How Does the Choice of Business Structure Impact Liability?

When you begin a business, you must choose the business structure for your company. Your business structure affects how the business and the owners are legally and financially liable for company debts and obligations. Therefore, it is crucial for every business owner to work with a South Carolina business attorney to be aware that the decisions they make regarding the business structure affect potential personal liability.

Overview of Business Structures and Their Liability Aspects

The level of personal liability for business owners differs depending on the business structure they choose for their company. The most common types of business structures in South Carolina include:

Sole Proprietorship

A sole proprietorship is the most straightforward business structure to form. Because it is not a legal entity, the owner is personally responsible for all business debts and liabilities. If someone sues the business, they are suing the owner. A sole proprietor pays personal income taxes on the business income on their personal tax return.  

Partnership

There are two types of partnerships – a general partnership and a limited partnership.

A general partnership is a business entity of two or more individuals who agree to operate a business. The partners are personally liable for all business debts and obligations. Unless the partnership agreement states otherwise, all partners can make decisions for the business that are binding on all partners.

A limited partnership has at least one general partner and one or more limited partners. Limited partners do not participate in the management of the company. Therefore, a limited partner’s personal liability is restricted to the amount they invested in the company.

Partnerships are pass-through entities for tax purposes. The partnership does not pay taxes on income. The partners pay personal taxes on the income they receive from the partnership.

Corporation

Corporations are legal entities. Individuals own shares of the corporation. They are not responsible for the debts and liabilities of the corporation. Corporations provide the highest level of protection from personal liability.

A C-Corporation files tax returns and pays taxes on the income the company earns. Shareholders pay personal income taxes on the amount they receive in dividends. However, if the shareholders elect to be classed as an S-Corporation, income passes through the company like a partnership and is taxed on the shareholder’s personal income tax return.

Limited Liability Company (LLC)

An LLC is a legal entity created under state law. It offers members (i.e., the owners) limited liability from personal responsibility for company debts and obligations. It does not provide the same level of protection from personal liability as a corporation.

Unless the LLC elects to be taxed as a corporation, income passes through the company to the owners. The owners report the income on their personal tax returns.

Consult With a South Carolina Business Lawyer About the Elements to Consider When Choosing a Business Structure

Personal liability and tax liability are two critical elements to consider when choosing a business structure for your company. However, understanding all of the legal and financial implications of each business structure is also essential.

Before setting up your business, it is wise to meet with an experienced South Carolina business lawyer. A business attorney will review the various business structures, explain the implications for personal liability, and discuss how the business structure impacts the company’s operations. Call Willcox, Buyck & Williams, P.A. to schedule a consultation to explore business structures with an attorney. 

Drafting Enforceable Contracts: Tips to Avoid Breach

In the business world, contracts are necessary to protect yourself and your business. In addition to being the backbone for nearly every transaction, contracts ensure the parties fulfill their obligations. Parties to a contract can suffer financial harm from contract breaches when the contract hasn’t been drafted properly and isn’t legally enforceable. Here are our top five contract drafting tips to help business owners avoid contract breaches in South Carolina.

1. Clearly Define the Parties and Terms of the Contract

Ambiguity is one of the most common causes of contract breach. Although the parties to a contract may assume that they agree on the terms’ meaning, disputes can arise when the terms are overly ambiguous. The contract should clearly identify all parties to the contract, including any subsidiaries or affiliates, to avoid confusion and potential breach of contract claims. 

It’s also essential to clearly outline the scope of the contract. The contract should clearly state the rights and obligations of each party, including any exclusions or limitations. The terms should be specific about the duties and responsibilities of each party and not leave any room for misinterpretation.

2. Include Precise Payment Terms

Many breach-of-contract claims involve misunderstandings about payment terms. When drafting a contract, it’s important to include detailed terms related to payment. The contract should specify the amount, acceptable payment methods, and due date for each payment. To ensure accountability, it should also specify any interest charges or penalties that will be incurred for late payment.

3. Address Remedies for Breach of Contract

Breach of contract can happen even when the contract has been well drafted and is legally enforceable. The contract should address the remedies available for a party whom a breach of contract has injured. Addressing the available legal remedies upfront can prevent you from undergoing a lengthy court battle. 

Consider including provisions that outline the penalties for a breach of contract. Examples of penalties for breach of contract include termination rights and liquidated damages. The contract should also include any available dispute resolution methods the parties must use.

4. Conduct Thorough Due Diligence

Before entering into a contract, both parties should conduct thorough due diligence. Learning about the other party’s financial stability, reputation, and previous business practices may help you avoid a breach of contract. 

An in-depth understanding of the other party’s licensing requirements and compliance with industry regulations can help you make informed decisions and minimize risk. You may decide not to enter into a contractual agreement with the other party. If you do, you will benefit from working with an attorney to include provisions that protect yourself.

5. Hire an Experienced Attorney to Draft and Negotiate Contracts

Drafting legally enforceable contracts requires an in-depth understanding of contract law. Many individuals and businesses have begun using online contract services to save money. Unfortunately, these services don’t provide the same legal evaluation and experience as working with an attorney.

For over 125 years, the attorneys at Willcox, Buyck & Williams, P.A. have helped South Carolina businesses draft and negotiate effective, legally enforceable contracts. When you work with our attorneys, we will ensure your contracts comply with all applicable South Carolina and federal laws and regulations.

Contact an Experienced Contract Attorney in South Carolina

At Willcox, Buyck & Williams, P.A., our attorneys help South Carolina businesses navigate the complexities of contract law. We will answer your questions and work with you to draft an effective contract agreement that protects you and your rights. Don’t hesitate to contact Willcox, Buyck & Williams, P.A. to schedule a complimentary case evaluation.

Dissolving a Business Partnership: Legal Steps and Considerations

Dissolving a business partnership can be emotionally and financially painful. Some have even described the process as comparable to getting divorced. When individuals form a business partnership, they usually agree on all the major business issues. Partners may not anticipate the partnership breaking down because they’re on the same page when it begins. 

Unfortunately, business relationships deteriorate more frequently than many of us realize. Disputes between the partners can arise, the business circumstances could change, or one partner may decide to leave or retire. Dissolving a business partnership can be a complicated legal process, and understanding the steps in the process can help you navigate it effectively.

1. Carefully Consider the Partnership Agreement

If you are considering dissolving your partnership or you’ve already begun the process, considering your partnership agreement is an essential first step. Ideally, you will have started your partnership by drafting and signing a written partnership agreement. The partnership agreement should include a clear exit strategy detailing the procedures each partner needs to follow to dissolve the partnership. 

The agreement should also address issues such as handling existing customers, which partner should keep which business assets, and what will happen to the commercial property. If you have an LLC, you should review your operating agreement. An attorney can help you understand your obligations under your contractual agreements.

2. Try to Resolve Disputes Effectively

Tensions can be high when navigating disputes between business partners. You may think litigation is inevitable because you cannot resolve your disagreements. However, in many cases, partners can resolve their disputes out of court. Negotiating an amicable resolution through mediation or arbitration may save you significant money and protect your personal and business reputation.

3. Consider Your Ideal Outcome and Work Toward It

As you begin the negotiation process, having your ideal outcome in mind is essential. What would you like to happen at the end of the dissolution process? Write down your goals and then discuss your desired outcomes with your business partner. Instead of trying to sabotage each other, you can work towards reaching your future goals.

4. Consider Your Current and Future Customers

Keep sight of the needs of your customers or patients, especially if you are in a contentious dispute with your business partner. Your professional reputation will be on the line. If the disagreement leads to clients feeling like they’re being treated poorly or neglected, even if you don’t intend to do so, your prospects in your industry could be damaged. Maintaining professionalism and working toward the goal of dissolving the partnership as amicably as possible may help you retain customers in the future.

5. Consult with an Experienced Attorney

Dissolving a business partnership can significantly impact you personally and as a business owner. Working with an experienced attorney can help you protect your rights as you move through the process. 

The South Carolina business Attorneys at Willcox, Buyck & Williams, P.A. are here to provide you with experienced legal counsel. We will help you understand your options and work with you to ensure you dissolve your partnership properly. We will work diligently to resolve your partnership’s dissolution amicably.  

When necessary, our experienced litigators are prepared to represent you in court. If you are going through the dissolution of a business partnership, don’t hesitate to contact Willcox, Buyck & Williams, P.A. to schedule an initial consultation with one of our skilled attorneys.

Defending Your Company From Unfair Competition (Slander/False Accusations)

You’ve worked hard to build your company. Deceptive and wrongful business practices can cause economic injury to your business. The law of unfair competition protects companies from fraudulent, deceptive, and unfair business practices. Companies can recover losses resulting from these practices. 

Our experienced South Carolina business attorneys handle complex business tort cases like unfair competition claims. We are seasoned trial lawyers with extensive experience litigating business torts to protect our clients’ business interests. If your company has been damaged because of slander, false allegations, or other deceptive business practices, contact our office to speak with an attorney. 

Understanding Unfair Competition

Unfair competition can crush a small business, making it impossible for the business to compete in the marketplace. Companies engage in many forms of unfair competition, including trademark infringement, fraud, interference with business relationships, and theft of trade secrets.

Slander and false accusations are another form of unfair competition. Defamation is false communications about your business that are likely to result in damage to your business’s reputation and economic loss. Slander is a type of defamation that occurs when someone makes false statements with malicious intent to cause harm to your business. For example, your competitor creates negative reviews about your company online or tells people your company is being investigated for defective products. 

The South Carolina Unfair Trade Practices Act gives businesses a framework for bringing action against companies and individuals who use slander and false accusations as unfair methods of competition. However, these claims are complex and require an experienced business defamation lawyer to handle the case. 

Identifying Slander and False Accusations

A defamatory statement is a false allegation that can severely disrupt business. The elements of slander and false accusations are:

  • A person or company made a false statement about your business
  • The statement was spoken or written to a third party
  • The party acted with negligence or intent to harm
  • The statement damaged your business

There is a difference between legitimate competition and unfair practices. Companies make statements to convince consumers to use their services or purchase their products. However, when a company fails to verify statements and accusations as accurate, they could be negligent. Likewise, intentionally making false accusations to hurt a company reveals malice and aforethought. 

Legal Remedies for Allegations of Unfair Competition 

Slander and false accusations against your company can damage your reputation, decrease your customer base, discourage new customers, lower employee morale, and decrease your bottom line. You have the right to file a lawsuit seeking compensation for damages and other remedies. Damages a business could recover from unfair competition include:

  • Injunctive relief to stop the party from continuing to make defamatory and slanderous statements
  • Compensatory damages for actual losses 
  • Attorney’s fees and expenses for the filing of the action

The court may also award treble damages if the party willfully and knowingly violated the law by making statements to harm your business intentionally. 

Preventative Measures for Businesses

It can be difficult to prevent unfair competition because you cannot control what another company or person says or does. A company can use contracts to prevent unfair competition by including non-disclosure clauses and confidentiality agreements. However, these contracts only apply to vendors, employees, and third parties engaging with the company. 

A company can try to protect itself from accusations of wrongdoing by never misleading customers, misrepresenting a product or service, making false guarantees, engaging in price switching, or concealing pertinent information. However, the best way to protect your company from unfair competition is to retain a South Carolina business lawyer as soon as you suspect wrongdoing or fraudulent behavior. The sooner you stop unfair competition, the less your business may suffer. 

Contact Us for a Free Consultation With a South Carolina Business Attorney

The best way to protect your business from slander and false accusations is with the help of an experienced South Carolina business attorney. At Willcox, Buyck & Williams, PA, our legal team fiercely defends you and your company against unfair competition. We pursue claims against the responsible parties to recover compensation for the damages and losses your business sustained. Schedule a consultation today to discuss how we can help you protect the business you’ve worked hard to establish.

Rectifying a Case in Breach of Fiduciary Duty

A fiduciary owes a duty of care to someone to act in their best interests to benefit them financially. Fiduciary relationships are common in business. A business relationship can create a fiduciary duty to act with full disclosure, fair dealing, and good faith. A party may owe the other party the duty to act with loyalty and confidentiality. Our South Carolina business attorney discusses how parties breach their fiduciary duty and how you can rectify a breach of fiduciary duty.

Examples of Breaches of Fiduciary Duty in South Carolina 

Many business relationships create a fiduciary duty. Examples of parties who may have a fiduciary duty include:

  • Accountants 
  • Employees
  • Guardian or conservator
  • Personal representative 
  • Attorney
  • Trustee
  • Power of attorney 
  • Corporate officer
  • Principals 

A fiduciary is held to the highest standard of conduct when executing their duties. They must act in good faith to do what is in the other party’s best interest. The fiduciary must keep the party’s money and property separate from the fiduciary’s assets. They must also keep accurate and complete records and work to manage the person’s property with care.

Examples of breaches of the fiduciary duty include:

  • Failing to disclose relevant facts and information 
  • Acting in the best interest of a competitor adverse party
  • Denying access to documents by shareholders, clients, or partners
  • Sharing trade secrets and confidential information 
  • Failing to disclose a conflict of interest
  • Acting in the fiduciary’s best interest and/or making side deals
  • Embezzling money from a trust, estate, or client account
  • Negligent management of assets and income 
  • Failing to keep accurate books and records
  • Exposing a partnership to liability because of malfeasance or negligence 
  • Failing to follow the terms of a trust or a Will

The above list is not an exhaustive list of the ways a fiduciary could breach their duty of care. Breaches of fiduciary duty occur in many ways. If you believe a fiduciary breached their duty of care, talk with a lawyer as soon as possible about rectifying a case of breach of fiduciary duty.

What Should I Do if I Suspect a Breach of Fiduciary Duty?

If you believe a person of trust has breached the fiduciary duty they owe to you, investigate the matter immediately. Gather as much information and documentation as you can regarding the matter. Then, seek legal advice from a South Carolina business attorney.

Your attorney may advise you to take one or more actions to protect your best interests and rectify the breach of fiduciary duty. For example, suppose an employee breaches their fiduciary duty. In that case, your attorney may advise you to terminate the employment and take steps to mitigate the damages caused by the breach of duty.

You may need to file a lawsuit to rectify a breach of fiduciary duty. Generally, you have three years to file a lawsuit under South Carolina law. However, you should not wait to consult an attorney. Your lawyer will need to gather evidence proving you had a fiduciary relationship, the other party breached their duty, and you sustained damages because of the breach. 

Schedule a Free Consultation With Our South Carolina Business Attorney 

It can be financially and emotionally devastating if you trust another party and they breach their fiduciary duty. Contact our South Carolina business attorney to discuss how you can rectify a breach of fiduciary duty. You may be entitled to compensation for your damages and financial losses.

Choosing the Right Partner for Your Business

The partners you work with can make or break your business. As Forbes says, “Business partnership can bring you triumphant glory or catastrophic disaster.” The right match of a business partner could bring abilities that are not your strengths or infuse capital to allow your company to grow. The whole could truly be greater than the sum of its parts, to borrow a maxim coined by Aristotle.

A South Carolina business formation & planning attorney could guide you through the process of evaluating potential business partners and draw up a partnership agreement that protects you and your company. This blog will explore some methods you could use when choosing the right partner for your business.

Complimentary Traits, Talents, and Skills

Individuals rarely excel at the many and different skills it takes to build and run a business well. You should look for someone who can bring abilities to the table that you do not. For example, if you love working on product development but despise marketing or sales, you should look for someone who is great at marketing and sales rather than teaming up with another product developer.

Someone Who Shares Your Vision for the Growth of Your Company

You might want to grow your company at a steady pace with a moderate budget for marketing. Neither you nor your partner will be happy if their passion is to shoot for the moon and spend a huge amount on marketing.

A Partner with an Exit Strategy

All things, good, bad, or mediocre, come to an end. Let’s say that you want to work in the company for 30 years, and then retire comfortably. Your partner, however, wants to work until they get carried out in a pine box. It is fine for partners to have different exit strategies, but they need to talk about them upfront rather than assuming that the other partner wants the same thing they do.

Another issue you will want to discuss at the beginning is whether both partners agree on what will happen to the business when they leave the company. If you or your partner consider the company to be a family business that should stay in the family until the next ice age, there should be a discussion about that issue early on. One partner might count on selling their interest to fund their retirement.

Someone Who Does Not Have to “Win” in Every Situation

Your partner does not have to be a doormat, but it will be frustrating if they have to win on every issue. Partners, similar to spouses, need to negotiate with each other and have healthy give-and-take without either one dominating the relationship or dictating everything. You and your partner need to treat each other with respect and work out disagreements amicably.

A Partner You Trust and Genuinely Like

A partnership that is not built on trust has quicksand for a foundation. Whether justified or not, when there is mistrust between partners, your partnership could be doomed. 

You do not, however, want to be overly trusting to the extent that you expose yourself or your company to risk from the partner. You should have an ironclad written partnership agreement.

You can talk to a South Carolina business attorney about the right type of partner for your company. Contact our office today for help with your case.

Effectively Protecting Your Business from Identity Theft

Identity theft is one of the fastest-growing crimes in the United States. However, business owners need to be aware that consumers are not the only victims of identity theft efforts. Thieves target small businesses and large corporations to steal information for identity theft. A Willcox lawyer can help you protect your business from identity theft and respond to litigation regarding breaches and failure to protect client and customer information. Ways to protect a business from identity theft include:

Policies for Collecting Personal Information

Review your policies for asking clients or customers for their personal information. Limit the personal information you gather. If you do not need birth dates, Social Security numbers, and other information, don’t ask for it. Instruct employees on the proper procedures for gathering personal information, such as never doing so when others can hear and turning computer screens so they cannot be viewed by anyone else.

Protect the Personal Information You Gather

There are several steps necessary to secure the personal information a business collects. Restrict access to personal information. Only employees who need the information should have access. Vendors and customers should be limited from accessing areas that contain the personal information of customers, clients, and employees. 

Secure personal information on computers and in the office. Computers should have the most advanced and current software to prevent hacks and data breaches, including spyware, firewalls, encryption software, and anti-virus software. Limit employees’ ability to access websites that are unrelated to your business. Also, restrict or prohibit an employee’s ability to download documents, images, or other data from the internet. Require multi-factor authentication to access computers and laptops. 

Keep file cabinets and other physical storage methods locked. Limit access to documents containing personal information and the areas where the documents are stored.

Do not email or mail documents containing personal information to clients or customers. If you must include personal information, only include enough information for the client or customer to identify their personal information (i.e., the last four digits of a Social Security number).

Address when and how to provide personal information to third parties. Require that all third parties who receive personal information comply with privacy laws. Ask for background checks for third-party vendors who enter your company routinely. 

Destroy Personal Information When No Longer Needed

Destroy documents and computer files containing personal information when it is no longer needed or required to be stored. Old documents should be destroyed using a cross-cut paper shredder as a minimum. Destroy old backups and computer disks. Before disposing of a computer or hard drives, wipe them clean with special software or magnetic cleaning, even if you will physically destroy the drives and device. 

Develop a Data Breach Response Plan

Talk with our South Carolina business attorneys to ensure you understand your obligations and legal responsibility for protecting personal information. Additionally, ensure you understand the legal requirements for a data breach response plan. Your plan must comply with the law and offer your clients and customers as much protection and transparency as possible. 

Learn More During a Free Consultation With Our South Carolina Business Attorneys 

We are committed to helping you protect the business you built. Contact our law firm to schedule a free consultation with one of our South Carolina business attorneys. We offer a wide range of legal services for business owners.

Legal Requirements for Starting a Sole Proprietorship

A sole proprietorship is a type of business entity. One person owns the business assets in their name and assumes personal liability for the business debts. A sole proprietorship is the easiest and least expensive business entity to create. However, before you start a sole proprietorship, you should consult a South Carolina business formation attorney about the legal requirements and liability for sole proprietors. 

Benefits and Disadvantages of a South Carolina Sole Proprietorship 

Sole proprietorships have many advantages, including:

  • Minimal setup costs
  • Easy to operate
  • Pass through taxation 
  • Full ownership and control 

However, sole proprietorships also have disadvantages. The main disadvantage is the personal liability for business debts and obligations. Additionally, sole proprietors may have limited funding options. If they receive funding, they might need to pledge their personal assets as collateral for the business loan. 

Are You Required to File With the South Carolina Secretary of State for a Sole Proprietorship? 

Most business entities are required to register with the South Carolina Secretary of State’s Office. However, sole proprietorships and general partnerships are not required to register. Therefore, you can start a sole proprietorship without filing any documents with the state.

However, you might need other paperwork and documentation to become a sole proprietor. Depending on your business type, you may need a tax identification number, insurance coverage, workers’ compensation insurance, and business licenses. 

The basic steps for creating a sole proprietorship in South Carolina are:

  • Select a business name (many sole proprietors operate under their personal name or a “doing business as” or d/b/a)
  • Create a business plan
  • Determine whether you need an EIN (employer identification number) or whether you can use your Social Security Number
  • Verify the type of insurance and bonds required
  • Understand personal liability and purchase liability insurance to protect yourself
  • Determine whether you need a business and/or other licenses
  • Speak with a tax professional regarding tax reporting and liabilities
  • Determine whether you must pay sales, employment, or other business taxes

A South Carolina business attorney can guide you through the steps to set up a sole proprietorship. They can also review other business entities with you that could provide more advantages and better protection for your company. 

Protecting Yourself Against Personal Liability for a Sole Proprietorship in South Carolina 

Because you bear sole legal liability for business obligations, you may want to consider purchasing insurance coverage that covers your business obligations. Personal liability insurance might not protect you if you are sued for a business obligation. 

Furthermore, all profits and losses are reported on your personal income tax return, so you may also need to consult with a tax professional before you begin the business. Accurate books and records are essential during tax time. A tax professional can also help you set up accounts and procedures for handling payments and taxes for employees and independent contractors. 

Learn More During a Free Consultation With Our South Carolina Business Attorney 

Setting up a new business is exciting. However, you need to ensure that you comply with the law, choose the best business entity for your company, and protect yourself from personal liability. Our South Carolina business attorneys will help you with all matters related to starting a new business. Contact us today to schedule your free consultation.

Why You Need a Non-Disclosure Agreement

This blog will discuss why you need a non-disclosure agreement if you have a business. A South Carolina business contracts attorney can talk to you and draft a non-disclosure agreement (NDA) tailored to your specific needs. You do not want to use a generic form for this important document.

What a Non-Disclosure Agreement Does

A non-disclosure agreement (NDA) identifies what information needs to get protected by the document and what is not confidential. You might be surprised at the assumptions your employees or others might think are not confidential. 

If you clearly identify what information these individuals can use or share, as well as what the NDA protects and prohibits from disclosure, they cannot claim that they did not know. People tend to work better with well-defined boundaries rather than uncertainty.

When a person signs an NDA and later violates it, they are guilty of a breach of contract. The NDA can specify the legal consequences of such actions. 

Situations When an NDA Could Protect the Employer/Business Owner

Here are some of the common situations in which you might want to have someone sign an NDA:

  • When you hire a new employee, you will want to make sure they understand that your proprietary information is not for them to sell to your competitors and use for their own purposes. Many companies have developed valuable ways of working that are proprietary. You might have software custom-made for your business. Customer lists and details are confidential. Third parties could make improper use of this data, so you will want to protect it with an NDA.
  • When employees leave their employment with you, it can be beneficial for them to sign an NDA. Also, when your company develops new information or processes, an updated NDA could be useful to protect the company.
  • When you bring on new investors or partners, they will get access to some confidential or proprietary information. Although they might have a legal right to access this data, you will want to nail down what they cannot share with others or use for their own purposes. 
  • Many products involve financial, technical, or other confidential or proprietary information that should get protected before the technology or product gets sold or licensed to the intended user. An NDA can ensure that the user understands the allowed use of that information as well as which uses are prohibited. 
  • Selling a company or merging with or acquiring another business involves dealing with multiple third parties. Each of these parties, like agents, brokers, and financial entities, should sign an NDA to protect your company from the unauthorized appropriation of your company’s proprietary or confidential information.
  • Even bringing on new clients can subject your company to the risk of misappropriation of your confidential or proprietary information by those clients. Some companies hire “secret shoppers” to pose as clients of their competitors to try to gain access to such valuable information.

This is not an exhaustive list of every circumstance in which you might benefit from the protection of an NDA. You will want to talk with a South Carolina business attorney about your company’s unique risks and develop a strategy to protect the fruits of your hard work with a non-disclosure agreement. Contact our office today for help with your case.

What to Do if Your Business Has Been Defrauded

When we hear about business fraud, we assume that the business was guilty of committing fraud on a consumer. However, businesses are also victims of fraud. Business fraud costs companies billions of dollars in losses each year. 

If your business is the victim of fraud or misrepresentation, it is crucial that you take immediate steps to stop the fraud and pursue legal remedies for compensation of damages. Our South Carolina business attorneys can help you pursue claims to hold the responsible parties accountable for their fraudulent acts.

How Do You Prove Business Fraud in South Carolina?

Business fraud includes false representations of a material. The misrepresentation can be intentional or negligent. Business fraud occurs when:

  • A party knows that a fact is untrue or fails to use reasonable care to determine if the fact is true or untrue;
  • The party misrepresents the fact to a second party as being true; 
  • The misrepresentation is material or relevant to the transaction or contract; 
  • The misrepresentation is made to induce the second party into action or inaction; and,
  • The second party relies on the false statement and suffers harm because of that trust. 

For example, a company falsifies documents and financial records to convince another company to enter a partnership or merger. Another example might be that a seller represents their ability to perform contractual obligations or hides a problem with a product. 

A company could be defrauded when employees falsify expense reports to obtain reimbursement checks or skim money from customer payments to the company. Civil fraud could occur when a party intentionally withholds relevant information to get a company to enter into a contract or perform services. 

Examples of Ways Companies are Defrauded in South Carolina 

Fraud can occur in many ways. Examples of business fraud include, but are not limited to:

  • Insurance fraud
  • Mail fraud
  • Bank fraud
  • Wire fraud
  • Fraudulent conveyance
  • Employment-related fraud
  • Securities fraud
  • Embezzlement
  • General fraud

Regardless of the type of fraud, the result can devastate a company. The company could sustain a significant financial loss because of the fraud. Furthermore, the company might suffer from harm to its reputation if customers or investors become aware the company was defrauded.

If Your Business Was Defrauded, You Could Pursue Litigation Through the Courts 

A business lawyer can help you seek compensation for damages caused by business fraud by filing a civil lawsuit. Depending on the circumstances, you could receive compensation for the actual monetary losses caused by the fraud, reimbursement for attorneys’ fees and costs, and other damages. A judge could order the other party to pay punitive damages as a way to punish the party who committed fraud. 

Contact Our South Carolina Business Attorneys for a Free Consultation 

Our experienced business lawyers at Willcox, Buyck & Williams, PA, can help you take steps to protect your business now and in the future. If you experience legal problems, we are here to fight to protect you and your company from liability. Contact us today to schedule a free case evaluation with a seasoned South Carolina business attorney.