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Chapter 54 Law for Small Businesses

Chapter 54 Law for Small Businesses

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Chapter 54 Law for Small Businesses

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  1. Chapter 54 Law for Small Businesses

  2. § 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.

  3. Finding an Attorney • The process should be methodical and include: • Interviewing and evaluating attorneys. • Retaining an attorney.

  4. § 2: Selecting an Appropriate Business Form • Factors to consider: • Limitation on Liability. • Tax Consideration. • Continuity of Life. • Legal Formalities and Expense.

  5. § 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.

  6. § 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).

  7. § 5: Raising Financial Capital • Capital can be raised through: • Loans. • Venture Capital. • Sale of Securities via public or private offerings.

  8. § 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.

  9. § 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).

  10. § 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).

  11. § 9: Employment Issues • A knowledge of employment law is crucial, to avoid common mistakes in: • Hiring Employees. • Employee Compensation. • Workers’ Compensation.

  12. Employment Issues [2] • Unemployment Compensation. • Firing Employees. • Case 54.3:Roberts v. Dudley (2000). • Covenants not to Compete. • Using Independent Contractors.

  13. 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.