Free Enterprise - The FindLaw Small Business Law Blog

April 2016 Archives

How to Protect Your Small Business From Embezzlement

Embezzlement occurs in all kinds of businesses, even schools, and the people who do it might surprise you. For example, today the Associated Press reports that a Vermont school principal has been arrested for embezzlement, and local police say they found items in his home that were purchased using school funds.

People steal from all kinds of businesses, even (and sometimes especially) if they hold positions of authority and responsibility, and they do it in a wide range of ways. There is no absolute protection from embezzlement for your business but you can pay attention to some things that will certainly help to prevent it. Here are tips suggested by Entrepreneur that will get you on the right track.

There might be fewer cooks in the kitchen at a startup, but that doesn’t mean divvying up the equity pie is any easier. Sure, you could say everyone in the room gets an equal share, but did everyone really contribute equally up to now? And will they in the future?

So how do you allocate equity based on a team member’s actual contributions, rather than their anticipated ones? Luckily, some smart folks have been after this question for a while, and come up with a dynamic equity split system. So how does it work?

3 Simple Ways to Keep Your Business Safe From Data Breaches

Even if you aren't doing business online, it would be hard to find a business today that doesn't rely on the Internet or exist on the web in some form. As such, cyber security is an increasing concern for businesses and individuals.

The cost from a data loss could be high indeed and you do need to be paying attention to a number of security issues. Here are three simple tips, reported by CIO, to help you to ensure your business's electronic safety.

Chances are, you already have lesbian, gay, bi-sexual, or transgender employees. And whether you're aware of that or not, you should at least be aware of the federal and state laws prohibiting employment discrimination based on someone's gender or sexual orientation.

But knowing the law and adhering to it can be two different things, and having the right anti-discrimination policies in place is just the start. Here are five things you need to know about LGBT discrimination in the workplace:

Contract Advice for the Self-Employed

If you are self-employed you've probably already discovered that there is a lot to do and you could use some help with basic contract issues. Maybe sometimes you imagine that if you had a legal team, everything would be easier.

That might be true. But there are quite a few things you can do on your own -- and times when it is right to decide not to do much. Knowing the difference will make your working life easier. Here are a few tips on what problems to handle, how to handle them, and how to figure out when a problem is too big to handle independently.

Tips to Keep Personal and Business Finances Separate

Having a small business is great because it lets you be the boss. But being the boss means having more responsibility and there are a lot of things you must decide when you are in charge. One of the most important is a method for financial management.

As much as your business may feel like your whole life, you do need to separate your personal finances from those of the business and keep the boundaries strict. The first step to financial health in both of these aspects of your existence, business and personal life, is not mixing. Let's look at the ABCs of keeping your business organized.

Let's face it, when you were getting your company started, you probably weren't thinking about how your days with it would end. And even some serial entrepreneurs haven't perfected their exit strategies. In some cases, it can be hard to say goodbye to the business you built; in other cases, it seems impossible to extricate yourself from your partners.

Either way, having an exit strategy can not only help your leave your small business efficiently and on good terms, it can ensure your business keeps going after you're on to the next thing.

3 Tips to Avoid Small Business Bankruptcy

The last thing you imagined doing when you started your business is going bankrupt. Obviously, you were aiming much higher, and you're a survivor, and you would like to avoid making this particular dreaded declaration.

So what can you do? Let's take a look at what exactly bankruptcy is and three steps you can take to avoid it.

What Is Bankruptcy?

There are multiple types of bankruptcies, and you may be familiar with the terms associated with the most common of them, Chapter 7 and Chapter 13. But generally speaking bankruptcy is a federal court procedure that helps consumers and businesses to either liquidate or reorganize, clear debts, and pay off creditors.

Getting the money to start your small business is never easy. Or maybe you need cash to expand or take advantage of a new market or idea. Either way, you might be seeing the success of GoFundMe, Indiegogo, and Kickstarter campaigns and wondering if crowdfunding is the way to go.

Before you begin your crowdfunding campaign (or if you've already started), consider these legal ins and outs of crowdfunding for small business:

It's not enough just to offer someone a great job, or even just great pay. Employees in this market are looking at their careers more holistically, and seeking benefits beyond pay and the possibility for advancement. So how do you attract talent and keep your employees happy?

There are some standard benefits that you could increase or extend. And there are some not-so-standard benefits that your small business might think about implementing. Here are five that are sure to keep your employees working hard on your projects, rather than on their resumes:

Risky Business: Evolution of Marijuana Laws Still Uncertain

The cannabiz is set to boom ... although it is difficult to say when that will happen with states taking very different approaches to marijuana cultivation and consumption. This week, California's San Francisco Bay Area residents will encounter "the nation's first multichannel marketing campaign for [artisanal] pot," reports Mother Jones. Meanwhile medical marijuana was just approved for very limited use in Philadelphia.

All businesses involve risk, and often the greater the risk, the greater the potential reward. The marijuana business is no different -- entering the thicket now means more confusion and possible losses but also likely more eventual opportunity for reward. Whether it's worth doing depends on you, your state, and the landscape of its marijuana regulation.

Can New Laws Block Biz Expansion Plans?

You do a great business in your home state and are considering expanding to neighboring locations. But beware. Your business expansion plans can be thwarted with new legislation and prospective competitors might work very hard to guard their territory, lobbying lawmakers to keep your business out.

That is what happened to Chicago's Binny Beverage Depot. The Illinois liquor chain planned to expand to Indiana, where its competitors were "fat, happy and lazy," according to company CEO Michael Binstein. But it won't be moving as soon as expected, reports The Chicago Tribune, because a new Indiana law just passed requiring more of local liquor store owners.

Does Your Small Biz Need an Ethics Policy?

You like to think of yourself as a good person and hope that your business will contribute positively to your community and the world. But having a feeling and having an ethics policy are two different things -- a policy makes abstract notions concrete, serving as a guide for you and your employees.

Your business code of ethics can be a moral compass for the whole operation. But coming up with an ethics policy can be a little daunting, so let's consider some general principles, as outlined by Kabbage, a small business finance site.

Nobody looks forward to firing employees. When you have to lay someone off, it either means your small business isn't doing as well as you want, or that you made a mistake in hiring. Either way, the last thing you want if you have to fire an employee is a wrongful termination lawsuit.

It's only natural that someone getting fired is going to be upset. But there are ways to protect your small business from legal disputes arising from layoffs. And if you can't prevent a lawsuit entirely, there are steps you can take to make sure you're on the right side of the law.

3 Tips on Business Breakups

You know how to handle a romantic breakup -- eat or shop or run it off, give it time, try not to text your ex. But what do you do when your business relationship is ending? Better yet, how can you prepare in advance?

There is actually a lot you can do to ensure that you handle the dissolution of a business partnership with grace. It starts with the beginning of the relationship. Here are five pointers, inspired by advice to entrepreneurs from small business lawyers in YFS Magazine.

You have a great idea. Now how do you make sure no one steals it? Having a website is essential these days, and it can be a great way to get your small business's ideas and information out to a wider audience. But it can also expose those ideas to some less ethical outfits just looking to lift content from other sources.

Copyrights are intended to protect your work from someone else's unlicensed use, but do they apply to website content? And are copyrights the best way to protect material and ideas on your website?

5 Legal Tips for Starting a Third Wave Coffee Shop

Are you watching the third wave of coffee and thinking you need to get in on this business? Third wave coffee simply indicates high quality java production. It's an effort to elevate coffee to more sophisticated territory, treating it like wine and other artisanal items rather than a commodity like corn, and third wave coffee shops are popping up everywhere, each with their unique approach to beans and brewing. But before you decide to surf the third wave, here are five legal tips on opening a business.

Parental leave isn't just for mothers anymore. And providing parental leave isn't just for venture capital-flush startups anymore. In some cities, it's becoming the law for all employers. It seems like America finally might be catching up to the rest of the developed world when it comes to giving parents paid time off.

So who's leading the way? Here are five places (four employers and one city) that are giving their employee parents the most benefits:

Some states are insuring discrimination protections for LGBT employees and customers. Others, not so much. So it's fair for the average small business owner or entrepreneur to wonder what they're responsibilities are when it comes to preventing discrimination.

Lucky for you, the U.S. Equal Employment Opportunity Commission (EEOC) has released a handy, 1-page guide to help startups comply with federal anti-discrimination laws. Here are some of the highlights:

How State Law Changes Can Have a Big Impact on Your Business

You may not consider yourself political, preferring business development to legal developments in your state. Still, you can't ignore the law. It changes all the time and it impacts the climate in which you operate, as entrepreneurs and business owners in North Carolina can tell you first hand.

Last week, that state passed HB2, a law that many nationwide have deemed discriminatory against the LGBT community. Companies warned Governor McCrory that passage of the law would cause them to reconsider doing business in North Carolina. Now the state is starting to pay the price for ignoring them, according to NBC News.

Does San Francisco's Fully Paid Parental Leave Law Signal National Change?

This month, San Francisco authorities passed a law requiring employers of a certain size to contribute to paid parental leave for the first six weeks of a newborn's life or upon adoption of a child. It is the first American city do so.

The law starts off gradually, applying to employers of 50 or more and is for parents who have worked 180 days at a job. But it will require businesses with 20 or more employees to supplement state funds for parents by January 2018.

For businesses both large and small, the H-1B Visa allows skilled non-citizen employees to work in the U.S. for three to six years. And whether you're adding international talent to an existing and established company or just getting started, the H-1B can be essential.

But availability is limited -- H-1B's are capped at 85,000 annually and they sell out fast. Like six days fast. The U.S. Citizenship and Immigration Services (USCIS) announced that it has already reached the mandated H1-B cap for this year, leading to many small business owners wondering what that means for sponsoring skilled foreign workers.

Do I Need a Lawyer to Form a Partnership?

Partnerships are easy to form, if not always easy to maintain and manage smoothly, so you don't necessarily need a lawyer to create one. Still, having a lawyer formalize your agreement to co-own a business is a good idea, even if you and your new partner could go it alone technically. Let's look briefly at partnerships, how they are formed, and why you should consult with a lawyer.

Beware Ransomware: 3 Simple Electronic Security Tips for Your Business

As a business owner, you know you have to stay on top of a lot of different things. But how much thought do you give to electronic security and scams? If you are not considering this now, you might have to when you find yourself separated from a lot of valuable data while the information is held ransom by hackers.

According to the Associated Press, electronic ransom is all the rage, with hackers increasingly demanding bitcoin payments from unwary users who open their "ransomware" and have to fork over to access their files. Here are three simple steps you can take to avoid becoming a victim.

What Disaster Aid Is Available for Small Businesses?

When disaster strikes, small businesses are hard hit, and the federal government recognizes this. In a Senate committee meeting this week, a Federal Emergency Management Agency representative emphasized the importance of focusing on small business rehabilitation for the sake of employment in recovering communities.

The Senate Small Business and Entrepreneurship Committee also discussed implementation of a law passed in November to specifically assist business owners who need to rebuild, reports USA Today. The Recovery Improvements for Small Entities after Disaster Act, commonly called RISE, is designed with you in mind. Let's look at what it offers.

With New York and California enacting $15-per-hour minimum wage laws, and many other cities and states following suit, it can be hard to keep up with all the new minimum wage requirements. So we've got you covered.

From the federal minimum wage to tips in the service industry, here are five essential minimum wage laws that small businesses need to know:

Buying a Biz: Lessons From Alaska Air Group and Virgin America

This week, Alaska Airlines announced that it would purchase Virgin America for $2.6 billion, which has you thinking: Is this a good way to grow a business?

You'd like to expand your operation and are considering an acquisition but you're not sure how to approach it ... or even if that is such a good idea. So, let's consider buying an existing business in light of the big deal announced this week.

Ruby Tuesday Workers Sue Food Chain in Wage Class Action

Ruby Tuesday workers sued the restaurant chain in a class action lawsuit over wages. The plaintiff class covers all Ruby Tuesday servers and bartenders who worked in all of the chain's restaurants for the last three years, according to Grub Street.

The workers say that they were forced to spend more than 20 percent of their time on side work while being paid on a tip-wage basis, which violates the law, and also were encouraged by the corporation not to report their side-work hours. To understand the workers' claims, you need to know something about serving drinkers and diners in the US. So let's start with the basics.

Craziest Employee Scams

Normally in this space we're warning small business owners to avoid vendor scams and online hackers. But when Vice published a short compendium of workplace scams, we knew we should warn you about your own employees as well.

Here are a few of our favorites to help you make sure you're on the lookout for employee scams at your small business.

Business Tips: Preventing Slips, Falls, and Lawsuits

When you go into business, you think a lot about risks and return on investment, but have you seriously considered personal injury? Whether or not you are ever sued, you are strongly advised to prepare for the worst.

Of course you cannot guarantee that you will prevent all injuries, and as a result suits from injured customers. But you can put in place some policies that will minimize the likelihood of a lawsuit. Let's take a look at why businesses get sued for personal injury commonly, and what you can do in advance to try to prevent a suit.

Happy families make happy employees, and happy employees are good for business. But long employee absences from the office can be bad for business. As a country, the United States lags far behind other Western, industrialized nations in providing paid family leave, which has state legislators and presidential candidates looking to increase employee protections and pay when taking family time off.

You want to take care of your employees, but not at the cost of your small business. So what are you legally required to do when it comes to paid family leave, and what should your small business be doing?