Writing an employee reference letter for a former employee and don’t know what you should say? Here’s how to make sure your letter of recommendation doesn’t get you sued.

Forget for a moment the legal pitfalls you can see. Let’s look at one you might not know exists. It’s hidden in something you may have done multiple times in the past. If you’re not careful, your legal woes could come from multiple sources as a result of this.

How often have you written a letter of reference? Most of the time, writing that letter comes with little risk. Maybe somebody you know applied for a scholarship and asked you as a present or former employer to write a letter for consideration by the committee? You have little to worry about, but what if you offer to write an outgoing employee a letter of reference for use in a job search? That’s when you have to cover yourself.

We asked a few attorneys to weigh in on how to protect yourself when writing a reference letter.

Understanding the Purpose of a Reference Letter

A reference letter is a powerful document that serves as a recommendation for a former or current employee, typically written by a colleague, manager, or supervisor. Its primary purpose is to attest to the employee’s skills, accomplishments, and character, providing valuable insights to potential employers, academic institutions, or other organizations. A well-crafted reference letter can significantly influence an individual’s career prospects, making it crucial to understand its purpose and importance. By highlighting the employee’s strengths and achievements, a reference letter can help them stand out in a competitive job market.

Benefits of Writing a Reference Letter

Writing a reference letter can offer numerous benefits for both the employee and the writer. For the employee, a strong reference letter can:

• Enhance their job prospects and increase their chances of getting hired
• Provide a competitive edge in the job market
• Showcase their skills, achievements, and character
• Demonstrate their value and potential to future employers

For the writer, crafting a reference letter can:

• Strengthen their relationship with the employee
• Enhance their professional reputation
• Provide an opportunity to support the employee’s career growth
• Demonstrate their commitment to the employee’s success

By taking the time to write a thoughtful and detailed reference letter, you can play a pivotal role in helping a former employee advance their career while also reinforcing your own professional standing.

Types of Reference Letters

There are several types of reference letters, each serving a specific purpose:

• Employment Reference Letter: Written by a former employer or supervisor to recommend an employee for a new job opportunity. This type of letter focuses on the employee’s job performance, skills, and professional achievements.
• Character Reference Letter: Written by a personal acquaintance, such as a friend or family member, to attest to an individual’s character and personal qualities. This letter highlights the person’s integrity, reliability, and other personal attributes.
• Academic Reference Letter: Written by a teacher, professor, or academic advisor to recommend a student for academic programs or scholarships. It emphasizes the student’s academic performance, potential, and contributions to the academic community.
• Professional Reference Letter: Written by a colleague or supervisor to recommend an individual for a professional opportunity or certification. This letter underscores the person’s professional skills, work ethic, and suitability for the specific role or certification.

Understanding the different types of reference letters can help you tailor your writing to meet the specific needs of the recipient.

Preparing to Write a Reference Letter

Before you start writing a reference letter, it’s essential to prepare thoroughly. Here are some steps to guide you:

• Gather Information: Collect details about the employee’s skills, achievements, and character. This information will form the basis of your letter.
• Review the Job Description: Understand the employee’s job responsibilities and how they performed in their role. This will help you provide relevant examples.
• Identify Specific Examples: Think of specific instances that demonstrate the employee’s skills and qualities. These examples will make your letter more compelling.
• Understand the Purpose: Know the purpose and requirements of the reference letter. Whether it’s for a job application, academic program, or certification, tailor your content accordingly.
• Obtain Consent: Ensure that you have the employee’s consent to write the reference letter. This is not only courteous but also necessary for legal and ethical reasons.

By preparing adequately, you can write a reference letter that is both accurate and impactful.

Writing an Effective Reference Letter

To write an effective reference letter, follow these tips:

• Use a Professional Format and Tone: Start with a formal salutation and use a professional tone throughout the letter.
• State the Purpose Clearly: Begin by stating the purpose of the letter and your relationship with the employee. This sets the context for the reader.
• Provide Specific Examples: Use specific examples to demonstrate the employee’s skills and qualities. This makes your letter more credible and persuasive.
• Highlight Achievements: Emphasize the employee’s achievements and accomplishments. This shows their value and potential to future employers.
• Be Concise and Clear: Use language that is concise, clear, and free of jargon. This helps ensure that your message is easily understood.
• Proofread Carefully: Review the letter for any errors or inconsistencies. A well-proofread letter reflects professionalism and attention to detail.

By following these guidelines, you can write a reference letter that effectively supports the employee’s career aspirations while protecting yourself from potential legal issues.

Make sure the employee reference letter is consistent with the employee’s personnel file

Consider this scenario: You have an employee who is average at best who you plan to let go. They weren’t a detriment to the team; you just want to go in another direction. Throughout their time at your company, you’ve kept a record of each time you talked to the person about issues like lateness, poor performance, and their job title.

You tell them that you’re letting them go and offer to write a recommendation letter for them. You leave out the negatives and focus on the positives, giving the person a better chance of finding a new job quickly. Then, a few weeks later, you get notice that the ex-employee is suing you for wrongful termination.

Washington, D.C., attorney Tom Simeone says, “…being a nice guy and providing a good reference for a not-so-good employee can come back to haunt an employer by contradicting the evidence they may have justifying their termination or sanctioning of the employee.”

In other words, the employee could say, “If I was as good as you said I was in the reference letter, why was I fired?” If the suit is filed, the ex-employee’s attorney will likely ask to see the employee’s personnel file. If the letter and the file don’t align, that could be bad news for you.

Related: How to Avoid Hiring Bad Employees

The new employer could sue you, too, for a former employee

It’s not just your former employee who could have it out for you; it could be their new (or most recent ex-) employer. If you write a letter that isn’t entirely accurate and the employer hires the person based on your reference letter, you could be sued if the contents of the letter turn out to be false or misleading. Simeone says, “The firm to whom an employer provides a reference may have a claim if the information is incorrect. While it may not amount to fraud — since that requires intent to defraud and mislead — it could lead to negligent misrepresentation, which only requires negligence or a failure to act reasonably.” Additionally, always include accurate contact details to facilitate any necessary follow-up inquiries.

A No-Win Situation

If you provide information in your letter that is false, such as exaggerating the employee’s skills, the former employee could sue you for defamation. For that reason, San Diego Attorney Samuel Brotman says, “You generally want to avoid recommendation letters for employees that were either fired or laid off.”

On the other hand, if you refuse to write a letter, that could be a problem, too. Attorney Moseley Matheson of the North Carolina-based Matheson Law Office says, “A former employee may also raise a claim for not providing a reference at all if they can demonstrate it has impeded their ability to find employment in that field.”

Confirm only the basics in the reference letter

The best and only way to reasonably protect yourself when writing employee reference letters is to make sure all of the information you provide is based on verifiable facts. Also, don’t provide any more information than is necessary. Chicago-based attorney Pamela Belyn says, “The general rule is to only confirm the basics, dates of hire, title, last salary, eligibility for rehire (yes or no). It is the cleanest way to avoid future litigation.”

Whatever you commit to paper (or email) becomes evidence. Don’t speak of the employee in a personal capacity, and keep the reference short.

The law isn’t universal

Wouldn’t it be nice if every state operated under the same rule of law? It doesn’t, and that’s why if there is any question about what you should include in a reference letter, consult an attorney in your area. The above represents basic guidelines that are applicable to most state statutes, but nothing beats the advice of a trusted attorney who knows your individual case.

This article provides general information only. If you need specific legal advice, you will need to contact an attorney.

The fast-paced, high-stakes drama of “Law and Order,” “Suits,” or even “Daredevil” might make being a lawyer sexy, but the legal sector is a demanding place to operate. It takes a special type of person working under pressure to elevate themselves from the competition. Often it comes down to easy-to-understand attributes applied with creativity and distinction.

If you’re looking for the best of the best in a lawyer or you’re a lawyer wanting to graduate to elite status, these are the features to pursue:

Staying Passionate and Knowledgeable in Legal Knowledge

The legal sector is not a place for the fake-it-till-you-make-it types. The best lawyers, including aspiring lawyers, love the law, from learning it to applying it. There are no exceptions to this as the passionate lawyer continues studying long after graduating from law school, and the thirst for learning is never quite quelled.

Having a burning passion is what keeps your lawyer working on your case long after business hours. If a lawyer doesn’t have passion, how do you know they will do everything in their power for you?

Exemplifying Trustworthy Judgment and Analytical Skills of Successful Lawyers

Making the right call at the right time is utterly paramount for a lawyer. Each and every day, high-level lawyers are required to draw logical conclusions from available data and use that in persuasive arguments. While this sounds purely based on trial or hearing experience, it undoubtedly permeates every facet, from contract negotiations to research and due diligence.

Demonstrating Compassion

The legal industry garners a reputation for being cutthroat, but this doesn’t paint a fair picture of the foundation of lawyering — compassion. Often overlooked, compassion is the driver of representing a client who we believe needs fair assistance under the law. Appreciating one’s unfortunate circumstances is a major asset to personal motivation and delivering a high standard of client care. Clients need to feel heard and cared for to truly trust their lawyers. Practicing law requires not only legal expertise but also a deep sense of compassion to serve clients effectively.

Stay technology savvy

The industry of law has been mired in tradition for centuries. The occurrences of innovation were typically reserved for the application of precedence and case law, but the infusion of technology is changing that. Legal document software, automation, AI, and new digitally augmenting software require lawyers to have strong technical skills. While inefficiency may not always have been a cause for concern for legal firms, a shift in client expectations means tolerance for outdated practices has diminished.

Growing law firms, recently graduated lawyers, and anyone looking to gain a competitive advantage need to use the technology solutions available on the market today. The American Bar Association (ABA) approves new software options regularly, giving lawyers hours of time back for billable work. Few skills will be as important as enhancing service through the use of technology going forward.

Always be organized

Organization is critical in everything a lawyer does, from managing legal documents to court appearances. Managing caseloads, disclosures, client files, meetings, knowing everything there is to know about the United States Code — and the list goes on. The reputational and embarrassment risks can directly impact the lawyer, client, and firm’s future. Furthermore, where a lawyer fails in an organization, lasting impressions can be left with judges, clients, and opposing counsel. It may seem over the top to characterize an organization in such terms but it is one skill that can be damaging in the long term.

Clear and Concise Communication with Effective Communication Skills

Being the most brilliantly educated mind with compassionate tendencies is largely moot without effective communication skills. The role of a lawyer hinges on this ability. Communication underpins the construction of cases and delivery of persuasive arguments and, in turn, is a hallmark of the most successful lawyers. However, communication isn’t just the ability to talk. It’s also the ability to listen and hear. From registering client concerns to finding weaknesses in opposing arguments or depositions, lawyers need to be incredibly acute listeners. Effective communication is essential for navigating the complexities of the legal system.

Perseverance

If you have graduated from law school, you likely know a thing or two about perseverance. Again, perseverance is one of the common denominator attributes found in successful lawyers. The willingness to endure and not give up the fight can be the bedrock of winning many cases. Late nights, overturning seemingly lost causes, or going to the ends of the earth for your clients is a trademark of any good lawyer.

Foresight

The pandemic dented the confidence of the forward planners among us, but the experience had a lot to teach us. First, change happens all the time in the world of law. New evidence is uncovered, and opposition actions are levied. Foresight and keeping on your toes are valuable characteristics to crafting bullet-proof arguments and ensuring you never get blindsided.

Secondly and on an organizational level, the ability to see sectoral change coming is essential. Law firms have just navigated the most disruptive change in recent memory as the need for digital offices grew out of nowhere. Keeping an eye on the future helps lawyers find that legal document software or AI that drives up profitability and competitive advantage. Those who refuse to be forward thinkers are often the casualties of obsolescence.

Creativity

The legally ignorant will question the place of creativity on this list, but I assure you that it belongs. Without the ability to think differently, you will always be outmaneuvered by your peers. Knowing the law is obviously essential, but applying it and problem solving relies on creative thinking. Simply put, you can’t prepare for every eventuality if you can’t think of unique ways your opposition can attack. Creativity is also essential for drafting well-reasoned legal documents that can withstand scrutiny.

Strong Work Ethic and Self-Motivation

A strong work ethic and self-motivation are the bedrock of any successful lawyer. These traits enable attorneys to stay focused and driven, even when faced with challenging cases or demanding clients. Self-motivated lawyers are proactive in staying up to date with changes in the law, attending professional development courses, and seeking out new opportunities to grow their practice. This dedication not only enhances their legal knowledge but also ensures they are always prepared to tackle new challenges.

A strong work ethic also plays a crucial role in effective legal practice. It helps lawyers manage their time efficiently, prioritize tasks, and meet deadlines consistently. By cultivating these qualities, lawyers build a reputation for reliability, professionalism, and excellence. Clients and colleagues alike recognize and respect a lawyer who demonstrates unwavering commitment and diligence in their work.

Continuous Learning and Professional Development

In the ever-evolving legal profession, continuous learning and professional development are non-negotiable. Successful lawyers understand that staying ahead of the curve requires a commitment to ongoing education. This means keeping abreast of the latest developments in their area of practice, attending conferences and seminars, and participating in online training programs.

Investing in professional development not only enhances a lawyer’s legal knowledge but also sharpens their skills and expertise. This continuous improvement allows lawyers to provide better services to their clients, ensuring they remain competitive in a crowded field. Moreover, a commitment to learning signals to clients and peers that a lawyer is dedicated to maintaining the highest standards of legal practice. In a profession where the stakes are high, continuous learning is a key differentiator for those who aspire to be successful lawyers.

Building Client Relationships

Building strong relationships with clients is a cornerstone of a successful legal career. Effective communication skills are paramount in this regard. Lawyers must be responsive to their clients’ needs, providing not only legal advice but also emotional support and guidance. By building trust and rapport, lawyers can create a loyal client base, generate repeat business, and attract new clients through referrals.

Good client relationships are essential for building a strong reputation and increasing client satisfaction. When clients feel heard and supported, they are more likely to recommend their lawyer to others. Prioritizing client relationships fosters a positive and supportive environment, which is crucial for long-term success in legal practice. Successful lawyers understand that their clients are their greatest advocates and that nurturing these relationships is key to a thriving practice.

Networking and Business Development

Networking and business development are vital skills for lawyers who aim to grow their practice and build their reputation. Successful lawyers actively build relationships with other professionals, attend industry events, and participate in online communities. By networking with other lawyers, judges, and industry professionals, they create opportunities for collaboration, referrals, and growth.

Business development goes hand in hand with networking. It involves identifying new opportunities, creating a marketing strategy, and promoting services to potential clients. Investing in these activities helps lawyers build a strong professional network, increase their visibility, and achieve long-term success. In a competitive field, the ability to network effectively and develop business is what sets successful lawyers apart from the rest.

In Closing…

Lawyers play an intriguing role within modern society. While many industries require definitive specializations in different fields, lawyers need to be experts in numerous areas.

Your field demands that you exude excellence in knowing the law inside out while being creative enough to apply it uniquely. You ought to be hardened enough to endure late nights of research and delivering firm, sometimes harsh counters while also being equipped with soft empathetic people skills. The legal field is uncompromising on the skills required, but knowing what begets success is half the battle.

You’ve come up with a great name for your product or business, and you want to be sure no one else uses it. Do you need to get it trademarked? Is registering a trademark something you can do on your own?

Or maybe you’ve just come up with a snappy product name, and you’ve decided you want to trademark it. What should you do next? Is it really as easy as the U.S. Patent and Trademark Office website says it is? Can you really do it without a trademark lawyer?

We’ll be honest; trademarks can be a bit tricky. In general, it’s helpful to get assistance from a lawyer even though it’s legal and possible to do it on your own. Here, we’ll walk you through the basics of what a trademark is, the protection it does and doesn’t give you, the gist of the trademark registration process, and more.

Getting paid when you work for yourself isn’t as simple as it may seem. Sole proprietors can follow these guidelines for paying themselves in a way that doesn’t land them in trouble with the IRS or other government agencies.

How do you pay yourself when you’re self-employed and haven’t incorporated your business? It ought to be simple, right? You sell something or do a service and get paid for it. That’s how self-employment works for freelancers, consultants, independent contractors, and other self-employed people, right?

If only it were that simple. When you’re self-employed, you’re running a business. That means you have to pay taxes on your income and abide by certain rules. For tax purposes, if you haven’t incorporated or formed an LLC and are the only owner of the business, the form of business you are operating under is called a sole proprietorship. 

As a sole proprietor, you don’t pay yourself a salary and you can’t deduct your salary as a business expense. Technically, your “pay” is the profit (sales minus expenses) that the business makes at the end of the year. You can hire other employees and pay them a salary. You just can’t pay yourself that way. The same rules for paying yourself in an LLC apply if you operate the LLC as a sole proprietorship or general partnership

You don’t have to wait until the end of the year to withdraw your profits, though. To pay yourself when you need money during the year, you take what’s called a draw on the profits. Taking a draw simply means taking money from the business account and giving it to yourself. You could take out cash or write yourself a check. You can do it once a week, once a month, or randomly, as needed.

How does that differ from just taking money customers pay you and putting it into your personal checking account? Technically, you could do that. But it’s not wise. You’re going to need detailed, accurate records of your business income and expenses when you file your taxes.

Am I a sole proprietor?

Before you can start paying yourself and paying taxes, you need to be sure you understand what a sole proprietor is. According to the IRS, “a sole proprietor is someone who owns and operates an unincorporated business by himself or herself.” The business can have a name that’s different from your given name (or not — that’s up to you).

But even when the business has a distinct name, if you’re the only owner and haven’t incorporated the business, all the profits from the business pass through to you and are reportable on your personal income tax forms. You report the year’s profits (or losses) from your sole proprietor activities on IRS Schedule C, which gets included with your personal tax return, and pay income taxes accordingly.

As a sole proprietor (or self-employed individual), you’ll need to pay federal, state, and possibly local income taxes on all the profits and ensure you pay income tax accurately based on your business earnings. You’ll also need to pay self-employment tax deductions. (The self-employment tax is basically Social Security and Medicare taxes for the self-employed.) Since your “salary” when you are self-employed is actually the profit from the business, the self-employment taxes are calculated on the business profits.

Separate personal and business finances with a business bank account

As a business owner, you’ll need to keep accurate records of your income and business expenses. Doing that will be extremely difficult if you put all your business earnings into the same account you use for personal expenses. Commingling business funds with your personal account may also make it more difficult to prove expenses were strictly for business if they look like personal expenses.

To keep things simple for yourself, your accountant, and the IRS, open a business bank account to start (you can get a business bank account through ZenBusiness). If you aren’t using a business name, open the account in your own name, but be sure to use it only for the business. If you are using a business name (for example, Joe’s Clam House), the bank will usually require a copy of a DBA (“doing business as”) certificate (a certificate saying you’re doing business under a fictitious name) or a business license report, or both. (Check with your bank to find out what they’ll need. Some banks may require a DBA certificate for a business even if the business “name” is your name.)

Use this business account to deposit all income from the business. Checks, ACH deposits, credit card sales receipts, and any other income should all be deposited into this account. Pay all the business bills from this account, as well. Your bank statements, along with records you keep about income and spending, will give you and your accountant a clear picture of how much the business earned, how much it spent, and what its profits are. If there’s a business name on the account, it will also help your business look more established to customers.

If your business is home-based, consider a separate phone line for your business. You’ll be able to deduct the entire cost of the business phone — plus, you can then answer all calls with your business name so you sound more professional.

If you’ll be charging any business expenses, get a separate charge card for use by the business. Chances are the credit card will be issued in your name, not the business’s name, or if the business name is on the card, yours will be, too. Use this credit card only to buy products or services for your business. Don’t make any personal purchases with the card. That way, you’ll know that everything charged to that card is for the business.

Use an accounting program to record all the deposits and withdrawals from the business checking account. Use the accounting program to characterize the nature of the expenses as you pay them (for example, website hosting, office supplies, accountant’s fees, etc.) Doing so will let you see at any time what your profit (or loss) is. Tracking expenses like this in your accounting program will also make it much easier at the end of the year to categorize your spending for tax purposes. It will also help you budget for the next year and analyze your spending patterns.

Paying Yourself

As a sole proprietor, you can pay yourself whenever you want (and the business income allows). Ideally, you’ll do this on a regular basis. When you do pay yourself, you just write out a check to yourself for the amount of money you want to withdraw from the business and characterize it as owner’s equity or a disbursement. Then, deposit the check in your personal checking or savings account.

Remember, this is “profit” being withdrawn, not a salary. Therefore, no income taxes, Social Security, or Medicare comes out of your check. But you will have to pay all those taxes when you file your personal tax return, so remember to set aside money to cover the expense. Once the business is profitable, you’ll be paying these amounts quarterly in the form of estimated taxes. But, in your first year of business, you may not have to pay anything until you file your annual return.

If you have expenses that will ultimately be shared between personal and business accounts (for example, the cost of Internet use if your home business tax deductions uses the same Internet connection the family does), those costs won’t get recorded in your accounting program. You’ll calculate them at the end of the year when you prepare your taxes and take a deduction for them on the Expenses for Business Use of Your Home form.

Maintaining a Healthy Business

Maintaining a healthy business requires ongoing effort and attention. This includes regularly reviewing your business finances, identifying areas for improvement, and making necessary adjustments. Staying up to date with changes in your industry and adjusting your business strategy accordingly is also vital for long-term success.

Equally important is prioritizing your personal well-being. Managing stress and avoiding burnout are crucial for maintaining both personal and business health. Consider delegating tasks, taking regular breaks, and seeking support from colleagues, mentors, or professionals. By focusing on both your personal and business well-being, you can help ensure a healthy and sustainable business that thrives over time.

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Managing your finances as a sole proprietor requires careful attention to record-keeping, tax compliance, and maintaining a clear separation between personal and business finances. By understanding how to pay yourself through owner’s draws, keeping accurate financial records, and staying on top of your tax obligations, you can set your business up for long-term success. While the process may seem daunting at first, adopting sound financial practices and seeking professional advice when needed will help you maintain a healthy business and avoid common pitfalls.

Here are five precautions you can take to maximize your chances of winning legal battles and minimize your chances of being sued, your need to sue others, and the potential legal fees associated with lawsuits.

If you’re like most people, you’re likely to have two opposing viewpoints about the law. Depending on where you stand in any individual legal confrontation, you may find yourself muttering, “There ought to be a law!” or “Laws! Laws! There are too many blasted laws!”

As a business person, you’re likely to have more encounters with the law than the average individual. Sometimes, you may be victimized by suppliers, contractors, or employees. At others, you may come under attack from dissatisfied customers, clients, or government regulatory authorities.

Regardless of the outcome of any legal encounter, the cost of the battle can have devastating effects on your home-based or other small business.

While there is seldom much you can do to stop legal action that has been started against you, the following five precautions can help you maximize your chances of winning legal battles and minimize your chances of being sued, your need to sue others, and the potential legal fees associated with lawsuits.

Maintain adequate personal injury liability insurance

Although a standard homeowner’s insurance policy offers protection against personal injury liability suits, that protection may not cover personal injury to customers, employees, or suppliers of your home business. Ask your insurance agency to make sure you have coverage against such personal injury claims. Many insurance companies now offer riders (additional options) that add this important protection to your home insurance policy for only a very small additional annual fee.

Make sure you get a written contract for work assignments

To be enforceable, an agreement must have all the elements of a contract. While the law does allow many contracts to be oral, it’s recommended that you always have a written contract.

Without a written contract detailing all aspects of an agreement, you leave yourself open to misunderstandings and outright lies. Consider a computer consultant who has agreed to develop a particular application program for a company on an oral agreement. The company and programmer agree verbally that the program should be finished in four months. Without a written contract spelling out specific details, the consultant may plan to deliver the prototype for the program in four months and work out the bugs in the ensuing weeks or months. The company may be expecting the debugged version of the program to be ready in four months. The result? Hard feelings and possibly legal action either by the consultant to collect his fee or the company claiming damages due to the unacceptable delay in delivery of their program.

Know your capabilities and perform all jobs with care

You may also be sued because you have not performed up to a reasonable standard of care (lawyers call this “negligence”). In order to minimize your chance of losing a negligence suit, perform your tasks using an amount of care equal to or above the care normally exercised in your business for performing that task, and, whenever possible, document your actions.

Consider including an “attorney’s fee” provision in contracts

Such a provision will usually allow you to collect your attorney’s fees from the other side if you win. Unfortunately, it also allows the other side to collect their fees if you lose.

Consider purchasing Errors and Omissions Insurance

To further protect yourself against negligence claims, you may want to buy errors and omissions (E & O) insurance. Such insurance will normally pay the attorney’s fees for your defense as well as any damages assessed against you up to the limit of your policy.

The hurricane season is upon us once again, and with it come warnings to prepare our homes and businesses. But hurricanes aren’t the only disasters that can strike. Here are things you should keep in mind when making preparations.

Over the years, I’ve followed news accounts of devastating tornadoes, floods, and wildfires in different parts of the country. I’ve been thankful that I live in Philadelphia, where we rarely see such natural disasters.

The small business administration definition (SBA) reports that it stands ready to help communities recover in the aftermath of a disaster. According to the SBA, following the Gulf Coast Hurricanes of 2005, they approved more than $5 billion in disaster loans to 102,700 homeowners and renters. They also approved $1.6 billion in disaster loans to area businesses.

Disasters occur in all seasons and in all places, so I’d like to share the SBA’s disaster preparedness ideas for homes and businesses:

• Your home or business plan should include an evacuation route to an established meeting area.
• Ensure that all family members and employees know and understand your plan beforehand. (Often, a disaster strikes without much warning.)
• Keep your emergency telephone numbers handy. Business owners should designate a contact person to communicate with other employees, customers, and vendors.
• Ask an out-of-state friend or family member to be your “post-disaster” point of contact. This person can be the person to call to provide information on your safety and whereabouts.

Make sure you have insurance coverage

The SBA recommends that you have adequate insurance. Disaster preparedness begins with having, at the very least, enough insurance to rebuild your home or business. Homeowners and business owners should review their policies to see what is and what isn’t covered. Businesses should consider “business interruption insurance,” which helps cover operating costs during the post-disaster shutdown period. Flood insurance is essential. (To find out more about the National Flood Insurance Program, go to www.floodsmart.gov).

Copy documents

The SBA recommends that you make copies of your important documents. It’s a good idea to back up vital records and information saved on computer hard drives and store that information at a distant offsite location. You can store your copies of documents and CDs in fire-proof safe deposit boxes offsite.

Remember that it’s vital to protect your windows, doors, and roofing. Install impact-resistant window and door systems, or simply install plywood shutters before a storm hits your area. Hire a professional to evaluate your roof to ensure that it can weather a major storm.

Have a disaster survival kit

You should also have on hand a “Disaster Survival Kit,” which consists of the following:

• Flashlight
• Portable radio
• Extra batteries
• First aid kit
• Non-perishable packaged and canned food
• Bottled water
• Basic tool kit
• Plastic bags
• Cash

As I learned in the Navy and my many years coordinating security and safety programs for the Defense Department, it pays to have a disaster plan. It also pays for everyone to know the plan, and be able to act according to the plan, if and when a disaster happens to strike.

You can learn more about developing a disaster plan by visiting www.ready.gov.

By Paul Davis

The apartment entrepreneur: If you aren’t one, you probably know one. But is it legal to start a business out of an apartment?

Everybody has a friend writing a screenplay or music, consulting, or trying to turn a hobby into a moneymaker … all from the comfort of residential rental property. This is not to mention the boom of tech start-ups begun out of living rooms and garages not only in Silicon Valley, but all across the United States.

Operating your home-based business under the thumb of a landlord is not always a good thing, however. And on top of possible restrictions in the lease, there may be actual legalities to consider.

Your business plans might get into trouble in three areas: zoning laws, home-based business ordinances, and licensing. Any of these might forbid your endeavor.

The first thing you should do is assess the situation. If you haven’t started your business yet, there are some resources you can tap to see if it will be successful before you spend a lot of time and effort only to see it go to waste.

Leasing office space is a big financial decision. Whether you’re renting space for your business for the first time or relocating, get answers to these 14 questions before you sign the lease agreement.

Leasing office space is just plain scary. Often, you have to sign a multi-year lease, and the monthly rent may be higher than your home mortgage, even for a very small office. Worse, the contract may leave you on the hook for rent payments even if you have to move because you outgrow the space or your business closes.

That’s why it’s important to evaluate the location, the building, the terms of the lease, and even the landlord before signing a commercial lease. Here are key factors to investigate.

14 Questions to Answer Before Signing a Lease For Office Space

1. Are you building for the future?

Depending on where you’re looking to rent office space, you may find landlords expect you to sign a 3- to 5-year lease or possibly even a 10-year lease. If you choose a space based on the number of employees you think you’ll have a year from now, you could easily outgrow the space before the lease is up.

Alex Cohen, a commercial specialist at CORE Real Estate, advises business owners to opt for more space than less because they can probably rent any surplus space later on. But if you do plan to rent surplus space, be sure your lease agreement will allow you to do so.

2. Is the location safe?

Attracting quality talent isn’t an easy task for small businesses. It will be even harder if the building where your rent space is in an unsafe or desolate part of town, in a location with many vacant or run-down buildings, or near a spot that attracts unsavory characters. 

3. Is the office space adequately wired for your business and equipment needs?

Space may be less expensive to rent in older buildings, but older buildings don’t always meet the power needs of today’s businesses. For example, the first office Business Know-How rented was in an older building on a main street in town. We discovered that we couldn’t microwave a cup of coffee at the same time as anyone was printing a document. If we did, it tripped a circuit breaker and knocked out power in part of the office.

Even newer buildings can have some limitations. There may not be adequate electrical outlets or LAN connections in the office, or they may not be near where you want to place desks or equipment. If you have to have the space rewired to meet your needs, it can cost a significant amount of money, even for a relatively small office. 

4. How much will furniture cost?

Cohen says that too many tenants consider furniture too late in the process. He advises that furniture delivery is often 4 to 6 weeks. “Even if a space build-out is complete, the absence of installed and wired furniture means a tenant cannot open for business.”

Second, during the buildout of the space, the furniture should drive some of the planning, especially for wiring.

RELATED: Office Space Alternatives to Working at Home

5. How much will the rent increase each year?

Many leases will have annual percentage rent increases built in. These should be spelled out clearly in the lease agreement. To keep your rent from skyrocketing at the end of the first multi-year term, see if you can have the lease written with an option to renew at the same predefined increase rate.

If you don’t have an option to renew, a rent increase could be substantial when you go to renew. That could leave you stuck with either paying the higher rate or paying a substantial sum of money to move to another location.

6. What’s included in the lease?

Your costs for leasing office space are rarely limited to just the monthly rent cost. Find out in advance what expenses are and are not included as part of your agreement.

What utilities will you have to pay for? Will you have to pay for trash pickup, cleaning business ideas, snow plowing in the winter, or any other common area fees? If something isn’t included, ask how much the monthly cost has been in the past. Don’t be taken by surprise after you sign a multiyear lease.

7. Who handles repairs?

When you lease a home or apartment, the landlord normally takes care of all repairs. With commercial space, that may fall completely on you. Make sure it’s spelled out in the lease.

8. How many cars drive by, and are they able to turn into the parking lot easily?

If you’re leasing a retail space, the landlord should give you an accurate count of how many cars drive by each day. It would be nice to know a count of pedestrians and cyclists, too. Is it consistent during the day or during rush hour?

If they don’t have this information but you’re still interested, head to the area and do a count on your own, or ask the city government if they have a count. You want to know the counts before signing the lease. Counting on your own is a tedious job, but this is too big of a decision to simply hope for the best.

While you’re counting, notice how easy or difficult it is for automobiles to turn into the parking lot and how many actually do turn in. If the building or strip mall is on a busy main thoroughfare, traffic may deter potential customers from stopping by.  

9. Is there enough parking?

A building or strip mall can have just a few tenants and not have enough parking space for everyone at one time. If the strip mall or building has a relatively small parking lot and has one or more tenants, such as a beauty salon or dental group that serves multiple customers or houses a tenant with a lot of employees, you and your customers may not always be able to find places to park.

The best way to tell is to check out the parking lot on different days and at different times of the day.

10. Who owns the building?

Establishing who owns the building is key. Is it an LLC, a large corporation, or a sole individual?

If the business owner isn’t local, it may be more difficult to resolve issues related to the building. Even when the business owner is located nearby, getting their attention is sometimes problematic.

If possible, check with some other tenants in the building to find out how quickly problems get resolved. Another option: Ask the landlord for contact information for former tenants of the space you want to lease. Call them and ask about their experiences.

11.  Do you understand the lease?

Business leases are complicated documents. Jack Levey, a real estate attorney at Plunkett Cooney in Columbus, Ohio, says, “Even terms that seem familiar may have a very different meaning in the lease than in everyday English.”

The lease you would sign was written to protect the landlord’s interest rather than yours. You should have your interests represented, as well. Have your attorney go over the lease and be sure you understand all the terms. They may be able to suggest terms in the lease you could try to negotiate to be more favorable to you.

12.  Are all promises in the lease?

Did you negotiate a certain number of parking spaces in the lot or use of break rooms that are outside of your leased space? Verbal promises are hard to enforce, so make sure they’re in the lease before signing.

13. Can you assign the lease, sublet the space, or even sell your business?

Strange question, but Levey says that your landlord may have a say in that decision. “Most leases say that you need the landlord’s permission to assign the lease to someone else, or even to sublet the space. Many leases are even stricter and require you to get the landlord’s consent to sell the equity in your business or merge with another company.”  

14.  Can you get an “out” clause written into the lease?

An “out” clause spells out the terms by which you can get out of the lease if you do outgrow the space or if, for some unforeseen reason, your business can’t continue to operate in the space. For instance, some landlords will agree to a clause that lets you terminate the lease without penalty, provided you give them a certain amount of advance notice (usually at least three months). 

The Bottom Line

Business leases have a longer length and are more complicated than residential leases. Before signing, get help from a real estate attorney. Your realtor probably doesn’t have the knowledge to represent your interests in the contract negotiation other than the basics like price and length.

RELATED: How to Evaluate a Commercial Lease

A notary is defined by the National Notary Association as “an official of integrity appointed by state government — typically by the secretary of state.” They’re held in high regard and known for their commendable integrity, serving the public by impartially witnessing people signing paperwork as a fraud deterrent. Ordinarily, they notarize important documents, such as official and legal paperwork, wedding certificates, birth certificates, and divorce settlements, among other things.

Notaries are ordinarily commissioned by the public, meaning they have a strict set of rules they must adhere to.

Is there more than a single type of notary?

Notaries have existed for hundreds of years. There are many types of notaries across the United States. However, the two main types of notaries are civil law notaries and common law notaries. The former type of notary is a lawyer who has passed the bar and is able to provide you with legal advice, whereas the latter is not a lawyer and is completely forbidden from giving legal advice, whether their own or of anybody else’s.

How about a notary public?

A notary, whether met in person or on the internet, still bears the same flag and maintains the same duty. Their entire purpose is to circumvent attempts at fraud by observing important documents being signed and verifying that they indeed were not forged.

Notaries, however, have a whole litany of other purposes. Some are to provide the notice of witnessing foreign drafts, acknowledge conveyances such as deeds and others, issue affidavits, and sign statutory declarations. Learn more on deed of trust definition here.

If an important document is signed, you often must have a notary witness its signing; however, in the past, a notary would always have to witness it personally. In our current digital age, you can now have documents notarized online. Online notarization has become a big thing and quelled the need for many in-person notaries unless, of course, it’s a very important document!

Can I become a notary?

Of course, as with many legal positions, every state issues different requirements for its potential notaries. Though the requirements are different, they still largely follow the same steps. According to the Florida notary service, there are a few fundamental steps one should engage with, should you decide you wish to become a notary in your state. You must first, of course, meet the qualifications necessary for your particular state, whether it be university, college, or night school. The basic qualifications include:

• Be 18 years of age or older.
• A legal resident of the state.
• Never been convicted of a felony.

You should also complete your application, submit it, and pay the fee to become a notary public. Of course, as with many legal professions, you will have to meet the state exam if that’s required in your state. You will then be sworn in by a member of your local council as a sworn notary public.

Unbelievable as it is, it really is that simple. Should you decide to pursue becoming a notary public, everything you need is contained in the paragraphs above.

John Pearson is a serial entrepreneur and writer who is passionate about helping small businesses launch and grow. His work has been featured in The Huffington Post, Entrepreneur, and Forbes.

Running a small business is a lot of work. You have to organize everything from accounts and workload to advertising and employees, but in return, you get to be your own boss and work when you want to. Whether you’re just starting out or have been self-employed for a few years, it’s important to familiarize yourself with the laws that relate to your line of work for a number of reasons. Here are just a few:

Protecting the Business from Lawsuits

While running your own business is exciting and liberating, it also comes with responsibilities. Corporate law is there to ensure that businesses function safely, legitimately, and fairly. It protects customers/clients, staff, and the environment from unscrupulous business practices and helps maintain consumer trust.

If you’re not aware of the current laws that relate to your industry, you could be breaching legislation and find yourself slapped with a lawsuit that could cost you a lot of time and money to fight.

Ensuring Staff and Customers Are Properly Protected

As a business, you have a responsibility to ensure that all your staff are properly trained and any relevant background checks are carried out. While details vary from state to state, most will have clear rules on employee rights when it comes to health, safety at work, training, and privacy.

If you’re not aware of these laws, you could be putting your staff at risk, violating employment laws, and failing to ensure your premises are safe for customers. If an employee or customer is injured as a result of your negligence, you could be liable. This applies whether you were aware of the law or not at the time.

Keeping up to speed with current legislation helps you to ensure that your premises, contracts, equipment, products, and training are all legal and above board.

Protecting Your Company’s Reputation and Brand

Trust and reputation are everything when it comes to business. They take years to build and only one bad incident to destroy. If you’re being vigilant and honest with your advertising and creating easy-to-understand contracts, a safe working environment, and a product or service that is what it claims to be, then your reputation will precede you. If your company’s name is not properly trademarked, then someone else could legally use it.

Furthermore, if you don’t background-check prospective employees and someone is attacked or harmed by them, you could be held liable. Similarly, if you fail to protect the personal information of clients, staff, or business associates, then you could find yourself in hot water both legally and professionally. No one wants to feel like their personal information is unsafe, and it will be difficult to attract customers if your business has a reputation for employing staff that have a documented history of violence or other criminal activity.

To help ensure your business always operates within the law and prevent liability or personal injury claims, it’s worth consulting an attorney. They can update you on any relevant legislation and help you take action to protect your business.

Written by Chris Lewis.