http://www.sba.gov/community/blog/rss/13711/feed en SBA’s 8(a) Certification Program Explained http://www.sba.gov/community/blogs/sba%E2%80%99s-8a-certification-program-explained <p>Did you know that the SBA has a program designed to help small, disadvantaged businesses compete in the federal marketplace? If you&rsquo;re interested in government contracting, the 8(a) Business Development (BD) Program offers a broad scope of assistance to small businesses for which you might be eligible. &nbsp;</p> <p>The 8(a) BD Program has been essential for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Ultimately, the program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.</p> <p><strong>Am I eligible? </strong></p> <p>Generally, to be approved into the 8(a) BD program and become certified, your small business must be owned and controlled at least 51% by <a href="http://www.sba.gov/content/socially-disadvantaged-eligibility" title="link to socially disadvantaged info">socially</a> and <a href="http://www.sba.gov/content/economic-disadvantage-eligibility" title="link to economically disadvantaged info">economically</a> disadvantaged individuals who are American citizens.</p> <p>You should also be able to demonstrate potential for business success and possess <a href="http://www.sba.gov/content/additional-eligibility-criteria" title="link to eligibility criteria info">good character</a>. You can read more details about eligibility requirements by <a href="http://www.sba.gov/category/navigation-structure/eligibility-requirements" title="link to eligibility requirements info">visiting this page</a> on our site.</p> <p><strong>What are the benefits?</strong></p> <p>So, how can the program help you? Once certified, you can take advantage of specialized business training, counseling, marketing assistance and high-level executive development provided by the SBA and our resource partners. You may also be eligible for assistance in obtaining access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance for being involved in the program. You can receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.</p> <p>8(a) businesses can also receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.</p> <p>In addition, 8(a) businesses can form joint ventures and teams to bid on contracts. This enhances your ability to successfully compete for and perform larger prime contracts. You can also participate in the 8(a) BD <a href="http://www.sba.gov/community/blogs/sba%E2%80%99s-mentor-prot%C3%A9g%C3%A9-program" title="link to Mentor-Protege page ">Mentor-Prot&eacute;g&eacute; Program</a> which allows companies to learn the ropes from other more experienced businesses.</p> <p><strong>What else should I know?</strong></p> <p>Participation in the 8(a) BD Program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage; the overall goal of which is to graduate 8(a) businesses that will go on to thrive in a competitive business environment.</p> <p>While participating in the program, you&rsquo;ll have to maintain a balance between your commercial and government business. There&rsquo;s also a $100 million (or five times the value of your primary <a href="http://www.sba.gov/content/identifying-industry-codes" title="link to NAICS code page ">NAICS code</a>) limit on the total dollar value of sole-source contracts that you can receive while in the program.</p> <p>To make sure you stay on track to accomplish goals and follow requirements, the <a href="http://www.sba.gov/local-assistance" title="link to local assistance tool ">SBA district offices</a> monitor and measure the progress of participants through annual reviews, business planning and systematic evaluations.</p> <p>&nbsp;</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/government-contracting-and-certification-%E2%80%93-what%E2%80%99s-it-all-really-mean" title="link to Government Contracting and Certification – What’s It All Really Mean? post">Government Contracting and Certification &ndash; What&rsquo;s It All Really Mean?</a></li> <li> <a href="http://www.sba.gov/gcclassroom" title="link to The Government Contracting Online Classroom post">The Government Contracting Online Classroom</a></li> <li> <a href="http://www.sba.gov/tools/local-assistance/ptac" title="link to Procurement Technical Assistance Centers post">Procurement Technical Assistance Centers</a></li> <li> <a href="http://www.sba.gov/tools/sba-learning-center/search/everything/government-contracting" title="link to Small Business Learning Center – Government Contracting post">Small Business Learning Center &ndash; Government Contracting</a></li> </ul> http://www.sba.gov/community/blogs/sba%E2%80%99s-8a-certification-program-explained#comments http://www.sba.gov/crss/node/810511 Business Law Advisor Government Contracting Wed, 26 Mar 2014 16:38:07 +0000 kmurray 810511 at http://www.sba.gov How to Buy an Existing Business http://www.sba.gov/community/blogs/how-buy-existing-business <p>Are you ready to enter the business world but nervous about starting from scratch? You may be considering buying an existing business, which certainly has its perks when compared to establishing your own, brand-new operation. But there&rsquo;s still plenty to keep in mind, and success isn&rsquo;t guaranteed by simply writing a check and getting the keys. Here are a few tips to help you <a href="http://www.sba.gov/content/buying-existing-business" title="link to information about buying an existing business">do your due diligence as you explore buying a business</a>.</p> <p><strong>Considering the pros and cons</strong></p> <p>There are many favorable aspects to buying an existing business such as an existing customer base, a team of employees and drastic reduction in startup costs. You may be able to jump start your cash flow immediately because of existing inventory and receivables.</p> <p>But there are also some downsides to buying an existing business. Purchasing cost may be much higher than the cost of starting a new business exactly <em>because</em> the initial business concept, customer base, brand and other fundamental work has already been done. Also, be aware of hidden problems associated with the business (like debts the business is owed that you may not be able to collect).</p> <p><strong>Choosing a business</strong></p> <p>There are many different types of businesses to buy. To narrow down the list of potential businesses you might be considering, ask yourself:</p> <ul> <li> <strong>What are my interests?</strong> If you have absolutely no idea what business you want to invest in, first eliminate businesses that are of no interest to you.</li> <li> <strong>What are my talents?</strong> Being honest about your skills and experience can help you eliminate unrealistic business ventures.</li> <li> <strong>What are my conditions for a business?</strong> Consider if a business has a condition that is unfavorable to you, such as location and time commitment.</li> </ul> <p><strong>Doing your research </strong></p> <p>Once you have found a business that you would like to buy, it is important to conduct a thorough, objective investigation and to <a href="http://www.score.org/resources/how-value-your-business" title="link to SCORE article about how to value a business">determine a fair and equitable price for the sale of the business</a>. You&rsquo;ll want to examine information such as tax returns, financial statements, employee files, contracts, leases and any <a href="http://www.sba.gov/content/buying-existing-business" title="link to list of important documents">other important documents</a> related to the business.</p> <p class="rteindent1"><strong>TIP</strong>: You should enlist a qualified attorney to help review the legal and organizational documents of the business you are planning to purchase. Also, an accountant can help with a thorough evaluation of the financial condition of the business.</p> <p><strong>Buying a business</strong></p> <p>When you&rsquo;ve decided to move forward with buying a business, the sales agreement is the key document you&rsquo;ll need to finalize the purchase. This agreement defines everything that you intend to purchase including business assets, customer lists, intellectual property and goodwill. If you do not have a lawyer to help you draft the terms of the sale, you should at least have one review the agreement before you sign it.</p> <p><strong>Closing on a business</strong></p> <p>The closing is the final step in the process of buying a business. Once again, you should have legal counsel available to review all documentation necessary for the business transfer. This page details <a href="http://www.sba.gov/content/buying-existing-business" title="items you should address during your closing">items you should address during your closing</a>.&nbsp;</p> <p>If you think buying an exiting business could be the right path for you, there&rsquo;s a lot of information available to help you succeed, including this <a href="http://www.entrepreneur.com/article/79638-1" title="link to Entrepreneur.com">article from Entrepreneur.com</a> and <a href="http://www.nolo.com/legal-encyclopedia/buying-business-what-you-need-29703.html" title="link to NOLO.com">additional guidance from NOLO.com</a>.</p> http://www.sba.gov/community/blogs/how-buy-existing-business#comments http://www.sba.gov/crss/node/807581 Business Law Advisor Starting Tue, 18 Mar 2014 11:57:18 +0000 kmurray 807581 at http://www.sba.gov What to Know About Small-Business Licenses and Permits http://www.sba.gov/community/blogs/what-know-about-small-business-licenses-and-permits <p>So, you&rsquo;re starting a business &ndash; congratulations! You already know that there&rsquo;s a lot to take care of, from <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru" title="link to choosing business structure information">choosing your business structure</a> to <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-register-your-busi" title="link to information about business registration">registering your business</a>. You&rsquo;ll probably also need a business license or permit &ndash; virtually every business does in order to operate legally. It depends on the kind of business you run, where it&rsquo;s located and what state and federal rules apply. Here&rsquo;s what you should know to make sure you&rsquo;ll be running your business within the law.</p> <p><strong>Why Does My Businesses Need a License or Permit?</strong></p> <p><a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to licenses and permits information">Licenses and permits</a> serve two major purposes: They allow the government to track your business&rsquo;s revenue for tax purposes, and they also protect the public.</p> <p>For example, if your business is involved in <a href="http://www.sba.gov/content/what-federal-licenses-and-permits-does-your-business-need" title="link to information about activities supervised and regulated by a federal agency">activities supervised and regulated by a federal agency</a> &ndash; such as selling alcohol, firearms, radio broadcasting, commercial fishing, etc. &ndash; then you&rsquo;ll likely need to obtain a federal license or permit.</p> <p>Other special state licenses, known as <strong><em>professional licenses, </em></strong>are required for dentists, hairdressers, veterinarians, realtors, physicians and more. These licenses indicate the level of expertise of an employee or business owner and that they&rsquo;ve met a certain requirements when it comes to training or education.</p> <p>State licenses are also required of businesses, such as restaurants and those that serve alcohol, to demonstrate that they meet certain state standards or codes. Particular regulations may vary by state.</p> <p>Defined by local and/or state laws, <strong><em>permits</em></strong> generally regulate the safety, structure and appearance of a community and its establishments. There are a number of different kinds of permits to be aware of, including:</p> <ul> <li> Seller&rsquo;s Permits &ndash; if you&rsquo;re purchasing wholesale merchandise for resale</li> <li> Building Permits &ndash; if you&rsquo;re remodeling or building commercial space</li> <li> Health Permits &ndash; if you&rsquo;re preparing food</li> <li> Home Occupation Permits &ndash; if you&rsquo;re running a home-based business</li> </ul> <p><strong>What About Tax Permits?</strong></p> <p>The IRS doesn&#39;t license your business, but it does require that certain businesses register to&nbsp;<a href="http://www.sba.gov/content/getting-tax-identification-number" title="link to tax id number information">receive a federal tax identification number</a>. You&rsquo;ll also need&nbsp;to register with state and local government agencies for applicable tax permits&nbsp;such as a sales tax license, income tax withholding and unemployment insurance tax.</p> <p><strong>Managing and Maintaining Your License or Permit</strong></p> <p><a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to information about licenses and permits">Once you have</a> your license or permit, you&rsquo;ll need to manage and maintain it. Keep these tips in mind to help make sure you don&rsquo;t lose sight of your obligations:</p> <ul> <li> Keep track of renewal dates.</li> <li> Keep a copy of all licensing applications and forms in your business records.</li> <li> Display your licenses or permits correctly. Most states and localities require businesses to prominently display their business licenses so customers can see them.</li> <li> If you expand your business &ndash; whether it&rsquo;s physical building expansion or launching a new product or service &ndash; you may need additional business licenses.</li> </ul> <p><strong>Additional Resources</strong></p> <ul> <li> <a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to Obtaining a Business License or Permit page">Obtaining a Business License or Permit</a></li> <li> <a href="http://www.sba.gov/content/follow-these-steps-starting-business" title="link to 10 Steps to Starting a Business">10 Steps to Starting a Business</a></li> <li> <a href="http://www.sba.gov/content/basic-zoning-laws" title="ilnk to Basic Zoning Laws page">Basic Zoning Laws</a></li> <li> <a href="http://www.sba.gov/content/zoning-laws-home-based-businesses" title="link to Zoning Laws for Home-Based Businesses page">Zoning Laws for Home-Based Businesses</a></li> </ul> http://www.sba.gov/community/blogs/what-know-about-small-business-licenses-and-permits#comments http://www.sba.gov/crss/node/786101 Business Law Advisor Business Laws Managing Starting Thu, 09 Jan 2014 13:54:31 +0000 kmurray 786101 at http://www.sba.gov Practices to Protect Your Small Business from Employee Lawsuits http://www.sba.gov/community/blogs/practices-protect-your-small-business-employee-lawsuits <p>Getting sued by current or former employees happens more often than you might think. In fact, <a href="http://usatoday30.usatoday.com/money/jobcenter/workplace/story/2012-04-15/workers-sue-unpaid-overtime/54301774/1" title="link to article about employers suing for overtime pay">the number of lawsuits filed regarding wage-and-hour laws alone in 2011 went up 32 percent</a> from just three years prior. Don&rsquo;t be too busy to check in and ensure you aren&rsquo;t breaking laws or otherwise opening yourself up to a potential lawsuit &mdash; no small business owner has the time, or money, for that.</p> <p>There&rsquo;s a plethora of advice out there on the subject of protecting your business from lawsuits. Before you read on, remember, you should always consult your legal counsel to ensure you are complying with federal and state laws. Laws regarding certain practices, such as non-compete agreements, vary widely from state to state.</p> <p><strong>Information and resources on avoiding legal trouble</strong></p> <p>We&rsquo;ve compiled a list of some of the most helpful tips from around the Web.</p> <ul> <li> <strong>Good intentions gone awry: </strong><a href="https://www.openforum.com/articles/the-10-mistakes-most-likely-to-get-you-sued/" title="link to OPEN Forum article">This OPEN Forum article</a> summarizes a whitepaper on how good intent regarding workplace flexibility could actually violate employment laws.</li> <li> <strong>Additional considerations on accommodating and hiring:</strong> <a href="http://www.score.org/resources/9-ways-small-employers-attract-lawsuits" title="link to SCORE article">SCORE expanded on the good intentions concept</a> to make note that you must also accommodate disabled employees and pointed out the importance of hiring the right candidates the first place.</li> <li> <strong>Advice from someone who&rsquo;s been there: </strong>A New York Times article earlier this year featured a small business owner who was sued by a former employee. <a href="http://www.nytimes.com/2013/02/21/business/smallbusiness/tips-for-small-business-owners-to-avoid-employee-lawsuits.html?pagewanted=2&amp;_r=0" title="link to article with six tips to help small businesses prevent lawsuits from happening">The owner offers six tips to help small businesses prevent lawsuits from happening</a>.</li> <li> <strong>An ounce of prevention is worth a pound of cure:</strong> <a href="http://www.investopedia.com/articles/financialcareers/08/company-lawsuits.asp" title="link to tips for protection">Investopedia provides five tips for protection</a>, including <em>hire a competent attorney.</em></li> <li> <strong>Let&rsquo;s talk about it: </strong><a href="http://bigawards.org/2013/10/09/avoid-a-lawsuit-7-tips-to-protect-your-small-business-from-getting-sued/" title="link to tips from the Business Intelligence Group">More tips are available from the Business Intelligence Group</a>, including one important point &mdash; communicate. Clear, rational communication might just lead to a resolution.</li> <li> <strong>Go right to the source:</strong> Finally, it&rsquo;s important that you review all of the actual laws and regulations with which you should comply. <a href="http://www.dol.gov/elaws/" title="link to Department of Labor eLaws ">The U.S. Department of Labor has made this easy through its elaws website, a step-by-step tool that provides employment laws assistance for workers and small businesses.</a> The site features &lsquo;Advisors,&rsquo; which are virtual reports of applicable information based on responses to questions about your business. There are Advisors for Disability Nondiscrimination, the Fair Labor Standards Act and more.</li> </ul> <p>When in doubt, consult your legal counsel. However, by taking some preventative measures, you could avoid legal issues before they start.</p> http://www.sba.gov/community/blogs/practices-protect-your-small-business-employee-lawsuits#comments http://www.sba.gov/crss/node/781491 Business Law Advisor Business Laws Managing Wed, 18 Dec 2013 13:01:59 +0000 jdelung 781491 at http://www.sba.gov Small Business Patents, Copyrights and Trademarks http://www.sba.gov/community/blogs/small-business-patents-copyrights-and-trademarks <p>As an entrepreneur or aspiring small business owner, one of the most significant considerations that may come to mind is how to protect your work. What steps should you take to ensure that someone else couldn&rsquo;t lay claim to what your product or service? Does a patent, copyright or trademark apply? Here&rsquo;s some clarifying information about patents, copyrights and trademarks and how to protect your intellectual property.</p> <p>The <a href="http://www.copyright.gov/" title="link to Copyright Office website">U.S. Copyright Office</a> provides a clear distinction between these three types of protection:</p> <ul> <li> Patents protect inventions or discoveries</li> <li> Copyright protects original works of authorship</li> <li> Trademarks protect words, phrases, symbols or designs identifying the source of the goods or services of one party that distinguishes them from others</li> </ul> <p><strong>Patents</strong></p> <p>According to the <a href="http://www.uspto.gov/patents/index.jsp" title="link to Patent and Trademark Office website">U.S. Patent and Trademark Office</a> (USPTO), a patent is an intellectual property right granted to an inventor that prevents others from making, using, or selling the invention throughout the U.S. or importing the invention into the U.S. Patents last for a limited time and come in exchange for publically disclosing the invention when the patent is granted.</p> <p>There are three types of patents you can apply for based on your type of invention: utility, design and plant (yes, the green kind!).</p> <ul> <li> <a href="http://www.uspto.gov/patents/resources/types/utility.jsp" title="link to information about utility patents">Utility patents</a> &ndash; if you invent or discover any new and useful process, machine, article of manufacture, composition of matter &ndash; or any new and useful improvement of these &ndash; you may be eligible for a utility patent.</li> <li> <a href="http://www.uspto.gov/web/offices/com/iip/pdf/brochure_05.pdf" title="link to PDF about design patents">Design patents</a> &ndash; if you invent a new, original and ornamental design for an article of manufacture</li> <li> <a href="http://www.uspto.gov/web/offices/pac/plant/" title="link to information about plant patents">Plant patents</a> &shy;&ndash; if you invent or discover a distinct and new variety of plant</li> </ul> <p><strong>Copyrights</strong></p> <p>A copyright (&copy;), according to the <a href="http://www.copyright.gov/" title="link to Copyright Office website">U.S. Copyright Office</a>, protects original works of published or unpublished authorship including literary, dramatic, musical and artistic works (such as poetry, novels, movies, songs, computer software and architecture).</p> <p>Copyright doesn&rsquo;t protect facts, ideas, systems or methods of operation, but it <em>may</em> protect the way these things are expressed.</p> <p>While you don&rsquo;t have to register a copyright because it applies the moment your work is created, registration is required if you ever establish a lawsuit for copyright infringement. Many also choose to register their works because they want the facts of their copyright on the public record and have a certificate of registration.</p> <p><strong>Trademarks</strong></p> <p>A trademark (TM) is a word, phrase, symbol or design that identifies the source of the goods of one party and distinguishes them from others. You might have also heard of a service mark (SM), which is essentially the same as a trademark, but it denotes the <em>source</em> of a service rather than goods.</p> <p>You aren&rsquo;t required to register your mark to establish claim over it &ndash; you&rsquo;ll be able to use &ldquo;TM&rdquo; and &ldquo;SM&rdquo; to let others know of your ownership. The registered mark (&reg;) comes into play if you&rsquo;ve filed an application with the USPTO and it&rsquo;s been officially registered.</p> <p>Here&rsquo;s some additional <a href="http://www.uspto.gov/trademarks/basics/BasicFacts.pdf" title="link to information about protecting your trademark">information about protecting your trademark</a>.</p> <p>&nbsp;</p> <p><strong>Additional Resources</strong></p> <ul> <li> <a href="http://www.uspto.gov/faq/index.jsp" title="link to frequently asked questions on the Patent and Trademark Office website">FAQ from the USPTO</a> &ndash; answers to common questions and information about the patent process and registering trademarks</li> <li> <a href="http://www.copyright.gov/help/faq/" title="link to frequently asked questions on the Copyright Office website">FAQ from the Copyright Office</a> &ndash; a list of answers to questions and <a href="http://www.copyright.gov/help/faq/faq-register.html">copyright registration information</a></li> <li> <a href="http://www.sba.gov/community/blogs/your-business-idea-patentable-guide-what-entrepreneurs-can-patent" title="Is your Business Idea Patentable? A Guide to What Entrepreneurs Can Patent blog post link">Is your Business Idea Patentable? A Guide to What Entrepreneurs Can Patent</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/protect-your-invention-or-product-patents-t-0" title="Protect your Invention or Product blog post link">Protect your Invention or Product</a></li> </ul> http://www.sba.gov/community/blogs/small-business-patents-copyrights-and-trademarks#comments http://www.sba.gov/crss/node/776271 Business Law Advisor Business Laws Managing Starting Wed, 11 Dec 2013 12:55:32 +0000 kmurray 776271 at http://www.sba.gov How to Move Your Sole Proprietorship, LLC or Corporation to a New State http://www.sba.gov/community/blogs/how-move-your-sole-proprietorship-llc-or-corporation-new-state <p>Are you moving to a new state and wondering how to re-establish your business there? Wondering how to make a seamless transition for your sole proprietorship, LLC or corporation in a new location? Here&rsquo;s some essential information about relocating your business.</p> <p><strong>Sole Proprietorships</strong></p> <p>It&rsquo;s pretty straightforward to move a sole proprietorship (or partnership) to a new state. You&rsquo;re required to register your new business using the &ldquo;Doing Business As&rdquo; (DBA) registration process in your new state at which point you&rsquo;ll discontinue your old one. Depending on the location of your business, you&rsquo;ll either register at your county clerk&rsquo;s office or with the state government. You can read more about DBA names <a href="http://www.sba.gov/content/register-your-fictitious-or-doing-business-dba-name" title="DBA names article">here</a>.</p> <p><strong>Limited Liability Companies (LLCs)</strong></p> <p>There are a few choices to consider when you move your LLC to a new state, so it&rsquo;s wise to consult an attorney for expert guidance on the particulars of your business situation. Here are your options:</p> <ol> <li> <strong>Continue your LLC in the previous state. Register as a foreign (out-of-state) LLC in your new state.</strong> This translates into more paperwork for you because you&rsquo;ll need to file duplicate annual reports and it may complicate your taxes. Things get more complex if you&rsquo;re reporting for a multi-member LLC.</li> <li> <strong>Dissolve your LLC in the previous state. Establish a new LLC in your new state.</strong> There aren&rsquo;t any tax consequences if you take this route.</li> <li> <strong>Register a new LLC in your new state. Each member transfers membership interest.</strong> When you register a new LLC, have each member transfer his or her percent ownership from the previous LLC to the new one.</li> <li> <strong>Register a new LLC in your new state. Merge your previous LLC into your new LLC.</strong> You can continue with your existing EIN because the IRS views this as a continuation of the previous LLC. If all LLC members still have a 50-percent interest in the capital and profits of the new LLC, you won&rsquo;t face any tax consequences.</li> </ol> <p><strong>Corporations</strong></p> <p>Moving a corporation to a new state mirrors the process for an LLC. As always, it&rsquo;s best to talk to an attorney about any tax consequences, reporting requirements and any specific requirements in your previous state about dissolving a corporation. Here&rsquo;s what you can consider when relocating your corporation:</p> <ol> <li> <strong>Continue your corporation in the previous state. Register as a foreign corporation in your new state.</strong> Again, this translates into increased paperwork and the chance that you&rsquo;ll incur fees in both states.</li> <li> <strong>Dissolve your corporation in the previous state. Establish a new corporation in your new state.</strong> Be aware that there may be costly tax consequences associated with this option and may have implications on employee benefits (such as retirement plans).</li> <li> <strong>Register a new corporation in your new state. Merge your previous corporation into your new one.</strong> This eliminates the need to pay fees in two states and allows for a tax-free reorganization.</li> </ol> <p><strong>After Your Move &ndash; Licenses, Permits and Taxes</strong></p> <p>Don&rsquo;t forget your post-move steps for your small business, including applying for all the necessary <a href="http://www.sba.gov/content/what-state-licenses-and-permits-does-your-business-need" title="licenses and permits article">licenses and permits</a> (which vary by state). And keep in mind local <a href="http://www.sba.gov/content/basic-zoning-laws" title="zoning laws article">zoning laws</a> as they apply to your new location.</p> <p>You&rsquo;ll also want to be sure to take care of your tax obligations. Because you&rsquo;re moving out of state, you&rsquo;ll need to close out your tax year in your old state (often as simple as checking the &ldquo;Final Return&rdquo; box on your state return). Every business is unique, so talk to a tax expert for an understanding of your business tax responsibilities in the first year of your move. You can also deduct or capitalize the costs incurred during business relocation (including moving costs, relocation site scouting trips, travel and meeting costs). Get more guidance on small business expenses and tax deductions&nbsp;<a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/establishing-business/tax" title="taxes article">here</a>.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/moving-out-home-office-%E2%80%94-four-tips-growing-bu" title="Link to tips about moving out of the home office ">Moving out of the Home Office &ndash; 4 Tips for Growing Businesses</a></li> <li> <a href="http://www.sba.gov/community/blogs/how-choose-best-location-your-business" title="Link to blog about choosing the best location for your business">How to Choose the Best Location for your Business</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-legally-change-structure-your-growing-small" title="Link to blog about changing the structure of your business">How to Legally Change the Structure of your Growing Small Business</a></li> </ul> http://www.sba.gov/community/blogs/how-move-your-sole-proprietorship-llc-or-corporation-new-state#comments http://www.sba.gov/crss/node/756284 Business Law Advisor Managing Thu, 31 Oct 2013 11:29:19 +0000 kmurray 756284 at http://www.sba.gov Is It Time to End Your Business Partnership? Here's How http://www.sba.gov/community/blogs/it-time-end-your-business-partnership-heres-how <p>Partnerships fail for many reasons. Misalignment of personality is possibly the first reason that springs to mind, but according to Michigan law firm <a href="http://www.wipplaw.com/partnership-failure.html" title="link to Family &amp; Aging Law Center ">Family &amp; Aging Law Center&nbsp;</a>, the two most common reasons that business partnerships fail is 1) <strong>failure to make an adequate plan</strong>, and 2) more importantly, from a legal perspective, <strong>failure to have a written partnership agreement</strong> that outlines in detail the partnership structure.</p> <p>Why is the partnership agreement so important? Most partnership agreements are written up at the beginning of the business venture and outline how the partners will run the business &ndash; how business decisions are made, how responsibilities are divided, how disagreements will be resolved and so forth. A good one will also include a dissolution strategy, like a prenuptial agreement. Although not required by law, it can be extremely risky to operate without one. Essentially, a good agreement brings structure and agreement to the partnership &ndash; without one, partnerships run the risk of being run like separate businesses within the business, with each partner doing (or not doing) their own thing!</p> <p>Without a partnership agreement, dissolving a partnership can get nasty and carry a lot of risk. For example, if a partner isn&rsquo;t paying bills on time or making regular contributions to pay off a business loan. Lapses and disagreements like these can quickly spiral out of control and impact your creditworthiness, relationships with vendors and so on.</p> <p>Even if you do have a partnership agreement, you are carrying an element of shared liability. Each partner is liable for the actions of the business, its debts, and of course, you also have to split profits.</p> <p>So what are your options when it comes to dissolving a partnership that&rsquo;s gone bad? Here are some considerations to bear in mind for those who have partnership agreements and those who don&rsquo;t:</p> <ol> <li> <strong>Change the weighting of the partnership agreement</strong></li> </ol> <p>You don&rsquo;t have to dissolve the partnership entirely. Perhaps you might <strong>change the weighting of the partnership</strong> so that you assume a majority share and with it more control over decisions and/or finances, while your partner agrees to remain involved, but to a lesser extent than currently.</p> <ol> <li value="2"> <strong>Buy out your partner or sell your share </strong></li> </ol> <p>If you want to continue the business, you could <strong>buy your partner&rsquo;s share</strong>, or sell yours if you want out but your partner doesn&rsquo;t.</p> <ol> <li value="3"> <strong>Legally dissolve the partnership</strong></li> </ol> <p>If you have a partnership agreement, revisit it and review your dissolution plan. Then take a look at the current state of your business to ensure a clean break. For example, have all partners completed all agreed duties? What&rsquo;s your business worth (use a third party valuation firm to help pinpoint this number)? What about leases, loans, and other contracts &ndash; how will the dissolution affect them and who will own the continued liability?</p> <p>As you can see, there are many considerations, so make sure you consult a lawyer to help protect your interests in any dissolution or restructuring of the partnership. They can also help draft a dissolution agreement that protects you from future disputes or claims that may be brought against you.</p> <p>It&rsquo;s also important to note that any dissolution of that partnership is governed by state law. Visit your state&rsquo;s website for more information about the process and the forms you&rsquo;ll need. It can take up to 90 days for the dissolution to become official. Once your partnership is dissolved, you can typically expect each partner to assume business assets and liabilities based on percentage of ownership.</p> <ol> <li value="4"> <strong>When there&rsquo;s no partnership agreement</strong></li> </ol> <p>If you didn&rsquo;t have a partnership agreement that outlined a dissolution strategy, try to work out terms together. If not, an intermediary may be able to help you resolve your dispute through mediation. Many law firms offer these services. Your final resort is a court-dictated decision which could be costly and may not provide the result you were looking for. Courts often divide assets and liabilities 50-50 regardless of any disputes.</p> <p><strong>Other factors to consider</strong></p> <p>Don&rsquo;t forget to let the IRS and state revenue office know that you are no longer in partnership the next time you file a return. Notify customers, vendors and others that your business structure has changed or dissolved. You&rsquo;ll also need to take care of other loose ends such as business licenses, permits and canceling a trade name or &ldquo;doing business as&rdquo; name with your local government. Refer to SBA&rsquo;s <a href="http://www.sba.gov/content/steps-closing-business" title="link to Closing your Business guide">Closing Your Business</a> guide for more information.</p> http://www.sba.gov/community/blogs/it-time-end-your-business-partnership-heres-how#comments http://www.sba.gov/crss/node/753505 Business Law Advisor Business Laws Managing Mon, 16 Sep 2013 18:29:34 +0000 Caron_Beesley 753505 at http://www.sba.gov Maternity Leave Benefits – What Are Your Small Business Obligations and Options? http://www.sba.gov/community/blogs/maternity-leave-benefits-%E2%80%93-what-are-your-small-business-obligations-and-options <p><img alt="" height="313" src="/sites/default/files/images/Untitled.png" style="float: right;" width="205" />Do you know what your legal obligations are to provide maternity leave to your employees? There are laws that dictate what maternity leave benefits you should be providing to your employees. However, they don&rsquo;t apply to all business owners.</p> <p>For example, under the <a href="http://www.dol.gov/whd/fmla/" title="link to Family and Medical Leave Act information">Family and Medical Leave Act</a> (FMLA), certain companies are required to provide unpaid, job-protected leave for family and medical reasons with continuation of group health insurance under the same terms and conditions as if the employee had not taken leave. This includes 12 workweeks of leave for the birth and care of a child in its first year.</p> <p>However, FMLA only applies to companies with more than 50 employees &ndash; a fact that excludes many small businesses and their employees.&nbsp;</p> <p>Federal law aside, your state may have more favorable laws for maternity leave. In California, for example, women may collect state temporary disability payments of about two thirds of their wages for the time during which they&#39;re physically disabled due to pregnancy and childbirth (usually six to eight weeks). To find out what laws apply in your state, check out this list of <a href="http://www.ncsl.org/issues-research/labor/maternity-leave-state-statutes.aspx" title="list of State Pregnancy, Childbirth, and Adoption Leave Statutes">State Pregnancy, Childbirth, and Adoption&nbsp;Leave Statutes</a> published by the National Conference of State Legislatures.</p> <p><strong>Should You Provide Maternity Leave if the Law Doesn&rsquo;t Require It?</strong></p> <p>If your business is not covered by FMLA or state laws, what steps can you take to ensure that employees get the appropriate level of maternity leave?</p> <p>Providing maternity leave is a smart option for small businesses.&nbsp; Even if FMLA does not apply to you, according to a <a href="http://www.dol.gov/whd/fmla/survey/" title="link to Department of Labor survey">U.S. Department of Labor survey</a>, providing both maternity and medical leave is proven to make a positive impact on the lives workers without placing an undue burden on employers. Abuse of these policies is also much lower than expected, and 90 percent of workers return to their jobs after taking FMLA leave.</p> <p><strong>Setting a Maternity Leave Policy</strong></p> <p>If you decide to offer maternity leave benefits (and assuming you don&rsquo;t already have to comply with federal or state maternity leave laws), the <a href="http://www.dol.gov/whd/fmla/" title="FMLA link">FMLA</a> and state laws are useful models on which to base your policy. Consider the following guidelines (as set by FMLA):</p> <ul> <li> The employee has been in your employment for at least 12 months and works a regular work week (FMLA requires an average work week of around 24 hours to be eligible, although state policies often don&rsquo;t require an hourly minimum).</li> <li> The policy applies to both men and women to give them reasonable time to bond with the child (newborn, adopted or fostered).</li> <li> The leave must be taken as a continuous block of leave.</li> <li> Determine the amount of time off you wish to offer and whether it will be paid, unpaid or paid in part. FMLA allows for up to 12 weeks a year. State laws vary between 6-12 weeks.</li> </ul> <p>Whatever you decide, apply your policy consistently with no special favors for certain employees. Include your policy in employee handbooks and terms of employment.</p> <p>If you think this will be too much of a stretch for your business, consider alternatives such as allowing new parents to work from home or part-time during the initial weeks of new parenthood.</p> <p><strong>Prepare Your Business</strong></p> <p>The thought of doing without any employee for several weeks can be daunting, but there are a few things you can do to ensure your business stays productive during an employee&rsquo;s period of extended leave:</p> <ul> <li> <strong>Get High Performers to Step Up </strong>&ndash; If someone on your team is looking for an opportunity to take on extra responsibility or has shown an aptitude for growth, consider asking them to step into the shoes of employees who take maternity leave. Plan the transition in advance and be sure to have a plan to hand back the role when the absent employee returns to work so that they don&rsquo;t feel that the position is in jeopardy.</li> <li> <strong>Cross Train </strong>&ndash; Cross training should be a key part of any business and will help your business handle the strain of short and extended leave more seamlessly. Your employees don&rsquo;t need to be able to do everything; instead, spread the load by Identifying a back-up team member for certain key tasks.</li> </ul> <ul> <li> <strong>Hire Independent Contractors</strong> &ndash; Contractors specialize in being able to come into a company and learn the ropes fast. It&rsquo;s always worth building relationships with contractors across several disciplines just to ensure you have coverage &ndash; both for maternity/medical leave situations or to help out when you need an extra pair of hands.</li> </ul> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/content/employment-and-labor-law" title="link to SBA Small Business Guide to Employment and Labor Law">SBA Small Business Guide to Employment and Labor Law</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/employers-guide-discrimination-pregnancy-discri" title="link to Employer's Guide to Discrimination: Pregnancy Discrimination">Employer&#39;s Guide to Discrimination: Pregnancy Discrimination</a></li> </ul> <p>&nbsp;</p> http://www.sba.gov/community/blogs/maternity-leave-benefits-%E2%80%93-what-are-your-small-business-obligations-and-options#comments http://www.sba.gov/crss/node/746411 Business Law Advisor Business Laws Managing Wed, 31 Jul 2013 12:02:48 +0000 Caron_Beesley 746411 at http://www.sba.gov How To Be an Ethical, Fair and Lawful Manager of Employees (While Protecting Your Interests) http://www.sba.gov/community/blogs/how-be-ethical-fair-and-lawful-manager-employees-while-protecting-your-interests <p>Managing employees can be a daunting prospect, especially if you are new to it. Many small business owners started their businesses because they wanted to be their own boss, but what happens when it comes time to hire employees &ndash; what kind of leader will you be, how will you juggle your business and the regulatory requirements of being the boss?</p> <p>While great leadership is often measured by your ability to lead and mentor your employees, it&rsquo;s also important to remember that as an employer and manager you are required to treat all employees equally and fairly.</p> <p>Sounds obvious, but as a new employer, there are a range of employment laws and regulations that you need to be aware of such as those that protect employees against discrimination and sexual harassment, wage and overtime abuse and more. Ignore these and you run the risk of creating an environment for disgruntled employees and the potential for a government investigation or lawsuit.</p> <p>So what can you do to ensure you adhere to basic managerial ethics and the law? Which laws even apply to your business? Here are some tips and considerations to bear in mind to help you avoid costly managerial mistakes.</p> <p><strong>Treat All Employees Equally and Fairly</strong></p> <p><a href="http://www.eeoc.gov/employers/index.cfm" title="equal opportunity laws info">U.S. equal opportunity laws</a> require that &ldquo;covered&rdquo; employers cannot make any hiring decisions based on your own bias for a certain group of people &ndash; this includes gender, race, religion, age, disability, genetic information or any other class of individual protected by the law. (<em>Note</em>: Not all businesses are covered by these laws. More on this below).&nbsp;</p> <p>Likewise, as a manger, you cannot harass employees because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. If your actions are questionable in this regard, an employee may be entitled to file a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). Visit the <a href="http://www.eeoc.gov/employers/index.cfm">EEOC website</a> for a complete list of equal opportunity laws that impact employers.</p> <p><strong><em>IMPORTANT</em></strong>: <strong>Not all businesses fall under the EEOC&rsquo;s jurisdiction &ndash; and this may very well apply to most small businesses.</strong> For example, the EEOC does not enforce or uphold complaints of businesses with less than 15 employees for general bias against certain groups. Visit the <a href="http://www.eeoc.gov/employers/coverage.cfm" title="additional information about equal opportunity laws">EEOC website for employers</a> for more information on who is covered by its laws. Also, your state may have its own equal opportunity laws, so check these carefully.</p> <p>Even if you don&rsquo;t fall under the EEOC laws, all employers are subject to the Equal Pay Act (EPA), which makes it illegal to pay different wages to men and women if they perform substantially equal work in the same workplace.</p> <p>Other considerations to bear in mind include operating a safe and secure workplace for your employees; ensuring employees receive the <a href="http://www.sba.gov/community/blogs/meal-and-rest-breaks-%E2%80%93-what-small-business-employers-need-know" title="meal and rest break law info">appropriate meal and rest breaks</a>, <a href="http://www.sba.gov/community/blogs/are-your-employees-working-overtime-during-holidays-understand-overtime-wage-law" title="overtime law info">overtime pay</a> and more.</p> <p><strong><em>TIP</em></strong>: To help you determine which laws apply to your business, read: <a href="http://www.sba.gov/community/blogs/which-employment-laws-apply-your-business-there%E2%80%99s-e-tool" title="tool for employment laws">Which Employment Laws Apply to Your Business? There&rsquo;s an E-Tool for That!</a></p> <p><strong>Keep Good Records</strong></p> <p>Good record keeping is a must in business, and it can help protect you should an employee raise a complaint (or even a lawsuit) against you. So document and record everything &ndash; from performance reviews, 360 feedback gleaned from colleagues about a job candidate, disciplinary actions (warning notices, performance improvement plans, etc.) and so on.</p> <p><strong>Develop an Employee Handbook</strong></p> <p>It&rsquo;s also a good practice to develop an employee handbook and code of conduct so you can ensure all new employees are aware of your corporate policies and procedures, as well as their rights.</p> <p><strong>Communicate any Policy Changes</strong></p> <p>Small businesses with a certain number of employees are often exempt from certain labor requirements &ndash; but as you grow or take on more employees, your compliance obligations will change. For example, most businesses with less than $500,000 in sales and only one employee aren&rsquo;t required to pay overtime according to federal law. (But do note that there are exceptions for certain jobs involved in &ldquo;interstate commerce.&rdquo; In addition, state laws can supersede federal laws &ndash; so check carefully.) But as the business grows, you&rsquo;ll need to adhere to <a href="http://www.sba.gov/community/blogs/are-your-employees-working-overtime-during-holidays-understand-overtime-wage-law" title="overtime laws info">overtime laws</a>.</p> <p>So as your business changes, make sure that you are aware of how it&rsquo;s legal obligations are shifting as well. And be sure to revisit employment contracts and corporate policies so the changes are clear to your staff.</p> <p><strong>Related Blogs</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/10-ways-your-small-business-may-be-breaking-emp" title="10 Ways Your Small Business May Be Breaking Employment Laws blog post">10 Ways Your Small Business May Be Breaking Employment Laws</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/4-tips-effective-and-inspiring-business-leade" title="4 Tips for Effective and Inspiring Business Leadership blog post">4 Tips for Effective and Inspiring Business Leadership</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/7-ways-lead-and-empower-your-team-%E2%80%93-because-s" title="7 Ways to Lead and Empower Your Team – Because Satisfied Employees Make for Happy Customers blog post">7 Ways to Lead and Empower Your Team &ndash; Because Satisfied Employees Make for Happy Customers</a></li> <li> <a href="http://www.sba.gov/search/apachesolr_search/motivate?page=1&amp;filters=tid%3A13671" title="8 Tips for Training your Small Business Employees on a Budget blog post">8 Tips for Training your Small Business Employees on a Budget</a></li> </ul> http://www.sba.gov/community/blogs/how-be-ethical-fair-and-lawful-manager-employees-while-protecting-your-interests#comments http://www.sba.gov/crss/node/738381 Business Law Advisor Business Laws Managing Starting Wed, 24 Jul 2013 12:43:38 +0000 Caron_Beesley 738381 at http://www.sba.gov Using Testimonials, Endorsements and Online Reviews in Your Marketing – How to Ensure You Aren’t Breaking the Law http://www.sba.gov/community/blogs/using-testimonials-endorsements-and-online-reviews-your-marketing-%E2%80%93-how-ensure-you-0 <p>Do you use endorsements or testimonials from customers in your marketing or advertising? Many business owners do. The power of referrals and quotes from customers can mean the difference between success and failure. However, you need to be aware of truth-in-advertising and endorsement laws. Likewise, if you use ask bloggers to write about your products, you need to be clear and transparent about your affiliations.</p> <p>The Federal Trade Commission (FTC) oversees consumer protection laws in a number of areas, truth-in-advertising being one of them. So, if you intend to use customer quotes or endorsements from others to help sell your products and services, here&rsquo;s what you need to know to ensure you comply with the law:</p> <p><strong>All Endorsements Must Be Truthful and Not Misleading</strong></p> <p>What does this mean? In essence, they must reflect the endorser&rsquo;s actual experience and opinion. You also can&rsquo;t use endorsements or testimonials that make claims about your products or service that you can&rsquo;t back up with clear proof. We&rsquo;ve all seen the ads that promise weight-loss miracles, often backed by quotes from customers testifying to their success. However, if there isn&rsquo;t scientific evidence to prove that this is true, then you are effectively misleading your customers. The FTC can hold both you and your endorser responsible for deceptive marketing practices.</p> <p><strong>Endorsements Must Reflect Typical Experiences</strong></p> <p>In addition to being truthful and not misleading, endorsements must reflect the typical experience of consumers who use the product &ndash; not the experience of just a few satisfied customers. If an endorsement doesn&rsquo;t meet this requirement, the ad must clearly disclose either what consumers can expect their results to be or the limited applicability of the endorser&rsquo;s experience. It&rsquo;s not enough to simply add a disclaimer like &ldquo;Not all consumers will get these results&rdquo; or &ldquo;Your results may vary.&rdquo;</p> <p>So what are your options? Well, if the endorser&rsquo;s experience isn&rsquo;t typical, then you can go ahead and use the endorsement, but you must have adequate proof to back up the results that the consumer claims to have gained. Alternatively, you must clearly disclose the results that people can expect.</p> <p><strong><em>Example</em></strong>: Let&rsquo;s say you manufacture or sell a product for which you want to make very specific claims &ndash; backed by a customer endorsement, such as a cosmetic wrinkle-reducing cream. Any quotes, testimonials or endorsements used must also be accompanied by a statement that clearly discloses the results that most people could expect in similar circumstances. And be specific: &ldquo;<em>Most users of this product saw a <u>50 percent</u> reduction in the <u>appearance</u> of fine lines and wrinkles after using this product for <u>12 weeks</u></em>.&rdquo; It would also be a good idea to have a link to any data that backs up this claim, such as a scientific research study.</p> <p><strong><em>Tip</em></strong>: Let&rsquo;s look at a real life scenario that many small business owners might encounter. Say you run a hair salon or landscaping business and you want to use a few customer quotes on your website &ndash; what should you do? Well, it&rsquo;s a good idea to get permission from endorsers before you post their comments (and an absolute must if you intend to post their names). Likewise, it would also be a good practice to check that they are willing to be contacted for a reference if a potential customer wants more information about their experiences. Before and after pictures are also a great way to back up the validity and truthfulness of any endorsements or claims.</p> <p><strong>Disclose Any Connections or Affiliations to Your Endorser</strong></p> <p>If you have any material connection with an endorser of your product, you must disclose it. So if you pay bloggers or affiliate marketers, or even give them free samples in return for a review, you must disclose that relationship. It&rsquo;s OK to use these endorsements in your marketing or advertising, but be sure to add a disclaimer. For example:</p> <ul> <li> Encourage bloggers or affiliates to follow the law by adding a disclaimer to their blogs or endorsements: &ldquo;<em>ABC Company gave me this product and here&rsquo;s what I think&hellip;</em>&rdquo;</li> <li> In your own ad, state the material connection you have with a paid or compensated endorser: &ldquo;<em>We provided John Doe with a trial product for review, here&rsquo;s what he had to say&hellip;</em>&rdquo;</li> </ul> <p><strong>What About Using Online Reviews?</strong></p> <p>Referrals and recommendations are an essential part of the small business owners marketing mix. Today, those reviews are increasingly part of the post-sales experience thanks to the popularity of independent online review sites like Yelp, Google+ Local, Service Magic, Angie&rsquo;s List and more.</p> <p>But can you lift quotes from these sites and use them in your marketing? If you check the Terms of Service of most these sites, user-generated content (i.e. reviews) are the property of the person who wrote the review. To use these reviews without permission of the reviewer may infringe copyright laws. There are other ways, however, to incorporate customer reviews into your website. Consider the following:</p> <ul> <li> <strong>Add links or plug-ins to your website</strong> that take people directly to your page on crowdsourcing review sites like Yelp.</li> <li> <strong>Use third-party rating and review tools</strong>, such as Shopzilla or BazaarVoice, on your site so that consumers can review products post-sale. Don&rsquo;t forget to add a disclaimer notifying your customers that the review may be posted online and used for marketing purposes.&nbsp; By using these services, your reviewers are subject to Terms of Service, which often includes giving consent to you as the website operator to use and publish their reviews, as well as certain biographical information such as name, alias, or location.</li> </ul> <p>Because these reviews aren&rsquo;t technically endorsements or testimonials and the reviewer has previously agreed to the Terms of Service, businesses (including many notable brands) often lift quotes from online reviews (remembering to strip out any biographical information that could identify the reviewer) and use them in email marketing, fliers and so on. If you have any doubt about the claims you may be making by using these reviews, consult an attorney.</p> <p><strong>More Information</strong></p> <p>For more information, consult the&nbsp;<a href="http://business.ftc.gov/advertising-and-marketing/endorsements" title="Endorsement Guide for Businesses">FTC&rsquo;s Endorsements guide for businesses</a> and check out this quick video from the FTC that summarizes what you need to know:</p> <object height="312" width="495" type="application/x-shockwave-flash" id="Endorsement Guides" data="http://www.business.ftc.gov/sites/all/themes/ftcbusinesscenter/flash/player495x312.swf"> <param name="swliveconnect" value="default" /><param name="play" value="true" /><param name="loop" value="true" /><param name="menu" value="false" /><param name="quality" value="autohigh" /><param name="width" value="100%" /><param name="height" value="100%" /><param name="scale" value="noscale" /><param name="align" value="l" /><param name="salign" value="tl" /><param name="wmode" value="opaque" /><param name="bgcolor" value="#FFFFFF" /><param name="version" value="7" /><param name="allowscriptaccess" value="always" /><param name="allowfullscreen" value="true" /><param name="src" value="http://www.business.ftc.gov/sites/all/themes/ftcbusinesscenter/flash/player495x312.swf" /><param name="flashvars" value="vidPath=http%3A%2F%2Fwww.business.ftc.gov%2Fsites%2Fdefault%2Ffiles%2FEndorsementGuides_FLV_201212061028331.flv&xmlPath=http%3A%2F%2Fwww.business.ftc.gov%2Fsites%2Fdefault%2Ffiles%2FEndorsementGuides_MasterClipsIncludedXML.xml&imgPath=http%3A%2F%2Fwww.business.ftc.gov%2Fsites%2Fdefault%2Ffiles%2Fendorsement-screenshot.jpg" /></object> http://www.sba.gov/community/blogs/using-testimonials-endorsements-and-online-reviews-your-marketing-%E2%80%93-how-ensure-you-0#comments http://www.sba.gov/crss/node/655421 Business Law Advisor Business Laws Managing Marketing Wed, 05 Jun 2013 17:39:27 +0000 Caron_Beesley 655421 at http://www.sba.gov Developing a Mobile App? Follow These 12 Tips for Protecting and Securing User Data http://www.sba.gov/community/blogs/developing-mobile-app-follow-these-12-tips-protecting-and-securing-user-data <p><img alt="SBA Mobile App" src="/sites/default/files/images/SBA_Mobile_App.JPG" style="width: 157px; height: 298px; float: right;" />Smartphone and tablet users will download 70 billion apps this year, according to an estimate by <a href="http://www.abiresearch.com/press/android-will-account-for-58-of-smartphone-app-down" title="ABI Research">ABI Research</a>. And the total global mobile app market is expected to be worth $25 billion by 2015 reports <a href="http://techcrunch.com/2011/01/18/report-mobile-app-market-will-be-worth-25-billion-by-2015-apples-share-20/" title="TechCrunch">TechCrunch</a>.</p> <p>If you have an idea for a marketable app or are currently developing one, then the world may just be your oyster. But before you take your app to market and get it accepted by an app store, the Federal Trade Commission (FTC) wants to ensure that your security policies are up to scratch and that you have taken the right measures to protect the data that your users share with you. &nbsp;</p> <p>Why? Apps and mobile devices often rely on consumer data &ndash; including contact information, location, photos, and so on &ndash; all of which can be vulnerable to data breaches, digital snoops and regular theft. In fact, <a href="http://techcrunch.com/2011/01/18/report-mobile-app-market-will-be-worth-25-billion-by-2015-apples-share-20/" title="Markets and Markets">MarketsandMarkets</a> cites the risk of data theft through delivery of phishing and spyware in mobile apps as the biggest downside to the growth in available apps.</p> <p>The FTC offers the following 12 tips to help developers approach mobile app security:</p> <p><strong>1.&nbsp;</strong><strong>Appoint a security lead</strong></p> <p>Your development team should include at least one person responsible for considering security at each stage of your app&rsquo;s development. If you are a solo entrepreneur, then that person is you.</p> <p><strong>2.&nbsp;</strong><strong>Review the data you intend to collect and maintain</strong></p> <p>Don&rsquo;t collect or keep data that you don&rsquo;t need. If you don&rsquo;t need user&rsquo;s contact info, don&rsquo;t collect it. Likewise, don&rsquo;t keep user data any longer than you need to &ndash; including location data.</p> <p><strong>3.&nbsp;</strong><strong>Understand the differences between mobile platforms</strong></p> <p>Each mobile operating system uses a different application programming interface (API), which includes different security features and permission handling. So don&rsquo;t just assume one size fits all; adapt your code accordingly.</p> <p><strong>4.&nbsp;</strong><strong>Don&rsquo;t rely on a platform alone to protect your users</strong></p> <p>Platforms may offer features to make security easier, but it&rsquo;s up to you to understand them. Use them properly, and explain them to your users in everyday language.</p> <p><strong>5.&nbsp;</strong><strong>Create secure user credentials</strong></p> <p>If your app requires that users create usernames and passwords, make sure that these credentials are secure and appropriate to the nature of your app. For example, a social networking app would require a higher level of authentication (password strength requirements) than a gaming app.</p> <p><strong>6.&nbsp;</strong><strong>Encrypt any data that is transmitted</strong></p> <p>Use transit encryption (SSL/TLS in the form of HTTPS) to secure usernames, passwords, API keys and any other important data that is transmitted from a device to your server. This is particularly critical because many users use un-secured public WiFi networks to access apps. If you use HTTPS, use a low-cost digital certificate from a reputable vendor and ensure your app checks it properly.</p> <p><strong>7.&nbsp;</strong><strong>Exercise caution and use due diligence on libraries and other third-party code</strong></p> <p>Third-party libraries can save time, but keep your ear to the ground. Does the library or SDK have known security vulnerabilities?</p> <p><strong>8.&nbsp;</strong><strong>Consider protecting data you store on a user&rsquo;s device</strong></p> <p>If a user&rsquo;s device becomes infected by a virus or malware, or they lose their device, think of ways you can help them protect any personal information that your app handles. Encryption is one option. Some platforms have their own storage schemes for protecting sensitive user data such as passwords and keys &ndash; use them.</p> <p><strong>9.&nbsp;</strong><strong>Protect your servers, too</strong></p> <p>If you maintain a server that communicates with your app, take appropriate security measures to protect it. If you rely on a commercial cloud provider, understand the divisions of responsibility for securing and updating software on the server. &nbsp;</p> <p><strong>10.&nbsp;</strong><strong>Don&rsquo;t store passwords in plain text</strong></p> <p>Protect user passwords by avoiding plain text storage on your server. Use an iterated cryptographic hash function to hash users&rsquo; passwords and then verify against these hash values. (Your users can simply reset their passwords if they forget.)&nbsp;</p> <p><strong>11.&nbsp;</strong><strong>You&rsquo;re not done once you release your app.&nbsp; Stay aware and communicate with your users</strong></p> <p>Once your app is out there and available for download, stay involved with its security. Update security libraries, push updates out to users, and use user feedback to help you spot and fix vulnerabilities.</p> <p><strong>12.&nbsp;</strong><strong>If you&rsquo;re dealing with financial data, health data, or kids&rsquo; data, make sure you understand applicable standards and regulations</strong></p> <p>If your app deals with kids&rsquo; data, health data, or financial data, ensure you&rsquo;re complying with relevant rules and regulations, which are more complex. The FTC offers details on the regulations that your business needs to be aware of in the following guides:</p> <ul> <li> <a href="http://business.ftc.gov/privacy-and-security/children%E2%80%99s-privacy" title="Children's Privacy laws">Children&rsquo;s Privacy</a></li> <li> <a href="http://business.ftc.gov/privacy-and-security/gramm-leach-bliley-act" title="Gramm-Leach-Billey Act">Gramm-Leach-Bliley Act</a></li> <li> <a href="http://www.hhs.gov/ocr/privacy/hipaa/understanding/index.html" target="_blank" title="HIPAA Guidelines">Health Insurance Portability and Accountability Act (HIPAA) Security Rule</a></li> <li> <a href="http://business.ftc.gov/privacy-and-security/health-privacy" title="Health Breach Notification Rule">Health Breach Notification Rule</a></li> </ul> <p><strong>The Bottom Line: One Size Doesn&rsquo;t Fit All </strong></p> <p>There are no hard and fast rules for app security. The <a href="http://business.ftc.gov/documents/bus83-mobile-app-developers-start-security" title="FTC mobile app development guidelines">FTC clearly states</a> that it expects app developers to shoot for reasonable data security practices and doesn&rsquo;t prescribe a one-size-fits-all approach. For example, if you are developing a basic app such as an alarm clock or flashlight that collects little or no data, then this is going to raise fewer security considerations than a location-based social network or, let&rsquo;s say, a health-monitoring app. These apps may use remote servers to store user data, and as a developer you&rsquo;ll need to secure your app from end-to-end. This includes the software, as well as data transmission and servers.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/five-legal-issues-consider-when-developing-and-" title="5 Legal Issues to Consider when Developing and Marketing a Mobile App">Five Legal Issues to Consider when Developing and Marketing a Mobile App</a></li> <li> <a style="text-decoration: underline;">Does your Website or Online App Target Kids? Stricter COPPA Rules go into Effect Soon</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/developing-mobile-app-follow-these-12-tips-protecting-and-securing-user-data#comments http://www.sba.gov/crss/node/642221 Business Law Advisor Business Laws Marketing Starting Wed, 29 May 2013 10:51:47 +0000 Caron_Beesley 642221 at http://www.sba.gov 5 Tips for Hiring and Managing a Summer Intern http://www.sba.gov/community/blogs/5-tips-hiring-and-managing-summer-intern <p>Is your small business looking to hire an intern this summer? You&rsquo;re not alone! <a href="http://www.internships.com/eyeoftheintern/news/idc-news/internships-survey-2013-internship-trends/" title="Internships.com survey">According to a December 2012 survey by Internships.com</a>, 53 percent of the 300 companies surveyed plan to hire more interns in 2013 than they did in 2012.</p> <p>In fact, internships are becoming increasingly important to both students and business owners. The difficult economic climate means that new graduates face unprecedented challenges as they try to enter the job market. Internships give them a vital foot in the door and also provide employers with nurtured and eager talent to help them grow their business.</p> <p>Just look at the <a href="http://www.internships.com/eyeoftheintern/news/idc-news/internships-survey-2013-internship-trends/">data</a>:</p> <ul> <li> 47 percent of employers have a structured internship program</li> <li> 39 percent of small businesses made full time job offers to interns in 2012</li> <li> 85 percent of employers say hiring an intern was a positive experience</li> </ul> <p>If you want new ideas and the opportunity to nurture a potential future employee &ndash; at a low cost &ndash; read these five tips for hiring and managing an intern (within the law).</p> <p><strong>Assess your Needs</strong></p> <p>Interns will be looking for the right kind of experience, so it&rsquo;s important to evaluate your needs and create a job description that is appealing for both parties. Think about how an intern can help you achieve your business goals? Do you have enough work to support an intern? Who will supervise, train and mentor this individual? What about resources &ndash; like office space or a computer?</p> <p>Think about potential workload that you can hand-off in terms of short and long term assignments and be sure to plan well in advance (hiring takes time)!</p> <p><strong>Should you Offer a Paid or Un-Paid Internship?</strong></p> <p>Should you pay your interns? Interestingly, most students state that compensation is the least important factor when considering an internship. And according to Internships.com, one third of businesses surveyed chose not to pay their summer interns (choosing to offer college credits, company perks or travel stipends instead).</p> <p>If you want to attract right talent and take your investment seriously, then it&rsquo;s worth compensating your intern(s) appropriately. (The average hourly rate for a bachelor&rsquo;s degree-level intern is $16.21, according to the <a href="http://www.naceweb.org/uploadedFiles/NACEWeb/Research/Intern/Comp_Guide_2012.pdf" title="National Association of Colleges and Employers website">National Association of Colleges and Employers</a>.)</p> <p>Why not get an un-paid intern? Perhaps the biggest rationale for paying interns is that the <a href="http://www.dol.gov/whd/regs/compliance/whdfs71.htm" title="U.S. Department of Labor website">U.S. Department of Labor</a> puts limits on the work un-paid interns can perform under the Fair Labor Standards Act. For example, your business can&rsquo;t be seen to derive any benefit from the intern. Essentially, the following applies:</p> <ul> <li> <strong>Unpaid interns cannot do any work that contributes to a company&#39;s operations</strong>. This includes any tasks that help you run your business, like documenting inventory, filing papers, or answering emails.</li> <li> <strong>Unpaid interns can shadow other employees and perform duties that don&#39;t have a business need.&nbsp;</strong>For example, a bakery may allow an apprentice/intern to decorate a tray of cookies that will not be sold to customers. Because the task was only a training exercise for the apprentice/intern and the bakery did not receive any benefit from that work, the bakery would not have to pay that student worker for that time.</li> </ul> <p>For more information on what exactly unpaid interns can do, according to the Department of Labor, read <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/truth-behind-unpaid-internships" title="Blog about unpaid internships">The Truth Behind Unpaid Internships</a>. &nbsp;&nbsp;</p> <p>Clearly, a paid internship program will give both your business and your intern(s) more flexibility.</p> <p><strong>The Hiring Process</strong></p> <p>This process isn&rsquo;t a whole lot different than hiring a regular employee. You&rsquo;ll need to write a job description &ndash; be sure to state whether the internship is paid or un-paid, your objectives for the position, responsibilities and assignments of the job, and specific experience that the intern can expect to gain.</p> <p>Where should you look for interns? In addition to posting the opportunity to your website and online job boards, approach local colleges and schools and register with their career services office. Many of these candidates are screened and motivated. Another option is the Department of Labor&rsquo;s <a href="http://www.dol.gov/summerjobs/Employers.htm" title="Summer Jobs+ Bank website">Summer Jobs+ Bank</a>, a Presidential initiative designed to connect youth with employment and internship opportunities. <a href="http://www.dol.gov/summerjobs/Employers.htm" title="Summer Jobs+ Bank listing">Post your listing here</a>.&nbsp;</p> <p><strong>Managing Interns &ndash; Considerations to Remember as an Employer</strong></p> <p>Perhaps the most important thing to remember is that this is a learning experience for your intern, not a traditional &ldquo;summer job&rdquo;. &nbsp;Consider the following:</p> <ul> <li> <strong>Expose them to Real World Experiences and Tasks</strong> - There&rsquo;s no harm in giving your intern mundane, tactical tasks to complete, but be sure to mix it up and give them real business experience as well.&nbsp; &nbsp;Have your intern sit in on meetings and sales calls. Give them the opportunity to take a first stab at a project, guide and mentor them through it, don&rsquo;t be afraid to let go of the reins a little, and step in when you need to.</li> <li> <strong>Mentor </strong>&ndash; An intern is used to feedback (college tutors provide it all the time), so be prepared to coach and provide honest feedback about what they are doing well on a particular project and where there&rsquo;s room for improvement.</li> <li> <strong>Set Parameters and Guidelines </strong>&ndash; This may not be something you are used to doing with your regular employees, but expectations need to be set about appearance, business attire, work hours, and acceptable internet/social media use.</li> <li> <strong>Set Expectations Among Other Employees </strong>&ndash; If you choose to delegate mentoring to another employee, be sure that employee is aware of your expectations. Likewise, set expectations across your staff so that the intern doesn&rsquo;t find him or herself being taken advantage of or assigned tasks that are not within their job description.</li> </ul> <p><strong>Workplace and Labor Laws </strong></p> <p>Many of the labor laws that apply to employees, such as&nbsp;<a href="http://www.sba.gov/content/employment-discrimination-and-harassment" title="Link to information about workplace discrimination laws">workplace discrimination laws</a>, also apply to interns. You must also ensure you comply with workplace&nbsp;<a href="http://www.sba.gov/content/workplace-safety-health" title="Link to informatoin about workplace health and safety laws">health and safety laws</a>. Some states also require that you carry&nbsp;<a href="http://www.sba.gov/content/workers-compensation" title="Link to information about workers' compensation insurance">workers&rsquo; compensation insurance</a>&nbsp;for interns.&nbsp;&nbsp;</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.dol.gov/whd/regs/compliance/whdfs71.htm" title="Internship Programs and the Fair Labor Standards Law">Internship Programs Under The Fair Labor Standards Act</a> from the U.S. Department of Labor</li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/5-things-know-now-about-hiring-temporary-or-s" title="5 things to know about hiring temporary or seasonal workers">5 Things to Know Now about Hiring Temporary or Seasonal Workers</a></li> <li> <a href="http://www.sba.gov/community/blogs/which-employment-laws-apply-your-business-there%E2%80%99s-e-tool" title="Which employment laws apply to your business? There's a e-tool for that">Which Employment Laws Apply to Your Business? There&rsquo;s an E-Tool for That!</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/10-ways-your-small-business-may-be-breaking-emp" title="10 ways your small business may be breaking employment laws">10 Ways Your Small Business May Be Breaking Employment Laws</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/5-tips-hiring-and-managing-summer-intern#comments http://www.sba.gov/crss/node/624181 Business Law Advisor Business Laws Managing Mentoring and Training Wed, 15 May 2013 11:35:42 +0000 Caron_Beesley 624181 at http://www.sba.gov 7 Ways to Protect Your Small Business from Fraud and Cybercrime http://www.sba.gov/community/blogs/7-ways-protect-your-small-business-fraud-and-cybercrime <p>How secure are your small business assets from fraud, identity theft and cybercrime?</p> <p>According to the <a href="http://www.acfe.com/" title="ACFE website">Association of Certified Fraud Examiners (ACFE),</a> companies with less than 100 employees lose approximately $155,000 as a result of fraud each year. Small businesses also have a higher fraud rate than larger companies and non-business owners. One of the most frequent sources of fraud is credit card abuse &ndash; largely due to the fact that few business owners actually take the time to go through every line item on their bill or choose to mingle business and personal accounts.</p> <p>Other sources of fraud stem from an overall lack of security across the business &ndash; such as inadequate network and computer security and a lack of background checks when hiring employees.</p> <p>Don&rsquo;t be a victim! Here are some tips you can take to better protect your business from some common forms of fraud and cybercrime.</p> <p><strong>Protect Your Credit Cards and Bank Accounts</strong></p> <p>Since this is a common area of fraud for everyone from sole proprietors to employee-based firms, this one goes at the top of the list. Start by separating your personal banking and credit cards from your business accounts &ndash; this will ensure fraudsters don&rsquo;t get their hands on ALL your money. Separating your accounts will also make it easier to track your business expenses and report deductions on your tax return.</p> <p>Next, make sure you use your card wisely. Don&rsquo;t hand over your plastic or your card number to employees or companies with which you don&rsquo;t have a familiar relationship. Switch to online bill pay or make sure you store paper bills securely. Likewise, use a secure mailbox for receiving and sending bills. If you don&rsquo;t have one, deposit your mail directly at the post office (this goes for any mail that contains sensitive information &ndash; you don&rsquo;t want to leave it lying around in an unsecured mailbox).</p> <p>Lastly, be sure to check your online banking every day for suspicious activity.</p> <p><strong>Secure Your IT Infrastructure</strong></p> <p>Every business owner should invest in a firewall as well as anti-virus, malware and spyware detection software. Backing-up is also a must and will make it a lot easier for you to continue working in the event of a cyber attack. This blog offers more advice on what to look out for and digs deeper into your options: <a href="http://www.sba.gov/community/blogs/4-ways-safeguard-and-protect-your-small-business-data" title="Article about how to protect business data">4 Ways to Safeguard and Protect Your Small Business Data</a>.</p> <p><strong>Use a Dedicated Computer for Banking</strong></p> <p>This is a great idea from Forbes magazine&rsquo;s <a href="http://www.forbes.com/sites/capitalonespark/2012/12/17/5-ways-small-businesses-can-protect-against-cybercrime/" title="Article about how to protect your business from cybercrime">5 Ways Small Businesses Can Protect Against Cybercrime</a>.&nbsp; Use a dedicated computer for all your online financial transactions and, ideally, make sure it&rsquo;s one that isn&rsquo;t used for other online activity such as social media, email and web-surfing which can open up the machine to vulnerabilities. Avoid mobile banking if you can.</p> <p><strong>Have a Password Policy</strong></p> <p>Another easy step you can take to protect your IT systems is to institute a password policy.&nbsp;</p> <ul> <li> Make sure you and your employees change them regularly (every 60 to 90 days is good rule)</li> <li> Set rules that ensure passwords are complex (i.e. contain one upper case letter, one number and must be a minimum of eight characters)</li> <li> Use different passwords for different online and system accounts</li> </ul> <p><strong>Educate Your Staff </strong></p> <p>Employees are perhaps your biggest point of vulnerability when it comes to fraud, but they are also your first line of defense. Hold regular training sessions on basic security threats (online and off) and prevention measures &ndash; both for new hires and seasoned staff. Enforce the training by instituting policies that guide employees on the proper use and handling of company confidential information, including financial data, personnel and customer information.</p> <p>For ideas on what to include in your training, check out the resources offered by small business groups like your local Small Business Development Center or Women&rsquo;s Business Center (<a href="http://www.sba.gov/local-assistance" title="Directory of small business assistance in your area">find one near you here</a>), you could also look out for free online webinars from security organizations and businesses.</p> <p><strong>Consider Employee Background Checks</strong></p> <p>One of the first steps to preventing fraudulent employee behavior is to make the right hiring decision. Basic pre-employment background checks are a good business practice for any employer, especially for those employees who will be handling cash, high-value merchandise, or have access to sensitive customer or financial data. This blog offers tips on which background checks you can legally pursue and some tips for doing your own detective work: <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/conducting-employee-background-checks-%E2%80%93-why-do-" title="Article about conducting employee background checks">Conducting Employee Background Checks &ndash; Why Do It and What the Law Allows</a>.</p> <p><strong>Insure Your Business</strong></p> <p>Fraud and cybercrime does happen; however, you can still seek to cover your damages by purchasing an insurance policy that protects you against any losses that you may incur from crime or fraud. Likewise, find out what your bank is willing to do to help you out if your credit card or business account is compromised.</p> <p><em><strong>How do you protect your business against fraud and cybercrime? Leave a comment below!</strong></em></p> http://www.sba.gov/community/blogs/7-ways-protect-your-small-business-fraud-and-cybercrime#comments http://www.sba.gov/crss/node/611861 Business Law Advisor Business Laws Emergency Planning Managing Wed, 08 May 2013 10:57:08 +0000 Caron_Beesley 611861 at http://www.sba.gov Does Your Website or Online App Target Kids? Stricter COPPA Rules Go into Effect Soon http://www.sba.gov/community/blogs/does-your-website-or-online-app-target-kids-stricter-coppa-rules-go-effect-soon <p>Do you target children or a youth demographic online? Perhaps you&rsquo;ve developed or are marketing a mobile app that appeals to a youth market? If so, you should be aware of the <a href="http://business.ftc.gov/privacy-and-security/children%E2%80%99s-privacy" title="COPPA">Children&rsquo;s Online Privacy Protection Act (COPPA)</a> &ndash; a federal ruling enforced by the Federal Trade Commission (FTC) that gives parents control over what personal information websites can collect from children under the age of 13.</p> <p>The <a href="http://www.ftc.gov/opa/2012/12/coppa.shtm" title="COPPA Rule">COPPA Rule</a> recently underwent an important overhaul of which online marketers need to be aware. The revised rule (which goes into effect in July 2013) put additional protections in place and streamlines other procedures that companies covered by the rule must follow.</p> <p>If you run a website or mobile app designed for children or collect any kind of information from someone you know is under 13, here&rsquo;s what you need to know about the revisions to COPPA:</p> <p><strong>Key COPPA principles remain unchanged</strong></p> <p>Most of the <a href="http://business.ftc.gov/documents/bus45-how-comply-childrens-online-privacy-protection-rule" title="COPPA requirements">key requirements of COPPA</a> haven&rsquo;t changed. You must still give notice to parents and get their verifiable consent before collecting, using or disclosing personal information from children under 13. You must keep collected data secure and you can&rsquo;t request that a child disclose more information than is reasonably necessary in exchange for participation in an activity.</p> <p><strong>Expansion of who is covered by COPPA &ndash; Plug-Ins and advertising come under the spotlight</strong></p> <p>If you operate a child-directed website and you allow outside services&mdash;including plug-ins (like YouTube videos) or advertising networks&mdash;to collect personal information from visitors, you will be required to comply with COPPA. This means you will need to provide notice and get parental consent for any user that identifies themselves as under 13, before the third party can collect the child&rsquo;s information. In effect, as the site owner or operator, the FTC will now hold you liable for any personal information requests made by these third parties.</p> <p><a href="http://www.ftc.gov/opa/2012/12/coppa.shtm" title="FTC description requirements">According to the FTC</a>, this &ldquo;<em>close(s) a loophole that allowed kid-directed apps and websites to permit third parties to collect personal information from children through plug-ins without parental notice and consent.</em>&rdquo;</p> <p>In addition, plug-in or ad network operators who have actual knowledge that they are collecting personal information through a child-directed website or service must also comply with COPPA.</p> <p><strong>What constitutes personal information has changed </strong></p> <p>Under the new Rule, the types of personal information that cannot be collected from children under 13 (without parental consent) has expanded to include geolocation information, as well as photos, video and audio that contain a child&rsquo;s image.</p> <p>In addition, persistent identifiers (such as cookies, IP addresses and mobile IDs) that can be used to recognize a user over time and across different websites or online services are also now considered personal information and parental consent must be obtained before collecting this data. If, however, you use persistent identifiers solely to support the internal operations of your site or service, rather than for marketing purposes, parental consent is not required.</p> <p><strong>Certain information collection is now permitted in &ldquo;support for internal operations&rdquo; </strong></p> <p>COPPA now allows businesses to apply for formal approval to collect certain information if it is used in &ldquo;support for internal operations.&rdquo; Permitted activities include contextual advertising, frequency capping, site analysis and more. However, you can&rsquo;t use the information collected to contact a specific person through behavioral advertising or to amass a profile on that person for any other purpose &ndash; without parental consent.</p> <p><strong>Changes to how businesses get parental consent</strong></p> <p>COPPA has always required that parental consent must be requested via email or postal mail. The new Rule requires that key information (such as how the information will be used) is displayed up front in that notice so that parents can get the details they need quickly.</p> <p>The new Rule also offers more ways for businesses to get the &ldquo;OK&rdquo; from parents (for more details of what was previously acceptable read the Direct Notice to Parents section of the FTC&rsquo;s <a href="http://business.ftc.gov/documents/bus45-how-comply-childrens-online-privacy-protection-rule" title="How to Comply with COPPA">How to Comply with COPPA</a>). These include scans of parental consent forms, videoconferencing, use of a government-issued ID and more.</p> <p><strong>Stronger provisions to keep kids info secure and confidential</strong></p> <p>Before releasing information to service providers and third parties, site operators must take reasonable steps to make sure these companies are capable of maintaining the confidentiality, security and integrity of that information &ndash; with assurances that they&rsquo;ll follow through. In addition, you are now only allowed to retain kids&rsquo; personal information for as long as is reasonably necessary, and must ensure that it is disposed of securely.</p> <p><strong>Safe harbor programs to get more oversight</strong></p> <p>COPPA previously allowed industry groups to create self-regulatory programs that governed member-compliance with COPPA. The new Rule strengthens the FTC&rsquo;s oversight of these programs with new auditing capabilities.</p> <p><strong>More Information</strong></p> <p>For more information about all these changes, read the FTC&rsquo;s December, 2012 <a href="http://www.ftc.gov/opa/2012/12/coppa.shtm" title="COPPA press release">press release</a> and refer to the site&rsquo;s <a href="http://business.ftc.gov/privacy-and-security/children%E2%80%99s-privacy" title="Child Privacy Guide">Child Privacy Guide</a> for more tips and insights.</p> <p>It is highly recommended that you discuss any concerns you have about COPPA compliance with a lawyer. The new rules are complex and have consequences beyond the content that you create or originate on your business website of online service. In addition, you can also email your questions to <a href="mailto:CoppaHotLine@ftc.gov" title="COPPA hotline email address">CoppaHotLine@ftc.gov</a>.</p> <p>Check out these related articles too:</p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/marketing-children-where-line-and-who-enforces-" title="Marketing to Children bog post">Marketing to Children: Where is the Line and Who Enforces it?</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/five-legal-issues-consider-when-developing-and-" title="Mobile app and legal issues blog post">5 Legal Issues to Consider when Developing and Marketing a Mobile App</a></li> <li> <a href="http://www.sba.gov/community/blogs/7-considerations-crafting-online-privacy-policy" title="Online privacy policy blog post">7 Considerations for Crafting an Online Privacy Policy</a></li> </ul> <p>&nbsp;</p> http://www.sba.gov/community/blogs/does-your-website-or-online-app-target-kids-stricter-coppa-rules-go-effect-soon#comments http://www.sba.gov/crss/node/598901 Business Law Advisor Business Laws Managing Wed, 01 May 2013 11:56:46 +0000 Caron_Beesley 598901 at http://www.sba.gov Which is the Best State to Incorporate Your Brick and Mortar or Online Business? http://www.sba.gov/community/blogs/which-best-state-incorporate-your-brick-and-mortar-or-online-business <p>One of the most frequently asked questions by prospective business incorporation filers is, &ldquo;which state should I incorporate in?&rdquo;</p> <p>It&rsquo;s a good question and the answer isn&rsquo;t always clear cut. For example, you&rsquo;ve no doubt heard about the perceived tax and operational advantages of incorporating in states such as Nevada (with its low filing fees and zero state corporate income, franchise and personal income taxes) and Delaware (with its flexible and pro-business statutes).&nbsp; But do these advantages really come into play for small business owners? Do you really want to tie your small business up legally with a state other than your own? What if your business operates largely online with customers in many states?</p> <p>Here&rsquo;s what you need to know about choosing a state in which to incorporate.</p> <p><strong>Why Incorporating in Your Home State May Be the Best Option</strong></p> <p>If you operate a small business and anticipate having less than five shareholders or members of your incorporated business, then it&rsquo;s widely considered the best strategy to incorporate in the state where you have a physical presence (property, shareholders, employees) &ndash; and for most small businesses, this is in their home state.</p> <p>Why? Even with the benefits of incorporating in states such as Nevada and Delaware, the hassles often outweigh the benefits.</p> <p>Consider the following:</p> <ul> <li> <strong>Even if you incorporate in tax-friendly Nevada</strong>, if you are operating or doing business in your home state, you&rsquo;ll still have to pay business taxes on revenue that originates in that home state.</li> <li> <strong>If you don&rsquo;t have a physical address in the state in which you incorporate</strong>, you&rsquo;ll need to hire and pay a registered agent in that state to act as your legal representative.&nbsp;</li> <li> <strong>If you are incorporated outside your home state, you&rsquo;ll need to file for a <a href="http://www.score.org/resources/foreign-qualification-doing-business-other-states" title="Information about foreign qualification">foreign qualification</a> in both your home state </strong>(if you wish to do business there) and in the state in which you are incorporated. This means double-duty paperwork, filing fees, taxes, and even penalties if you inadvertently skip this important step. You may even have an increased tax liability in your home state because you are registered as a foreign entity there. You are also subject to the same annual reporting requirements in both states.</li> <li> <strong>If you register out of state, you&rsquo;ll be subject to the laws of that foreign state of corporation.</strong> These laws may differ from those of your own state (and state laws can vary significantly in many areas). This can have complicated ramifications and may require your presence in court in your registered state, if you run into even the simplest of legal disputes.</li> <li> <strong>As a &ldquo;foreign&rdquo; business, you may also encounter difficulties opening a business bank account</strong> in either or both the states in which you are incorporated in and physically located.</li> </ul> <p>Unless you intend to transact business in states like Nevada or Delaware, filing in these states has very few long-term advantages.&nbsp; Yes, the tax laws and ease of doing business may be appealing at first, but peel back the onion and you&rsquo;ll find that, in the long run, it is more economical and time-saving for small businesses to pursue home-state incorporation.</p> <p><strong>Where Should You Incorporate an Online Business?</strong></p> <p>Choosing a state in which to incorporate your online business involves pretty much the same steps as a brick and mortar business. For example, if you intend to market and sell to a relatively local market, then filing in your home state will make the most sense.</p> <p>However, it&rsquo;s important to get legal advice and weigh the pros and cons. Many small online businesses choose to incorporate in their home state because that&rsquo;s where they have a physical presence (such as a home-based business) and it&rsquo;s also often where most of their employees are situated, regardless of where their customer base is.</p> <p>If your online business grows and you open a physical location in another state, you&rsquo;ll need to apply for a <a href="http://www.score.org/resources/foreign-qualification-doing-business-other-states">foreign qualification</a> in each state in which you are doing business (including your original home state). Foreign qualification is technically a form of incorporation, and your company will be responsible for the associated fees and laws in that state. As a rule of thumb, if your business meets any of the following criteria in a state other than your home state, then you should check with the state government and/or a lawyer to find out about applying for a foreign qualification:&nbsp;</p> <ul> <li> Your business has a physical presence in the state</li> <li> Your business has employees in the state</li> <li> Your business accepts orders in the state</li> <li> Your business has a bank account in the state</li> </ul> <p><strong><em>Disclaimer</em></strong>: The information in this blog doesn&rsquo;t constitute legal advice. Always consult a lawyer to find the incorporation option that best suits your needs.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru" title="Business Structure Guide">SBA &ldquo;Choose your Business Structure&rdquo; Guide</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/top-10-questions-about-small-business-incorpora" title="10 Questions about Small Business incorporation">Top 10 Questions About Small Business Incorporation Answered</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/sole-proprietorship%E2%80%94-popular-business-structure" title="Is Sole Proprietorship Right for You?">Sole Proprietorship&mdash;Is this Popular Business Structure Right for You?</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/legal-steps-involved-moving-your-business-new-s" title="Legal Steps Involved in Moving your Business to Another State">The Legal Steps Involved in Moving Your Business to a New State &ndash; FAQs Answered</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/which-best-state-incorporate-your-brick-and-mortar-or-online-business#comments http://www.sba.gov/crss/node/575901 Business Law Advisor Business Laws Managing Starting Wed, 17 Apr 2013 11:16:37 +0000 Caron_Beesley 575901 at http://www.sba.gov 6 Legal Factors to Consider When Hiring Global Employees http://www.sba.gov/community/blogs/6-legal-factors-consider-when-hiring-global-employees <p>Are you thinking of hiring overseas-based employees? Whether you are operating an overseas branch of your own business or looking for specific skill sets that aren&rsquo;t readily available here at home &ndash; there can be benefits to hiring overseas employees, but there are also challenges.</p> <p>How do you make sure your staff turns up for work on time? How do you hold them accountable and keep them motivated? What about communication across different languages, cultures and time zones? These are all concerns and challenges that many business owners have faced and their suggestions for tackling them are discussed in this guide from The New York Times: <a href="http://www.nytimes.com/2012/09/06/business/smallbusiness/running-a-business-with-employees-around-the-world.html?ref=smallbusinessguides&amp;_r=1&amp;" title="Link to New York Times article">Running a Business With Staff Scattered Around the World</a>.</p> <p>But what about the legal and regulatory side of managing employees in other countries? Labor laws will likely differ from those in the U.S., so it&rsquo;s important to understand those laws before you make your first overseas hire. For example, U.S. <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-fire-employee-and-stay-within-law" title="Information about &quot;at-will&quot; employment laws">&ldquo;at-will&rdquo; employment laws</a> don&rsquo;t apply overseas. Most countries demand that employers have a concrete reason to fire someone (whereas most U.S. states permit employers to terminate any employee at any time, for any reason, or for no reason at all).</p> <p>What other factors of foreign labor law should you consider?</p> <p>Ben Macaluso, writing for the <a href="http://www.bizjournals.com/denver/print-edition/2012/03/02/be-mindful-of-foreign-laws-governing.html?page=all" title="Link to Denver Business Journal">Denver Business Journal,&nbsp;</a>suggests that U.S. employers watch out for the following:</p> <ul> <li> <strong>Time Off Laws</strong> &ndash; Foreign companies, most notably Europe and Australia, are very generous in their vacation, sick and maternity leave policies. Certain countries also extend leave policies to encompass other activities such as building homes or career development.</li> <li> <strong>The Power of Unions </strong>&ndash; Unions carry a lot of weight overseas and employee benefits and work conditions are strongly controlled by these. For example, you might not be able to change existing policy or conditions without union approval.</li> <li> <strong>Non</strong>-<strong>Compete Agreements</strong> &ndash; Many U.S. businesses write non-compete agreements into employee contracts. Foreign countries generally prohibit these.</li> <li> <strong>Notice </strong>&ndash; How much notice you are required to give in the event of a lay off or firing also varies overseas.</li> </ul> <p>Some U.S. laws also apply when it comes to hiring employees in other countries, for example:</p> <ul> <li> <strong>Bribes</strong> &ndash; U.S. federal law prohibits corruption in the form of payments to foreign officials for business favors.</li> <li> <strong>Employee Privacy </strong>&ndash; Other countries may have strict laws that govern what employee information you can share publicly (even apparently harmless records such as an employee directory could run the risk of violating privacy laws).</li> </ul> <p>To ensure you are complying with local labor and tax laws, consult in-country experts who are familiar with business and regulatory matters in the country you intend to base employees out of.</p> <p><strong>Additional Resources</strong></p> <ul> <li> <a>Buying a Small Business Overseas &ndash; 5 Tips for a Smooth Transaction</a></li> </ul> <div> &nbsp;</div> <p>&nbsp;</p> http://www.sba.gov/community/blogs/6-legal-factors-consider-when-hiring-global-employees#comments http://www.sba.gov/crss/node/556531 Business Law Advisor International Managing Wed, 03 Apr 2013 11:47:33 +0000 Caron_Beesley 556531 at http://www.sba.gov 5 Tips for Ensuring Your Blog Doesn’t Get You into Legal Trouble http://www.sba.gov/community/blogs/5-tips-ensuring-your-blog-doesn%E2%80%99t-get-you-legal-trouble <p>More and more small companies are using blogging to promote their business. In fact, in 2012, &ldquo;small business&rdquo; was one of the fastest growing categories in Technorati, a global blog search engine, with 20 percent growth that year alone (source: <a href="http://technorati.com/business/article/small-business-blogging-proved-effective-for/" title="Small Business Blogging Proved Effective for the Year 2012">Small Business Blogging Proved Effective for the Year 2012</a> by Rahul Manekari).</p> <p>Why? Blogs are a great tool for connecting with your customers and sharing your expertise. They also improve your company&rsquo;s search engine rankings. Search engines love fresh, relevant and local content&mdash;and blogs deliver on this need.</p> <p>While you&rsquo;re busy wondering what you should be writing about (the articles at the end of this blog offer tips on that), it&rsquo;s important to assess any potential legal risks you might be taking. Think about it: many bloggers combine original content that they&rsquo;ve written with quotes, references and even ideas from other bloggers. But at what point does this become plagiarism or an infringement of copyright? Likewise, if you&rsquo;re planning on showcasing customer quotes or testimonials in your blogs, is this even legal?</p> <p>Here are five tips for ensuring you stay out of legal trouble as you write your business blog!</p> <p><strong>Don&rsquo;t Get Slammed for Copyright Infringement</strong></p> <p>Copyright infringement is the number one reason that bloggers get into trouble. Never copy or paste the content of others, whether it&rsquo;s words, images, video or music, unless you have written permission to do so. For a deeper dive into this topic (in plain English) read: <a href="http://www.sba.gov/community/blogs/can-you-use-or-reproduce-work-others-your-website-or-blog" title="Can you Use or Reproduce the Work of Others on your Website or Blog">Can You Use or Reproduce the Work of Others on Your Website or Blog?</a></p> <p>If you do reference the work or opinion of others, give them credit (you can see an example in the opening paragraph of this blog).</p> <p><strong>Don&rsquo;t Bash the Competition</strong></p> <p>Blogging is about building community and trust, and helping customers feel good about doing business with you. It&rsquo;s not a vehicle for bashing the competition, price comparisons, or other marketing tactics. Blog writing lends itself to a conversational voice, so slamming the completion can often come across as &ldquo;catty&rdquo; and unprofessional. That&rsquo;s not to say you can&rsquo;t talk about your products or business in the context of the competition, but focus on how you are different (how your products are made, how people use them, or how to get more out of them)&mdash;not how bad/poor/expensive the competitive marketplace is.&nbsp;</p> <p><strong>Be Careful When Mentioning Customers by Name</strong></p> <p>A great way to differentiate yourself is to have customers share their experiences of doing business with you. A nice quote or interview with a satisfied customer would make for a great blog topic. But wait, did you know you must have written permission from a customer before you can use their name or endorsement? The Federal Trade Commission enforces <a href="http://business.ftc.gov/advertising-and-marketing/endorsements">regulations that govern how customer endorsements are used in marketing materials</a>. For a few quick pointers on how to abide by these regulations, plus tips on using customer testimonials in your marketing materials or blogs read:&nbsp; <a href="http://blog.score.org/2012/sba/great-service-will-use-again-how-to-use-customer-testimonials-to-market-your-business/" title="How to Use Testimonials to Market your Business">&ldquo;Great Service, Will Use Again&rdquo;: How to Use Customer Testimonials to Market Your Business.</a></p> <p><strong>Be Truthful About Any Claims You Make About Your Business</strong></p> <p>The FTC has clear guidelines on what constitutes &ldquo;truth in advertising&rdquo; or &ldquo;misleading claims&rdquo;. So be sure that any claims you make about your business or its products and services are correct and can be backed up. This is especially true if you are sharing blogging duty with other employees. If you&rsquo;re not sure when you might be crossing the line in praise of your products, check out the rules.&nbsp; More info here: <a href="http://www.sba.gov/community/blogs/how-lawful-are-your-small-business%E2%80%99-advertising-claims-%E2%80%93-tips-getting-it-right" title="How Lawful are your Small Business' Advertising Claims">How Lawful Are Your Small Business&rsquo; Advertising Claims? &ndash; Tips for Getting it Right</a>.</p> <p><strong>Understand Third Party Blog Terms of Service</strong></p> <p>If you use a third party blog tool to host your blog, familiarize yourself with its terms of service. For example, who has intellectual property rights for the content you post and what procedures are in place if you believe your intellectual property has been violated? How can that third party use that content? Many blogging sites have terms of service that grant that party a license to host, store, reproduce, modify, publicly display and distribute your content. If this is of concern, then you may want to consider hosting your blog on your own website.</p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/thinking-starting-blog-tips-help-you-start--0" title="Tips to Help you Start and Maintain a Business Blog">Thinking of Starting a Blog? Tips to Help You Start, Maintain &amp; Grow a Small Business Blog!</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/8-tips-keeping-your-business-blog-current-rel" title="8 Tips for Keeping your Business Blog Current, Relevant and Fresh">8 Tips for Keeping your Business Blog, Current, Relevant and Fresh</a></li> <li> <a href="http://www.sba.gov/community/blogs/give-your-blog-boost-%E2%80%93-how-find-and-work-with-guest-bloggers" title="How to Find and Work with Guest Bloggers">Give Your Blog a Boost &ndash; How to Find and Work with Guest Bloggers</a></li> <li> <a href="http://www.sba.gov/community/blogs/how-get-more-tweets-likes-and-other-shares-your-blog-posts" title="How to Get More Tweets, Likes and Shares on your Blog Posts">How to Get More Tweets, Likes and Other Shares on Your Blog Posts</a></li> <li> <a href="http://www.sba.gov/community/blogs/never-run-out-blog-topic-ideas-here-are-36" title="Never Run out of Blog Ideas - Here are 36">Never Run Out of Blog Topic Ideas: Here are 36</a></li> <li> <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/10-often-overlooked-ways-get-traffic-your-blog" title="10 Often Overlooked Ways to Get Traffic to Your Blog">10 Often Overlooked Ways to Get Traffic to Your Blog</a></li> </ul> <p>&nbsp;</p> http://www.sba.gov/community/blogs/5-tips-ensuring-your-blog-doesn%E2%80%99t-get-you-legal-trouble#comments http://www.sba.gov/crss/node/533661 Business Law Advisor Business Laws Marketing Wed, 13 Mar 2013 11:28:59 +0000 Caron_Beesley 533661 at http://www.sba.gov How Minimum Advertised Pricing Impacts Your Retail or Online Store’s Marketing Efforts http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-minimum-advertised-pricing-impacts-your-ret <p>If you run an online or retail business, did you know that you might be prohibited from advertising a manufacturer&rsquo;s products below a certain minimum price?</p> <p>Minimum advertised pricing (MAP) policies are particularly critical to manufacturers who sell their products for online resale, given the ease at which consumers can now conduct online and mobile price comparisons. MAP policies are also established to help small businesses compete and sell on service and value, rather than entering into a price war with cost-cutting big box stores.</p> <p>But how legally enforceable are these minimum advertised pricing policies and, as a small business owner, is there a way to get around them in your sales and marketing practices?</p> <p><strong>The Truth About Minimum Advertised Pricing</strong></p> <p>Minimum advertised pricing only relates to &ldquo;advertised&rdquo; pricing and is perfectly legal under U.S. antitrust statutes. So, essentially, you are limited to advertising MAP-protected products at a certain price, but you can sell these products at any price you choose (often guided by the Manufacturer&rsquo;s Suggested Retail Price or MSRP).</p> <p><strong>What Does this Mean for Online Businesses?</strong></p> <p>Under typical MAP agreements, online retailers can&rsquo;t &ldquo;display&rdquo; any prices that fall below the MAP price. But which part of an online store actually represents advertising display space has caused quite a bit of controversy. For example, say a product is listed on a site for $10. Once a coupon code or other incentive is applied, the actual shopping cart price could come down to $8. Is that still considered &ldquo;advertising&rdquo; since a transaction technically hasn&rsquo;t yet occurred, or is it a commitment to buy and outside the scope of a MAP agreement?</p> <p>The difference between an advertised price and an actual price that you may be charged has come under scrutiny by U.S. Circuit Courts and FTC rulings, which tend to agree that an actual price displayed in a secure/encrypted shopping cart isn&rsquo;t subject to MAP &ndash; because it&rsquo;s technically not advertising space, but represents an actual storefront. So in an online world, an actual price may legally end up being a lot lower than the MAP-required advertised price.</p> <p>In fact, manufacturers are often advised to focus their MAP policies on advertised prices in paid search ads, shopping comparison ads, and internet landing pages but not in shopping carts or other point of sale interfaces.</p> <p><strong>Look for Alternative Ways to Discount</strong></p> <p>While it&rsquo;s not always advisable to lead with price in your marketing efforts, look for other ways to attract customers without breaking any MAP agreements. For example, many manufacturers are okay with your offering free shipping, coupon codes, or a &ldquo;buy-one-get-one at a discount,&rdquo; if MAP doesn&rsquo;t protect that other item. Essentially, as long as the dollar value of the MAP-protected product isn&rsquo;t reduced, then you are okay. Be careful with coupon codes. It&rsquo;s safer to advertise the coupon&mdash;not the product that it can be applied against&mdash;so as not to imply that you are advertising the MAP item at a reduced price. Instead, be clear about what items are excluded from any coupon code promotion.</p> <p><strong>The Bottom Line</strong></p> <p>If you are unsure about how your online advertising and marketing practices may border on breaking any MAP agreement you have with a manufacturer, talk to them or consult a legal attorney. Manufacturers do monitor their dealers for potential violations and the law is constantly in flux on this one, so do your due diligence.</p> <p>For more information about the legality of MAP policies, check out the <a href="http://www.ftc.gov/bc/antitrust/manufacturer_requirements.shtm" title="FTC Guide to Antitrust Laws">Federal Trade Commission Guide to Antitrust Laws</a>.</p> <p> &nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-minimum-advertised-pricing-impacts-your-ret#comments http://www.sba.gov/crss/node/520531 Business Law Advisor Business Laws Marketing Wed, 06 Mar 2013 12:37:11 +0000 Caron_Beesley 520531 at http://www.sba.gov Sole Proprietorship—Is this Popular Business Structure Right for You? http://www.sba.gov/community/blogs/sole-proprietorship%E2%80%94-popular-business-structure-right-you <p>If you&rsquo;re starting a business, you may be wondering how to legally structure it. Should you incorporate, become an LLC, or operate as a sole proprietor?</p> <p>Over 70 percent of U.S. businesses are owned and operated by sole proprietors or sole traders.</p> <p>But what does being a sole proprietor involve and is it the right structure for your small business? Here&rsquo;s what you need to know about the advantages and disadvantages of being a sole proprietor.</p> <p><strong>What is a Sole Proprietor?</strong></p> <p>A sole proprietorship is basically an unincorporated business owned and run by one individual (no partners are involved), with no distinction between the business and its owner. As a sole proprietor, you are entitled to all profits and are responsible for all your business&rsquo;s debts, losses and liabilities.</p> <p>A sole proprietorship is the easiest business structure to form (you only need to <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/obtain-business-licenses-" title="licenses and permits">get a license or permit</a> and <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-register-your-busi" title="business registration">register your business with your local government</a>) (hence its popularity). It is also a simple structure to maintain with few forms and little business administration needed. Many freelancers, consultants and independent contractors operate as sole proprietors for ease and convenience.</p> <p>SBA&rsquo;s <a href="http://www.sba.gov/content/sole-proprietorship-0" title="Sole Proprietor Guide">Sole Proprietor Guide</a> offers more details about the process of starting a business as a sole proprietor and the steps you&rsquo;ll need to follow.</p> <p><strong>What Are the Advantages of Being a Sole Proprietor?</strong></p> <p>As mentioned above, the ease of starting and operating a sole proprietorship is one of the reasons this business structure is hugely popular. Also, sole proprietors are relatively unencumbered by government regulations and can run their business autonomously without the need to report to partners, shareholders and board members. You control all your own decisions and the money you make.</p> <p>Sole proprietors have the benefit of reporting tax on any income earned through their own personal tax return, rather than filing separately as a business &ndash; which can save time and hassle. You also won&rsquo;t need to prepare a balance sheet for your company.</p> <p>Sole proprietors also have a lot of flexibility when it comes to their careers. You can easily close your business without too much bureaucracy, or work on a full or part-time basis for another employer without worrying about answering to anyone about your own business affairs (aside from your clients, of course) &ndash; another reason this is a popular option for freelancers, many of whom hold down two jobs!</p> <p><strong>What About the Disadvantages?</strong></p> <p>One of the reasons many new business owners seek to incorporate instead of being a sole proprietor is the liability issue.</p> <p>You may not think now that you need protection against liability, but what if a client holds you in breach of contract or threatens to sue you? Can you afford to put your personal assets at risk to satisfy any claims against your business? As a sole proprietor, there is no legal distinction between the owner and the business. This means that you are personally liable for all business losses and debts. Business incorporation can limit your liability as a business owner, essentially putting your personal assets off limits if anyone brings a judgment against you. So sole proprietors are inherently exposed to risk that incorporating as a <a href="http://www.sba.gov/content/corporation" title="corporation">corporation</a> or <a href="http://www.sba.gov/content/limited-liability-company-llc" title="limited liability company">limited liability company</a> can help alleviate.&nbsp;</p> <p>Other disadvantages can potentially impact your bottom line and growth plans. For example, banks typically require that businesses incorporate before they&rsquo;ll lend them money, leaving you to rely on savings, credit cards and other sources of capital. Then there&rsquo;s the perception issue &ndash; being an incorporated business can give you a more professional appearance to potential clients.</p> <p>Finally, because you aren&rsquo;t required to produce financial statements or a balance sheet, your financial controls might not be as sharp as the need to be and this could be detrimental in the long term.</p> <p><strong>The Bottom Line</strong></p> <p>If you are starting a business, operating it as a sole proprietor can afford many benefits:</p> <ul> <li> <strong>Ease of start-up </strong>(from an administrative perspective)</li> <li> <strong>Lower start-up costs</strong> (incorporation involves forms, fees and sometimes legal advice)</li> <li> <strong>Quicker and simpler tax preparation</strong></li> <li> <strong>Autonomy of business decisions and control of profits</strong></li> </ul> <p>Then again, it&rsquo;s important to consider the downsides.</p> <ul> <li> <strong>Liability</strong> &ndash; If you run a business that could expose you to risk in the form of debt or lawsuits (e.g., industries such as a child care or a food service business), then operating as a sole proprietor could leave your personal assets vulnerable.</li> <li> <strong>Raising capital can be hard</strong></li> <li> <strong>Lack of financial controls </strong></li> <li> <strong>Lack of professionalism</strong></li> </ul> <p>If you still have questions, there are a number of counseling resources in your community that can help, including Small Business Development Centers. <a href="http://www.sba.gov/local-assistance" title="Small Business Development Centers">Find them here</a>.</p> <p><strong>Additional Resources</strong></p> <p>For a complete guide to your available business structure options and how to set them up refer to SBA&rsquo;s <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru" title="business structures">Choosing a Business Structure</a> guide.</p> <p>If you think incorporation might be right for your small business, check out this recent blog: <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/top-10-questions-about-small-business-incorpora" title="business incorporation">Top 10 Questions about Small Business Incorporation Answered</a>.</p> http://www.sba.gov/community/blogs/sole-proprietorship%E2%80%94-popular-business-structure-right-you#comments http://www.sba.gov/crss/node/504991 Business Law Advisor Business Laws Starting Wed, 27 Feb 2013 16:16:00 +0000 Caron_Beesley 504991 at http://www.sba.gov Selling into the U.S. as a Foreign Business: Should You Incorporate Your Business Here? http://www.sba.gov/community/blogs/selling-us-foreign-business-should-you-incorporate-your-business-here <p>Do you run an overseas business? Thinking of expanding and selling into the U.S. market?</p> <p>Because U.S. residency or citizenship is not required, non-U.S. citizens can readily sell into the U.S. However, many overseas business owners aren&rsquo;t clear on whether they are required to incorporate in the U.S. and the associated tax implications.</p> <p>Here&rsquo;s what you need to know:</p> <p><strong>Should I Incorporate My Business in the U.S.?</strong></p> <p>This is a question that comes up frequently on the <a href="http://www.sba.gov/community/discussion-boards" title="SBA Community Discussion Boards">SBA Community Discussion Boards</a> and there&rsquo;s not a clear cut answer for all businesses.</p> <p>Essentially, if your intent is to sell goods into the U.S.&mdash;whether online or through U.S. partners such as a wholesaler&mdash;you may not have to file for incorporation in the U.S. However, if you plan to have a physical presence in the U.S. (such as an office or employees), then incorporation, whether as a <a href="http://www.sba.gov/content/corporation" title="Information about setting up a corporation">corporation</a> or <a href="http://www.sba.gov/content/limited-liability-company-llc" title="Information about setting up a limited liability corporation">limited liability corporation</a> (LLC), is worth considering. Likewise, for online businesses in particular, remember that many U.S. consumers feel more confident buying from a registered U.S. business, so that&rsquo;s another important factor to weigh up.</p> <p>Each business is different and it&rsquo;s important to look at incorporation in the context of your overall business goals, state incorporation laws, taxation considerations, as well as your ability to scale and manage that legal entity from overseas.</p> <p>To understand the factors that might impact your decision, book some time with a good U.S. business attorney who understands both international and U.S. law.</p> <p><strong>How to Incorporate a Foreign Business in the U.S.</strong></p> <p>Once you&rsquo;ve made the decision to incorporate, you&rsquo;ll need to understand the process.</p> <p>In the U.S., business incorporation occurs at the state level for all business owners, regardless of whether you are a citizen or a foreign national.</p> <p>The process will vary from state-to-state, but generally involves two steps: applying to register in that particular state, and establishing a registered agent with a valid address in that state (no P.O. Box numbers). A registered agent can be either the business owner or another person who is authorized to receive legal papers on behalf of the business, such as an attorney or secretary.</p> <p><strong>What Business Structure Should I Choose?</strong></p> <p>The most popular choice of business structure for non-U.S. citizens is to form an <a href="http://www.sba.gov/content/limited-liability-company-llc" title="How to form an LLC">LLC</a>, although you can also legally form and own shares in a <a href="http://www.sba.gov/content/corporation" title="How to form a C corporation">C corporation</a>. Non-U.S. citizens cannot retain shares in an <a href="http://www.sba.gov/content/s-corporation" title="How to form an S corporation">S corporation</a> because business income is reported on personal U.S. income tax returns.</p> <p>To learn more about choosing the right business structure and how to file for incorporation, check out SBA&rsquo;s <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru" title="Choose your business structure guide">Choose your Business Structure</a> guide. This blog offers more insight: <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/top-10-questions-about-small-business-incorpora" title="Top 10 questions about small business incorporation answered">Top 10 Questions About Small Business Incorporation Answered</a>.</p> <p><strong>Which State Should I Incorporate In?</strong></p> <p>If most of your clients are concentrated in a specific state or you have an office or physical presence in a state, it may make sense to incorporate there. If you don&rsquo;t plan on having a physical presence in the U.S., you can form a corporation or LLC in states such as Nevada and Delaware, both of which are considered friendly to foreign companies.</p> <p>If you operate in more than one state, you can elect to incorporate in any of these states. However, you are required to register your business in the other states in which you operate; this process is called foreign qualification and you can apply for it with the help of a lawyer or online incorporation service. Again, for the best advice, consult a U.S. business attorney who has expertise in both U.S. and international law.</p> <p><strong>Do I Need to Pay U.S. Taxes?</strong></p> <p>If you are a non-resident business owner, the U.S. Internal Revenue Service (IRS) will tax you on income that is sourced in the U.S. If your business is incorporated in the U.S., you may also be required to pay an annual fee to the state where your business is incorporated.</p> <p>The IRS offers a guide specifically on&nbsp;<a href="http://www.irs.gov/businesses/index.html?navmenu=menu1" target="_blank" title="IRS guide to international business">International Business,</a>&nbsp;but if you are still left with more questions, it is always good to check with a qualified attorney or accountant.</p> <p>U.S. citizens will likely need an Employment Identification Number to start up, a process that requires their social security number (SSN). In the case of foreign businesses, an&nbsp;<a href="http://www.irs.gov/individuals/article/0,,id=96287,00.html#what" target="_blank" title="IRS information about Individual Tax Identification Numbers">Individual Taxpayer Identification Number&nbsp;</a>(ITIN) will suffice. The IRS issues these 9-digit tax processing numbers to individuals who are required to pay US taxes but who are ineligible for a SSN, including resident and non-resident aliens and foreign nationals.</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/selling-us-foreign-business-should-you-incorporate-your-business-here#comments http://www.sba.gov/crss/node/465931 Business Law Advisor Business Laws International Managing Starting Taxes Wed, 06 Feb 2013 11:36:53 +0000 Caron_Beesley 465931 at http://www.sba.gov Meal and Rest Breaks – What Small Business Employers Need to Know http://www.sba.gov/community/blogs/meal-and-rest-breaks-%E2%80%93-what-small-business-employers-need-know <p>Should you pay employees for rest and meal breaks? Are you even required to offer such breaks?</p> <p>We all need rest and meals during work hours and the law stipulates standards for these breaks, including whether your employees should be paid for them. Here&rsquo;s what you need to know:</p> <p><strong>Federal Wage and Hour Laws</strong></p> <p>Under the <a href="http://www.dol.gov/whd/flsa/index.htm#.UNCBNG9gEbg" title="Fair Labor Standards Act">Fair Labor Standards Act</a> of the <a href="http://www.dol.gov/whd/regs/compliance/whdfs22.htm#.UNB_q29gEbg" title="U.S. Department of Labor">U.S. Department of Labor</a>, non-exempt employees can take short breaks (although it&rsquo;s not mandatory). A short break is typically considered to be 20 minutes or less, and employees must be paid for these as hours worked. When it comes to meal breaks, anything more than 30 minutes <u>does not</u> generally need to be compensated as work time (although again, meal breaks aren&rsquo;t required under federal law). But here&rsquo;s the caveat &ndash; if your employee does any kind of work during that meal break, such as answering email or taking a business phone call, then you must pay them for that break.</p> <p>Bathroom breaks, which are required under the Occupational Safety and Health Administration, are excluded from the definition of rest breaks.</p> <p>To avoid any legal hassles, be sure you communicate your break policy to employees. For example, employers have been known to come under the spotlight for permitting certain workers to take frequent (paid) cigarette breaks, while other employees do not. If employees are taking unauthorized breaks, or unauthorized extensions of authorized breaks, you are not required to count the unauthorized time as hours worked (so long as the terms of what is authorized/unauthorized have been expressly communicated to employees).</p> <p><strong>State Wage and Hour Laws</strong></p> <p>Even though meal and rest breaks aren&rsquo;t required under federal law, some states do impose mandatory breaks for employees in specific industries after a certain amount of hours worked. For example, in California, a meal break must be provided no later than the end of the employee&rsquo;s fifth hour of work. So giving employees the option of skipping lunch to get out of work early is breaking the law.</p> <p>Generally, state laws stipulate a 30-minute paid meal break. For laws in your state, check this consolidated breakdown of <a href="http://www.dol.gov/whd/state/meal.htm" title="Department of Labor information on state meal break laws">state meal break requirements</a> and <a href="http://www.dol.gov/whd/state/rest.htm#.UNCITG9gEbg" title="Department of Labor information on state rest break laws">rest break laws</a> from the Department of Labor. You can also refer to your individual <a href="http://www.dol.gov/whd/contacts/state_of.htm#.UNCIom9gEbg" title="Directory of state labor offices online">state labor office</a>.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/content/employment-and-labor-law" title="SBA Small Business Employment and Labor Law Guide">SBA Small Business Employment and Labor Law Guide</a></li> </ul> <p><strong>Related Blogs</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/10-ways-your-small-business-may-be-breaking-emp" title="Blog about common ways that small businesses break the law without knowing">10 Ways Your Small Business May Be Breaking Employment Laws</a></li> <li> <a href="http://www.sba.gov/community/blogs/are-your-employees-working-overtime-during-holidays-understand-overtime-wage-law" title="Blog about overtime laws">Do your Employees Work Overtime? Understanding Wage Laws</a></li> </ul> http://www.sba.gov/community/blogs/meal-and-rest-breaks-%E2%80%93-what-small-business-employers-need-know#comments http://www.sba.gov/crss/node/440421 Business Law Advisor Business Laws Managing Starting Wed, 23 Jan 2013 12:32:54 +0000 Caron_Beesley 440421 at http://www.sba.gov How to Craft a Social Media Policy for Your Small Business http://www.sba.gov/community/blogs/how-craft-social-media-policy-your-small-business <p>If your business interacts with consumers via email or on the web, then it&rsquo;s likely that you have an <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/7-considerations-crafting-online-privacy-policy">online privacy policy</a> that governs how you collect, use and store consumer information. But do you have policies or guidelines that govern how your business uses social media to engage and interact with your followers?</p> <p>Social media opens up new avenues for communication and engagement with consumers, but it also brings with it an element of risk. For example, perhaps your employees have access to social media at work, or are posting on behalf of your business. How can you be sure they aren&rsquo;t releasing confidential company information, slamming the competition, or breaking copyright by posting images or user-generated content without permission?</p> <p>Blogging also falls under the social media umbrella and is one of the Internet&rsquo;s biggest sources of copyright abuse. Blogging is also subject to certain product endorsement laws that you should be aware of.</p> <p>Crafting a social media policy or code of conduct can help protect your business and your employees.&nbsp; Here are some considerations you should bear in mind, plus some policies developed by other businesses that can help you craft yours.</p> <p><strong>Start With Your Employees</strong></p> <p>Do you allow employees to access social media in the workplace? The choice is yours, although the law does provide some guidance on just what you can restrict employees from doing. For example, last year the <a href="http://www.nlrb.gov/news/acting-general-counsel-releases-report-employer-social-media-policies" title="National Labor Relations Board ">National Labor Relations Board</a> ruled against employers who fired workers for complaining on social media sites about their workplace conditions during non-work hours, stating that these cases &ldquo;&hellip;interfere with the rights of employees under the National Labor Relations Act, such as the right to discuss wages and working conditions with co-workers.&rdquo;</p> <p>It&rsquo;s hard to avoid employees gaining access to social media in the workplace; smart phones or tablets provide anywhere access. However, it&rsquo;s a good practice to develop a clear policy about which instances warrant access to social media during work hours and for work purposes, and if you intend to discipline employees who abuse your code of conduct.</p> <p>If you choose to permit access to social media, be sure your social media policy guidelines outline your expectations with regard to sharing company confidential or proprietary information such as photos, videos, or documents.</p> <p>Laws are changing constantly, so it&rsquo;s a good idea to work with lawyer to ensure you are complying with federal, state and local laws as they pertain to social media and employment law.</p> <p><strong>If You&rsquo;re Not Sharing Your Own Content &ndash; Be Warned</strong></p> <p>Social channels (including blogs, social networking sites, and image sharing sites), are a potential minefield for intellectual property abuse. So it&rsquo;s critical that your policy clearly details what can and can&rsquo;t be shared online by employees who post on the company&rsquo;s behalf. For example, if a Facebook moderator wants to use a wholesaler&rsquo;s image of a product to help promote your newest line, be sure to get written permission from the wholesaler first, unless permission was previously granted.</p> <p><strong>Endorsements Must Be Disclosed</strong></p> <p>Many companies reach out to other bloggers or social media page owners to solicit reviews, mentions or endorsements. If you offer cash, freebies or any other form of compensation for this favor, then the Federal Trade Commission requires that the &ldquo;endorser&rdquo; clearly state in their post that the review or mention was in exchange for a fee or other compensation. Read more in this blog: <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/bloggers-and-social-media-users-must-disclose-f" title="FTC Blogging and Social Media Disclosure Requirements">Bloggers and Social Media Users Must Disclose Freebies, Comps, and Paid Endorsements Under New FTC Rules</a>.</p> <p>Likewise, if you ask employees to promote your product or service on their social networks or blog, they must disclose their affiliation with your business.</p> <p><strong>What Should Your Social Media Policy Look Like?</strong></p> <p>Your social media policy doesn&rsquo;t need to look like a legal document; it should simply outline how your business and its employees will represent itself in a virtual social world.</p> <p>Such policies often include rules on when and how employees will be using social media, plus tips for adopting a social media voice and reminders to respect customer service policies and intellectual property. Some also set forth expectations for courteous and respectful engagement from social media followers themselves (a good defense should you ever need to remove offensive posts).</p> <p>Many businesses have implemented social media policies and guidelines targeted at employees only. While these don&rsquo;t have to be published in the public domain, if your policy addresses points of consumer concern, then you should consider posting it on your website and social networks.</p> <p>Here are a few useful examples that you can refer to as you craft your company&rsquo;s social media policy:</p> <ul> <li> <a href="http://corporate.walmart.com/social-media-guidelines" title="Link to Walmart social media policy">Walmart</a> &ndash; Breaks down engagement guidelines by social media network, such as Twitter and Facebook, while separately addressing corporate concerns such as intellectual property or employee disgruntlement.</li> <li> <a href="http://forums.bestbuy.com/t5/Welcome-News/Best-Buy-Social-Media-Policy/td-p/20492" title="Link to BestBuy social media policy">Best Buy</a> &ndash; Offers clear do&rsquo;s and don&rsquo;ts for company employees engaged in social media</li> <li> <a href="http://www.epa.gov/irmpoli8/policies/social_media_policy.pdf" title="Link to Environmental Protection Agency social media policy">Environmental Protection Agency</a> &ndash; A good example of more formal employee-centric social media guidelines</li> </ul> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/email-phone-and-social-media-monitoring-workplace-%E2%80%93-know-your-rights-employer" title="Laws that protect against email, phone and social media monitoring in the workplace">Email, Phone and Social Media Monitoring in the Workplace &ndash; Know Your Rights as an Employer</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/7-considerations-crafting-online-privacy-policy" title="Tips for crafting an online privacy policy">7 Considerations for Crafting an Online Privacy Policy</a></li> </ul> http://www.sba.gov/community/blogs/how-craft-social-media-policy-your-small-business#comments http://www.sba.gov/crss/node/420291 Business Law Advisor Business Laws Managing Marketing Wed, 16 Jan 2013 12:37:12 +0000 Caron_Beesley 420291 at http://www.sba.gov Contract Law – How to Create a Legally Binding Contract http://www.sba.gov/community/blogs/contract-law-%E2%80%93-how-create-legally-binding-contract <p>Whether you are entering into a relationship with a customer, a vendor or an independent contractor, contracts are a fact of business. You need them because they serve as legally valid agreements protecting your interests.</p> <p>But aren&rsquo;t contracts laden with legalese? Don&rsquo;t they have to be blessed by an attorney to ensure their validity? Not always.</p> <p>In fact, I&rsquo;ve seen contracts come across my table that are less than one page in length, in plain English, and still legally binding. How?</p> <p>Generally, to be legally valid, most contracts must contain two elements:</p> <ul> <li> All parties must agree about an offer made by one party and accepted by the other.</li> <li> Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.</li> </ul> <p>In addition, certain contracts are required by state law to be in writing (real estate transactions, for example), while others are not. Check with your state or with an attorney if you are unclear, but it&rsquo;s always good business practice to put every binding agreement in writing.</p> <p>Here&rsquo;s how your small business can comply with these requirements and ensure your contracts are legally valid: &nbsp;</p> <p><strong>1)&nbsp;</strong><strong>The Ins and Outs of Reaching an Agreement</strong></p> <p>The point when two parties come to an agreement can be a little fuzzy. For example, many businesses will put a standard contract template before an independent contractor and expect it to be signed without any discussion. At that point &ndash; and the law is clear on this &ndash; a legal contract exists only when one party makes an offer and the other accepts all terms of that offer. So in this example, the contractor is still free to rebut any of the points in the contract and make a counter offer, until an agreement has been reached.</p> <p><strong>How Long Should an Offer Stay Open?</strong></p> <p>Offers are rarely accepted immediately and further discussions or amendments may be required. Unless the offer has a deadline for acceptance, it can remain open. It&rsquo;s good practice to include an expiration date to ensure you have room to maneuver should you wish to change the terms or revoke the offer before a certain date.</p> <p>Offers that are subject to an expiration date &ndash; known as option agreements &ndash; are typically price-driven or give the buyer the opportunity to mull the decision without fear of losing out to a competing buyer. It&rsquo;s important to understand that a seller can place a fee on option agreements. For example, if you decide to give a buyer 30 days to think over a purchase, you can charge him for that. This typically occurs when the product or service is of high value or when the seller pledges not to sell that product to another customer during that 30-day option period. Likewise, a seller can&rsquo;t revoke the offer until that 30-day period ends.</p> <p><strong>What about Counteroffers?</strong></p> <p>Bargaining or negotiating can often lead to a counteroffer. Once made, the legal responsibility to accept, decline, or make another counteroffer then shifts to the original offeror.</p> <p><strong>2)&nbsp;</strong><strong>The Importance of Exchanging Something of Value</strong></p> <p>In addition to ensuring both parties are in agreement on the terms of an offer, the second element that ensures a contract is legally valid is that both parties exchange something of value. &nbsp;This is important since it differentiates a contract from being a one-sided statement or even a gift. &ldquo;<em>Something of value</em>&rdquo; might be a promise to perform certain services by one party while the other party agrees to pay a fee for the work performed.</p> <p>Most business transactions are based on this exchange of promises. However, the act of doing the work can also satisfy the exchange of value rule. For example, if you contract with a vendor to provide you X and Y, but you decide you need to add Z to the final deliverable, the vendor can create a binding contract by actually doing Z &ndash; something which you can&rsquo;t quibble or get out of if you change your mind.</p> <p><strong>More Information and Resources</strong></p> <p>For more information about the legality of any agreements, consult a lawyer or attorney. &nbsp;</p> <p>For insights into what a contract should look like, check out available <a href="http://www.score.org/resources/tab-a">contract templates</a> from <a href="http://www.score.org/">SCORE</a>. Use the search field to find &ldquo;contract agreements&rdquo; or other keywords for the type of contract you are looking to create. Also check out these blogs for additional tips:</p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/setting-client-contract-must-know-information-f" title="Information about writing a client contract ">Setting Up a Client Contract &ndash; Must Know Information for Freelancers</a></li> <li> <a href="http://www.sba.gov/community/blogs/starting-freelance-business-%E2%80%93-how-take-care-legal-tax-and-contractual-paperwork" title="Starting a Freelance Business - Legal and Paperwork Matters">Starting a Freelance Business &ndash; How to Take Care of Legal, Tax and Contractual Paperwork</a></li> <li> <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/five-legal-myths-about-startups" title="5 Legal Myths about StartUps">5 Legal Myths about StartUps</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-and-when-use-non-compete-agreements-appropr" title="How and When to Use Non-Compete Agreements Appropriately">How and When to Use Non-Compete Agreements Appropriately</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/contract-law-%E2%80%93-how-create-legally-binding-contract#comments http://www.sba.gov/crss/node/390691 Business Law Advisor Business Laws Managing Wed, 02 Jan 2013 12:56:21 +0000 Caron_Beesley 390691 at http://www.sba.gov “Made in the USA” Can Make Good Business Sense, But Watch Your Advertising Claims http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/%E2%80%9Cmade-usa%E2%80%9D-can-make-good-business-sense-watch-y <p>Does your business source or manufacture all its goods in the USA? The &ldquo;Made in the USA&rdquo; tagline can be a powerful marketing tool, but it can also make good business sense.</p> <p>According to the <a href="http://www.washingtonpost.com/business/on-small-business/five-ways-made-in-the-usa-can-cut-your-companys-manufacturing-costs/2012/09/26/8cb7b3c4-081b-11e2-858a-5311df86ab04_story.html" title="Washington Post article">Washington Post</a>, manufacturing in the USA can be a smart investment, even in the face of cheaper offshore alternatives. The article, written by Los Angeles-based small business owner Nicholas Ventura, cites &ldquo;Five ways &lsquo;Made in the USA&rsquo; can cut your company&rsquo;s manufacturing costs.&rdquo; Ventura is co-founder of&nbsp;<a href="http://www.wearvenley.com/" target="_blank" title="Youth Monument Clothing website">Youth Monument Clothing, Inc.</a></p> <p>&ldquo;<em>Made in the USA&rdquo; is what built my business to what it is today. When starting your new business, ask yourself how you can harness the benefits of domestic production, too. You may be pleasantly surprised</em>&hellip;&rdquo; Why? Ventura cites the following advantages of US-based manufacturing:</p> <ul> <li> <strong>Inventory can be cut tremendously</strong> &ndash; Importing inventory often requires larger production runs to meet minimum orders that can tie up capital and cash flow in stock. But it&rsquo;s a fine balance, as Ventura explains: &ldquo;&hellip;<em>missed sales due to lack of inventory is worse than having too much inventory in the first place. By being made in the USA, we can fulfill these orders and maintain a skinny inventory because turnaround times are quick.&rdquo;</em></li> <li> <strong>Domestic supply chains are quicker </strong>&ndash; Turnaround time from overseas factories can be substantially slower than domestic suppliers. Sourcing domestic goods can help you meet demand more quickly.</li> <li> <strong>Forecasting becomes much easier</strong> &ndash; &ldquo;<em>The larger minimums and longer turnaround time forced us to buy production runs in large numbers and forecast trends with little confidence in our predictions</em>,&rdquo; explains Ventura. Domestic production increases agility and allows you to &ldquo;<em>react on the fly to the market</em>&rdquo; without &ldquo;<em>sitting on a ton of dead inventory.</em>&rdquo;</li> <li> <strong>You may save money </strong>&ndash; &ldquo;<em>Looking back, we would have made a better investment in developing our supply chains here in America rather than trying to cut costs from the onset</em>,&rdquo; <em>says</em> Ventura.</li> <li> <strong>&ldquo;Think of your national pride!&rdquo;</strong> &ndash; &ldquo;Made in the USA&rdquo; is a hot trend for a reason. &ldquo;<em>Production equals jobs &ndash; it&rsquo;s a simple equation that many Americans ignore.</em>&rdquo;</li> </ul> <p><strong>Be Careful About &ldquo;Made in the USA&rdquo; Claims</strong></p> <p>If you are a U.S. manufacturer or are looking to promote your goods as &ldquo;Made in the USA,&rdquo; be sure you have a clear understanding of what this means. The Federal Trade Commission (FTC) is charged with preventing deception and unfairness in the marketplace and has the power to take law enforcement actions against false or misleading claims that a product is of U.S. origin.</p> <p>If half your product is made in the U.S while the other half is manufactured in China, you cannot claim it is &quot;American-made.&quot; To <a href="http://business.ftc.gov/documents/bus03-complying-made-usa-standard" title="Federal Trade Commission Made in USA Standards">comply with &ldquo;Made in the USA&rdquo; standard</a>, the FTC&nbsp;<a href="http://www.ftc.gov/opa/1997/12/musa2.shtm" target="_blank">requires</a>&nbsp;that all products advertised as American-made must be &quot;all or virtually all&quot; made in the U.S. Even if you don&rsquo;t expressly state that your products are made in the USA (for example, in advertising or product labeling), giving the impression that your product is of U.S. origin (such as use of a flag or geographic reference) can get you into trouble if it is not accurate. Both of these types of expressed or implied statements are subject to FTC enforcement.</p> <p>To learn more about potential red flags and how to ensure your &ldquo;Made in the USA&rdquo; product labeling, advertising or other claims are compliant with the law, check out this SBA blog: <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/made-usa-labels-information-manufacturers-ret-0" title="Made in the USA - Information for Manufacturers, Retailers, and Consumers">Made in the USA Labels: Information for Manufacturers, Retailers, and Consumers</a> and be sure to refer to the FTC&rsquo;s guide for business owners: <a href="http://business.ftc.gov/advertising-and-marketing/made-usa" title="Federal Trade Commission &quot;Made in USA&quot; Guide for Business Owners">&ldquo;Made in USA.&rdquo;</a></p> <p><strong>Related Articles</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/how-lawful-are-your-small-business%E2%80%99-advertising-claims-%E2%80%93-tips-getting-it-right" title="Truth in Advertising Information">How Lawful are our Small Business&#39; Advertising Claims? - Tips for Getting it Right</a></li> </ul> <p>&nbsp;</p> http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/%E2%80%9Cmade-usa%E2%80%9D-can-make-good-business-sense-watch-y#comments http://www.sba.gov/crss/node/384691 Business Law Advisor Business Laws Managing Wed, 19 Dec 2012 12:16:28 +0000 Caron_Beesley 384691 at http://www.sba.gov How Lawful Are Your Small Business’ Advertising Claims? – Tips for Getting it Right http://www.sba.gov/community/blogs/how-lawful-are-your-small-business%E2%80%99-advertising-claims-%E2%80%93-tips-getting-it-right <p>Does your product do what your advertising claims it does? Perhaps you&rsquo;ve invented or imported a product &ldquo;that will remove even the toughest carpet stain in 10 minutes &ndash; guaranteed!&rdquo; Can you stand behind that claim in a court of law?</p> <p>Even if you don&rsquo;t realize that your claims are false, the <a href="http://business.ftc.gov/advertising-and-marketing" title="Federal Trade Commission website">Federal Trade Commission</a> (FTC) or your state government can take action against you for non-compliance with marketing and advertising laws.</p> <p>Take for example an actual case scenario (described in this <a href="http://business.ftc.gov/blog/2012/09/good-night-sleep-tight-be-sure-get-your-ad-claims-right" title="Link to FTC blog post">FTC blog post</a>) in which the FTC challenged claims for &ldquo;<em>Rest Easy,</em>&rdquo; a natural product available nationwide that claimed to &ldquo;<em>Kill &amp; Repel Bed Bugs&hellip; Rest Easy is HIGHLY effective, killing 90% of bedbugs within 2 seconds of contact, and the rest within 30 minutes</em>&hellip;&rdquo;</p> <p>According to the FTC, the company behind the product and its corporate officers had no sound science to back up their promises. Under the settlement &mdash; which included a $264,976 judgment&mdash; the business needed &ldquo;competent and reliable scientific evidence to support performance or efficacy claims they make about Rest Easy or any pesticide they market in the future.&rdquo;</p> <p>So what do advertising laws require you to do when you market your product, promotions or services? Here&rsquo;s what you need to know:</p> <p><strong>Federal Truth-in-Advertising Laws</strong></p> <p>To ensure your business is in compliance with the Federal Trade Commission Act, follow the following rules:</p> <ul> <li> <strong>Your advertising must be truthful and non-deceptive</strong> &ndash; This means it must not contain information that is misleading or omit information that can influence a buyer&rsquo;s decision.</li> </ul> <p style="margin-left:.5in;"><strong><em>Example</em></strong>: You must have proof to back up both express (explicit) and&nbsp;implied claims that consumers take from an ad. For example, &quot;ABC Mouthwash prevents colds&quot; is an express claim that the product prevents colds. An implied claim is one made indirectly or by inference. &quot;ABC Mouthwash kills the germs that cause colds&quot; contains an implied claim that the product will prevent colds. Although the ad doesn&#39;t literally say the product prevents colds, it would be reasonable for a consumer to conclude from the statement &quot;kills the germs that cause colds&quot; that the product prevents colds.</p> <p style="margin-left:.5in;">The same applies when you make claims about free offers such as &ldquo;buy one get one free&rdquo; or &ldquo;buy ABC and get XYZ free.&rdquo; Be clear about limitations and disclose your terms and conditions.</p> <ul> <li> <strong>The evidence must back up your advertising claims</strong> &ndash; This means you&rsquo;ll need objective evidence to support your claims. The kind of evidence depends on the claim &ndash; at a minimum you must have the level of evidence you say you have.</li> </ul> <p style="margin-left:.5in;"><strong><em>Example</em></strong>:&nbsp; The statement &quot;Two out of three doctors recommend ABC Pain Reliever&quot; must be supported by a reliable survey to that effect. If the ad isn&#39;t specific, the FTC looks at several factors to determine what level of proof is necessary, including what experts in the field think is needed to support the claim. In most cases, these ads need to be supported by tests, studies or other scientific evidence that has been evaluated by people qualified to review it using acceptable, accurate methods.</p> <ul> <li> <strong>Advertisements cannot be unfair</strong> &ndash; For example, don&rsquo;t knock what your competitors have to offer by using false or misleading information.</li> </ul> <p><strong>State and Local Truth-in-Advertising Laws</strong></p> <p>Next, confirm that you are not violating state and local truth-in-advertising laws. For example, some states expect you to have enough stock in inventory to meet demand for advertised products. If you don&rsquo;t, then your ad needs to state that quantities are limited. USA.gov&nbsp;provides links to <a href="http://www.usa.gov/directory/stateconsumer/index.shtml" title="Directory of state and local government consumer agencies">state and local consumer agencies</a> responsible for enforcing truth-in-advertising and related consumer protection laws.</p> <p><strong>In a Nutshell</strong></p> <p>The next time you brainstorm your advertising claims, have the following checklist in mind:</p> <ul> <li> <strong>Be accurate</strong> &ndash; Deceiving or misleading your consumers is illegal. And it&rsquo;s not just your words; your product imagery should be accurate, too.</li> <li> <strong>Get permission</strong> for endorsements, quotes or whenever you choose to mention a person or organization&rsquo;s name.</li> <li> <strong>Be fair to your competitors</strong> and accurate in your claims about what your product does and what theirs does not.</li> <li> <strong>Watch your pricing claims </strong>&ndash; Many retailers make cost comparisons to entice consumers. Whatever you do, don&rsquo;t make untruthful claims or comparisons on this one.</li> <li> <strong>Claims likely to raise a red flag at the FTC </strong>&ndash; The FTC pays closest attention to advertising claims about health or safety, such as: &ldquo;ABC will reduce the risk of skin cancer&rdquo; and ads that make claims consumers would have trouble evaluating themselves, such as: &ldquo;ABC refrigerators will reduce your energy costs by 25 percent.&rdquo;</li> </ul> <p><strong>More Information</strong></p> <ul> <li> Truth-in-advertising doesn&rsquo;t just affect your ad claims. Read more about marketing to children, green marketing, product labeling, &ldquo;Made in the USA&rdquo; claims and more in SBA&rsquo;s <a href="http://www.sba.gov/content/advertising-and-marketing-law" title="SBA Small Business Guide to Marketing and Advertising Law">Small Business Guide to Marketing and Advertising Law</a>.</li> <li> <a href="http://business.ftc.gov/documents/bus35-advertising-faqs-guide-small-business" title="Advertising FAQs - A Guide for Small Business">Advertising FAQ&#39;s: A Guide for Small Business</a> (FTC)</li> <li> <a href="http://blog.score.org/2012/sba/great-service-will-use-again-how-to-use-customer-testimonials-to-market-your-business/" title="How to Use Testimonials to Market your Business">&ldquo;Great Service, Will Use Again&rdquo;: How to Use Customer Testimonials to Market Your Business</a></li> </ul> http://www.sba.gov/community/blogs/how-lawful-are-your-small-business%E2%80%99-advertising-claims-%E2%80%93-tips-getting-it-right#comments http://www.sba.gov/crss/node/379111 Business Law Advisor Business Laws Marketing Wed, 12 Dec 2012 11:46:05 +0000 Caron_Beesley 379111 at http://www.sba.gov Don’t Get Scammed Just Because You Want to Get Into SAM http://www.sba.gov/community/blogs/don%E2%80%99t-get-scammed-just-because-you-want-get-sam <p>&nbsp;</p> <p>You can count on it, just like clockwork: when a new federal program or interface or system is put in place, someone is going to try to squeeze some extra cash out of people who want to use it.&nbsp;</p> <p>Here at SBA HQ, we&rsquo;ve heard recently of attempts to do just that to people who want to register their small businesses in the new <a href="http://www.sam.gov" title="SAM">SAM database</a>.&nbsp; SAM stands for System for Award Management.&nbsp;</p> <p>SAM, which is being developed in phases &ndash; the first was released in July 2012 &ndash; is changing the way you do business by consolidating nine separate and distinct federal systems into one, thus allowing companies to use one login to access all the capabilities previously found in the nine separate legacy systems. &nbsp;Among the systems it&rsquo;s replacing is the Central Contractor Registration, or CCR, a database where companies that want to do business with the government register.&nbsp;</p> <p>It wasn&rsquo;t long before the questions started bubbling up. One of the first was &ldquo;Does it really cost $599.00 to register for SAM?&rdquo;</p> <p>SBA field offices and resource partners &ndash; such as the Procurement Assistance Center at the Mohawk Valley Small Business Development Center &ndash; started hearing several reports over the past few months that their small business clients were being contacted by firms offering to get them set up in SAM for a fee of $500 to $599.</p> <p>As Roxanne K. Mutchler, the Government Contracting Coordinator at the Mohawk Valley SBDC pointed out recently to some of these clients: &ldquo;Please make your current and future clients aware that these are private, for-profit businesses that will charge the client for registering their business. &nbsp;<strong><em>There is no cost to register at the new SAM website!&nbsp;</em></strong>We can assist them with the process for FREE!&rdquo; &nbsp;&nbsp;</p> <p>The real SAM website is: <a href="https://www.sam.gov/">https://www.sam.gov/</a>.&nbsp;Always look for the &ldquo;.gov&rdquo; after &ldquo;SAM&rdquo; in the URL address. Private, for-profit businesses will not have the &ldquo;.gov&rdquo; suffix.&nbsp; Even if a site looks a lot like a federal government website, don&rsquo;t be fooled. Without the .gov ending, it isn&rsquo;t.&nbsp;</p> <p>A couple of good places for helpful info about getting into the SAM database are the <a href="https://www.sam.gov/sam/transcript/SAM_User_Guide_v_1.8.pdf">User&rsquo;s Guide</a> issued by the General Services Administration, and the <a href="https://www.sam.gov/sam/transcript/SAM_FAQs-June2012.pdf">SAM FAQ</a>. Both of these are in a PDF format, so you can download them easily to your own desktop. &nbsp;You can access many more online aids at the <a href="https://www.sam.gov/">SAM website</a> by clicking on the &ldquo;Help&rdquo; button and &ldquo;User Guides.&rdquo;</p> <p>One caution: Some people have been unable to reach the new SAM site.&nbsp; Mohawk Valley&rsquo;s Mutchler recommends changing one computer setting: In your Internet Explorer browser, go to &ldquo;Tools&rdquo; then &ldquo;Internet Options&rdquo; then &ldquo;Advanced&rdquo; and put a check mark at &ldquo;Use TLS 1.0&rdquo; (it&rsquo;s down near the bottom).&nbsp;</p> <p>Another caution: Don&rsquo;t get sucked into paying for something that&rsquo;s free, and for which you can get free help from a Small Business Development Center in your area. Find one <a href="http://www.sba.gov/local-assistance">here</a>. All you need is a zip code.</p> http://www.sba.gov/community/blogs/don%E2%80%99t-get-scammed-just-because-you-want-get-sam#comments http://www.sba.gov/crss/node/376311 Business Law Advisor Government Contracting SBA News and Views Wed, 05 Dec 2012 20:18:26 +0000 Stephen Morris 376311 at http://www.sba.gov Are Your Employees Working Overtime During the Holidays? Understand Overtime Wage Law http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/are-your-employees-working-overtime-during-holi <p>The holidays tend to complicate small business payrolls, what with employees looking to earn a little extra cash and owners needing coverage for extended hours or shifts. But not all employers must pay overtime and not all employees are eligible. Confused? Here&rsquo;s what you need to know about your obligations as a business owner when it comes to overtime pay.</p> <p><strong>When is Overtime Due?</strong></p> <p>Under the <a href="http://www.dol.gov/compliance/laws/comp-flsa.htm#.UJPKMMVgEbg" title="Fair Labor Standards Act">Fair Labor Standards Act (FLSA), </a>&nbsp;both full- and part-time employees have equal rights concerning overtime pay (enforced by the Department of Labor). Some states also have overtime laws. The FLSA requires&nbsp;that&nbsp;covered, nonexempt employees are paid <a href="http://www.dol.gov/whd/regs/compliance/whdfs23.pdf" title="Information about paid overtime pay">overtime pay&nbsp;</a>at not less than one and one-half times their regular pay rate (hence &ldquo;time and a half&rsquo;) after 40 hours of work, per workweek.</p> <p>It&rsquo;s important to note that these hours must be within the workweek, so for example, employees who work a 12-hour day on Monday but no other days that week are not entitled to overtime because they didn&rsquo;t work over 40 hours within that one week &ndash; no matter how long their first shift was.</p> <p><strong>Do all Employers Have to Pay Overtime?</strong></p> <p>Although most employers are required to pay overtime, there are many exceptions.</p> <p>To determine if you need to pay overtime, you need to understand what the term &ldquo;covered&rdquo; means. A &ldquo;covered&rdquo; employee is &ldquo;covered&rdquo; by the FLSA and therefore eligible for overtime pay. But not all employees are &ldquo;covered.&rdquo; Here&rsquo;s what you need to know to determine whether your employees are covered:</p> <ul> <li> If your business does more than $500,000 in sales each year and you have at least two employees, then your employees are generally &ldquo;covered&rdquo; and eligible for overtime.</li> <li> However, even if you don&rsquo;t meet these criteria, you must pay overtime if your employees work in what the Department of Labor calls &ldquo;interstate commerce.&rdquo; This is a broad category and includes anyone who is involved in producing goods that will be sent out of state. It also covers an employee who makes phone calls or sends letters out of state, employees who travel for business and even employees who do janitorial work in a building where goods are produced for shipment out of state!</li> </ul> <p>If none of these criteria apply to you, you might still be covered by your <a href="http://www.dol.gov/whd/state/state.htm" title="State labor departments">state&rsquo;s overtime law</a>.</p> <p>Read more from the Department of Labor for official explanation of <a href="http://www.dol.gov/whd/regs/compliance/whdfs14.htm#.UJPLmcVgEbg" title="Information on who is covered by the FLSA">who is covered and who is not.</a></p> <p><strong>Which Employees are Entitled to Overtime?</strong></p> <p>If your business is covered by the FLSA or state overtime laws, most but not all your employees may be entitled to overtime. We&rsquo;ve just discussed what a &ldquo;covered&rdquo; employee is, but it&rsquo;s also important to understand what an &ldquo;exempt&rdquo; or &ldquo;nonexempt&rdquo; employee is and how this factors into overtime pay.</p> <p>While &ldquo;nonexempt&rdquo; employees are eligible for overtime, &ldquo;exempt&rdquo; employees are not. But what is an exempt employee? The FLSA has a fairly broad list of job types that are exempt, such as newspaper deliverers or seamen, among others. For the complete list, check out this overview of <a href="http://www.dol.gov/compliance/guide/minwage.htm" title="Information about employees who are exempt from overtime rules">employees who are exempt from overtime rules</a> from the Department of Labor.</p> <p>There is one category of exempt workers than can confuse employers &ndash; administrative, executive and professional employees. Sounds like a broad definition! But here&rsquo;s the deal: employers aren&rsquo;t required to pay overtime to these employees <strong><em>if they are paid on a salary basis and earn at least $455 a week, every week</em></strong> <strong><em>and perform certain job duties</em></strong> &ndash; generally managerial or supervisory. The Department of Labor offers more information about the basic requirements that <a href="http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf" title="Information about administrative, executive or professional employees and overtime laws">determine whether an administrative, executive or professional employee is exempt from overtime</a>.</p> <p><strong>Do I Have to Pay Overtime to Part-Time Employees</strong></p> <p>Yes. Part-time and full-time employees have equal rights when it comes to overtime, minimum wage and other requirements of the Fair Labor Standards Act.</p> <p><strong>Is Extra Pay </strong><strong>Required&nbsp;for Weekend or Night Work?</strong></p> <p>Extra pay for working weekends or nights is a matter of agreement between the employer and the employee. The FLSA does not require extra pay for weekend or night work. However, if covered and nonexempt workers do work more than 40 hours in a work week, they are due time-and-a-half in overtime pay.</p> <p><strong>When is Double Time Due?</strong></p> <p>The Fair Labor Standards Act has no requirement for double-time pay. This is a matter of agreement between you and your employees.</p> <p><strong>Got Questions?</strong></p> <p>Still have questions about overtime law? You can <a href="http://www.dol.gov/dol/contact/#.UJPcNMVgEbg" title="Contact the Department of Labor">contact the Department of Labor</a> directly via phone, mail or email, or post your question on the <a href="http://www.sba.gov/community/discussion-boards" title="SBA Community Discussion Boards">SBA.gov Community Discussion Boards</a>.</p> <p><strong>More Information</strong></p> <ul> <li> <a href="http://www.dol.gov/dol/topic/workhours/overtime.htm#doltopics" title="Department of Labor Guide to Work Hours">Department of Labor Guide to Work Hour Laws</a></li> <li> <a href="http://www.sba.gov/community/blogs/10-ways-your-small-business-may-be-breaking-employment-laws" title="10 Ways your Small Business may be Breaking Employment Laws">10 Ways your Small Business May be Breaking Employment Laws</a></li> <li> <a href="http://www.sba.gov/community/blogs/5-things-you-need-know-now-about-hiring-temporary-workers-2012-holiday-season" title="5 Things to Know about Hiring Temporary Workers">5 Things to Know Now about Hiring Temporary Workers for the 2012 Holiday Season</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/does-my-business-have-provide-part-time-employe" title="Does your Business Have to Provide Part-Time Employees with Benefits">Does My Business Have To Provide Part-Time Employees with Benefits?</a></li> </ul> http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/are-your-employees-working-overtime-during-holi#comments http://www.sba.gov/crss/node/375091 Business Law Advisor Business Laws Managing Wed, 05 Dec 2012 12:38:44 +0000 Caron_Beesley 375091 at http://www.sba.gov More Than Just a Seller – How to Start a Business on an Online Marketplace http://www.sba.gov/community/blogs/more-just-seller-%E2%80%93-how-start-business-online-marketplace <p>Starting a small business enterprise on eBay, Amazon Webstore, Etsy or even Craig&rsquo;s List has become an increasingly popular option for entrepreneurs looking to get instant visibility and access to a massive online marketplace. &nbsp;</p> <p>But how do you go about becoming a serious eBay seller and forming a business around your enterprise?&nbsp; At what point does your enterprise become more than just a hobby? Will you need to get a business license, incorporate, and pay sales tax?</p> <p>Here are some answers to these and other common questions about moving beyond just selling online to becoming a serious online business owner.</p> <p><strong>Do I Need to Form a Business to Sell on eBay, Amazon, etc.?</strong></p> <p>Actually, no &ndash; as long as you aren&rsquo;t making a profit, you can buy and sell on these sites without formalizing a business entity. To the IRS, you are a hobbyist.</p> <p>It might even be a good idea to test the waters this way to give you an idea of what you&rsquo;re getting into before diving in head-first. But remember, once you start making a profit, the IRS will consider you a for-profit business and you&rsquo;ll need to report any income you earn. Since neither eBay nor PayPal reports transactions to the IRS, it&rsquo;s up to you to report your profits.</p> <p>For more information check out IRS guidance on <a href="http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions" title="Information from IRS.gov on when your hobby starts becoming a business">when your online marketplace activities are a considered a hobby and at what point they become a business</a>. &nbsp;</p> <p><strong>What Do I Have to Do to Make It Formal?</strong></p> <p>If you are serious about selling on eBay or Amazon, then you need to behave like a business: obtain a license and/or a permit, register with the local authorities, obtain a sales tax permit, and determine how you structure your business.</p> <p>How? Follow SBA&rsquo;s <a href="http://www.sba.gov/content/follow-these-steps-starting-business" title="10 Steps to Starting a Business">10 Steps to Starting a Business</a> for some great tips. Some things won&rsquo;t apply to you. You may not have employees, for example, so skip the part about being an employer. Here are the steps to pay attention to:</p> <p><strong>- Write a business plan</strong> &ndash; A business model that relies 100 percent on another company for its revenues is risky. So plan your entry into the online marketplace carefully. When writing a plan for starting an eBay or Amazon business, think about what you&rsquo;re selling. How will you position yourself? Will you concentrate on specific brands at a discount? How will you differentiate yourself from the competition? What kinds of margins are you shooting for and how will you achieve that with the inventory you have? Try to predict a profitability point where you&rsquo;ll be able to extend your online marketplace business with your own online business.</p> <p><strong>- Finance your business</strong> &ndash; You may not need a business loan, but it&rsquo;s useful to plan your options. Could you fund initial inventory with <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/bootstrapping-your-business-it-you" title="Tips for bootstrapping your business">savings or credit</a>? Could you <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/6-tips-borrowing-startup-funds-friends-or-famil" title="Tips for borrowing funds from friends or family">borrow from friends or family</a>? Would a <a href="http://www.sba.gov/community/blogs/could-you-finance-your-start-with-microloan" title="Information about microloan programs">microloan</a> be a good fit?</p> <p><strong>- Register your business </strong>&ndash; Don&rsquo;t overlook it; it&rsquo;s not only the law, but it also affords several benefits. For instance, it will enable you to open a business bank account, write off business expenses, and help you leverage competitive pricing agreements with wholesalers. Registration involve several steps, not all of them necessary, but important to be aware of:</p> <ol> <li> <strong><em>Register a &ldquo;Doing Business As&rdquo; Name</em></strong> - If you are operating an online store under a name other than your own, you may need to register a &ldquo;Doing Business As&rdquo; name, also known as a DBA, trade name or assumed name. You can do this directly with your local government. If you&rsquo;re not sure whether you need to register a DBA, check with your local government office.</li> <li> <strong><em>Choose a Business Structure</em> </strong>&ndash; Many small businesses operate as <a href="http://www.sba.gov/content/sole-proprietorship-0" title="Information about running a business as a sole proprietor">sole proprietorships</a>, meaning there is no legal difference between your business and you, as an individual. You&rsquo;ll also file your business taxes on your personal income tax. No formal action is needed to form a sole proprietorship. Often, online marketplace business owners file for incorporation or <a href="http://www.sba.gov/content/limited-liability-company-llc" title="Information about becoming an LLC">become an LLC</a> to help separate their business and personal finances and gain legal protection as a business entity. Consult a lawyer or legal expert to help you determine the pros and cons of incorporation and how to register.</li> <li> <strong><em>Obtain Licenses and Permits </em></strong>&ndash; These are a necessary part of doing business and are required by your state and local government. Even online and home-based businesses cannot operate legally without them. Use <a href="http://www.sba.gov/content/search-business-licenses-and-permits" title="License and permit search tool">SBA&rsquo;s License and Permit tool</a> to find out what&rsquo;s required.</li> <li> <strong><em>Get a Sales Tax ID or Permit</em></strong> &ndash; You&rsquo;ll need a sales tax ID in order to collect and pay sales tax. The law about collecting sales tax online can be confusing and is <a href="http://www.sba.gov/content/collecting-sales-tax-over-internet" title="Information about collecting sales tax">explained here</a><strong><em>. </em></strong>Many online marketplaces offer tools to help you calculate sales tax, but as of now, it&rsquo;s your responsibility to pay it. In order to collect sales tax, your state may require you to obtain a sales tax permit. You can find SBA&rsquo;s links to state tax resources <a href="http://www.sba.gov/content/learn-about-your-state-and-local-tax-obligations">here</a>.</li> <li> <strong><em>Get a Federal Tax ID</em></strong>&nbsp;&ndash; If you have employees or are structured as a partnership, corporation or other types of organization, you&rsquo;ll need to get an Employer Identification Number (EIN) from the IRS. It&rsquo;s the business equivalent of a social security number. You can&nbsp;<a href="http://www.irs.gov/businesses/small/article/0,,id=102767,00.html" target="_blank" title="How to apply for an EIN">apply for an EIN from the IRS online</a>.</li> </ol> <p>While these are some of the main legal steps you&rsquo;ll need to follow, there are other important considerations, including:</p> <ul> <li> <strong>Pay </strong><a href="http://www.sba.gov/community/blogs/how-calculate-and-make-estimated-tax-payments" title="Information about paying estimated taxes"><strong>estimated taxes</strong></a></li> <li> <strong>Maintain </strong><a href="http://www.sba.gov/content/recordkeeping/"><strong>good records</strong></a> so you can maximize your tax deductions</li> <li> <strong>Separate your personal and business finances</strong> &ndash; <a href="http://www.sba.gov/community/blogs/how-open-small-business-bank-account-online" title="Tips on opening a business bank account">Open a business bank account</a> (this will help you facilitate PayPal transactions) and <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/six-factors-consider-when-choosing-credit-card-" title="Tips on applying for a business credit card">apply for a business credit card</a></li> <li> <strong>Engage the experts</strong> &ndash; Consult a tax specialist or accountant. They don&rsquo;t have to be on retainer, but can provide great advice as you get started in business. Local resources including <a href="http://www.sba.gov/content/small-business-development-centers-sbdcs" title="List of Small Business Development Centers">Small Business Development Centers</a>, <a href="http://www.sba.gov/content/women%E2%80%99s-business-centers" title="Directory of Women's Business Centers">Women&rsquo;s Business Centers</a>, and <a href="http://www.sba.gov/content/score" title="Information about SCORE">SCORE</a> offer free training and counseling to small business owners.</li> </ul> <p>&nbsp;</p> http://www.sba.gov/community/blogs/more-just-seller-%E2%80%93-how-start-business-online-marketplace#comments http://www.sba.gov/crss/node/369141 Business Law Advisor Business Laws Starting Taxes Wed, 28 Nov 2012 12:24:16 +0000 Caron_Beesley 369141 at http://www.sba.gov If Your Employees Drive for Your Business, be Aware of Rules about Cell Phone Use http://www.sba.gov/community/blogs/if-your-employees-drive-your-business-be-aware-rules-about-cell-phone-use <p>Do your employees drive commercial motor vehicles (CMVs) as part of your business operations? If they do, it&rsquo;s important that <em>you and they</em> know about <a href="http://www.fmcsa.dot.gov/rules-regulations/administration/rulemakings/final/Mobile_phone_NFRM.aspx" title="Link to U.S. Department of Transportation">stringent regulations</a> that went into effect nationwide in early 2012, restricting the use of handheld cellular phones while driving.</p> <p>The U.S. Department of Transportation ruling restricts CMV drivers from the following:</p> <ul> <li> Making a call while holding a cell phone</li> <li> Dialing a cell phone using more than one button</li> </ul> <p>It would have banned reaching for a cell phone in an unsafe manner, but after pushback from a variety of industry associations, the DOT amended the rule to permit drivers to reach for a compliant mobile telephone (i.e., a hands-free phone), provided the device is within the driver&#39;s reach while he or she is in the normal seated position, with the seat belt fastened.&nbsp;</p> <p>The rule also bans employers from requiring or allowing a CMV driver to use a handheld cell phone while operating a vehicle. CMV drivers must also be prepared and equipped with hands-free cell phone options before they drive a vehicle. The fine is steep &ndash; up to $2,750 for drivers and up to $11,000 for employers.</p> <p>The ruling is based on research conducted by the DOT that put the odds of being involved in a safety-critical event are three times greater when the driver is reaching for an object than when the driver is not reaching for an object. If the driver is dialing a cell phone, the odds of being involved in a safety-critical event rise to six times greater than when the driver is not dialing a cell phone.</p> <p><strong>Other potential liabilities employers may face </strong></p> <p>Clearly, employers who have commercial motor vehicle drivers in their workforce need to be more aware than ever of potential liabilities they face for the actions of their employees behind the wheel. To boost awareness, the National Federation of Independent Business (NFIB) has put together a <a href="http://www.nfib.com/legal-center/compliance-resource-center/compliance-resource-item?cmsid=59269">useful list</a> of rules employers need to remember if they have employees who drive any vehicle for work:</p> <ul> <li> <strong>Business owners are generally responsible for injuries to third parties that are caused by employees acting&nbsp;<em>within the scope of their employment</em></strong>&nbsp;&ndash; whether the employee is driving a company-owned vehicle or a personal vehicle (i.e. if an employer authorized the employee to do it or it was deemed necessary in order for the employee to carry out the job).</li> <li> <strong>Employers may be held liable for allowing unlicensed, incompetent or unqualified employees to drive a company car</strong>. Incompetency can include driving under the influence of alcohol or reckless driving.</li> </ul> <p>The NFIB goes on to suggest that employers should be aware of <a href="http://www.fmcsa.dot.gov/rules-regulations/rules-regulations.htm">federal laws</a> that govern CMV safety and should encourage safe driving habits, including:</p> <ul> <li> Ban all employees from texting or talking on the phone while driving for work.</li> <li> Encourage employees to pull over before using a cell phone in a car.</li> <li> Limit or altogether end any work-related driving by employees with poor driving records.</li> <li> Update your company&rsquo;s policy and any employee handbooks to reflect the most recent regulations in your area regarding distracted driving.</li> </ul> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.fmcsa.dot.gov/rules-regulations/rules-regulations.htm" title="Link to U.S. Department of Transportation">U.S. Department of Transportation, Federal Motor Carrier Safety Administration Rules and Regulations</a></li> </ul> http://www.sba.gov/community/blogs/if-your-employees-drive-your-business-be-aware-rules-about-cell-phone-use#comments http://www.sba.gov/crss/node/364461 Business Law Advisor Business Laws Wed, 14 Nov 2012 12:20:26 +0000 Caron_Beesley 364461 at http://www.sba.gov How Sweeping Changes to the U.S. Patent System Will Impact Your Small Business http://www.sba.gov/community/blogs/how-sweeping-changes-us-patent-system-will-impact-your-small-business <p>If you hold patents, have patents pending or are thinking of filing a patent, then it&rsquo;s time for you to get to know the details of the most significant reform of the U.S. patent system in more than a century.</p> <p>On September 16, 2012, the Leahy-Smith America Invents Act (AIA) of 2011 was signed into law, signaling an historic overhaul of the patent system. According to the <a href="http://www.uspto.gov/news/pr/2012/12-59.jsp" title="U.S. Patent and Trademark Office website">U.S. Patent and Trademark Office</a> (USPTO), the provisions of the AIA will &ldquo;spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality.&rdquo;</p> <p>So what does this mean for small business owners to whom patents are valuable assets? Here&rsquo;s what you need to know:</p> <p><strong>You and Your Competitors Can Now Give Input on Pending Patent Applications</strong></p> <p>For the first time in the history of U.S. patent law, third parties can now come forward and challenge patent applications. For example, if you know of someone who is trying to file a patent on a product that would interfere with your business, you now have an opportunity to provide information to the patent examiner to help them determine whether the innovation in the application is patentable.&nbsp;</p> <p>&ldquo;<em>By introducing third party input into the examination process for the first time since the inception of our nation&rsquo;s intellectual property system, we&rsquo;re able to expand the scope of access to prior art in key areas like software patents,&rdquo; </em>said Undersecretary of Commerce for Intellectual Property and Director of the USPTO David Kappos in this <a href="http://www.uspto.gov/news/pr/2012/12-60.jsp" title="U,S. Patent and Trademark Office press release">press release</a>.</p> <p>To support this change, in October 2012 the USPTO launched a crowdsourcing tool &ndash; <strong><a href="http://patents.stackexchange.com/" title="AskPatents Tool from U.S. Patent Office">AskPatents</a></strong> &ndash; to solicit input on patent applications. If you are concerned about a particular patent, you can post questions and challenge patent applications online. USPTO patent examiners will take these comments into consideration when reviewing applications. Inventors can also check the site to see if their idea is patentable.</p> <p><strong>Resolving Patent Disputes Just Got a Whole Lot Easier</strong></p> <p>In the past, if you were to contest a patent or a competitor filed a patent dispute against your business, you could expect the process to involve costly legal fees and drawn-out litigation in district courts. Under the provisions of the AIA, however, the USPTO offers a &ldquo;<em>timely, cost-effective alternative to district court litigation for challenging the patentability of a claimed invention in an issued patent.</em>&rdquo; Under this provision, the USPTO handles post-grant reviews (for a fee), resolving disputes more quickly and saving small business owners the hassles of dragging a patent dispute through the courts.&nbsp;</p> <p>In a nutshell, these provisions &ldquo;&hellip;<em>establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs</em>,&rdquo; <a href="http://www.uspto.gov/news/pr/2012/12-50.jsp" title="U.S. Patent and Trademark Office press release">said USPTO&rsquo;s David Kappos.</a></p> <p><strong>More to Come</strong></p> <p>Look for additional provisions to come from the AIA in March 2013, when the U.S. patent system moves from a first-to-invent to a first-inventor-to-file system. This will bring the U.S. in line with other nations and make it more important than ever for small businesses to consider filing a provisional patent application and engage a patent lawyer as soon as possible.</p> <p>Read more about the new and upcoming changes on the USPTO website: <a href="http://www.uspto.gov/news/pr/2012/12-59.jsp" title="U.S. Patent and Trademark Office press release">Historic Patent Reform Implemented by U.S. Patent and Trademark Office</a>.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/content/intellectual-property-law" title="SBA Small Business Guide to Intellectual Property">SBA Guide to Small Business Intellectual Property</a></li> <li> <a href="http://www.sba.gov/community/blogs/your-business-idea-patentable-guide-what-entrepreneurs-can-patent" title="Is your Business Idea Patentable? Read more in this blog">Is your Business Idea Patentable? A Guide to What Entrepreneurs Can Patent</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/protect-your-invention-or-product-patents-t-0" title="Patents, Trademarks and Copyright Explained in this blog">Protect your Invention or Product - Patents, Trademarks, and Copyright Explained</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/how-sweeping-changes-us-patent-system-will-impact-your-small-business#comments http://www.sba.gov/crss/node/357451 Business Law Advisor Business Laws Managing Wed, 07 Nov 2012 12:48:41 +0000 Caron_Beesley 357451 at http://www.sba.gov