2011 Small Business Presentation for HAUL

THE LEGALITIESThe Legal Issues Your Small Business and Non-profit Should Be

Aware OfPresented by: Erin McClarty Esq.

Wednesday, September 14, 2011

WHEN LEGAL ISSUES CAN ARISE

Formation

General Operation

Advertising/ Transactions

Labor

Trademarks/Intellectual Property

Dissolution/ Winding Down


Sole Proprietorship

Not a legal entity; one person doing business

Unlimited liability for all debts

General Partnership

Group of two or more who agree to carry on all business and share in all profits/losses.

Limited Partnership

General partners make managerial decisions and share liability. Limited partners liability limited to their share.

CHOOSING A FOR-PROFIT STRUCTURE


CHOOSING A FOR-PROFIT STRUCTURE

Corporation

Limited Liability Company

Limited Liability Partnership


OTHER STRUCTURES CONSIDERED

• Franchise

• Distributorship- License to sell products

• Business format- Allow for business under a trademark

• Manufacturing- given the formula to make a product

• Joint Venture

• Would enter a joint venture agreement

• Subsidiaries


CHOOSING A NON-PROFIT STRUCTURE

Trusts

• Created by a settlor

• Very rigid in structure

Unincorporated Association

• 3 or more people come together for a common non-profit purpose

• Less formality and fewer reporting requirements than a corporation


CHOOSING A NON-PROFIT STRUCTURE

Limited Liability Company

Corporations


ADVERTISING: TELEPHONE SOLICITATIONS

Telephone Consumer Protection Act

Texas Law Enforcement Telephone Solicitation Act

Must file a registration statement and pay fee.


ADVERTISING: WEBSITES

Privacy Concerns

• Have a privacy policy in place

Internet Regulations

• Children’s Online Policy Protection (COPPA)

Jurisdictional Issues

• Post “Terms of Use” on your website

E-commerce


ADVERTISING: EMAIL

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM)

Governs “commercial mail”


ADVERTISING: OTHER TEXAS LAWS

Criminal and civl offenses for fraud or misrepresentation

Example: Texas Deceptive Trade Practice Act


OPERATIONS

Insurance

Worker’s Compensation

General Liability

Licenses and Permits

Does your business require

• a certain license?


OPERATIONS CONTINUED....

Supply Chain Concerns

Getting agreements in place with manufacturers. Want to est. pricing, delivery, warranties, indemnities, termination and governing law.

Address products liability. Can affect everyone in the sales chain.

Federal Corrupt Practices Act (FCPA) Concerns

Huge concern when you have intermediaries or representatives abroad.

Respondeat Superior Concerns

Protect Intellectual Property


COMMERCIAL PROPERTY

Must protect against lawsuits for injury.

Landowners often try to disclaim responsibility for these.

Legal issues can arise with commercial leases

Will want to get assurances that the land is suitable for your purposes, address maintenance, rent increases, term and foreclosure.

Always be thinking about potential zoning or covenant issues


LABOR

Managing Employees

Create an employment agreement

Include a confidentiality agreement

Beware with Social Media Policies


EMPLOYEE V. INDEPENDENT CONTRACTOR

Classification is a hot-button issue

Avoid employee problems and many taxes using independent contractors.

Several Factors to determine who is an IC

Determination of Worker Status (IRS Form SS-8)

Texas workforce commission also has a test at http://www.twc.state.tx.us/news/efte/ics_contract_labor.html

IC’s make you more susceptible to IRS audits


LABOR LAWS

Fair Labor Standards Act (FLSA)

Department of Labor has a handbook for guidance: www.dol.gov/asp/programs/handbook/main.htm

Family Medical Leave Act (FMLA)

Texas Labor Code


NON-PROFIT ISSUES

Charitable Solicitation Laws

May require registration in each state you plan to solicit in

Fill out Uniform Statement Kit at www.multistatefiling.org

Losing tax-exemption status

Unrelated Business Income Activities

1. Trade or business; 2. Regularly carried on; 3. Not substantially related to furthering the exempt purpose.

IRS Publication 557 Tax-Exempt Status for Your Organization gives guidance


http://www.multistatefiling.org

http://www.multistatefiling.org

HOW CAN YOU PROTECT YOURSELF

Educate yourself on all the applicable laws

Take how-to books with a grain of salt

Get together your “team”

Bring in knowledgeable people. You get what you pay for.

Utilize development centers, groups and associations

Look for “Meet-ups” and Networking Groups

Attend continuing education


WHY DO I NEED AN ATTORNEY?

Guidance and Counsel

Sound-board

Can’t know every law

Draft or review contracts

Pre-emptive action, mitigation and judgement calls

Advocate and representative in case of business transactions

mediation, mergers, negotiationsWednesday, September 14, 2011

BUT I CAN’T AFFORD ONE…..

Be Creative

Some attorneys allow you to buy “credits”

Do package deals

Hire counsel on a contract basis


ATTORNEY RESOURCES

Houston Volunteer Lawyers Program

S.C.O.R.E

Houston Lawyers Referral Service

Texas Accountants and Lawyers for the Arts

Texas C-bar


CONTACT

Erin McClarty Esq.

[email protected]

www.notationsonnonprofit.com


mailto:[email protected]

mailto:[email protected]

http://www.notationsonnonprofit.com

http://www.notationsonnonprofit.com

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