However, this is not the case, and there are a number of issues that can impact your income regardless of whether you are a business owner or a basic employee. In particular, you need to consider the issue of legal trouble.
If you do experience a problem with the law, it can lead to high costs, expensive fines and other problems for your bank balance. So, what legal issues are we talking about here? Well, there are a few that could certainly knock your finances down a few pegs.
It is often said that you should keep your personal life and your business life separate. But divorce is a situation where the two overlap and there’s not much that you can do about it.
If you earn more than your partner, a divorce could leave you in a position where your finances are impacted, particularly if you have children. You could be expected to pay child support, and the cost of this can be substantial. That’s why before you get married, you may want to think about arranging a prenup.
A prenuptial agreement will ensure that if your marriage does end, as statistics suggest it probably will, then you will be able to have complete control over your income and what you will be expected to pay to your partner. This is a particularly important consideration if you own a business or if your partner’s income is not enough to provide the lifestyle that they are accustomed to while married to you.
To handle this type of agreement you need to speak to a lawyer and make sure that the contract is iron clad. If a prenup can be broken, it is essentially worthless and will put you in the position that we have previously discussed where you will be expected to pay anything or everything that your partner’s lawyer argues for.
Injuries and accidents
You may also find yourself in legal difficulty if you have been injured. An injury that wasn’t your fault could certainly put you in the position where you have unexpected bills that affect your finances.
For instance, you might be involved in a car accident, if that’s the case, then you should expect to pay for damages to both your vehicle and any medical bills that are necessary for treatment of you and your passengers. If the accident wasn’t your fault, then it will be the responsibility of the insurance provider for the other driver to pay up and cover the costs.
However, you might find that you only receive a low insurance offer from the company in question. If that is the case, you will have to lawyer up to fight a low insurance offer and make sure that you get the financial support you need and that is legally owed to you.
In another scenario, you might find that you are the individual being sued for the injury or accident that has taken place. While this can affect anyone who owns a property, it should be a particularly important issue to business owners.
Business owners, like all property owners, are held underneath the clause of premises liability. This means that if you own a property and someone is injured, emotionally or physically there, you can be held legally accountable. Lawsuits involving premises liability can often include damages being paid out ranging in the high hundreds of thousands or low millions. It can be a crippling blow to both your personal income and your small business revenue.
Avoiding a legal issue like this is a simple matter of making sure that your business property is up to code and completely safe for all the employees or members of the public who may frequent it.
If you are running a company, working as a freelancer or even offering a service as an employer, you do need to be aware of the potential danger of a contractual dispute. Contracts are made all the time in life, and we will give you a simple example.
You might be thinking about purchasing a second-hand vehicle from a dealer. Most people believe that if you pay a deposit and then choose not to proceed forward with the purchase, the only thing that you lose is the money that you have already paid.
Legally, however, the car seller is within their right to force you to buy the vehicle if you have signed a contract. They could take you to court, potentially win and at this point, you will have to pay the full cost of the car that you agreed to buy as well as any legal fees incurred. This doesn’t happen very often due to the fact that the cost of the legal battle is not worth what the dealer will lose if the car purchase doesn’t go through.
In other situations, a business will open a contractual dispute because they have more to lose. For instance, you might decide to sue a business that agreed and failed to deliver materials used to make your product. Or, a company could sue you if you fail to supply a certain level of product to them as agreed in a pre-written contract.
This is another reason why lawyers are so important when running a business. If you are running a small business, you should at least be using an outsourcing service for legal advice, particularly when forming contracts with potential partners.
Similar to a prenup, any contractual agreement between a business and an individual or two businesses must be completely secure. Otherwise, it can lead to financial loss for both parties involved.
As you can see then, there are a number of legal issues that can impact your finances and put you in a difficult situation. That said, with a little forward thinking and by hiring the right services, you can make sure that these legal issues do not negatively impact your income or indeed, the future of your business prospects.