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2011 Small Business Presentation for HAUL


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A presentation I did discussing the legal issues small businesses and nonprofits should be aware of when incorporating and operating.

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2011 Small Business Presentation for HAUL

  1. 1. THE LEGALITIES The Legal Issues Your Small Business and Non-profit Should Be Aware Of Presented by: Erin McClarty Esq.Wednesday, September 14, 2011
  2. 2. WHEN LEGAL ISSUES CAN ARISE Formation General Operation Advertising/ Transactions Labor Trademarks/Intellectual Property Dissolution/ Winding DownWednesday, September 14, 2011
  3. 3. CHOOSING A FOR- PROFIT STRUCTURE 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.Wednesday, September 14, 2011
  4. 4. CHOOSING A FOR-PROFIT STRUCTURE Corporation Limited Liability Company Limited Liability PartnershipWednesday, September 14, 2011
  5. 5. 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 • SubsidiariesWednesday, September 14, 2011
  6. 6. 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 corporationWednesday, September 14, 2011
  7. 7. CHOOSING A NON- PROFIT STRUCTURE Limited Liability Company CorporationsWednesday, September 14, 2011
  8. 8. ADVERTISING: TELEPHONE SOLICITATIONS Telephone Consumer Protection Act Texas Law Enforcement Telephone Solicitation Act Must file a registration statement and pay fee.Wednesday, September 14, 2011
  9. 9. 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-commerceWednesday, September 14, 2011
  10. 10. ADVERTISING: EMAIL Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) Governs “commercial mail”Wednesday, September 14, 2011
  11. 11. ADVERTISING: OTHER TEXAS LAWS Criminal and civl offenses for fraud or misrepresentation Example: Texas Deceptive Trade Practice ActWednesday, September 14, 2011
  12. 12. OPERATIONS Insurance Worker’s Compensation General Liability Licenses and Permits Does your business require • a certain license?Wednesday, September 14, 2011
  13. 13. 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 PropertyWednesday, September 14, 2011
  14. 14. 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 issuesWednesday, September 14, 2011
  15. 15. LABOR Managing Employees Create an employment agreement Include a confidentiality agreement Beware with Social Media PoliciesWednesday, September 14, 2011
  16. 16. 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 efte/ics_contract_labor.html IC’s make you more susceptible to IRS auditsWednesday, September 14, 2011
  17. 17. LABOR LAWS Fair Labor Standards Act (FLSA) Department of Labor has a handbook for guidance: Family Medical Leave Act (FMLA) Texas Labor CodeWednesday, September 14, 2011
  18. 18. NON-PROFIT ISSUES Charitable Solicitation Laws May require registration in each state you plan to solicit in Fill out Uniform Statement Kit at 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 guidanceWednesday, September 14, 2011
  19. 19. 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 educationWednesday, September 14, 2011
  20. 20. 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
  21. 21. BUT I CAN’T AFFORD ONE….. Be Creative Some attorneys allow you to buy “credits” Do package deals Hire counsel on a contract basisWednesday, September 14, 2011
  22. 22. ATTORNEY RESOURCES Houston Volunteer Lawyers Program S.C.O.R.E Houston Lawyers Referral Service Texas Accountants and Lawyers for the Arts Texas C-barWednesday, September 14, 2011
  23. 23. CONTACT Erin McClarty Esq. www.notationsonnonprofit.comWednesday, September 14, 2011