Failing to Check for Legal Problems
Say you and your sister start an LLC (limited liability company) to avoid paying taxes like a corporation and to shield yourselves from most of the debts that the company might incur if it went under. Say also that your sister is married to a shady swindler who never liked you and always wanted in on the business.
Potential legal problems have to be dealt with before they occur, not after the fact. What happens if your sister gets a divorce? Do you know just how much of your business this guy is entitled to? Most importantly, have you taken steps to make sure that he can't walk off with half of the company?