SMALL BUSINESSES ARE AT RISK IN TODAYS MARKETPLACE

When people decide to start a business, they usually have a great idea and some money to invest in the enterprise. Some people opt to start the business by themselves or with family members; others have partners or other investors who will not be involved with the management of the business. So, will the new business be a sole proprietorship, partnership, corporation, or limited liability company (LLC)? Laws governing these different business forms are not the same, especially in areas such as personal liability for business debts, and the business's tax obligations. A lawyer can help you focus on all of the following important considerations.
10. Contracts. Most businesses execute contracts for space, services, and supplies. Businesses often have agreements between partners, investors, and employees. It is important to get it right so you don't end up in court.
9. Registering, Licensing, and Permits. Some business entities are required to register with the state in order to be recognized. Even businesses that are not required to register may be required to obtain licenses or permits.
8. Control. The choice of business entity often dictates the manner in which the business is operated. Choosing the wrong entity may make you personally liable for the wrongs of employees or partners.
7. Multi-state Business. The preconditions to forming and conducting a business entity in one state may not be accepted in another state. If you are not careful, the protections you have in your home state of operations may be lost if you do business in another state.
6. Strict Conformity. With some business entities you must strictly conform to the state law governing that business form or you lose its benefits and protections.
5. Capital. Businesses need to raise money, keep records of income and distributions, and behave in a fiscally responsible manner. Different business entities may require different procedures for raising capital and making distributions.
4. Variety of Entities. Although there are five basic business entities, there are other options within these entities that determine things like double taxation and liability for the acts of partners.
3. Autonomy. With many business entities, the things you don't decide are decided for you. Most states have adopted "Uniform Laws" that fill in the gaps for business entities where their charters, by-laws, and other organizing documents are silent. You may be subject to a whole set of laws and regulations that you don't even know exist.
2. Tax. Different business forms provide different tax advantages and disadvantages. The only thing more crucial to a new business is liability.
1. Liability. Different business forms provide different protections and risks to the business owner/investor. Personal liability means that your business puts everything you own at risk. An attorney can help you avoid this situation or minimize your risk. Knowing about your personal liability and reducing the risk that your business may devastate the economic well-being of you and your family is worth the visit to your attorney. It is not always easy finding a good Attorney. We can make it easy for you Just click here to find the right attorney for your business

BY PHILLIP ERNEST
August 10, 2009
Fort Worth and Texas small businesses are ahead of those in many other U.S. markets - with 2 percent growth in employer firms in Texas compared to a 2 percent drop nationwide - yet the effects of the recession are indicated by the 7.5 percent unemployment rate in June, the highest in more than 16 years, according to the Texas Workforce Commission.
As a result, here in Fort Worth, as elsewhere, small business owners are being forced to focus on their operations as never before. Everything must be evaluated in terms of need, cost and return on investment.
Currently, the national news media is saturated with stories about the proposed national health care reform and, to a lesser extent, the latest minimum wage increase. Both issues are of importance to small business owners and their employees. Another that should be on the radar screen of business owners and their employees is legal service plans, or pre-paid legal services.
The reason is simple: in a time of economic volatility, small business owners are more likely to need access to legal services - both for proactive purposes, such as creditor debt collection, and for preventative purposes, such as lawsuit defense. Ironically, this is the time small business can least afford the high cost of "hourly fee" or "flat" fee services of most corporate law firms.
Pre-paid legal service plans benefit the small business in two distinct ways. First, from an operational perspective, there are a variety of plans that can be tailored to the needs of the business owner for a fixed monthly rate. These plans include a suite of legal services, such as: legal consultation, legal correspondence, contract and business document review and trial defense services - provided by attorneys from a provider law firm with local market experience.
Secondly, legal service plans can be incorporated into the company's human resource benefits package for employees. As a group plan, this can be offered as a voluntary benefit, managed through payroll deduction. Participating employees gain access to legal services and consultation on a variety of personal issues, such as buying a home, divorce and creditor disputes. The Society of Human Resource Managers has reported that legal service plans are a valued human resource benefit and one of the fastest growing voluntary benefits in recent years.
In addition to cost control, legal service plans offer business owners' access to timely and accurate information. Being able to contact a specialist in a specific area of business or tax law is not something many business owners would do, yet the peace of mind in knowing the right decision was made and action taken, based on expert knowledge cannot be overstated.
The specific legal services that small business owners' use tends to morph to the need of the moment. For example, one small business owner has a customer who comes in once each month with a revision to the existing business contract. This small business owner uses the legal service plan to have an attorney with the provider law firm examine that document for any changes that might impact his business. Rather than paying an independent attorney $250 to 300 for that specific service, he pays less than $100 monthly (and still has access to a multitude of other legal services). Another company, a construction firm, operates in several states. Doing business in multiple states required multiple law firms (and separate billing) from each. By choosing a legal service plan with nationwide coverage, this small business owner was able to save thousands of dollars each year. Still, other firms find the collection letter service (up to 10 letters per month) invaluable. When "nudging" is not enough, a letter on law firm stationery has a way of generating attention.
Some legal service plan providers offer additional services to complement the needs of small business owners and employee groups. The use of legal service plans in small business continues to grow as the owners and their employees recognize the benefits and cost-savings these plans offer. Perhaps the current recession has served as a catalyst or tipping point toward a new direction in the delivery of legal services.We make it easy to find the right attorney for your business

Legal Protection for Home-Based Businesses
In today's highly litigious society, legal experts agree that when it comes to protecting your small business, an ounce of prevention is worth much more than a pound of cure -- it may be worth your entire business. And home-based businesses are no exception.
"Today's [home-based] business owners are going to face the same liabilities as other businesses," says Marcus Raynor, executive director of the New Jersey Lawsuit Reform Alliance. "There's no distinction in exposure to litigation. Lawsuits can change or even shut down a small or home-based business overnight."
If you're serious about protecting your business, abide by these three important rules, and take note of the following true stories of home-based business owners who learned these lessons the hard way.
1. Have an ironclad contract in place. Ken, a service provider, works from his home office in New York finding positions in rehabilitation facilities for certified counselors. The individuals Ken places aren't his employees, but freelancers and independent contractors. Nonetheless, one of the individuals Ken placed in a part-time position filed a suit against him to claim unemployment benefits.

"What saved Ken was his contract, which was ironclad," says his attorney, Tatia Barnes, whose practice specializes in preventive legal counseling. "I helped write the contract with my client and even went to the IRS website to make sure the contract clearly explained that these were not full-time employees," Barnes says. Responding to the New York Department of Labor, she was able to successfully argue that the employment relationship was that between a service provider and an independent contractor.

"I can't stress enough the importance of taking the time to have a contract tailored to meet your specific needs," Barnes says. She warns home-based business owners not to cut corners by using generic boilerplate contracts or to assume that because they are a one-person operation that a simple "handshake agreement" will suffice.
2. Don't negotiate or settle without a careful review. Mark P. runs a Florida-based shipping business from his home. His company coordinates the shipping of products from suppliers to customers. Without trucks or warehouse facilities, he is the classic "middleman." Mark was sued for $65,000 by one large shipping company, which claimed he had failed to pay for the costs associated with some of the shipments he was managing. Mark told his attorney that he had lost some accounts and was having problems with vendors, but he knew he didn't owe as much as $65,000.

Daniel F. Mantzaris, Mark's attorney and a partner in the law firm deBeaubien, Knight, Simmons, Mantzaris & Neal, LLP, reviewed all of the documentation associated with the shipping costs to accurately assess what Mark actually owed. Because the amount claimed by the shipping company was much higher than the amount actually owed, Mantzaris countersued on behalf of his client. "At the end of the day, we negotiated and got the $65,000 shipping bill down to about $10,000," Mantzaris says, adding that business owners must review everything carefully before agreeing to any type of settlement.

A similar lawsuit in Minnesota involved a large shipping company suing a one-person shipping business for $100,000 because of a trucking accident. Fortunately for the small business owner named in the lawsuit, he was able to prove that he had played no role in coordinating the transaction. As his attorney said after the case was dismissed, "Sometimes people are just looking for someone to blame."

If your small business comes under legal fire, carefully review the case before considering any settlement or negotiating. Whenever possible, get solid legal counsel.
3. Never underestimate the need for a warning. When a commercial real estate broker asked Jolene, a real estate agent, to show a commercial property, he made it clear that the property was in the process of being renovated. Jolene passed the warning along to the prospective renter, who still insisted on being shown the property. As the two women navigated the facility, Jolene told the prospective renter to be careful on the stairs, which were not yet completed. Despite the warnings, the woman fell. She later sued Jolene over injuries she sustained as a result of the fall.

While Jolene's case is still pending and her attorney cannot comment, the issue of proper warnings and safety is a serious one. "In today's litigious society, you always have to err on the side of caution and realize that any potential activity you're involved in could be the subject of a lawsuit," says Bob Dorigo Jones, senior fellow at the Foundation for Fair Civil Justice. He says that a "caution" sign prominently placed on the outside of the property might have served to warn visitors that the site was potentially dangerous.

Unfortunately, for now it's Jolene's word against the woman's as to whether Jolene gave sufficient warning beforehand. "[This case] shows why everything has to be in writing these days," says Dorigo Jones, who blogs about how to protect yourself against frivolous and excessive lawsuits.

Review your business for potential weak spots that could make you vulnerable to litigation. And remember -- when in doubt, get it in writing.
Legal Service Providers Can Offer Affordable Protection
So how else can home-based business owners make sure they're protected from these kinds of disastrous scenarios? For many, hiring an attorney can seem cost-prohibitive, but there are other solutions available. Many small businesses, for example, use group legal service providers such as Pre-Paid Legal Services Inc., which provides legal services to individuals and independent business owners for a small monthly fee.
Business insurance is also a necessity for all business owners, including those working from home offices. The National Association of Insurance Commissioners maintains a website devoted solely to home-based business insurance issues. It covers topics ranging from property and liability coverage to business interruption insurance.