Free Enterprise - The FindLaw Small Business Law Blog

January 2013 Archives

Business Name Changes: 7 Legal Reminders

Research In Motion has officially changed its business name to BlackBerry, after its once-ubiquitous product. Will this corporate name change help save the struggling company and revive BlackBerry sales?

That's yet to be seen. After all, how many people even realized that Research In Motion was the name of the BlackBerry maker in the first place? As many in the business world have ditched their BlackBerry devices in droves, it's unclear who even cares at this point.

But desperate times call for desperate measures, and changing a business' name can potentially pay off -- though a company has to jump through a lot of legal hoops to make it official.

'Small Biz Reg Watch' Lets Biz Owners Sound Off

A new website for small business owners, "Small Biz Reg Watch," launched today with the help of the House Committee on Small Businesses.

What's the purpose of this new corner of the web? It's a forum for small business owners to comment on proposed regulations that may affect their bottom line or the way they do business.

The website doesn't change the right of small business owners to comment on newly proposed rules; any citizen can do that. But it makes it easier for small businesses to compete with big business for the government's ear.

5 First Steps If Your Business Is Sued

It's every small business owner's nightmare: your business has been sued. Someone showed up at your office and served you papers for a lawsuit. Or a former employee or client called and told you to expect the suit in the mail. It's not a good start to your day.

But after you get over the shock and anger that someone would do this to you and your company, it's time to make a game plan. You need to know what to do next.

Here's a hint: The answer isn't "call the plaintiff and give him what for." There are smarter ways to tackle this problem that won't make the issue worse. For example:

Customer ID Theft: Are Businesses Liable?

Identity theft is probably a concern for many of your customers. And while in some instances it happens because of careless or foolish Internet usage, for many people the problem starts with a business' security breach. In that case, the problem may lead to business liability.

No matter what kind of company you have, if you store client or customer information online then you could be putting people's data at risk.

Even worse than customer dissatisfaction, a security breach could leave you legally liable. Here are a few ways that can happen, and what you can do:

Sending W-2s Late? Penalties Are Possible

What happens if you can’t get your W-2 forms out to your employees on time?

An employer who pays an employee more than $600 per year (in cash and noncash payments, such as benefits) has an obligation to file a W-2 with the Social Security Administration and must also provide W-2s to employees.

Being late on either of these two things can cost an employer by way of penalties from the IRS. And the IRS isn’t kidding around when it hits taxpayers with penalties.

What happens if you just can’t get your W-2 forms out to your employees by the February 1 deadline? Here’s what you should do, if you find yourself in that boat:

After Nightclub Fire, 5 Tips for Your Business

How does a deadly nightclub fire in Brazil affect your business? Well, it should be a wakeup call for you to review and possibly revamp your procedures for dealing with a fire.

It doesn't matter if you run a nightclub, a day spa, or an Internet startup, you need to have a plan in place in case a fire breaks out on your premises. An effective emergency fire protocol can help to avoid a tragedy, and perhaps even a lawsuit.

Here are five tips you may want to consider when evaluating, and re-evaluating, your own emergency fire plan:

Credit Card Surcharge Legal, But Will It Cost You?

Small businesses are feeling the effects of the recent credit card antitrust settlement. As of Jan. 27, 2013, most merchants that accept credit cards can add a surcharge when customers pay by credit card, Time magazine reports.

This is in accordance with the terms of a $7.4 billion settlement that came about last year, between the card companies and merchants.

Going forward, merchants are now allowed to impose up to a 4 percent surcharge on customers' credit card transactions in the 40 states where such surcharges are legal.

But could imposing a surcharge cost you your customers?

FTC Warns of 'Consumer Complaint' Email Scam

Beware of that "Notification of Consumer Complaint" email you may receive, purportedly from the Federal Trade Commission. It may not really be one of your customers complaining, but rather an elaborate email scam.

The FTC is warning small business owners that someone is sending out an email with the subject line, in all caps, reading: "NOTIFICATION OF CONSUMER COMPLAINT."

The federal agency wants you to know that this email is not from them. The FTC warns small businesses that the email falsely states that a complaint has been filed with the agency against your business. Furthermore, the FTC warns you not to click on any of the links or attachments.

Starting a Business On Your Own? 5 Legal Risks

If your New Year's resolution was to finally get around to starting your own business, we'd like to support you in your efforts. And even if your motivation isn't New Year's-related, we still want to give you a heads up on what legal risks to watch out for.

After all, when you create a company, you create an entirely new legal entity. That means it has responsiblities to the government and to other legal entities, both people and corporations.

For your company to survive and grow, it helps to stay out of legal trouble. Here are five of the most common legal risks that new businesses often face:

3 Estate-Planning Tips for Entrepreneurs

Estate planning is a vast topic and covers a lot of ground. For entrepreneurs and small business owners, it can get complicated.

Here's one reason why: A family's wealth can often be tied up in the business venture. That becomes the one major source of income for the family.

Entrepreneurs and small business owners can benefit from estate planning and can use estate planning tools to their advantage. Here are three things you need to think about:

Attorney, Arbitration, or Mediation?

When you need to resolve a legal problem, should you go for an attorney, arbitration, or mediation?

If a contract is involved, you may not have a choice. Otherwise, there are many options when it comes to resolving legal disputes for your business. Hiring an attorney is certainly the most visible option, and it's a good one if you have the right problem. But in some cases having a drawn-out court battle won't help your situation.

You could ask an attorney, a mediator, and an arbitration firm which method is right for you. Or you could swap three meetings for this one useful article. Here's what you need to know when making this choice:

Will PayPal Policy Change Be Good for Business?

PayPal is planning "aggressive changes" to its user terms and conditions, along with its overall fraud management operations, reports CNNMoney. But will these changes be good for your small business?

So far, there's little information out about these policy changes. However, according to PayPal's senior director of communications, they will signify a "fundamental shift" in the way the company has been doing business.

Here's why many business owners have high hopes for the PayPal policy change:

Best Buy Coupon Fiasco: 3 Legal Lessons

You may have heard about the Best Buy coupon fiasco. And with the company now not honoring the coupons, you may be curious about the legal ramifications.

The electronics retailer recently offered an Internet coupon in a promotion: Get $50 off of your purchase of $100 or more if you pay with a Mastercard, reports The Huffington Post.

The coupon had some standard restrictions such as not applying to iPods and certain TV sets. But there were no restrictions on the number of coupons a customer could use, nor were there restrictions on using the coupons to purchase gift cards.

5 Tips for Keeping Employee Exit Interviews Legal

Employee exit interviews are a great way to glean valuable information from your soon-to-be former workers. But you'll also want to keep the interview legal.

Exit interviews can be no-holds-barred, as departing employees simply don't care or have been waiting to sound off. But some employees, especially those being terminated, may find them insulting.

Exit interviews are pretty simple. Most of the time you should simply keep your mouth shut, take notes, and listen. Still, there are some tips that you should know to prevent the exit interview from veering into illegal territory:

IRS' Home Office Tax Deduction Changes for 2013

The home office tax deduction used to be seen as a potentially scary deduction to take. Many tax experts called it a red flag for an audit.

Starting next year, however, it looks like the deduction won't be so difficult to take anymore.

In addition to its audit risks, the home office deduction was also cumbersome. In order to get the deduction, taxpayers would have to turn in Form 8829 Expenses for Business Use of Your Home.

Things are looking different, going forward. The Internal Revenue Service just announced a new way to take the home office tax deduction.

Do You Have to Give Workers MLK Day Off?

The Martin Luther King Jr. holiday is this coming Monday, and you may be wondering whether you have to give your workers MLK Day off.

After all, it's a federal holiday. So your employees may be clamoring for this day off, even though they wouldn't get non-federal holidays off like Valentine's Day or Kwanzaa.

But with many people staying home from work, you may want to stay open on Monday as it may be prime time for a bump in business. So do you have to give your workers time off for MLK Day?

5 Legal Tips When Buying a Franchise

Buying a franchise may seem like a great idea. After all, you're buying into a business that is presumably already established and has a recognizable customer base.

So by paying the franchise fee, you can avoid a lot of the problems that come with starting a business like letting customers know what your business is about, deciding what goods to carry, and even knowing where to get your supplies.

However, buying a franchise is not for everyone -- the entrepreneurial landscape is filled with failed and disgruntled former franchise owners. So before rushing out and buying a franchise, you may want to keep these five legal tips handy:

Don't Mix Up Employee, Contractor Tax Forms

It's tax season, and you're sending out your tax forms to all of those people who worked for you in the past year.

One of the big questions many have is, "Which form"? Do you send out a W-2 or a 1099?

Which form, indeed.

That question hinges on a lot more than some tax technicality. In order to answer it, we need to reach into employment law to help determine the answer to the first question: employee or independent contractor?

5 High-Tech Mistakes Business Owners Must Avoid

Unless you're a high-tech guru or run a business that's focused on technology, it's easy to make some high-tech mistakes that can come back to haunt you.

There's no way to ignore technology since it's central to almost every aspect of running a company. Connecting with customers, dealing with sales and inventory, and organizing paperwork all rely at least in part on computers and mobile devices.

You don't have to be a master of all technology. What's more important if figuring out how to avoid the more serious mistakes that could undo all the good that high-tech gadgets do for your company.

Here are five high-tech mistakes to avoid:

Are English-Only Policies at Work Legal?

There's a good chance your company communicates largely in English, but that doesn't necessarily mean you should adopt an English-only policy at work.

An English-only policy tells employees that other languages can't be used in the workplace, and while it might sound intriguing, it's probably not a good idea for your business. The Equal Employment Opportunity Commission generally frowns on those policies for various reasons.

If you're a monolingual English speaker, that attitude may leave you scratching your head. But there are good reasons to avoid an English-only police in the workplace.

5 Signs You Need a Tax Lawyer, Not a CPA

Many small businesses use Certified Public Accountants or Enrolled Agents to do their tax work for them.

Yes, it’s true. A CPA or an EA can do much of the work needed when it comes to your taxes. The roles are the same in many cases, and the knowledge that a CPA has often isn’t too different from that of a tax attorney.

But there are times when a small business needs a good tax lawyer, not just a good CPA. Here are five signs that you should probably consider hiring a tax lawyer:

7 Ways You're Sabotaging Your Own Business

It's not that you're doing it intentionally, but if you're a stressed-out small business owner there's a chance that you're sabotaging your own business.

Not all the work you do for your business is necessarily helping you move forward. Putting in all the overtime and taking on all that work may actually be setting you back. That's obviously not the goal.

But it's hard to fix a problem if you don't know what you're doing wrong. To help you out, here are some of the more common forms of self-sabotage that can happen to business owners:

Are Workplace Flu Shot Policies Legal?

You might be considering a mandatory flu shot policy for your workplace. However, you may be uncertain in knowing whether these policies are legal.

We're in the midst of a massive flu outbreak. So you may be noticing that your customers and employees are walking around with a cough, runny nose, or fever.

And as a small business owner, you may be acutely aware of how damaging one sick employee can be for your business, let alone multiple sick workers. So is a flu shot policy the way to go?

Burger King Franchisee Settles Harassment Suit

The largest franchisee of Burger King restaurants has agreed to settle a sexual harassment lawsuit for $2.5 million.

Carrols Restaurant Group announced that it will pay the money to 88 former and one current employee in a case that's dragged on for 14 years, reports Reuters.

Carrols did not admit any wrongdoing in the settlement. In its announcement, the company simply explained that the settlement was "far less costly" than continuing to litigate the case.

Rite Aid Settles Overtime Lawsuit for $20.9M

Rite Aid has agreed to settle an overtime class-action lawsuit for $20.9 million.

The company was accused of violating federal wage and hour laws when it classified approximately 6,100 assistant store managers as "exempt" workers. The lawsuit claimed these employees were misclassified, and that they should have been entitled to overtime pay and other benefits given to nonexempt employees, reports The Patriot-News.

Nationwide, there were 15 lawsuits against Rite Aid, 14 of which were resolved with this settlement. One lawsuit in California will move forward.

Top 10 Problems Facing Small Businesses

Think your small business experiences more problems than most? Or that luck just isn't on your side with new laws, regulations, and other complications?

Well, you may take comfort in knowing that most small business owners are probably going through the same pains as you.

In a survey by the National Federation of Independent Businesses, small business owners ranked the most serious problems they face. The NFIB asked business owners to assess 75 different types of problems; here were the Top 10:

2012 1099 Forms Are Due Soon: Top 3 Tips

It's a new fiscal year, which means it's time to start filling out and filing your 2012 1099 forms if you want a stress-free tax season.

As you probably know, small business owners file self-employment taxes every fiscal year. If you haven't done it before, it's a little more complicated than the 1040 form that most people fill out. Among the requirements: You have to file a 1099 form for any taxable income that doesn't show up on a W-2 form.

You can spend hours reading through the IRS' website about all the changes and updates. To help you out, here are three tips that every small business owner should know:

Should You Extend Benefits to Unmarried Couples?

The trend of unmarried couples living together is leading to some unintended consequences, including issues regarding the extension of employee health benefits.

Traditionally, companies that provided health benefits offered them only to the spouse and dependents of an employee. That meant boyfriends and girlfriends weren't included, even if they were in a stable, long-term relationship.

While that model is still the dominant one, some companies are now offering more. What began as an effort to help same-sex couples get benefits has had some important benefits for young opposite-sex couples too.

Outdoor Fitness Trainers May Face Legal Hurdles

Fitness trainers and instructors who use public outdoor spaces are running into legal problems in some cities, and they're not the only small business operators at risk.

The city of Santa Monica, California, is considering charging an annual fee for trainers who use public parks as workout spaces, and asking for a percentage of their gross revenue. If that happens, it could be a huge expense for those fitness buffs-turned-entrepreneurs.

But the extra cost isn't the only concern. Santa Monica's decision is a reminder that anyone using public space has legal responsibilities.

5 Ways the 'Fiscal Cliff' Bill Affects Small Biz

It seems like we averted fiscal doom (this time) as President Obama, Democrats, and Republicans in Congress finally reached a "fiscal cliff" deal.

But despite President Obama notching a "win," of sorts, on his scoresheet, the deal may seem like some amorphous piece of legislation with uncertain impact on you and your small business.

As with most politicized issues, you may have to roll up your sleeves and really do some reading to figure out just what the "fiscal cliff" deal means for you. To help you out, here are five ways -- some good and some bad -- that the deal may impact your business: