Free Enterprise: May 2012 Archives
Free Enterprise - The FindLaw Small Business Law Blog

May 2012 Archives

Which Car Insurance is Best for Your Business?

If you run a business, you know insurance is important. Especially if part of your company's services requires putting employees behind the wheel. But what should you look for when it comes to choosing a car insurance plan?

This is one choice you don't want to speed through. While commercial auto insurance premiums can often be more expensive, they can save you money in the long run.

Here are some questions you should consider when shopping for a policy for your business.

How serious is an NDA? Some say it really doesn't have much clout. Others will swear by a non-disclosure agreement.

It's a contract signed between two parties, where one party agrees not to disclose certain trade secrets, inside information and other things he or she may come to learn of during the course of the relationship between the parties.

Many resort to NDAs as a method of protecting their inventions of business secrets. Is the NDA, even the most iron-clad NDA, the best way to protect an invention or idea?

Should Smoking be Banned in all Apartments, Condos?

Being a smoker in California just got a little tougher. County supervisors in Marin have passed a new ordinance that bans smoking in apartments and condominiums.

The new rule will affect complexes located in unincorporated areas of Marin County. Marin itself was recently named the healthiest county in California by a report from the University of Wisconsin Population Health Institute and the Robert Wood Johnson Foundation.

While some may find the ordinance bizarre, it's actually not the first of its kind. Could a similar ban be coming to your town?

Pizza Patron Offers Free Pizza if You Order in Spanish

Order in Spanish, get a free pizza. That's the gist of Pizza Patron's Spanish marketing ploy, which it has named "Pizza Por Favor." On the evening of June 5, all patrons who order a pizza in Spanish will get a free pepperoni pie.

The advertising campaign has been drawing criticism from all sides. Marcela Gomez, president of Hispanic Marketing Group, even thinks it's discrimination.

This blogger thinks she's probably right.

Los Angeles City Bans Plastic Bags

Los Angeles became the largest city in the country to enact a plastic bag ban on Wednesday, following in the footsteps of 47 other municipalities in California. The LA plastic bag ban is expected to affect about 7,500 large and small grocery and convenience stories.

Before the ban goes into effect, the city will conduct an environmental review and draft a final ordinance. Once enacted, large stores will have six months to comply and small ones will have a year.

Are you thinking of starting a new business but have no clue where to begin?

Running a successful business can be an art form. It's not easy and you might find yourself jumping through several hoops when trying to launch your brainchild.

That's where FindLaw comes in. We have a free mini-guide to help you navigate through the entrepreneurial waters. This free download is loaded with valuable information.

Best Retirement Plans for Small Businesses

All small businesses operate toward the same goal: staying in business. Once the initial shaky stage is over, the next step is preparing for the future. One aspect is choosing the best retirement plan for your company.

However, the task can seem daunting. After all, owners want to choose something that'll be fair to their employees and give the right amount of tax benefits. But they also don't want a plan that'll eat up their company's liquidity.

There are a lot of choices when it comes to setting up an employee retirement option. So which one is right for your small business?

Pop-up retail shops are popping up everywhere.

We're talking about those stores that show up for a brief period, only to disappear into the void once the time period is over. A good example are Halloween shops -- they pop up in September, only to disappear in November. Fireworks shops also fit the bill.

If you want to start a pop-up store, here are give quick tips:

Think Twice Before Advertising on Your Car

You've seen them -- car business advertisements. There are magnets, stickers and vinyl wraps. You can cover the entire vehicle, or opt for just the doors or windows. The variations are endless. But are they legal?

You must answer this question before you advertise your business on a car. While there's a good chance you'll be able to advertise on your car, the right to do so is probably not unlimited. Car business advertisements are often regulated for safety purposes -- and to prevent neighborhood eyesores.

How to Protect Your Business from Car Accident Suits

When you run your own company, lawsuits can pop up out of anywhere. Nowhere is this more true than in businesses that require you or your employees to drive. Car accident suits can put a huge dent in your bottom line, but there are ways to protect your business.

From 2003 to 2009, over 1,500 workers died each year from driving-related accidents, according to the U.S. Department of Labor. On average, on-the-job fatalities can cost a business over $500,000. Nonfatal accidents usually result in about $74,000 in losses.

So what's the best way to prevent your company from going under due to a car accident lawsuit? Here are five things you can do.

If you're thinking of starting a nonprofit tax-exempt entity, you'll likely know that there's quite a bit of research involved. Once you start digging, you'll come across words that might make absolutely no sense whatsoever.

So here's to demystifying these crazy words and making the law of tax exempt organizations a little more user friendly. Have a look at our top 5 legal terms for nonprofit law.

You Should Download FindLaw's Free Guide to Hiring

Are you planning on hiring some new employees? There's a lot to consider besides qualifications these days. Chief among them is your own potential legal exposure.

But don't worry. FindLaw is here to help. Download our latest free guide "The FindLaw Guide to Hiring" It'll help you piece together what you, as an employer, can and can't do during the hiring process.

The guide summarizes many of the complex in-depth employment law articles available on FindLaw. Rather than wade through the countless pages of text, our new guide quickly answers common hiring questions, like:

How to (Legally) Start a Homemade Food Business

When it comes to food, many people usually have one specialty they believe they make better than anyone else. But making the jump to selling it isn't as easy as just having a good product. Whether it's a sandwich or Beef Wellington, figuring out how to start a homemade food business is not without its legal risks.

So before you start investing in your own homemade food start-up, consider looking into the following issues first.

Could CA's Foie Gras Ban Go National?

Some famous California chefs have taken to the street, or rather the kitchen, to fight the state's upcoming foie gras ban.

Several high-profile chefs have held foie gras events at their restaurants, CBS Los Angeles reports. They showcased special menus featuring the soon-to-be-outlawed ingredient. However, animal rights activists haven't found their actions amusing. Many have fought back by protesting outside some of the restaurants.

The law banning foie gras goes into effect on July 1 in California. But could it also be the spark needed to set off a national trend?

Stay Legal, Don't Make Ad Fine Print Too Small

It's no secret that business owners like to bury important terms and details in fine print and obscure locations. They do it in print ads, on television and on the Internet. It's a common practice.

But in some situations, using fine print is deceptive advertising. Federal Trade Commission rules require all significant conditions and limitations to be clearly and conspicuously presented.

Densely packed lines of fine print, footnotes, and fast-scrolling disclosures often don't meet this obligation. 

Thou shall not post bad reviews of your church online -- unless you want to face the wrath of a vengeful lawsuit.

That's what an Oregon pastor seems to be saying, as he's filed a $500,000 defamation lawsuit against four former church members who badmouthed his church on a blog, Portland's KGW-TV reports.

But the accused defamers are fighting back against Pastor Charles O'Neal's lawsuit, with a special kind of legal action that asserts free speech under the First Amendment. Small businesses and nonprofits may want to take note of their strategy.

Boss Can Limit Employee's Pieces of Flair: 2nd Cir. Rules

No, you haven't stepped into the world of Office Space. But we are going to talk employee flair.

A few years back, employees at a Manhattan Starbucks filed a complaint against the company with the National Labor Relations Board over its flair policy. Employees, who were trying to unionize, were only permitted to wear one pro-union button less than 1-inch in diameter while on the clock.

The NLRB deemed this an unfair labor practice, but now the Second Circuit has reversed.

What Are Your Investors' Legal Rights?

It's par for the course these days for entrepreneurs to seek outside funding for a small business or start-up. Some draw the attention of venture capitalists, while others head to crowdfunding websites like Kickstarter.

Though these investors are technically contributing to your business, they're not doing so without expecting something in return. As much as entrepreneurs would like to take the money and run, the reality is that investors have rights.

And if you fail to respect those rights, you could find yourself in the middle of a lawsuit.

There are times when estate planning and small business law cross over. The family limited partnership is one of those times. It's a vehicle used by small businesses to manage the continuity of their business and to effectively plan for the future.

So, what is a family limited partnership and how can it help a small business?

NY Bagel Shop Fined Over Poppy, Seasame Seeds

New York City's health inspectors are on a rampage. A bagel seed rampage, that is. And your city may be next.

B&B Empire Bagel Cafe was reportedly fined $1,650 for allowing sesame and poppy seeds to fall onto the floor while its bagels were being made. They weren't reusing the seeds, but merely allowing them to accumulate on the floor until they had finished seeding and baking the bagels.

Few think the bagel seed fine is fair.

The New Jersey "tanning mom" accused of child endangerment has been banned from a chain of tanning salons, the New York Daily News reports.

Tanning mom Patricia Krentcil denies she took her 5-year-old daughter into a tanning booth, which is unlawful in New Jersey for a child under 14. Public attention and ridicule have led one tanning-salon chain to bar Krentcil from its premises.

But is it legal to ban a particular customer from your business?

Facebook Suit Shows Costs of Ignoring Court

Free Enterprise has sporadically covered the story of Paul Ceglia, the man suing Facebook for a 50% share in the company. He purports to have signed a contract with Mark Zuckerberg in 2003, for which he claims to have email proof.

Now, the obvious lesson here is that you should really watch what you write in emails -- and don't use email to conduct negotiations. But the not-so-obvious lesson? You should really follow court orders.

If you don't, you might end up like Paul Ceglia -- fined.

How to Spot 5 Common Resume Lies

Every entrepreneur dreams of the day they'll be able to expand their business to beyond just them. But hiring in this economy can be tricky. Applicants are getting desperate and fudging on resumes is a common way for them to tip the scales in their favor.

While it goes without saying that slight exaggerations are to be expected in all resumes, sometimes people go overboard.

So if you don't want to end up with an illiterate IT manager, be sure to watch out for the following five common resume lies:

How to Avoid Jaw-Dropping Legal Bills

Business owners big and small know the sting of attorney fees. Figuring out how to avoid astronomical legal bills might seem impossible. After all, you need lawyers to keep your company on the up and up.

However, that doesn't mean you have to be gouged along the way. Growing a business can be impossible without good cash flow. And high legal bills can delay your expansion.

But fear not, there are things you can do to curb this beast. Here are five tips to keep your lawyer fees to a minimum.

Conn. Is 49th State to Sell Alcohol on Sunday

One of the last blue law holdouts, Connecticut has become the 49th state to allow off-premises Sunday alcohol sales. Liquor stores and grocers can sell beer, wine and spirits seven days a week.

Resulting sales are expected to bring about $5.2 million a year into state coffers -- money that was instead being collected by neighboring states. For years, consumers fled to Massachusetts, New York and Rhode Island in search of Sunday alcohol and cheaper prices, according to Governor Dannel Malloy. He hopes that the changes will encourage residents to make local purchases.

Here's a huge win for business taxpayers. Well, it's a win for those involved in Son of Boss tax shelters.

Generally, the IRS can't audit your company for anything over three years back. Now, after the recent Supreme Court ruling, the IRS 3-year rule also applies to Son of Boss tax shelters.

Son of Boss tax shelters have been a major source of IRS tax revenue. First, though, do you know what exactly a tax shelter is?

External hiring decisions are important for any small business, but it may make more business sense to promote from within, a new study finds.

External hires are usually more costly for a business in more ways than one, according to the study by Matthew Bidwell of the University of Pennsylvania's Wharton School of Business. External hires also take about two years to "get up to speed" in their new position, the study found.

"My research documents some quite substantial costs to external hires and some substantial benefits to internal mobility," Bidwell said in a statement. His research found:

"No shirt, no shoes, no service," is a policy commonly posted in many retail businesses. But what about your employees? Should you prevent them from going barefoot at work?

Small businesses often require customers to wear shoes because of liability concerns, such as: What if a barefoot customer steps on something and then sues for her injury?

Similar concerns are afoot when employers institute policies against going barefoot at work. But as far as the law is concerned, employee footwear is generally required in only a few specific circumstances.

How to Hire Family Members and Friends Without Drama

Guest post by Jennifer K. Halford, Esq.

Many small business owners hire family members or friends to work for their businesses. And often times that is a good decision.

After all, it is convenient. You don't have to advertise for the position. You usually know the individual's work ethic. And they tend to be committed to their job because you are the boss.

Yet, hiring family and friends is also one of the areas I hear business owners having the most difficulty with. Friendships are destroyed when your friend fails to perform to standards. Family members may try to take advantage of you. Other employees may accuse you of nepotism.

Get the benefits of working with family members and friends without these problems. Make sure to do the following to hire your family and friends the right way:

In one of our perennially popular Free Enterprise posts we ran down a to-do list for starting a nonprofit.

Now, let's take it one step further and talk about what you need to do if you want to have a smooth ride through the IRS nonprofit tax exemption process.

Here's a simple checklist so be sure to click on the links throughout the post for more detailed information.

5 Ways to Get Your Customers to Pay Their Invoice

Guest post by Jennifer K. Halford, Esq.

It is very common for businesses to provide their customers with an invoice to request payment for goods or services that have been provided.

In so doing, you are trusting that your customers will pay the amount requested. You are also trusting that they will pay on time.

But customers don't always pay their invoices as requested. And this can be detrimental to your business. You have already provided the goods or services. So you have nothing to insure payment. Plus, statistics show that the longer you wait to collect on the invoice, the less likely the customer is to pay.

Few small businesses can withstand customers choosing not to pay to their invoices on time, especially in this economy. So here are five ways to get your customers to pay their invoice: