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Small Business Essentials


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Small Business Essentials

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Small Business Essentials

  1. 1. Small Business Essentials: Legal Considerations, Insurance and Managing Risk Robert J. Weil Law Office of Robert J. Weil, PLLC 4031 University Drive, Suite 100 Fairfax, Virginia 22030 (703) 934 2036 O (703) 277 7730 F (703) 399 5671 C
  2. 2. Key Considerations • Undertake a thorough review of corporate and legal options and issues to enhance more effective and efficient operation and management of your business • Understand and comply with applicable state and federal laws – corporate, employment, tax, etc. • Engage in regular reviews of internal business policies, procedures, legal requirements and documentation as a means of preserving assets and reducing or limiting liability risks
  3. 3. Business Entity Choices • Sole Proprietorship: -Owned/operated by one person -NO insulation from personal liability -Inexpensive and simple to operate • Corporation: - “C” vs. “S” corporation -Corporation and not the shareholders liable for corporate debts and obligations -Maintain corporate formalities
  4. 4. Other Business Forms • Partnership: - General or limited partnership - Written partnership agreement -Set forth partner rights in management and shares -Set forth duration of partnership -Partners jointly and severally liable for debts • Limited Liability Company: -Treated as corporation for liability purposes -Articles of Organization -Operating Agreement -Control rests with members -Professional LLC
  5. 5. Basic Business Sense • Familiarity with and consistent adherence to state statutes and corporate formalities • Maintain reliable Registered or Resident Agent • Dutifully file your Annual Reports and pay Assessments • Maintain a set of accurate and complete books and records • Avoid scenarios that may permit “piercing the corporate veil” • Have a document retention policy
  6. 6. Policies and Procedures Employee Handbook • Does your business have a handbook? • Is it followed? Is it regularly updated? If not, get rid of it. • Does it confirm employment at will and avoid creating a contract of employment? • Does it contain a Non-discrimination Policy? • Does it contain a Sexual Harassment Policy? • Do you require an Employee sign off of receipt? • Identification of employee benefits • Compliance with both Federal and State statutes
  7. 7. Additional Employment Practices Issues • Consider implementing clear company policies related to use of social media, internet, e-mail • Confirm ownership of company computer and e- mail systems • Document employee reviews, both good and bad • Maintain complete and up-to-date employee files • Secure Employment Practices Liability insurance • Review hiring and interviewing procedures and forms • Regularly review you application form, job postings and position descriptions
  8. 8. Intellectual Property Trade, service and certification marks: • PTO registration ® • TM or SM • Diary critical dates for affidavits of continued use (5-6 year) or renewal (10 years) • Copyrights – Proper notice Copyright© 2014 Company Name, Date. All Rights Reserved • Publications and website content – include thorough disclaimers • Maintain control over blogs/forums
  9. 9. Insurance Commercial General Liability Insurance • Scope of coverage – coverage for bodily injury and property damage Excess Liability or Umbrella Coverage • Liability limits over and above CGL Business Property Coverage – Confirm property and equipment values annually Workers’ Compensation – List all states Professional Liability/Errors and Omissions • Coverage for losses arising out of performance of professional service Certificates of Insurance - Frequently ignored
  10. 10. Commercial Property and Equipment Leases Commercial Lease • Term of Lease • Escalation Clauses for rent, operating costs • Events of Default – What are they? • Retain ability to assign or sublease Subleases • Approval of form by Landlord Equipment Leases • Personal guarantees – NO!
  11. 11. Contracts • Clearly identify the contract parties • What is the contract term or duration? • Clearly define the Scope of Services • Specify terms and conditions of payment • What constitutes termination or default? • Who owns any intellectual property created? • Confidentiality/Non-competition • Insurance and Indemnification language • Dispute resolution/litigation • Amending the contract • Limits on recoverable damages • Independent Contractor/Consultant Agreements
  12. 12. Website and Social Media • Include a proper disclaimer of liability for content and opinions expressed • Define the terms and conditions of use and require acknowledgement • Privacy Policy • Referral Programs • Listserv and discussion forum guidelines
  13. 13. Summary • Corporate and legal reviews improve management and protect the business • Regularly consider and identify evolving liability risks • Develop sound policies and procedures for avoiding liability risks and for addressing such risks efficiently and effectively when they occur • Develop a plan for how the business responds when something goes wrong
  14. 14. Robert J. Weil Law Office of Robert J. Weil, PLLC 4031 University Drive, Suite 100 Fairfax, Virginia 22030 (703) 934 2036 O (703) 277 7730 F (703) 399 5671 C