Free Enterprise - The FindLaw Small Business Law Blog

Recently in Business Organizations Category

While the flashy pseudo-sharing economy start-ups like Uber, Lyft, Instacart, and TaskRabbit are known for popularizing the building of empires off the exploitation of contractors, the current trend is pushing away from the contractor-based employment model.

As many companies that utilize contractor based services have learned in the past, mischaracterizing employees as contractors can be a costly, multi-million dollar, mistake. Here are the top three advantages for businesses that choose to hire full time employees rather than rely on contractors.

While racial, cultural, religious, and other forms of diversity are celebrated in American culture, businesses often find that their teams lack diversity. For businesses, small and large, diversity is a good thing as it can provide a multiplicity of perspectives within an organization. And diverse perspectives can help your business attract diverse customers and clients.

But how do you recruit diverse candidates and increase workplace diversity without actually discriminating? Below you'll find 3 tips to help legally improve workplace diversity.

The story has become so common, it's hard to even distinguish the cases: same-sex couple goes to wedding vendor; vendor refuses service based on religious beliefs; same-sex couple sues for discrimination; and a court rules in favor of same-sex couple.

This time is was the Washington State Supreme Court, ruling that a florist's refusal to provide flowers for a former customer's same-sex wedding violated state civil rights laws. Here's a look at the ruling at how it might affect your small business.

Starting July 17, 2017, a new immigration program to the United States will be available for international entrepreneurs that meet certain qualifications. The program is geared toward allowing startup founders to temporarily reside and work in the US in order to manage rapidly growing startup businesses. It is aptly called the International Entrepreneur Rule.

One of the major purposes behind the new International Entrepreneur Rule is to provide temporary immigration relief for international entrepreneurs whose immigration into the country would provide for a public benefit to the US, such as through US job creation. Basically, this provides an avenue for entrepreneurs with innovative ideas to start their businesses in the US.

Starting and running a business is ripe with risks, both to the individual and the business. However, when an individual elects to run their business as a sole proprietorship, they are personally taking on the business's legal risks. The most frequently raised concern of sole proprietors involves their personal liability for business debts.

For example, if a customer is injured, a sole proprietor could be personally sued, and his personal assets seized in a judgment, whereas if the business were structured as a separate entity, the business owner could potentially avoid personal liability. For a sole proprietor, liability is a complex topic and, surprisingly, it can actually cut both ways.

Maybe you're just getting ready to start your small business. Or maybe you've been plugging along for a couple years and are finally ready to take your operations big time. Or, you're unhappy with the current legal structure of your business and are looking for an alternative.

Either way, you may be considering forming a partnership. But you should know that partnerships, as all corporate structures, come with legal complications. Here are five legal issues that business partnerships may run into.

Theranos, the once revolutionary laboratory testing company, may be facing a new secret lawsuit from their former partner Walgreens. In a filing on Tuesday, Walgreens asked the Federal District Court in Delaware to permit the company to file a lawsuit "under seal" against Theranos that is based on the contracts that the two companies held with each other.

The motion filed by Walgreens explains that the two companies signed a non-disclosure agreement (NDA) relating to Theranos's business and technology. As a result of the NDA, Walgreens explained to the court that the allegations in the complaint, if disclosed in a public filing, would likely violate the terms of the NDA exposing them to liability.

Married small business owners often overlook a common reason why some businesses fail: divorce. In most states, one spouse's small business can be considered a marital asset or marital property. When a couple divorces, assets need to be divided, and that small business can be a couple's largest asset. That's why it's important to make sure your business is divorce proof from the outset.

Fortunately, there are ways to protect a small business after a divorce has been filed. Nonetheless, it is a good idea to protect the business from division before divorce happens. To understand your situation, you first need to know if your business will be separate or community property.

If you forgot to divorce-proof your business before filing for divorce, your only option may be to give up other assets, such as the house, cars, or retirement accounts in order to maintain control of your business.

It happens all too often that when a small business owner wants to retire they realize that they have no exit strategy. Sometimes the lack of an exit strategy is due to the expectation that a child will take over running the business. Unfortunately, what often gets overlooked is that not having an exit strategy can leave that child in a situation where much of the business is lost.

The sooner a small business owner recognizes the need for an exit plan (aka a succession plan), especially if that plan is simply to transfer the business to their kids rather than sell it off, the better off the business will be. The following checklist, while broad, should help small business owners plan their exit and transfer the business to their kid(s).

Most entrepreneurs start and end their careers as a sole proprietor. However, the more successful ones eventually incorporate, and the most successful ones start, run, and sell, multiple businesses at the same time. For the serial entrepreneur, there is no one right way to go about structuring multiple businesses.

Sometimes a serial entrepreneur will have multiple businesses all focused in one industry. For instance, a surf shop owner may own the surf store, as well as make surf boards, bikinis, offer surf lessons, sponsor a professional surf team, and make surfing videos. Apart from being one of the most motivated surfers to ever ride a wave, this serial entrepreneur would really benefit knowing the different kinds of corporate structures and how to structure multiple businesses.