Expanding & Growing Your Business: How to Avoid the Pitfalls

It is certainly an exhilarating and rewarding experience to witness the expansion of your company!  The growth may involve the hiring of additional personnel, the acquisition of computer and telecommunications equipment, the obtaining of additional customers or suppliers, and/or the addition of new product lines or services.  Being prepared for the possible legal issues which may emerge as a result of your business expansion will ensure that the experience is indeed a rewarding one.

If your company is doing business with customers or suppliers outside of New York State, the terms of the contracts which you utilize in conjunction with your dealings with them become ever so important.  For example, as a general rule, your contracts should not only be clear and unambiguous so that disputes can be avoided, but they should specifically contain provisions which state that New York law governs and the parties consent to the jurisdiction of the New York courts.  Inclusion of such language may deter the commencement of legal action by your customers or suppliers.  At a minimum, it should save you the additional expense associated with out-of-state litigation.

When hiring additional employees or consultants, it is important to consider mechanisms to protect valuable proprietary information, such as customer lists.  This may entail having the employee or consultant enter into a non-compete and confidentiality agreement.  Your company may also wish to take additional security precautions, limiting access to confidential information and certain computer data bases.  Obtaining trademark or copyright protection for some business products may also be desirable.

If your business expansion entails acquiring or updating computer or telecommunications equipment, it is important not only to negotiate the financial aspects of the deal, but it is imperative that any contracts you enter into be reviewed by an attorney who is knowledgeable in such matters.  Negotiating the non-monetary terms of such contracts can prevent problems and help contain costs.

In conclusion, expansion of your business can be an incredibly satisfying experience.  By consulting with an attorney, one can avoid some of the pitfalls.  

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