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What steps should I take to protect myself from personal liability as a small business owner in Pennsylvania?

Picture of Chris Battis By   ·  1 minute read

As a small business owner in Pennsylvania, there are several steps you can take to protect yourself from personal liability. Here is a list of actions you can take:

  1. Incorporate or form a limited liability company (LLC): One of the most common ways to protect yourself from personal liability is to incorporate or form an LLC. This creates a separate legal entity, limiting the amount of personal liability you can face. This means that if your business is sued, your personal assets will be safe from being taken to pay off any debts or legal obligations.
  2. Follow all relevant laws and regulations: A vital step for any small business owner is to ensure they are compliant with all relevant laws and regulations. This includes paying taxes, obtaining the appropriate licenses and permits, and abiding by labor laws. Doing so will help to prevent any legal issues that could lead to personal liability.
  3. Obtain insurance: Another step to take is to obtain adequate insurance coverage. This can include general liability insurance, workers' compensation insurance, and property insurance. Insurance can help to protect your assets by covering costs associated with litigation or damages.
  4. Keep accurate and organized records: Maintaining accurate and organized records is essential for small business owners. This includes financial records, contracts, and employee records. Proper record keeping can help to defend against any legal claims.
  5. Consult with an attorney: Finally, it is highly recommended to seek advice from a licensed attorney who can provide guidance on specific legal issues related to your business. This can help to prevent any potential problems and ensure your business is protected.

It's essential to keep in mind that while taking these steps can mitigate personal liability, there is always a risk that you could face legal issues as a small business owner. There may also be exception or limitations to liability protection in certain situations, and further action may be required. Therefore, consulting with an attorney is always the best course of action to help your business stay compliant and protected.