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Six Things To Do If Your Startup Is Sued


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Setting up a startup and keeping it running is hard enough; the last thing you need is legal trouble coming your way. Unfortunately, there are plenty of things that could land your startup in trouble. According to a law firm in Dallas, Texas, several crimes count as what are called white-collar crimes. These may include fraud, forgery, and even embezzlement. 

The worst thing about white-collar crimes is that you can commit them without even realizing it. In this case, it will take a strong legal team to beat the charges. So here are six things to do if your startup is sued.

What to Do if Your Startup Is Sued

1. Speak to Your Business Lawyer.

If you have a business lawyer, the first thing to do after receiving the lawsuit is to speak with them. Your lawyer will give you guidance on what to do next. They will also help you weigh all the legal implications of any steps you take after being sued.

2. Inform Your Insurance Company.

In cases where you have insured your company against lawsuits, it is essential to inform your insurance company of the suit. Doing this will give them enough time to figure out the way forward and prepare to provide compensation for the losses you may incur as a result of the lawsuit. It is always advisable to insure your company against lawsuits since doing so will help minimize your financial losses.

3. Hire a Defense Lawyer.

Lawyers specialize in different fields. Your business lawyer may not be the best person to represent you against a white-collar criminal charge. Ensure you hire a professional criminal defense lawyer if your company has to battle such a charge. Depending on your charges, you might even opt for a more specific lawyer who specializes in your particular type of lawsuit. 

4. Avoid Interacting with the Plaintiff.

The last thing you should ever do when accused of criminal charges is to confront your accusers. Doing so will only put you in the court’s bad books. If you need to convey any messages, relay it through your lawyer. This way, you will keep yourself out of trouble and focus on other aspects of your case.

5. Keep Your Documents in Order.

In embezzlement and fraud cases, be sure that you have all your documents in order. These documents may help you prove your innocence. Moreover, lacking some of the essential documents, such as the company’s registration licenses, may land you in further trouble. 

6. Protect Your Finances.

Criminal charges can affect your finances. In most cases, the court may order your accounts frozen. It may further liquidate all your assets if you are guilty of any criminal charges involving fraud or money laundering. 

To prevent massive losses, you may want to speak to your lawyer on how to protect your finances. You may also want to separate your personal assets and bank accounts from those of your company. Do not let your company’s trouble spill into your personal resources. 

Preparation Is Key.

The secret to avoiding legal trouble is to always prepare for such lawsuits. This means that you should keep track of all the activities going on in your startup. Some employees may land you in trouble without your knowledge. Look into your startup’s affairs from time to time. It will also pay to have a defense lawyer on hand. This way, you will not have to hunt for a lawyer if you ever get sued. Do not let legal trouble destroy the startup you have worked so hard to build.



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