer Helps:
We help you lay the groundwork now for a clean, valuable business down the road.

Whether you're preparing for a merger, acquisition, or exit, Empire Business Law ensures your legal infrastructure can support a seamless transaction and minimize liabilities.

7. Using Generic DIY Legal Templates

Online legal forms are tempting. They're fast, cheap, and seem "good enough." But generic templates often leave out critical clauses — or worse, include language that’s invalid under your state’s laws. One-size-fits-all legal documents rarely fit anyone well.

Common Mistakes:

• Using online operating agreements or contracts without review
• Failing to customize documents for your business type or industry
• Assuming a template protects you just because it's "legal-looking"

How a Business Lawyer Helps:
We don’t use templates. We create tailored documents that reflect your goals, operations, and risk profile. Empire Business Law ensures your legal foundation is built on real protections — not cookie-cutter language that doesn’t apply.

How Empire Business Law Helps You Avoid These Mistakes

Avoiding these legal pitfalls starts with one simple decision: bringing in the right business lawyer from the start. At Empire Business Law, we don’t just fix problems — we prevent them. Our team supports startups, entrepreneurs, and growth-stage companies with:

• Custom legal strategy for your stage of business
• Proactive legal oversight to reduce risk and increase confidence
• Flat-rate billing, so you get predictable costs without hourly surprises
• Local support in California and New Jersey
• Decades of experience in business formation, contracts, IP, employment law, and transactions

Whether you need help launching, scaling, or selling your company, we're here to provide ongoing legal support designed for entrepreneurs.

Conclusion: Get Ahead of Legal Risk Before It Costs You

Every business owner faces legal risks. But those risks don’t need to turn into expensive problems. When you bring a business lawyer into the conversation early, you gain a trusted advisor who helps you build a legally sound company from the ground up.

At Empire Business Law, we help you focus on growing your business — while we handle the legal details that keep it protected. If you're ready to stop guessing and start scaling with confidence, schedule your free consultation with our legal team today.