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Small Business Legal Strategy for Coronavirus

On Behalf of | May 18, 2020 | Business Law

As the calamity continues to change and governments around the world organize to solve the immediate threat, the long-term strategic impacts of COVID-19 also require analysis and strategic planning. All businesses, regardless of size, should prepare for the long-term impacts of COVID-19 in the workplace. In addition to the immediate effects on their operations, it is equally important to make sure they are prepared for a possible economic downturn in these moments. Confronting legal needs can seem like a daunting task at this time, but it’s always best to start protecting your business before it’s too late. There are several key legal documents that are essential and will need to be analyzed before you get back to business operations.

Operating Agreements and Bylaws

Let’s start with operating agreements for LLCs and bylaws for corporations. These documents are beneficial to a well-ordered business. They are especially important if you have multiple owners involved in the business. These documents define how functional and financial decisions are made for the company and will dictate how the company may respond in tough financial situations. Properly drafted legal documents can help you avoid possible liability and guard your best interest. These documents are especially significant as they provide how important business decisions are made (particularly when there may be a disagreement as to the best course of action), define the distribution of profits and losses, and lists out the obligations and rights of all members. Furthermore, these documents serve as a contingency plan if a downturn becomes too severe as members leave, sells their interest, get divorced, or die.

In addition to their bylaws, corporations should ensure that they are holding annual meetings and recording minutes as required by law.


Unfortunately, knowing what type of license you need to operate may be difficult since there are many different governing departments that cover different jurisdictions. Contingent on your small business operation, you may need to obtain local, county, or federal licenses. As your operations change, your licensing needs may change as well. This may include registering with additional licensing departments if you are expanding into new jurisdictions. If you are adding to the scope of your business’s offerings or changing direction entirely, additional licensing can also be in the form of health license and permits, environmental license and permits, food and beverage licensing, and transportation licensing, just to name a few.

You’ll have to make sure that all your business licenses are current and that your entity is in good standing as well. Neglecting to do so can prevent your business from working with vendors or receiving government funding for difficult times.


Business contracts should be updated periodically and now is a good time to review your business’s agreements. Depending on how your business operation will move forward from a crisis, you may need to draft an addendum to critical parts of your contracts. These can range from partnership agreements, vendor / supplier agreements, independent contractor agreements, or employment agreements. Keep in mind that drafting a completely new contract is a possibility as well to ensure that you are covering the entire scope of your operations. It is also important to ensure that your website has a current privacy policy and terms and conditions that are relevant to your business and industry. While it takes some time and effort to draft all these legal documents, they are the foundation to any successful business.

No matter the changes to your business operations, it is important to think of the legal side of those changes. Whether companies change to keep up with the times and technology, or decide to change due to crisis, it is recommended to speak with a Michigan business attorney to make sure your Michigan business is set up for success.