Free Enterprise - The FindLaw Small Business Law Blog

April 2013 Archives

Does Race Affect Small Business Funding?

A new study is adding to the growing body of evidence that the playing field for entrepreneurs is tilted depending on the color of their skin.

A research paper released by the Small Business Administration finds that black and Hispanic entrepreneurs face greater difficulty than ever in securing business loans, Bloomberg Businessweek reports.

Here are some of the study's key findings:

Asking for a Doctor's Note? Keep It Legal

We knew the drill in grade school: You say you’re sick, then you hand over a doctor’s note. The grow-up world isn’t all that different, as employers commonly ask employees to verify sick leave with a note from a doctor.

Sure, asking for a doctor’s note is, for the most part, legal — but demanding a prying doctor’s note isn’t. Requiring too much information from employees for sick leave can land employers in legal trouble.

Here are five do’s and don’ts when asking for a doctor’s note:

5 Things You Shouldn't Say in a Help Wanted Ad

There's an art to writing a help wanted ad. They have to be to-the-point, yet descriptive. You want to get it out to people, but you also don't want to get swamped with responses.

No matter what, be careful. With the wrong wording or recruitment process, your help wanted ad might be circled with a big fat red pen -- for a discrimination lawsuit.

Here are a few tips to prevent your help wanted ads from seeming discriminatory:

AP Twitter Hack Spurs 'Spear-Phishing' Alert

The attack on the @AP Twitter account, which led to a stock market "flash crash" Tuesday, was the latest in a series of hacks called "spear-phishing."

A number of Associated Press employees received an email that appeared to be from a co-worker, but in fact was generated by hackers to fool them into clicking on a malicious link within the email, Slate reports.

As a host of major organizations join the ever-growing list of spear-phishing victims, small businesses will want to be on alert for similar attacks. Here's what you need to know:

3 Ways to Get Out of a Business Contract

Ending a business contract isn’t always pleasant experience, but getting out of one shouldn’t be the end of the world.

Situations often change, and business owners may have to break contracts in order to protect their interests. Being prepared can help make the process easier.

Knowing that the life of your business will contain more than a few curveballs, here are three potential ways to get out of a business contract:

What the Internet Sales Tax Means for Small Biz

The days of tax-free online shopping may be numbered. The Senate is set to vote on a bill that would give states the power to collect sales tax on all Internet purchases.

If the bill passes, local governments could get up to $11 billion (yes, with a "b") per year in added revenue, The Washington Post reports.

Small businesses need to know about The Marketplace Fairness Act because it could affect the way they do business.

Small Business Hiring: Do Lawbreakers Win?

There's a growing problem that many small-business owners say is making their survival difficult: Small businesses are being undercut by competitors that hire workers who are in the U.S. without permission from the government.

Though you may know about the problem, you may not realize how big of a problem it's becoming for small businesses.

3 Things to Know about Slapp Suits

With services like Twitter, Facebook and Yelp, every smartphone-carrying customer has the power to shout your business mistakes to the world. While large corporations have the advertising power to influence public opinion, a small company may need to protect themselves if a customer goes too far and defames the business. However, if you sue over a legitimate, non-defamatory comment, you may be using what is known as a SLAPP suit.

A savvy business-owner can navigate the world of SLAPP suits and anti-SLAPP motions by remembering these three things.

Is Employment Discrimination Ever Legal?

Recent college graduates and even seasoned veterans of the job market are becoming increasingly frustrated with the goal of a stable, well-paying job. For employers, there is an increasing worry that a distressed job candidate or employee will amount their personnel practices to discrimination.

Using general discretion as an employer is legal and can be distinguished from outright discrimination, but there are some cases where the distinction is not as clear. Here are a few examples it might be helpful to consider during the hiring process.

Family Businesses: 3 Legal Safeguards

The last four years have seen a marked decrease in public opinion of large and faceless corporations, turning more and more consumers away from the big chains and toward smaller "mom and pop" businesses. Family businesses may be better equipped to weather a turbulent economy because they are supported by loyal relatives with a shared interest in the company's legacy, reports The New York Times.

On the other hand, conflicts within family can hit your hard work and investments where they hurt most. If you're planning to build a company that will stay in the family, here are some legal safeguards you should consider.

How to Incorporate Your Business

When you're planning out the future of your business, it's important to know what kind of structure you will have. If you want to become a corporation, you'll need to understand how to incorporate the business.

The details of the process can get pretty nitty-gritty, but there are general steps that can help you get familiar with the process. Here are the steps you can take to begin the incorporation process.

Are Your Employees Eligible for FMLA?

The Family and Medical Leave Act (FMLA) gives some employees the right to up to 12 weeks time off work should certain personal or family health issues arise.

But contrary to popular opinion, not all employers have to give their employees FMLA leave regardless of the seriousness of the health issue. In addition, not all employees are FMLA eligible regardless of who they work for.

So how do you know when you have to give your employees FMLA leave?

5 Legal Considerations for Buying a Franchise

Buying a franchise may be a great way to start your own business. You have the advantages of starting a business with a recognizable name and built-in customer base.

However, there may also be a lot of downside and risk with purchasing a franchise. This can start with the franchise fee and all the restrictions stated in the franchise agreement.

Before rushing out and buying a franchise, you may want to keep these five legal tips handy:

Motivating Employees: 5 Cheap, Legal Tips

Like Dolly Parton, many employees feel they must pour themselves a cup of courage to endure the 9 to 5 grind. But some employers are trying to make the work atmosphere more pleasant for the sake of productivity, moral and fun. A number of creative and affordable tips exist for employers to keep workers happy, AllBusiness reports.

But while thinking outside-of-the-box might be brilliant, it's important to stay legal. Here are five tips to employers for keeping worker-bees content while staying within legal boundaries:

Steps to Close Your Business

Shutting down your business may be one of the most difficult decisions you will ever make.

You may be closing your business down for a variety of reasons such as financial, retirement, or because you simply lost interest. Regardless of the reason, you will need to meet certain legal steps to properly unwind your business.

Here's a general overview of the steps to follow to close your business:

5 Considerations When Choosing a Business Name

The first thing you may have thought about when starting a business is your business name.

Choosing the right business name is critical. It is often a customer's first exposure to your store, service or product. Likely, you will want to strike a balance between a descriptive name and one that is truly unique.

To help you craft the best business name, take note of these five considerations:

5 Legal 'Spring Cleaning' Tips for Your Business

We're well into April, and it's time to do some spring cleaning.

For business owners, spring cleaning can mean much more than simply organizing your office. It's also a good time to reflect on your business as a whole, and perform some legal "spring cleaning" tasks as well.

Here are five spring cleaning tips, and some related legal reminders, that can pay off for your business:

5 Ways to Show Your Biz Is Socially Responsible

With so many businesses to choose from, many consumers want to spend their money at a business that is socially responsible.

But while your business may behave in the most socially responsible manner, how do you get the word out to potential customers?

Consumers often can't simply look at a product or a business and tell that it is socially responsible, as a Forbes contributor points out. So business owners have to be proactive in marketing themselves as socially or environmentally friendly, while making sure those marketing efforts are legal.

Here are five potential ways you can do this:

Is It Legal to Ask for Customer ZIP Codes?

We all know the retail checkout tango: They ask if you found everything alright; you reply "yes"; then they ask for payment and for your ZIP code; you provide the string of digits and off you go with your shiny new merchandise.

But is it legal to ask for customer ZIP codes?

The Massachusetts Supreme Court, for one, is cutting the dance short. Last month, the court ruled that a ZIP code cannot be required to complete a credit card transaction because it violates a state consumer-protection law.

The decision, which follows similar rulings in other states, raises questions about when and where the practice of asking for a customer's ZIP code may be illegal.

Send Fake 'Phishing' Emails to Test Employees?

Some employers are sending fake "phishing" emails to test their employees' safe computing practices. Should you do it too?

One of the most popular fake "phishing" emails pictures a Turkish Angora cat with a purple mohawk and the subject, "Check out these kitties! :-)" The email includes an attachment or link promising more feline photos. But workers who click it get a surprise: A warning from their IT departments not to open such emails, reports The Wall Street Journal.

Why are employers doing this? Because many realize that it's not foreign hackers who cause the most harm to their networks and databases. Instead, it's employees who open suspicious emails and unwittingly invite viruses onto work computers.

N.Y.'s Amazon, Overstock Sales Tax Upheld

Amazon and other online retailers like Overstock must collect state taxes from New York customers, the state's highest court has ruled.

The decision is at odds with other state decisions and could potentially lead to the U.S. Supreme Court stepping in and clarifying the issue of when online stores have to charge sales tax, reports Reuters.

For many retailers, this decision will only make their online businesses more confusing as they will have to follow different rules for different states. For example, an Illinois Supreme Court recently ruled that a similar "Amazon tax" was not permissible.

3 Ways Your Business Can Save on Legal Costs

When you own and operate a business, you are sure to incur plenty of business costs. Perhaps the most annoying costs are those that don't really provide your customers an obvious benefit like legal costs. Fortunately, there are many tips for a business to save on legal costs.

While companies like Apple and Samsung can throw hundreds of millions of dollars to resolve their legal issues and disputes, the reality is that you probably can't.

However, that doesn't mean you don't have options. Here's a look at three ways that you can get solid legal service without breaking the bank: