Legal Concerns of the Entrepreneur
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Legal Concerns of the Entrepreneur

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Presentation given to class of entrepreneurs re: legal concerns of business ownership

Presentation given to class of entrepreneurs re: legal concerns of business ownership

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Legal Concerns of the Entrepreneur Legal Concerns of the Entrepreneur Presentation Transcript

  • Legal Concerns for the Entrepreneur
    By Salene Mazur Kraemer, Esquire, MBA, CTP-D
    Pittsburgh, PA 15241
    412.427.7075 phone, 412.221.3658 fax
    www.mazurkraemer.com
    salene@mazurkraemer.com
    1
    MAZURKRAEMER LAW
  • Overview
    A. Getting Started
    B. Corporate Formation & Formalities
    C. Hiring Employees or Contractors
    D. Regulatory Compliance
    E. Raising Money
    F. Intellectual Property
    G. Corporate Counseling
    H. Contract Drafting & Review
    I. Product Liability, Warranties, Advertising
    J. Business Torts
    K. E-Commerce
    L. Exit Strategies
    2
    MAZURKRAEMER LAW
  • A. Getting Started
    1. Leave Current Employment
    2. Startup, Acquisition
    (stock or assets), Franchise
    3. Business Plan
    4. Location Selection
    5. Hiring Professionals
    6. Choose Business Entity
    7. Forming the Board
    3
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  • Leave Current Employment
    Covenant Not to Compete
    Trade Secrets
    Invention Assignment Agreement
    Misappropriation of Company Resources
    Non-Solicitation Agreement
    MAZURKRAEMER LAW
    4
  • Location Selection
    MAZURKRAEMER LAW
    5
    • Office share
    • Commercial lease
    • Buy property
    • Virtual office
    • Location visibility
  • Choose Business Entity
    Sole Proprietorship ***
    C Corporation
    S Corporation ***
    Partnership
    Limited Partnership (who is the GP and who is the LP) ***
    Limited Liability Limited Partnership
    Limited Liability Company ***
    MAZURKRAEMER LAW
    6
  • Considerations
    Number of Owners
    Type of Owners
    Personal Liability Protection
    Tax status
    Governing Agreement
    Flexibility re: management/governance
    Flexibility re: profit/loss allocations, as well as cash distribution
    Securities concerns- additional investors?
    Liquidation of entity
    MAZURKRAEMER LAW
    7
  • Hiring Professionals
    Accountant
    Graphic Design Artist
    Website developer/hosting
    IT consultant
    PR firm/social media
    consultant
    Insurance
    Banker
    Lawyer (Corporate, IP, FDA, etc. )
    Printer
    Benefits Company
    MAZURKRAEMER LAW
    8
  • B. Corporate Formation Documents
    Articles or Certification of Incorporation or Formation or Partnership
    Written Consent of Sole Incorporator
    Unanimous Consent of Board of Directors
    Corporate Minute Book
    Stock Certificates
    Docketing Statement
    Application for EIN
    Name Reservation in State Incorporated and Where Intend to Do Business
    Fictitious Name Filing
    Certificate of Authority to Do Business in Other States
    Publication of Authority to Do Business in State
    Voting Agreements,
    Necessary Tax Forms
    Shareholders Agreement, Partnership Agreement, Operating Agreement
    Buy-Sell Agreement
    9
    MAZURKRAEMER LAW
  • C. HR Issues-Hiring Employees & Contractors
    Employment Agreements
    Consulting Agreements
    Covenant Not to Compete
    Policy/Handbook
    Discrimination Prevention
    Pre-employment application/screening
    Wrongful discharge v. employee at will
    Equity compensation
    10
    MAZURKRAEMER LAW
  • Employee v. Independent Contractor
    TEST IC- 1) control the outcome of a piece of work and the means and manner of achieving the outcome; 2) Offer services to public at large, not just one business
    IMP-employer does not have to pay social security or Medicare, unemployment insurance or workers’ comp for employee, no benefits, no retirement
    Lower paid, lower skilled often considered employees
    MAZURKRAEMER LAW
    11
  • Important Legislation
    Civil Rights Act
    OSHA
    National Labor Relations Act
    ADA
    Age Discrimination
    Family Medical Leave Act
    Fair Labor Standards Act
    EEOC
    MAZURKRAEMER LAW
    12
  • Reduce Litigation Risk
    Pre-employment recruiting materials
    Careful interview and screening process
    Consistent job evaluations during course of employment
    Have written employment or independent contractor agreements
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    13
  • D. Regulatory Compliance
    Local, state (foreign or domestic), federal level
    Zoning approval, permits and licenses
    Insurance
    Government
    14
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  • E. Raising Money
    Business plan
    Private placement memo
    Stock Purchase Agreement/Subscription Agreement
    Securities Compliance (both Federal and States)
    Loan agreements (term v. revolver v. secured)
    UCC filings, Security Agreements
    Guaranty agreements
    15
    MAZURKRAEMER LAW
    SOURCES:
    *Private investors (self, friends, family, angel investors)
    *Venture capital financing
    *Credit (term loan or revolver)
    *Strategic alliances, joint ventures
    *Loan funds
    *Issue common stock, preferred stock, bonds
  • F. Intellectual Property
    Basic Forms
    Patents
    Trademarks
    Copyright
    Trade Secret
    16
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  • IP Issues Continued
    Trade Secret Proprietary Information Program
    Confidentiality or non-disclosure agreements
    Non-competition and non-solicitation agreements
    Invention Assignment Agreement
     Trademark, Service Marks-brands, logos, packaging or designs that are used to distinguish its goods and services
    Registered Internet domain name
     Copyright for text, graphic, software, audio or film materials, such as manuals or promotional or training materials
     Licensing Agreements
    International?
    MAZURKRAEMER LAW
    17
  • G. Corporate Counseling
    Board Formation
    Legally required
    Selection, number, frequency of meeting, diversified, outside v. interested, compensation
    Synergy, credibility
    Fiduciary Duty of Care to corporation and shareholders (BIOTC)
    Duty of Loyalty (no self-dealing, no usurp corp opportunity)
    Duty of Care (“reasonable man” test)
    Business Judgment Rule (disinterested, informed, shifts burden)
    D&O Insurance
    Indemnity Agreement (officers)
    18
    MAZURKRAEMER LAW
  • H. Contract Drafting & Review
    Commercial Property Leases
    Equipment Leases
    Agreements of Sale for Property
    Loan Agreements
    Sale of Goods (Supply Agreement, Distribution Agreement, Purchase Order)
    Engagement letters
    Customer Contracts
    Consignments
    Management Agreement
    Requirements and Outputs Contracts
    19
    MAZURKRAEMER LAW
  • Contract Law Basics
    Basic elements (offer, acceptance, consideration)
    UCC v. Common Law
    Contract theories (breach of contract, unjust enrichment, promissory estoppel, restitution)
    Oral, written, implied
    Statute of Frauds (goods over $500, real property, contract longer than 1 years, pre-nup, assumption of debt)
    Remedies
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  • Remedies
    $ or Equitable (specific performance, injunction, recission)
    Expectation
    Reliance
    Restitution
    Consequential (foreseeable)
    Liquidation
    Punitive
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  • Material Contract Terms
    Who are the parties?
    Duties and Obligations
    Payment Terms
    Duration
    Termination
    Warranties and Representations
    Indemnification
    Boilerplate provisions
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    22
  • Boilerplate Provisions
    Notice provisions
    Governing Law
    Waiver of Jury Trial
    Amendment
    Assignment
    Attorneys’ Fees
    Litigation v. Arbitration or Mediation
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  • Creditors’ Rights in Bankruptcy
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  • I. Product Liability, Warranties, Advertising
    Warranties (express (not puffing), implied warranty of merchantability, implied warranty of fitness for a particular purposes)
    Limitation of Liability, AS IS clauses
    Products liability for defective products sold in dangerous or defective condition (strict liability, chain of distribution, design defect, warnings)
    False or Misleading Advertising
    Successor Liability
    Defenses (comparative fault, assumption of risk)
    25
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  • J. Business Torts
    Negligence (duty of care, breach, cause, damages)
    Intentional Torts (false imprisonment, IIEM, defamation, appropriation, trespass, nuisance, fraud/misrep, conversion, interference with K’l relations, unfair competition)
    Vicarious Liability/respondeat superior
    Strict Liability (ultrahazardous and products)
    Toxic Torts (exposure to harmful substances)
    Defenses, Damages, J/S Liability, Contribution
    26
    MAZURKRAEMER LAW SM
  • K. E-Commerce
    Basic terms of use (favorable linking, information usage, disclaimers, liability limitation, dispute resolution and forum selection provisions)
    Clickwrap agreements
    Passive or "brochureware" website vs. selling goods or services online
    Cookies Permission
    Data security
    Illustrations or photos
    Restricted territories
    27
    MAZURKRAEMER LAW
  • 412.427.7075 phone, 412.221.3658 faxwww.mazurkraemer.comsalene@mazurkraemer.com
    28
    MAZURKRAEMER LAW