Whether you are a brand new business, single proprietor, an established business, or preparing to retire, there are legal issues you and your business may be facing. This TIC-TOC with Rich Goates will give you some ideas of things you may not be thinking about and at least point you in the right direction on how to address those issues.

1. Legal Tic Toc
What Legal Issues Am I not Thinking About?
Rich Goates, Telarus General Counsel

2. Issues this Tic-Toc will touch on
1-Starting a Business (entity protection, looking into the future with partners)
2-Growing a Business (marketing and go-to market risks, renegotiating agreements)
3-Planning an Exit (business succession, asset protection)
LEGAL DISCLAIMER
This presentation does NOT constitute legal advice, rather is to be used as a
general resource that can be instructive in asking questions to a retained
legal advisor.

3. Starting a Business 101
Settingup an entity
Asset Protection:
Don’t let a business
mistake cost you your
home and/or personal
assets
Don’t let a personal
mistake leave business
assets exposed to loss
Don’t leave yourself unprotected!

4. LLC vs. S-Corp
• Both are taxed as partnerships as “Pass-
Through” entities
• S-Corp- Great when there is cash flow
• LLC- Great for holding assets
• Talk to your accountant or lawyer as
specific goals and circumstances are
important to consider

5. Once the entity is Set-up…
• Do not co-mingle funds (Don’t rob Peter to pay
Paul—don’t pay mortgage with company funds).
• To the extent possible, pay yourself a consistent
salary (it is okay to take periodic “distributions” as
well as needed).
• Based on your business model, get adequate
insurance.
• Keep good books.

6. Need extra help?
When hiring employees,
carefully determine
whether that employee will
be considered an
independent contractor, an
employee, or a statutory
employee.
Growing your Business

7. Misclassification of Workers
Call a chicken a duck, but that
doesn’t mean there won’t be
consequences.
https://www.irs.gov/newsroom/
understanding-employee-vs-
contractor-designation

8. Change Management
• As business needs change, re-evaluate your
insurance needs, at least annually.
• If you do business with suppliers outside of
Telarus (either direct or other masters) ask
yourself, “When was the last time I looked at
the supplier agreements?”
• Supplier terms have gotten more
favorable to the channel and it may be
time to renegotiate

9. Contract Checklist
30 items we look for
in supplier contracts
including:
-Evergreen
-Single-Agent Breach
-Most Favored Nation
-Channel Equity
-Payment on
Renewals and
Upgrades
Let Telarus be your Wingman!
Let us negotiate the most favorable
terms possible.

10. Business Partners
-When bringing on a partner are you contemplating
an exit strategy that gives each of you options?
-First Right of Refusal (mechanism for partner to
protect themselves against the other partner selling
to a third-party without consent)
-Is the plan for the partner to be able to buy
accounts back at some point? At what price?
-What happens when the business relationship
breaks down? How do you get out without losing
everything?

11. Business Succession
-Have you done a will and/or a trust?
-Do you have someone to manage your
business in retirement? (Account Management)
-Have you addressed death and incapacity in
your operating agreement with your business
partner(s)?
-Is your goal to leave your income stream to a
surviving spouse?

12. Dead, but
Commissions
aren’t gone
Telarus’s new Partner Agreements expressly states it will
recognize your estate planning documents and your residual
commissions will continue even after you are gone.

13. Questions?