Free Enterprise - The FindLaw Small Business Law Blog

October 2009 Archives

GINA Regulations and Wellness Programs for Small Businesses

Small business owners may have to rethink their wellness rewards programs because of new rules and regulations under the Genetic Information Non-Discrimination Act; which is known as GINA.

GINA was introduced as a safeguard to protect against employers and health insurers collecting genetic information from individuals and using it to make decisions about health coverage, hiring and firing and promotions.

However, lawmakers have made it very clear that GINA will influence the way employers conduct their wellness rewards programs.

Non-Profits & Spin-Offs: Green Business for the Greater Good

In this economic downturn, charities have increasingly attempted to find alternative ways to help fund themselves. Sometimes these charities have thought outside the box. They have spun off into for-profit organizations that help fund their charitable ventures. But what is so special about these small businesses? They are small businesses that are embracing green initiatives.

Small Business Social Media 102

As we mentioned in our previous post in Social Media 101, it is crucial to monitor your small business' online presence. But what can you do about what is being said about your business? What can you do to boost online reputation and traffic?

Well we have your primer on exactly what to do:

Small Business Social Media 101

As we discussed in a previous Free Enterprise post, managing your small business' online presence is pretty important.

According to an avid blogger and marketing guru quoted by Inc.: "Blogging is a cheap and scalable way to talk to interested people."

"But understand that while you advocate for your company, you are also walking a tightrope from a legal and business point of view."
What can you do as a small business owner in order to harness the power of social media such as networking sites, blogs, and message boards to help your own business grow?

Taxes 101: Bartering and Uncle Sam

Ah, the sound of success.  The barter took place, the exchange was triumphant, and your business was able to save crucial funds through a bartered-for exchange.  And you suddenly find yourself recommending bartering to everyone you meet, small business owners and civilians alike. 

Amid the clinking glasses and celebratory toasts...just don't forget about Uncle Sam.  Even though many barter exchanges do not involve cash, the Internal Revenue Service (IRS) still requires an accounting of the exchange.

Here are a few important tax considerations regarding bartering according to the IRS:

Pros and Cons of a Barter Exchange

In an earlier post we provided a broad overview of the concept of bartering for small business and considerations a small business can keep in mind as they move towards a barter agreement.  Once your company has decided on what to barter, it will have a choice of how to find a barter partner.

A common way is through word of mouth.  If your business is involved in any lead-generating organizations or affiliated with the local Chamber of Commerce, you may have opportunity to meet a number of other sole proprietors in different sectors.  Setting up barter agreements with them can prove to be effective since you know they are local and involved in some of the same organizations, which lends a little credibility and reliability to any potential agreement.

If in-person searches have come up dry, you can also look into the option of a barter exchange.

According to the IRS, a barter exchange is a person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services.   A barter exchange allows companies to have more access to goods and services through an organized format.

Bartering for Small Biz: Deciding What to Barter

Regardless of whether you are in the early stages of your sole proprietorship or are a seasoned entrepreneur, you may have considered non-monetary ways to exchange goods and services.  And you aren't the only one.  Numerous small businesses opt to utilize bartering to save money and make use of overstock.

Bartering involves exchanging a set of goods and services for another set of goods of services.  And note, there is usually no exchange of money in a barter relationship.  Before you start humming the barter melody, you'll have to give some thought as to what you want to barter. 

What to barter?

Business Bloggers Beware: Posts Can Bring Lawsuits

Small business owners need to be vigilant about what they post on their blogs. If they are not, it could end up in a lawsuit worth millions of dollars.

That is exactly what happened to Leslie Richard; she owns a small business called Oko Box which sells clothing made out of organic hemp, bamboo and cotton.

FTC "Red Flags" Rule Live on Nov 1st: Is Your Small Biz Covered?

Nothing says danger like a red flag.  And that likely inspired the Federal Trade Commission (FTC) to name its anti-fraud regulation which requires certain creditors and financial institutions with covered accounts to implement programs to identify, detect, and respond to warning signs--the "Red Flags" Rule. After initial delays, the date the Rule will begin to be enforced is now November 1st, 2009.

The implementation of the Act comes at a time when consumers are growing wary of identification leaks and news stories of data breaches.   According to the FTC, over 9 million Americans are victims of identity theft every year. 

Small Business Ready to Hire, Survey Says

For a small business, finding the right number of employees is a delicate balance.  And though economic times may pose a formidable hurdle in the present, visionary entrepreneurs are often looking to the future and imaging how their ventures will be able to grow, expand, and still output quality goods and services. 

According to a survey released by Intuit this week, it looks like small business may be ready to start recruiting new players to the team.  Over 40 percent of small business owners polled said they are planning to hire new employees sometime over the next year.  Sixty percent of small business owners anticipate their business will grow in the next year.

5 Quick Facts About a Franchise Disclosure Document (FDD)

Between starting a business from scratch and adopting a proven model, you may choose to go with the latter and buy a franchise.  Once you have settled on this mode of entrepreneurship, you will begin the process of researching franchise options to find the right fit for you. 

One key law that you will come across is the Federal Trade Commission (FTC)'s "Franchise Rule".  It was promulgated in 1978 and amended in 2007.  The Franchise Rule requires franchise and business opportunity sellers to provide to prospective purchasers with a Franchise Disclosure Document (FDD).

Here are 5 quick facts about FDD's:

Knowing Non-Profit: 31 Types of 501 Non-Profit Organizations

Sure, there is the 501(c)3 organization structure a non-profit can file as.  But, it turns out there are 30 other types of 501 organizations.  Surprised and intrigued?  Take a look at the list below, as detailed in IRS publication 557

Once you've made it through the options, check out the Related Resources for more information on each.  Nobody said the IRS doesn't give non-profits a few filing choices.

Obama Proposes New Steps for Small Business Loans

Help is on the way for small business, according to President Obama.  In a speech delivered at a small business in Landon, Maryland this week, the President outlined new initiatives for small business to ease up lending and to make critical capital available at affordable rates.

Here are a few notable points President Obama mentioned in his speech:

Small Biz: Yes, You Can Negotiate With Credit Card Companies

Swipe fees, interchange fees, hidden costs, and complex fee structures can make credit cards a form of payment you hope your customers do leave home without.  However, even in the landscape of fine print and boilerplate language, there is room for negotiating your credit card processing fee.  And in light of proposed legislation dubbed the "Credit Card Fair Fee Act", it is never too early for your business to build savvy in negotiating fair terms.

Here are a few tips to help you navigate your small business to friendlier credit card terms:

Employer ID Number (EIN): 3 Things Small Business Owners Should Know

As you read this post, there is a small business in its final stages of closing shop.  And there's an entrepreneurial-hopeful ready to take the plunge.  The legal and financial models of small enterprise in America make small businesses more fluid and adaptable than their large-scale counterparts.  In that vein, we revisit some basic topics in small biz that can be useful to entrepreneurs, in whichever stage of the small business life cycle they find themselves in.

If you are standing at the start line, raring to go... you may have heard of the concept of a small business Employer Identification Number or EIN.  Here are three basic things you should know about Employer Identification Numbers and resources to help you learn more and even apply for one yourself.

$5M in Disaster Loans for Kentucky Small Biz

It felt like another hot summer day in Kentucky.  And then rain started.  In Louisville over six inches of rain fell in a single hour.  The President declared it a federal disaster.  And after small business owners scrambled to higher ground, they waited to be able to return to assess the damages and worried about how they would be able to rebuild. 

According to Reuters, the Small Business Administration (SBA) has given its nod in approving upwards of $5 million in federal low-interest disaster loans for Kentucky homeowners, renters, and businesses who sustained damages from storms and flooding on August 4th 2009.

SBA Defines "Small Business"

The Small Business Administration (SBA) has a host of programs and loan incentives targeted at small business.  So, the essential question: what is an SBA small business?

The SBA defines a small business as one that is:

  • independently owned and operated
  • is organized for profit
  • and is not dominant in its field

Colorado Minimum Wage Drops, Deflation to Blame

If you are small business employer in Colorado, snow may not be the only precipitation falling from the skies this winter.  Colorado minimum wage is anticipated to drop from $7.28 an hour to $7.24 per hour on January 1, 2010, one cent below the federal minimum wage.

What is SBA 8(a) Certification?

In the alphabet soup of small business categories and certifications, you may not have heard of the Small Business Administration 8(a) Business Development Program aimed to bolster minority and other disadvantaged businesses through federal contract and other preferences.  

Here are some quick facts about the 8(a) certification program:

Top 5 Posts on Non-Profit Organization

Whether you are season non-profit professional or you are a budding social entrepreneur contemplating your first venture, you may find yourself thirsty for knowledge about all things non-profit. 

Over the past few months, we have been posting about various aspects of non-profit organization.  Here is a rundown of our top 5 posts...

Effects of Swine Flu on Small Business: Dangerous

The Department of Homeland Security has projected that worker absentee rates could reach 30% or even 50% this flu season, as reported by the Sacramento Business Journal.   A survey by the Harvard School of Public Health was also cited as finding that only one-third of companies reported that they could continue business as usual if half of their workers were absent for two weeks. 

The U.S. has had 9,000 confirmed cases of H1N1 flu (swine flu) so far, with worldwide numbers topping 350,000.

What can your business do?

Here are five steps you can take now, cherry-picked from the earlier post  on the subject: 

8 Useful Tax Deductions for Small Business

They say there is nothing certain but death and taxes.  And while small businesses may be able to sidestep death, they are still in line to pay taxes. But, Uncle Sam does try to help out by providing a number of tax deductions aimed at supporting the small business sector.  Here are a few top picks of small business tax deductions for and how to use them.

1. Legal and professional fee deductions 

If you consulted with an attorney regarding your small business or have engaged an accountant to keep your books in order, you may be eligible to deduct those fees.  Sole proprietors can write off fees using Schedule A of IRS Form 1040 or Schedule C, or Schedule C-EZ depending on the type of professional engaged. 

Best Cities for Small Biz: Where to Launch

You have a business idea and a plan.  But before you begin forming your team and securing financing, you wonder... where does this business have the best chance of succeeding?

Well, the results are in.  And a city in the heart of the panhandle state gets top prize.  Fortune Small Business released its ranking of top 50 metropolitan cities to start a small business and Oklahoma City leads the pack.  Factors such as per capita income, hourly wages, workforce quality, taxes, and foreclosures were evaluated.

Here is a sneak peek at the top 10 big cities for small business as reviewed by Fortune Small Business:

My Employee Invented It. Who Owns the Rights?

Your small business is staffed with bright, talented employees who are always thinking out of the box.  That's a good thing.  One of your employees innovates a product while in the staging room, perhaps improving upon an existing design or fashioning an entirely new one.  That could be excellent.  But considering the process you went through for securing the patent and intellectual property rights for the original product, you can't help but wonder... who owns the rights on the employee's innovation?

Is the Recession Over?

The various sectors of the economy are clamoring to find out... is the worst behind us?  And small business is no exception.  Having been particularly affected by the economic downturn-- which limited financing opportunities and forced entrepreneurs to make difficult decisions regarding hiring, firing, and closing-- U.S. small business has been looking to economic forecasts to determine whether to get ready for more rain or whether it's okay to put the umbrella away. 

According to over 80% of professional forecasters from the National Association of Business Economists (NABE), the most severe recession in over 70 years is over. 

But before you break out the bubbly and start a small business standing wave, you should know that though the recession was not as deep and as long as it could have been, analysts anticipate that its recovery will also not be as fast and dramatic as Main Street might hope. Output for all of 2009 is thought to contract 2.5% and then rebound the following year by 2.6%.

Progress Report: Small Business Tax Relief Act of 2009

We posted a piece a few months ago about a new bill called the Small Business Tax Relief Act of 2009, proposed by Senator Charles Grassley, R-Iowa.  Now, your business, and bank account, may be benefitting from the recent upswing in the stock market over the past months, but you may have noticed that job creation and small business financing have still been a struggle.  And that you have had to face tough choices such as cutting staff or cutting health care.  One topic that is always hot among small business owners is taxes--and how to make them work in favor of Main Street. 

With those considerations in mind, you may be wondering, yeah, whatever happened to that proposed legislation?  Is it any closer to becoming law? Well this is your follow-up.

EPA Offers Small Business Gateway

Environmental regulation can be a thorny issue for small businesses.  With evolving laws and ongoing studies revealing new facts about commonly used chemicals and pesticides, keeping up-to-date can prove to be a small business challenge.

To assist small businesses in staying current with environmental developments, The Environmental Protection Agency (EPA) has developed a website of applicable resources directed entirely to small businesses.  The EPA Small Business Gateway is organized with 6 topic headings.  They are:

Start a 501(c)(3) Non-Profit in 5 Steps

With the popularity of terms like social entrepreneurship, social innovation, and non-profit entrepreneurship it is clear that the non-profit sector identifies itself squarely in the realm of business enterprise.  And it's a good baseline to start from because the law views non-profit organizations as businesses too.  And whether a business is powered by revenue or social change, it must complete the needful to hold itself out as a legal entity.  Here are 5 steps to start a 501(c)(3) non-profit organization.

California Sues Small Business Scammers

As a small business owner, you wear many hats and shake a number of hands in an average day... you don't have time to get duped by scams.  And the state of California agrees.  As the Central Valley Business Times reports, the state is suing 8 individuals and 6 businesses for orchestrating scams targeting small business owners.

What did they do?

SBA Asks: Are You Ready to Start a Business?

Why read an article to find out whether you are ready to become an entrepreneur when you can take a test?  The Small Business Administration (SBA) has devised an online questionnaire to help you determine whether you are ready to launch your business idea into reality.  The quiz features a simple layout with question in three categories: General, Personal Characteristics, and Skills, Experience, and Training.  And whether you are about to start a business or have just begun the process, answering these question may help to frame issues that you will have to address as a small business owner.

3 Things to Consider When Naming a Business

Perhaps a rose by any other name would smell as sweet, but you don't want to take any chances with your new small business.  Your business name will often be the first thing potential clients know about your business.  It may be what appears in online searches or what they find in the local Yellow Pages.  Whether humorous, serious, descriptive, or abstract, naming a business is often one of the initial stumbling blocks that an entrepreneur must cross.

As you begin brainstorming names for your new venture, keep in mind these considerations.

Hourly or Exempt Employees? A $36 Million Verdict for Misclassifying

For small business owners who wear many hats in the course of a single day, playing HR specialist can be among the most challenging of those roles.  And if this week's U.S. Supreme Court nod to let stand a $35.6 million verdict against Family Dollar Stores for unpaid overtime pay to store managers is any indication, it can prove to be an employer's most critical responsibilities as well.

One major source of confusion, and the basis for the Family Dollars Stores suit, is whether to classify workers as exempt or non-exempt (hourly).  In the case of Family Dollar Stores, store managers claimed violation of the Fair Labor Standards Act by classification of managers as exempt employees, not eligible for overtime pay.  However, a jury found that the plaintiffs should have been classified as hourly workers and thus should have been receiving overtime pay.  Though the U.S. Supreme Court reviewed the facts of the case, in the end they decided against hearing an appeal on the matter, thus solidifying the verdict amount and judgment against the defendant store.

SBA Awards $5 Million in PRIME Grants to Non-Profits

Grants from the Program for Investment in Microentrepreneurs Act (PRIME) -- a program of the U.S. Small Business Administration-- were awarded to 58 non-profit organizations this week.  PRIME grants were created to support low-income entrepreneurs and very low-income entrepreneurs in receiving training and technical assistance to launch, operate, and expand their ventures.

The SBA received over 400 submissions in the non-competitive application process which was open to microentrepreneurs in the U.S. as well as in U.S. territories.  A microentrepreneur is identified as a small business with five or fewer employees and businesses owned by low-income individuals.

SBA Loan Report Card: 2009 Fiscal Year in Review

As small businesses look to the SBA for guarantees on loans and other assistance in plowing through an intimidating economy, they want to know---what effect has the recession had on SBA's small business loan approval?

With the new fiscal year underway as of October 1st 2009, stats for the past fiscal year are in.  And the grades are decidedly mixed for the Small Business Administration (SBA) when it comes to loan approval.  While overall indicators showed a major drop in total number of SBA loan approvals, a closer look shows significant improvement throughout year leading into the new Q1. 

Dealerships Recovering from Cash for Clunkers Hangover?

It has been over a month since the Car Allowance Rebate System (CARS) program-- popularized as Cash for Clunkers-- ended, but dealers are apparently still recovering from all of the heavy car sales partying.

According to some dealers, Cash for Clunkers wiped out their lot inventories, leaving bare pickings for the fall.  General Motors, Ford, and Chrysler have reportedly seen a inventories at a 25-year low.

4 Steps to Filing for Small Business Bankruptcy

If your personal business has reached the point of filing for bankruptcy, you have likely learned from the experience and want to expedite the process and move forward.  Before you can focus on reinventing yourself, and your credit, you'll have to take care of filing for bankruptcy.  Here is a breakdown of four steps to take to complete your small business bankruptcy.

Sole Proprietors: NOL Carry Back Set to Expire Oct 15

October 15th 2009 is last day sole proprietors, certain individual partners in a  partnerships, and certain shareholders of an S corporation, can take advantage of IRS Net Operating Loss (NOL) carry back incentive, for large losses in 2008.  The incentive was introduced as part of the American Recovery and Reinvestment Act (ARRA) in February.  There are efforts to extend tax benefit, as part of the proposed NOL Carryback Act, but self-employed entrepreneurs risk missing this opportunity by waiting.  

What is a Net Operating Loss (NOL) carry back?

The NOL Carry back incentive allows eligible self-employed individuals the choice to carry back NOLs from tax years beginning or ending in 2008 for 3 to 5 years, rather than the standard 2 years.  Small businesses can receive special tax refunds, which have the potential to be larger because the loss is spread over a larger span of years.

5 Things Non-Profits Should Know About Planned Giving

Planned giving, bequests, deferred giving, legacy gifts.  They are all terms to describe the mode of donating through estate-planning vehicles such as trusts and wills.  And during the current economic slowdown when a non-profit organization's donors may be reluctant to submit regular donations, instead of closing shop a charitable organization may want to establish a planned giving program to allow donors to leave a legacy of supporting a cause. 

Here are some things your non-profit organization should know about planned giving:

Greenhouse Gas Rule Won't Apply to Small Business

Though the Environmental Protection Agency (EPA) is getting tough on lowering greenhouse gas emissions, small businesses may be reprieved from potential new regulations. 

The proposed EPA greenhouse gas rule would require large industrial facilities-- those emitting 25,000 tons or more of greenhouse gases per year-- to reduce 6 greenhouse gases by utilizing new technology and increasing energy efficiency at their facilities.   The EPA estimates that such large operations are responsible for 70% of greenhouse gas emissions.