Category Archives: Legal Issues

Do you sell products online? You need to know about nexus.

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Until recently, a business was said to have a nexus in a state if it maintained a physical presence there. Where nexus existed, a business was required to remit taxes to the state. This understanding served until digital commerce wholly revolutionized the global economy.

Today, a retailer can operate from their living room, selling goods without any physical presence outside their own home. Clearly, the old definition of nexus is obsolete. New definitions—offered up mostly by states looking to recoup lost sales tax revenues—rely on murky rationales of “economic nexus” and “factor presence.”

Unfortunately, neither the Supreme Court nor Congress has offered to clarify the issue, leaving businesses across the country to work things out on their own.  Continue reading →

Ask SCORE: Do I need to copyright my website to protect it?

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Your business’s website can be one of the most powerful marketing tools you’ll ever have at your disposal. Unfortunately, the better it is, the better the chances it will catch the eye of unscrupulous competitors. They might have no qualms about hijacking your written content, images or other elements and presenting them as their own.

How can you prevent people from stealing content and images from your website? Copyright!

Copyright protects the rights of creators of original works—such as literary, dramatic, musical and artistic works (for example, play scripts, movies, poetry, books, songs, photography and even computer software). It protects the way things are expressed/presented in works (e.g., the images, arrangements of words or music, etc.); it does not, according to the U.S. Copyright Office, protect “facts, ideas, systems, or methods of operation.” When you create (draw, write, photograph, etc.) something original, copyright law automatically gives you ownership of the work. At the moment you create a work, copyright exists.

This is also the case with digital content, including websites.  Continue reading →

The who, what, when and why of non-disclosure agreements.

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businessman signing contractYou put a lot of time, energy and effort into your business. With so much invested, doesn’t it make sense to protect what you worked so hard to build?

Various ways exist to do that, such as choosing the right legal structure for your business, installing security software on your computer, getting business insurance, etc.

And don’t forget having an NDA!  Continue reading →

Ask SCORE: Should I work with contractors or hire employees for my small business?

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As your small business grows, you will reach a point when you can’t do everything by yourself. To get the help you need, you can choose to outsource various tasks to independent contractors or hire employees and delegate the work.

To decide which will make the most sense for you and your company, it’s important to understand some of the key differences between working with independent contractors and having employees on staff.

Years ago, I owned a “virtual” marketing services firm. I worked with a group of talented creative people — designers, illustrators, photographers, and others. I asked them to work on projects for my clients, and they often asked me to work on projects for their clients. We all had licensed businesses and we enjoyed working with each other.   Continue reading →

Thinking about buying or selling a business?

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Make sure you understand buy-sell agreements.

by Kelly Deis of SoundPoint Consulting

Buy-Sell Agreements are legal documents that govern how ownership will change hands in privately owned companies if and when something significant happens to one of the owners.

These agreements are intended to ensure the remaining owner(s) control the outcome during critical transitions, while making sure the transitioning owner (or their estate) are treated fairly and equitably.

Although owners may have the same interests while both are in the company and all is going well, these same owners may have wildly divergent desires and needs after a triggering event occurs.

It is not too hard to imagine a scenario where one wants operational stability while the other needs liquidity. For instance, if a partner dies, the remaining owner wants business as usual, while the deceased’s estate wants to cash-out.

The interesting thing about Buy-Sell Agreements is that you do not know which side of the transaction you will be on when the agreement is drafted. Because of this, it is in both party’s interest to make them as fair and equitable as possible.

Continue reading →

LLCs for Freelancers: Understanding Liability Protection

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Nearly every professional freelancer eventually faces the question of whether to remain a sole proprietor or form an LLC. The question becomes more taxing as business grows and the potential for liability increases.

As a freelancer, you may have heard that forming an LLC provides liability protection. While this is true, it is not an impenetrable shield.

Understanding how liability works is crucial for protecting you and your freelance business.

The most important difference between a sole proprietorship and an LLC is that the limited liability company is a legal entity separate from you, the freelancer. If your LLC is sued while pursuing its business, the company’s assets are at risk, but your personal assets are not.  Continue reading →

Some day you will want to sell your business.

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Asset or Stock Sale How do they Differ?

by Kelly Deis of SoundPoint Consulting

So, you want to sell your business. For most of us, it is a once in a lifetime event. There is no reason to expect that you should know the intricacies of a transaction.

That is why it is oh so important to have good advisers help walk you through the process.

One of the fundamental decisions you will need to make is whether the transaction will be an asset or stock sale. It will depend upon your individual circumstances as well as your business structure.

If you are an LLC, then a stock sale is not an option as there is no stock to sell (although owners may sell their membership interests).

S-Corps have the option of the 338 election which treats the transaction as a stock sale for legal purposes and an asset sale for tax purposes, but that is WAY beyond the scope of this newsletter.  Continue reading →