Not many are aware of this, but in the United States, 99.9% of all businesses fall under the Small Business category. That translates to about 29.6 million organizations in total!
Furthermore, these businesses have in employ 57.9 million people. That makes up about 47.8% of the entire employed population.
All these go to show how important small businesses are to the country and its economy. And as someone who owns such an organization, you’d want to keep it thriving. You want to maintain its contribution to the economy, to prosper, and more importantly, to grow.
That’s where a business attorney comes into play.
Hiring an attorney for your small business is something that actually benefits business owners from the very start, even before they launch their branded enterprise. But that doesn’t mean you wouldn’t need one anymore since you’re already open.
Read on to find out just why.
An Attorney Is One of the Two Most Important Professionals Your Business Needs
The other one is a professional specializing in bookkeeping and accounting. After all, you’d need someone to do all the number crunching for you. And someone who you can trust to handle all important documents, especially those tax returns the federal, state, and local governments require of you.
As important in almost every aspect of a business is an attorney. Not a lot of people, especially start-ups and newcomers to the industry, know how big a contribution small business lawyers can make.
And just to give you an idea, these legal professionals can help you comply with all the laws. And that ranges from zoning regulations to copyrighting and trademarking. They can also guide you when it comes to formal incorporations and most importantly, liabilities and lawsuits.
Keep in mind that not all business lawyers are the same. This is especially true in terms of education, experience, and specialization. For instance, you’ll find lawyers who boast of completing online hybrid master of legal studies programs, which allow them to practice in a variety of fields.
There are also the specializations. Some focus on commercial real estate laws, while others specialize on taxes and registration. Do note, however, that many highly qualified lawyers can help you with many areas of your business.
Determining What Kind of Business You Are
Just like there are many types of lawyers, there are also many different types of businesses. Where does yours belong? This is one of the areas a lawyer can help you with.
Your business attorney has the knowledge and expertise to help you figure out whether your organization is a limited liability company (LLC) or a corporation. And from there, help you come up with the right business model. And of course, help you in preparing all needed paperwork.
A Business Attorney Can Prevent That Lawsuit in the First Place
Did you know that in the United States, the courts receive and process more than 100 million lawsuits every year?
Many of these are consumers suing product and/or service providers. Some are lawsuits that one company files against another. And then there are the cases filed by employees against their employers.
The threat of facing a lawsuit is real. Especially one from a disgruntled employee. In fact, small and medium-sized businesses in the country have a 12% chance of being sued.
And that risk increases depending on the location of your business. For instance, California employers have a 40% likelihood of receiving a summons!
Wherever you are in the country though, know that there’s always a risk of liabilities and lawsuits. Your organization may have a lower risk, but it’s a risk nonetheless, one that you want to avoid at all costs.
This is why you’d want to work with a business attorney from the very beginning. Or look for one right away even after you’ve already launched and established your organization. This way, you can considerably lower your risks of getting served.
It’s Far More Difficult to Deal with an Already-Filed Lawsuit
Expanding on the subject above, hiring an attorney is best done prior to facing a lawsuit. Many small businesses have committed the mistake of only hiring one after the authorities have already served them the summons.
In other words, you’d want to connect with a qualified business attorney before anything like this happens. For the simple reason that it’s way more difficult, not to mention expensive, to deal with a lawsuit that someone has already filed.
Keep in mind that once a lawsuit occurs, it’s already there. The problem already exists. It’s just a matter of how great your expenses are.
Don’t forget that lawsuits are extremely expensive. Just the average settlement alone can already cost your business up to $250,000! And that doesn’t even include the fees you have to pay the court.
The thought alone of having to scrounge up more than a quarter of a million should be enough to make you start looking for a lawyer now. But it’s not just about avoiding lawsuits.
For instance, your business lawyer can help you with the legal side of creating a safe workplace policy. Always remember that workplace safety regulations, although they have the same goal of keeping work environments healthy for everyone, still vary from state to state.
The Employment World Is Rife with Possible Lawsuits
Do you know how much the average cost of employee claims are? A whopping $160,000. What’s more, nearly a quarter of all lawsuits employees file lead to defense and settlement costs.
There are just so many ways that employees can sue their employers. There are various types of discriminatory behavior. They can arise from factors such as age, disability, compensation, harassment, national origin, race, religion, and gender among many others.
A perfect example of employment discrimination is the Hively v. Ivy Tech Community College case. There are many other cases that involved discriminatory behavior against members of the LGBT community. But in a nutshell, it shows how employers choosing not to hire a qualified applicant because of their sexual orientation is a form of discrimination.
Keep in mind, though, that charges brought about by discrimination are not just your worries. There are also the matters relating to workplace safety.
Just think of how Starbucks Canada faced a $1 million lawsuit for failure to keep its workplace safe. Employers who don’t provide worker’s compensation can also expect to face legal liabilities. And these are just some of the many other possible reasons for employers facing a lawsuit.
But these should be enough to tell you that being a business owner comes with such great risks. And one of the best ways to avoid them is through the help and guidance of a business lawyer.
It’s Easy to Miss Important Details When Reading the Fine Print
How much of the fine print do you really need? If you’re like most people, chances are, you don’t actually read it. You just skip to the part where you have to sign.
While this may have been okay before you became a business owner, now that you are, it’s totally not fine. That’s one way for you to surely get into trouble, whether with another business partner, supplier, investor, contractor, client, or employee.
As important as reading the fine print is ensuring you have it on the documents your business issue too. After all, you’d want others to comply with your organization’s standards and regulations too.
This is where another important task of a business lawyer comes into play. Aside from helping you understand what you’re signing and agreeing to, your lawyer also helps you come up with standard contracts. At the same time, they will also ensure you respond appropriately to contracts you receive.
Help with Getting Licensure and Dealing with Taxes
Your accountant isn’t the only person who will help you deal with your yearly tax returns. Before this even happens, your lawyer will first have to register for your business’ tax identification numbers. And there are several, including those from federal, state, and local governments.
Keep Your Intellectual Property Rights Safe and Secure
Of course, your need for safeguarding intellectual property rights depends on the nature of your business. If your business is involved with creative curation, such as those in the design and media, then you need a lawyer to help you protect your IP rights. At the same time, your lawyer will also help you avoid stepping on others’ IPR too.
Don’t Wait Until It’s Too Late for Your Business: Hire the Right Attorney Now
As you can see, there are just so many risks that come with owning and operating a business. But your goal is to expand and thrive. Not to constantly worry about these risks.
So, as early as now, whether you’re just about to launch your business or have already done so, hire a business attorney. This way, you can rest assure that your organization is safe and secure from any possible legalities and liabilities.
Want more business articles like this? Then make sure you check our blog out.
Six Ways to Protect Your Company in 2019
A new business has enough to worry about without the addition of legal trouble. With how complicated the legal system is, and how many branches of it affect businesses today, it can be a real challenge to stay within the law without inadvertently breaching it.
Not only are there plenty of laws to follow, but they also change. One year you might be well within the legal system, the next you’re breaching it because they have made a change to how you’ve been running your business for the last five, ten, or even twenty years.
Adapting with the times is a sign of a successful business, and to help you improve your company’s adaptability you will want to follow this guide:
1. Have a Legal Team of Experts on Hand
Legal advice is invaluable, which, of course, is why it can be so expensive. For new businesses, small businesses, and those who have a narrow profit margin, this can mean a difficult period can be incredibly difficult to budget for.
A great way to avoid the unexpected legal fees, however, is to subscribe to them. That way you can budget appropriately and have a professional financial lawyer on your side as you need to. If your allocated hours run up, you will then benefit from an 80% discount for extra hours until the next month.
2. Create an Anti-Harassment Policy
Discrimination and harassment laws should never be taken lightly. In the States, discrimination laws usually don’t come into effect until you have more than 15 employees working for you, but this changes from state to state. Assuming is your enemy, so always check up on what you are legally entitled to do and go one step beyond.
3. Get Your Business Model Written Down
You want your company’s business model, including partner agreements, to be written down and formalized. If they aren’t this could spell trouble in the future when your partner tries to take more than his share, but you don’t have a legal document stating he can’t.
4. Get Your Company Trademarked
Another way to protect your company is to get it trademarked. Not every brand name can be, of course, but if you have a unique name it is best to get it trademarked so that there will never be any doubt as to which company a customer is trying to deal with.
5. Get the Necessary Copyright (When Applicable)
On top of trademarking your brand your will also want to apply for patents and copyright when applicable. New products that have a unique or distinctive design can be patented and trademarked and therefore protected from copycats.
6. Keep Your Books in Order
Last but not least, you will always want to keep your accounts in order. Not having this information can make it difficult to acquire tax discounts, but more importantly it can be a huge disadvantage if your company is audited or money goes missing from your account.
By keeping up to date with your finances you better protect yourself and can work on how to budget better.
What Do Trade Secrets Protect?
According to the United States Patent and Trademark Office, a trade secret is “information (that) can include a formula, pattern, compilation, program, device, method, technique or process.”
At first glance, you may think that a trade secret looks very similar to a utility patent, but as you will see, they are very different. For starters, a utility patent is something that is filed and approved through a rigorous process, whereas a trade secret is only granted limited protection in certain cases.
A trade secret aka ‘confidential information’ is non-patented information that provides a company with a competitive advantage in their industry. This could be anything from a marketing strategy to a recipe for award-winning cookies, and at their core, they enable a company to keep an edge on their competition.
As everything comes down to ‘interpretation’, and even lawyers interpret the law in a way that works for their client. Disclaimer: Don’t get caught out in a way your competitors can steal your information. A patent attorney in Orlando recommends always seeking legal advice. Startups are particularly vulnerable to the prying eyes of competitors. The options for protecting your intellectual capital or business trade secret include non-disclosure agreements (NDA), and of course if deemed the appropriate strategy, applying for a patent.
Read more below about what types of protections you are granted in the United States for a trade secret.
What is a Trade Secret?
A trade secret is anything that gives you a competitive edge in your industry, whether it is a process, recipe, or simply a method of doing something. In some cases, trade secrets are eligible for patents; in other cases, a trade secret must simply be protected by ensuring this information is not leaked.
Trade secrets are not protected like a patent – instead, they only protect against unauthorized disclosure. This means that if a contractor were to leak your trade secret to a competitor, you may be able to seek damages from the contractor, royalties from the competitor, and possibly have a court force the competitor to keep the trade secret from leaking further.
However, there is nothing that bars a competitor from independently discovering the same secret. In a patent, your invention is clearly laid out by the USPTO. Since a trade secret is not disclosed in the same nature, you can not take up legal actions against a third party who has come across the same information under their own labors.
How Does a Trade Secret Work?
Since trade secrets include such a wide variety of things, they vary slightly depending on the information in question. One good example of a trade secret is a simple customer pricing list for a sales organization.
If this list were to be leaked to the competition, there is little stopping competitors from simply offering better rates to steal these clients. One way that this list can be handled is through the use of a non-disclosure agreement, otherwise known as an NDA. In the NDA, the company can indicate all information that is not to be released or shared outside of the company, and in many cases, can not be shared within the company either.
If a trade secret is shared or discovered by misappropriation, a court may force the entity to take measures to keep the information from going any further, as well as forcing royalty payments, legal fee reimbursement, and more.
Remember though: if your competition independently discovers the same information as your trade secret, you are not granted any legal protection. If you are concerned about this and believe that your trade secret is truly unique and useful, explore your options for getting it patented in order to enjoy complete protection.
What’s in a Name: How to Choose & Legally Protect Your Business Name
When starting out on a new business, one of the most exciting parts of getting set up is choosing the perfect business name. We want something witty that sticks in people’s minds, and perfectly sums up exactly what it is that we do. Brainstorming the perfect business name can be hard, and it is made harder by the fact that just because we think we have come up with the perfect business name does not mean that we can use it.
Before we start doing anything with our amazing new business name, we need to make sure that we are actually allowed to use it. We don’t want to find ourselves with a great new website and fancy business cards only to have another business come in and stop us from using our new name, and even potentially request damages. We can save ourselves a lot of time and stress by taking the time to properly confirm whether our chosen business name is available for us to use.
Business names are regulated under Trademark Law. Regulations are in place to prevent businesses from using a business name that is likely to lead them to be confused with a competing business. If a business is found to be infringing on the trademark of another business, it can be forced to change its name, which can be a costly setback, and sometimes forced to pay damages.
It is not always prohibited to use a business name that is already in use. If the business that is already using the name is relatively small, and provides drastically different services to you, you may still be able to use the name. The same applies if the business is located a significant distance from where you are and only serves a limited community, which your business is unlikely to serve.
Research your Business Name
Once you have come up with an appropriate business name, there are a number of searches to conduct in order to ensure that it is available to use. While a federal database of registered trademarks exists, it is not sufficient to just search here. Some companies with a local focus will only register their trademark on the state level, and under United States law, a business can lay claim to a trademark by using it, without registration.
As well as searching the federal database of registered trademarks, which includes every trademark registered by the United States Patent and Trademark Office, also do a state level search for your state, and neighbouring states if you think that your business will be active there.
The next place to search is the world wide web. In fact, it is probably worth doing a basic internet search before investing time and effort in trademark searches as most companies have a web presence, so this is a fast way to eliminate names.
As well as searching for companies using your exact name, look out for companies using a similar name that are active in a similar field. If there is too much crossover in your brand and service, these companies may also be able to prevent you from using your selected name under trademark law.
This type of internet search also helps you make sure that your selected business name is available as a domain name for when it comes to establishing your own web presence. Check with different abbreviations and hyphens as well as alternative top-level domains (such as .com or .net). While you may legally be able to use a business name, you may still want to avoid it if another company is already using your preferred web domain, or a very similar domain.
Conduct Business Entity Search
Finally, you need to check if the business name is available in your state.This search has to done on a state level. Each state maintains a database of all corporations, limited liability companies (LLCs) and limited partnerships registered in the state. Each state will also have a fictitious name database, which is a list of all registered business names in the state regardless of whether they have registered a trademark or registered as a corporation with the state. This is the final search that will show up unregistered companies without a web presence.
Register your Trademark
Once you have found a business name that you can use, it is a good idea to think about registering. While it is not legally required to register a trademark to start using it, registering your trademark can be useful if you do ever find that you need to defend your trademark in court. Plus, it may help reduce the risk of others using your name, as it will be easier for them to locate your business when they do their own new business trademark search.
Brexit Unknown Makes UK Businesses Nervous
Brexit is certainly making businesses nervous right now, and there are many reasons for that. Despite almost three years having passed since the original vote, things are no clearer as to what the impact will be on business or what kind of trading relationships the UK will have with the EU going forward. Therefore, some nervousness is to be expected.
UK Businesses Rely on EU Workers
UK businesses of all kinds and in all industries employ EU workers. The question that remains unanswered is how those working relationships will function after Brexit has properly occurred.
There are guarantees in place that workers currently residing in the UK will be able to carry on living here, but it’s not at all clear whether more EU workers will be able to move here with ease after Brexit, and most indications suggest that won’t be the case. This will certainly have a big impact on businesses in many sectors. See this article on: Solicitors talk Brexit.
All Types of Workers Are Required for the UK Economy to Function
One idea that has been floated by the UK government is the idea of an income threshold, meaning only those earning more than a certain amount of money will be allowed to live and work in the UK. This would mean that highly skilled workers would find it much easier to work in the UK than low skilled workers would.
However, the UK economy relies on both skilled and low skill labour in order to function properly. If that supply of low income workers was cut off after Brexit, more businesses would struggle.
Contingency Planning Might Not be Enough for Small Businesses
For big businesses, contingency plans are already being put in place. This is expensive and time-consuming for large companies, but it will mean that they’re able to protect themselves against the upheaval brought about by Brexit. On the other hand, small businesses don’t always have that option because they don’t have the resources to put adequate contingency plans in place. It’s those small businesses, therefore, that are likely to be hit hardest.
It’s clear that small businesses are not opening at the rate they previously were because of Brexit uncertainty too. This denies the UK economy future growth prospects as well as depriving society of potentially successful ideas and businesses.
What Can Business Do to Prepare?
In terms of what businesses should be doing now, it’s best to seek professional legal advice about the situation, what you can expect and where your business and its staff stand. You should also analyse your supply chain and think about how that could change in the future under various Brexit scenarios. It might also be a good idea to look at existing contracts with EU companies and seek clarifications regarding those.
The Brexit situation is constantly in a state of flux, so things can change very quickly in one direction or the other. Therefore, it’s important for businesses to be watching and listening so that they can work out what their next move should be in order to prepare properly and minimise risk.
If You Own A Business, You Need An Estate Plan
It’s an unfortunate fact that arguments over material possessions break out between family members when somebody dies. It’s rough when one beneficiary thinks they’re entitled to that person’s possessions and financial resources more than the others. The complexity of the situation is amplified when the deceased person owned a business.
If you’ve got a family, you have every reason to care about what will happen to your business when you die. Your business has the potential to be an investment for your children or a nest egg for your spouse. If you haven’t created an estate plan that includes your business, it’s time to create one.
Start with a will
Your will is the most basic estate planning document. It allows you to declare who will be named the executor of your business. Your business executor will be responsible for continuing the business.
Dying without a will places a huge burden on your employees, business partners, and the success of your company.
Although a will is important, it’s not everything.
Your will isn’t the principle governing document of your estate
Our USA based readers may be interested in what’s in this article titled: What Might Surprise You About Your Will, CG Trust explains that many assets don’t fall under a will or probate like real estate, life insurance, and mutual funds. When you purchase these assets, you’re asked to assign a beneficiary and sometimes a contingent beneficiary.
When you specify a beneficiary for an asset, that overrides anything stated in general terms in your will. For example, say you leave everythin’ to your aunt Suzie in your will and your children are listed as beneficiaries on your life insurance policy. Your aunt Suzie can’t touch your life insurance policy – only your listed beneficiaries can.
Identify your designated beneficiaries for all business assets. If it’s not somebody you want to inherit that asset, change your beneficiary immediately. Remember, a beneficiary on a specific asset overrides what’s in your will.
Focus on minimizing your taxes
Most people don’t realize that when a business owner passes away, the estate taxes can tank the business. Estate taxes can be more than 50% of the value of your business and must be paid within nine months of your death. Most businesses need to liquidate to pay these taxes.
Thankfully, the IRS has tax breaks in Section 303 and Section 6166 that can protect your business. Section 303 deals with using stock to pay death and funeral taxes; Section 6166 deals with Federal estate taxes.
Both sections make it easier to pay necessary taxes without breaking up your business.
Avoid probate as much as possible
Although the process is mostly clerical, probate ties up assets for months (sometimes years) and can be expensive. It’s best to plan ahead to avoid probate as much as you can.
When you create a properly structured ILIT living trust, the benefits paid from the insurance policy won’t pass through probate. The funds will be available immediately to cover estate taxes and other financial obligations.
You can also establish a grantor retained annuity trust (GRAT). With this trust in place, if your assets grow over the terms of that trust, the appreciation won’t be subject to estate taxes. This allows you to pass your business assets to your kids or your spouse.
Declare power of attorney
You need to declare power of attorney to someone trustworthy to handle legal matters on behalf of the business when you pass away. This individual will be in charge of things like payroll, managing vendor payments, and financial assets.
If you don’t declare power of attorney to someone before you die, the court will appoint a guardian who may not have your company’s best interests in mind.
You also need a succession plan
A succession plan is designed to ensure your business runs as smoothly as possible; it’s a plan that chooses decision makers and creates a strategy for transferring company information to the right people. Although the details for every business will be different, Fidelity.com describes what might be included in this plan.
For example, a management succession plan might include training your successors, delegating responsibilities, and bringing in an outside advisor for their objectivity. An ownership succession plan might include defining who will own vs. manage the business, creating terms that consider your family’s best interests and timing the transfer of your business to avoid a discounted sale of your business.
Get professional guidance
Making sure your business survives and stays in good hands when you die is important. If you’re not sure where to start, contact an estate planning professional for help.
4 Things to Consider When Creating a Business Continuity Plan
One of the biggest mistakes a business owner can make is abiding by the “it will never happen to me” rule in regards to disasters. Each year, thousands of natural disasters occur all over the country.
Acts of nature like wildfires or floods can lead to a business closing for long periods of time. The only way to prevent problems when dealing with disastrous situations is by creating a business continuity plan.
Studies show that nearly 82 percent of the businesses in the United States do not have the IT infrastructure in place to deal with a disastrous act of nature or network outage. Instead of leaving the functionality of your business to chance, now is the time to take continuity planning seriously.
The following are some of the things you should consider when creating a business continuity plan.
1. Work on Identifying the Potential Threats You Face
Before you can create a comprehensive business continuity plan, you need to adequately identify the potential threats your business faces. Having a plan for a variety of possible disasters can help you rebound in a hurry following one of these events. Some business owners only make continuity plans to deal with things like natural disasters, but there are many more disastrous situations to consider.
For instance, figuring out what you would do to keep your business functional in the event of an employee strike or cyber-attack is essential. Once you have a list of possible disaster situations, you need to map out all of their outcomes.
If you are unsure about how to map out these outcomes, working with professionals who are experienced in continuity planning is a must. Often times, these professionals will be able to look at these situations objectively and help you figure out how to create adequate plans for each one.
2. Constructing a Recovery Team is a Must
One of the most vital parts of a successful business continuity plan is creating a recovery team. If you want to keep your own staff freed up during a disaster, hiring a third-party to perform this job is easy. Before hiring a company to fill this role, you need to assess the amount of experience they have.
Not only can a third-party act as your recovery team, they can also help you hone and refine your existing continuity plan. Allowing professionals to get a look at this plan can help you out greatly. They will be able to look at your continuity plan objectively and provide you with guidance on how to improve and strengthen it.
3. Know What is At Stake Without a Continuity Plan
Driving home the importance of a continuity plan is easy if you actually assess what you stand to lose without one. Often times, businesses without a comprehensive continuity plan will lose a lot of money in the event of a disaster.
While some of this money can be recouped via a class action lawsuit, a business may still lose lots of customers in the process. You can learn more about disaster-related lawsuits with a bit of online research.
4. Prioritizing is Vital When Creating One of These Plans
When disaster strikes, you will have to limit the number of resources your team uses. When creating a business continuity plan, it is important to figure out what technology or systems you need up and going first. Having this list of priorities in hand in the event of a disaster can help you limit the amount of downtime your team experiences.
Instead of trying to take on this complicated process alone, you need to reach out to disaster recovery professionals. With their help, you can get a plan in place in a hurry.
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