Perspectives on Business Expansion: Compliance and Risk Management

It’s natural for most entrepreneurs and business owners to want to expand their businesses. There are many paths to expansion, including:

• Organic growth through increased sales of current product lines
• Development of new product lines
• Merger of the business and its assets with another business
• Acquisition of another business and its assets

Regardless of how you expand, there are many important legal, compliance and risk management issues to take into account. Below are some factors you or your attorney will need to consider.

Business Structure

The first step is to look at your business structure. You may be a corporation, a limited liability company, a sole proprietorship, a partnership, or something else.  As you grow, you’ll need to evaluate whether your business formation documents continue to suit your needs and make changes if necessary and appropriate. If you’re looking to buy out a partner, increase your liability protection, or otherwise ensure a solid legal foundation for growth via a new product line, merger or acquisition, you should consult with a Harrisburg business attorney.

Employment Law

In most cases, expanding your business will mean adding additional employees. It’s imperative to have practices and procedures in place to ensure that you are meeting all applicable laws in the areas of employment discrimination, hiring practices, health, safety, employee benefits, and many other issues. Having clear standards and a legally-sufficient employee handbook are important to success as you grow your business.

Taxes and Insurance

Any path that results in growth will have tax and insurance implications. If you change your business structure, your tax rates may change. You may need to procure additional liability insurance for new and expanded lines of business or if you move into a large office building or manufacturing space.

Real Estate

Growing your business may also have real estate implications. Will you need to renegotiate your commercial lease, confront zoning and land use issues, or evaluate tax credits and financing?

Compliance Obligations

If the company’s growth is moving you into a new line of business or moving you beyond an “exempt” status for certain reporting or regulatory obligations, there will likely be a host of compliance obligations for the business to address. These can be in any number of possible areas: health and safety, environmental compliance, financial reporting, taxes, data security, privacy, and many others. Further, these compliance obligations must be reviewed and evaluated at all governmental levels – federal, state, and local.

Contact One Oak Legal

As your company evolves and grows, legal risks and compliance challenges must be identified and managed. As business attorneys and business owners ourselves, we understand the mix of excitement and concern you feel as you grow. Contact us today and let us help you on your growth journey.