In case you haven’t heard, America, while it may be a great country, is also a cesspool of lawsuits. It’s been reported that we have more lawyers and more lawsuits in this country, than in all of the other countries on the planet, combined!

What that means to you, the home business owner, is that if you’re still willing to go out and capture the American dream, you will become a juicy target for lawsuits, and the more successful you become, the juicier a target you will become.

Often, whether there is justification or not, your employees will want to sue you or cause legal problems concerning discrimination, Workmans Comp, the Americans with Disabilities Act, insurance, “wrongful termination”, “inadequate security”, unsafe work environment, sexual harassment, and a HOST of other potential legal issues. Everyone you do business with is a potential legal problem… your landlord, your ISP, your vendors, agencies you work with. Your customers, too, may pose a significant legal risk to you…. And your neighbors, especially if you have a home business…. And strangers who walk near your office or your home. Even your kid’s soccer coach could haul you into court one day claiming that, because you criticized his or her coaching methods, he or she is emotionally devastated and unable to work anymore.

We’ve all heard about the lady who sued McDonald’s because her coffee was hot and the man who sued a whole city because the sports arena didn’t have enough bathrooms. The illegal aliens who, through our esteemed court system, took away an American citizen’s ranch because the man tried to protect his property from trespassing.

The last time I tried to hire a lawyer to help me draft a simple letter, he sent me a ten page contract called an “Engagement Letter” that I was expected to sign before he would even accept me as a client. I called him back and said, “I’ve got to hire a lawyer just to help me review the contract YOU want me to sign in order to become my lawyer! You people are crazy.”

While investigating a burglary a policeman once advised me that if I ever have to physically defend myself from an intruder in my home or office, to be sure that – instead of injuring him – I go all the way and be sure to kill the intruder who is breaking the law and trying to harm me, because if I don’t, he’s likely to sue me, and win, and can take everything I own!

Your only defense is to remain poor. One of the first things a lawyer does before he decides to take these types of cases is check out the assets of the potential target. If you’re poor and having nothing to get, you can live your life free of many legal problems. But, (Forefathers, please look the other way) if you buy into the American dream and aspire to a better life for yourself and for your kids, beware. The journey is riddled with potential legal landmines and if you’re not careful, you could lose almost everything including your home business

Even if someone sues you without any justification at all, you could spend tens of thousands of dollars, or in some cases, even hundreds of thousands of dollars, or more, defending yourself from a false accusation.

When you have a business, it is imperative that you choose a form of business entity that offers you some insulation between your home business activity and assets and your personal assets.

Corporations, some partnerships and LLCs (limited liability companies) are the most common business entities formed by lawyers for their business clients for this purpose. Once your new entity is formed, certain procedures are also required to make sure that you realize the full benefit and protection. Some of these procedures may include not using company money on personal items, keeping minutes to corporate meetings, and making sure you always disclose, sign as, and do business as the proper name of your entity.

Business owners are strongly advised to seek competent legal advice concerning all of these issues. Lawyers are expensive, however, and sometimes there just isn’t enough money available to a small business to pay for a lawyer to help them form corporations and other business entities.