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Chapter 54 Law for Small Businesses. § 1: The Importance of Legal Counsel. Those with the desire to start their own business need to be sure to cover the options and legal requirements thoroughly with respect to issues such as: Finding an Attorney. Selecting the Appropriate Business Form.
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Chapter 54 Law for Small Businesses
§ 1: The Importance of Legal Counsel • Those with the desire to start their own business need to be sure to cover the options and legal requirements thoroughly with respect to issues such as: • Finding an Attorney. • Selecting the Appropriate Business Form. • Creating the Business Entity. • Intellectual Property Assets. • Raising Financial Capital. • Buy-Sell Agreements and Key-Person Insurance. • Contract Law. • Credit and Payment Issues. • Employment Issues.
Finding an Attorney • The process should be methodical and include: • Interviewing and evaluating attorneys. • Retaining an attorney.
§ 2: Selecting an Appropriate Business Form • Factors to consider: • Limitation on Liability. • Tax Consideration. • Continuity of Life. • Legal Formalities and Expense.
§ 3: Creating the Business Entity • The creation of a business entity must be done with caution, with attention to: • Choosing a Corporate Name. • Creating the articles of incorporation, bylaws, and holding initial meetings. • Creating and maintaining corporate records.
§ 4: Intellectual Property • Trademarks, patents, and trade secrets are protected by intellectual property laws to protect the value of the investment in their creation and their economic potential into the future. • Register your trademark at the U.S. Patent and Trademark Office. http://www.uspto.gov • Case 54.1:Royal Appliance Mfg. Co. v. Minuteman International, Inc. (2002).
§ 5: Raising Financial Capital • Capital can be raised through: • Loans. • Venture Capital. • Sale of Securities via public or private offerings.
§ 6: Buy-Sell Agreements and Key-Person Insurance • Buy-Sell Agreements allow the owners of a business to have the right of first refusal • This is done to protect passive investors from the possibility that managing shareholders may “bail out” of corporation by selling their shares to third parties. • Key-Person Insurance protects against the risk that these key persons may become disabled or die.
§ 7: Contract Law and Small Business • Contract law is complex, especially in the area of sales of goods. • An attorney should be consulted for creating contract forms for specific purposes and transactions involving a significant investment or dealings in unfamiliar areas. • Case 54.2:Instant Print Centers, Inc. v. Crowley (2002).
§ 8: Credit and Payment • The offering of early payment incentives and the imposition of late payment penalties on one’s buyers may be subject to the terms of the Truth in Lending Act (TILA).
§ 9: Employment Issues • A knowledge of employment law is crucial, to avoid common mistakes in: • Hiring Employees. • Employee Compensation. • Workers’ Compensation.
Employment Issues  • Unemployment Compensation. • Firing Employees. • Case 54.3:Roberts v. Dudley (2000). • Covenants not to Compete. • Using Independent Contractors.
Law on the Web • Lawyers.com. • Small Biz at CourtTV.com. • Legaldocs.com. • Register your domain name at register.com. • Small Business Tax info at IRS.gov. • Legal Research Exercises on the Web.