Starting a small business is more than just an entrepreneurial dream—it’s a fight against a system designed to favor those with deep pockets and powerful connections. Large corporations have entire legal teams ensuring they can maneuver through loopholes, crush competition, and exploit workers. Bureaucracies bury small business owners in paperwork, delay critical approvals, and make it nearly impossible for the little guy to compete. I’ve seen it firsthand. I’ve spent my career fighting for those who are ignored, underestimated, and discarded by powerful institutions. And I’m here to tell you: the law can be a weapon for justice—if you know how to use it.
If you’re starting a small business, you’re stepping onto a battlefield. The legal landscape is complex, and a single mistake can leave you vulnerable to lawsuits, fines, or even losing your business entirely. That’s why having a solid legal foundation isn’t optional—it’s survival. I’ve helped small businesses navigate this system, fighting back against landlords who break contracts, banks that refuse to honor loan agreements, and government agencies that drag their feet. If you want to level the playing field, start with these legal essentials.
Choose the Right Business Structure
Your business structure determines your legal protections, taxes, and liabilities. Get this wrong, and you might find yourself personally on the hook for debts or lawsuits—a mistake that could cost you everything.
A sole proprietorship might seem simple, but it offers no legal protection. If your business is sued, your personal assets are at risk. A Limited Liability Company (LLC) is a better option for most small businesses—it separates your personal assets from business debts, reducing risk. A corporation provides even stronger protections but comes with more regulatory burdens. Partnerships need ironclad agreements to prevent disputes from turning into legal wars.
Never assume a verbal agreement is enough—it isn’t. I’ve represented business owners who thought a handshake deal would protect them, only to watch their so-called “partners” walk away with everything. Protect yourself. Put it in writing.
Register Your Business and Protect Your Name
Without proper registration, your business doesn’t legally exist—which means you have no standing to enforce contracts or defend against legal threats. Some businesses get shut down overnight because they skipped this step.
Registering your business with the state gives you official recognition, but that’s just the beginning. If you’re using a trade name, file a Doing Business As (DBA) to protect it. More importantly, secure your intellectual property early. Trademarks safeguard your brand from being stolen by bigger companies that can afford an army of lawyers. I’ve seen it happen—a small business builds a great name, only for a corporation to swoop in, trademark it, and force them to rebrand or shut down.
Protect what you build. File the paperwork. Get your name legally locked down before someone else does.
Ironclad Contracts Are Non-Negotiable
The fastest way to lose money in business is with a bad contract—or worse, no contract at all. Don’t trust anyone’s word. People break promises when money is on the line, and when they do, a contract is the only thing standing between you and disaster.
Every agreement—with partners, employees, vendors, and clients—needs to be in writing. Contracts should spell out expectations, responsibilities, payment terms, and consequences for breaches. And never use a generic template you found online—I’ve litigated too many cases where those so-called “contracts” weren’t worth the paper they were printed on.
Think of contracts as your legal armor. Without them, you’re walking into battle unprotected.
Understand Employment and Labor Laws
Hiring employees comes with a web of legal requirements, and breaking these laws—even accidentally—can bankrupt a small business. Wage disputes, wrongful termination claims, and discrimination lawsuits can wipe out years of hard work.
Know the difference between employees and independent contractors—misclassifying workers can lead to massive fines. Follow labor laws regarding wages, overtime, and workplace safety. And never assume that being a small business shields you from lawsuits. I’ve defended employers who thought they were too small to be sued, only to find themselves facing six-figure settlements.
Treat your employees fairly—not just because it’s right, but because the law will punish you if you don’t.
Stay Compliant with Licenses and Regulations
Many small businesses get crushed by fines and shutdowns simply because they failed to secure the right permits or follow regulations. Local, state, and federal laws dictate everything from how you serve customers to what signage you can use. Ignoring them isn’t an option.
Zoning laws determine where you can operate. Health and safety codes dictate business practices. If you’re in a regulated industry—like food service, finance, or healthcare—missing a single compliance requirement can lead to closure or criminal charges. I’ve seen regulators come down hard on small businesses while turning a blind eye to violations from corporate giants.
Don’t give them an excuse to shut you down. Know the laws. Stay compliant.
Shield Yourself with Proper Insurance
Lawsuits happen—often unfairly, and often with devastating consequences. One accident, one disgruntled customer, one unforeseen disaster can leave you with legal bills that sink your business.
General liability insurance is essential—it protects you against lawsuits from injuries, property damage, and claims of negligence. If you sell products, product liability insurance shields you from defects claims. If you have employees, workers’ compensation insurance is a must. Too many business owners only realize they need insurance when it’s too late.
The best way to win a legal fight is to avoid it entirely. A strong insurance policy can be the difference between surviving and losing everything.
Building a business isn’t just about chasing success—it’s about defending yourself from failure. The system is stacked against small business owners, and if you don’t take the right legal steps, it will find a way to crush you. But knowledge is power. Understanding the law—using it as a shield, as a weapon, as a tool for justice—can level the playing field.
I have spent my career standing up to powerful institutions, fighting for those who don’t have the resources to fight for themselves. If you’re starting a business, you’re stepping into that same battle. But you don’t have to fight it alone. Know the law. Protect yourself. And never let the system push you around.
About the Author: Nick Harrison is an attorney, advocate, and public servant who has dedicated his career to fighting for justice. He has gone head-to-head with powerful institutions, challenging discriminatory policies, defending veterans, and standing up for those who have no one else in their corner. From taking on high-profile legal battles to helping small businesses and nonprofits navigate complex legal issues, he brings both fierce advocacy and unwavering support to those he represents. His work has not only changed lives—but changed laws. With experience in litigation, policy reform, and leadership under pressure, Nick is committed to using the law as a force for good and ensuring that no one is left behind.
