As an owner of a small business avoiding the danger of litigation should be a top priority for you. Legal issues can take you by surprise and seriously hurt your bottom line. To help protect your business, watch for these common legal issues:
By Kelly Bagla, Esq. Thinking about starting a business? If you are – Brilliant! Congratulations on taking control of your life and being part of the 31.7 million small businesses in the USA. Before jumping in with both feet, it’s important to research your industry, find competitors, understand risk and map out your finances before starting your business. Starting a business can be stressful, but having the independence of being able to provide for your family is beyond security. Starting a business does come with work, often feeling like there are a thousand things to work on all at the same time. There’s no avoiding this reality for new small business owners, but with planning, it’s possible to manage expectations and take actions with a sense of purpose toward building your business. Many people who have started businesses usually take these steps: DO YOUR RESEARCH. You should understand the industry you’ll be involved in so you can dominate it. No matter how unique you might think your business idea is, you should be aware of what your competitors are doing. What’s worked for them and what’s not so you can avoid their mistakes. DETERMINE YOUR AUDIENCE. Spend time considering who your target demographic will be. This audience will be the driving force in each decision you make. Understanding who needs your product or service can help fine tune your offerings and ensure your marketing and sales strategies are reaching the right people. Part of this decision us understanding if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise. Within those parameters are multiple categories, including but certainly not limited to age, gender, income and profession. You cannot earn a profit without your customers, so understand who they are and make them your priority. HAVE A STRONG MISSION. Standing out is no easy task and no one magic formula guarantees results. However, knowing your business’s purpose is central to guiding these decisions. By spending time on what’s important to you, what your business’s strengths will be, what differences you want to bring to your target market, and what purpose will those differences serve, you can create a strong mission statement that will reflect your business beliefs. Staying true to yourself will show your audience that your business will be consistent and your customers can rely on you for the same professional quality of goods and service. It’s only appropriate to mention that one of my favorite quotes is “Why Blend In When You Were Born To Stand Out.” MAP YOUR FINANCES. Starting a business requires money that you likely won’t have right away. This is why you need to seek out ways to acquire capital. Most entrepreneurs start a business with a very limited amount of capital. However, there are plenty of options available to an inspiring business owner. The first and most common place to seek capital is from friends and family. If that is not enough, expand the search to angel investors and then venture capitalists. Should these options not provide the amount needed, then apply for business loans through banks and small business associations (SBA). UNDERSTAND THE RISK. Of course, there will always be a level of risk involved with launching a new business venture, but calculating, understanding, and planning for risk is an important step to take before you start working on your business. This means assessing your industry’s risks before moving forward with a business plan. Risks can come in many forms, as mentioned, industry risks, financial risks, loss of customer interest, and most importantly, being sued and loosing everything. Planning and preparing as much as you can for business related risks could save your business from going under and save you thousands in hard earned money. HAVE A BUSINESS PLAN. Business plans come in many forms, for example, business plans to raise money, business plans to expand operations, and business plans to start a business. The latter one is the type of business plan you want to start with. Keep in mind a business plan is a live document that will change when your business needs change or expand. It can be tedious drafting a business plan but its essential to keep your business on track. Start the business plan by first outlining the steps you need to take for a successful launch and continued growth. Include the following: your mission statement, a description of your business, a list of your products or services, an analysis of the current market and opportunity, a list of decision makers in the company, along with their bios, and finally your financial plan outlining how and when the money will be used. Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion. Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
By Kelly Bagla, Esq. Did you know out of the 27.9 million businesses in the United States, 2.45 million of them are owned by Veterans? 70% of American consumers are more likely to buy from a veteran owned business than from a business not owned by a veteran. Starting or running a business takes courage, discipline and dedication. It also takes knowing the legal aspects that could safe guard your hard work. Before starting, running or buying a business consider the following: HAVE A BUSINESS PLAN. A complete, thoughtful business plan is one of the most valuable tools in helping you reach your long-term goals. It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road. OBTAIN FINANCING. Whether you are starting a new business or buying an existing one, small businesses need money. If you or your spouse served in the military and would like to fund your small business, you can take advantage of a few different favorable loan options geared towards veterans. INCORPORATE YOUR BUSINESS. Many small business owners launch their companies as sole proprietorships in which they and their businesses are essentially one and the same. However, changing the format of a small business to a corporation or a limited liability company can offer a range of advantages for entrepreneurs. The advantages of incorporating a small business include: Personal asset protection. Both corporations and limited liability companies allow owners to separate and protect their personal assets. Additional credibility and name protection. Adding “Inc.” or “LLC” after your business name can add instant legitimacy and authority. Consumers, vendors and partners frequently prefer to do business with an incorporated company. Perpetual existence. Corporations and limited liability companies can continue to exist even if ownership or management changes. Sole proprietorships and partnerships just end if an owner dies or leave the business. Deductible expenses. Both corporations and limited liability companies may deduct normal business expenses, including salaries. Compete for more contracts. Some businesses require vendors and contracting companies to be incorporated before they can compete for contracts. Entice and hold employees with stock options. A corporation has an advantage in attracting talented employees by offering employees partial ownership in the business through stock options. Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion. Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
The world has been turned on its axis over the last 17 or so months as a result of the COVID-19 pandemic. Small businesses have been hit particularly hard and will continue to be harmed with the new surges in infections caused by the delta variant as employers face pressing questions about worker vaccination requirements. I discuss some of these questions below addressing vaccination policies, vaccine exemptions, and vaccine verifications. Can an employer require employees be vaccinated before working in person? Recently, the Equal Employment Opportunity Commission issued guidance stating that implementing mandatory COVID vaccination policies is permissible, as long as the employer does not violate federal discrimination rules around disability and religion. Is it legal to fire employees because they refuse to get vaccinated or show proof of vaccination? If an employee has a valid “Vaccine Exemption Form” on file, the employer should consult an attorney before firing the employee for refusing to get vaccinated. Depending on the situation, it could violate state and federal laws prohibiting discrimination. Requesting proof of vaccination, in general, is legal, but employers need to be mindful of the employee’s privacy and not to collect any other unnecessary medical information. How can employers screen employees for COVID-19 symptoms? Employers can screen employees for COVID-19 symptoms before they enter the workplace by: Asking if they have any COVID-19 symptoms, such as cough, fever, shortness of breath. Asking if they have been around anyone with COVID-19 symptoms. Taking their temperatures before they enter the workplace. Can employers require employees get tested for COVID-19? Yes, the CDC and Equal Employment Opportunity Commission have extensive guidelines on how businesses can monitor employees for symptoms and test employees. Employers can only test employees by a viral test that shows whether a person is currently infected. Can employees refuse to come back to work for fear of infection? The Occupational Safety and Health Act protects employees refusing to return to the workplace if they reasonably believe they are in “imminent danger” of contracting the virus. To take advantage of this protection, employees cannot be generally scared of getting the COVID virus but must specifically prove this fear. If there is no imminent danger, and the employee still refuses to return to work that employee is not entitle to pay. What is recommended to include in a workplace vaccination policy? Part of your employee communication should consist of a written workplace vaccination policy, whether you decide to mandate vaccinations or not. Use clear and direct language about vaccination requirements, exemptions, and reasonable accommodations, such as social distancing, working remotely, or using paid leave. Also, lay out the consequences of not following the policies, such as termination of employment. However, when drafting your policies be sure to consider all applicable federal and state laws. How should employers evaluate vaccine exemptions? As a small business employer, if an employee tells you that they cannot receive the vaccination because of a disability or religious belief, you should first determine if your business is subject to the requirements of the ADA and Title VII, and if it is, follow the legal requirements and guidance of both. Can an employer require verification of vaccination due to COVID-19 concerns? Employers can ask if employees have been vaccinated, even requiring proof of vaccination through self-attestation or a COVID-19 vaccination record card or passport according to the Equal Employment Opportunity Commission’s recent guidance. This topic is hotly debated and many employers are concerned about privacy issues. Limit the questions to COVID-19 related concerns and not to ask questions about the employee’s health in general. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
Bagla Law Firm, a leading expert in business formation and asset protection, has been doing business in Carlsbad, California for more than a decade. Why did business attorney, Kelly Bagla, Esq. choose Carlsbad? And why has she continued to build her California Law Firm in this oceanside community? Here are three top reasons why this business attorney (and her clients) recommend Carlsbad to do business. Quality of Life Carlsbad is a seaside community that has village charm and a world-class business environment. According to Kelly, “I have helped many startup companies with business formation who have chosen to locate their businesses here primarily because of the quality of life. You can’t beat the near-perfect weather and and idyllic setting.” Many business owners site the unique combination of a low-key beach life, a dense suburban feel, plus a booming business environment, as the perfect set of reasons for doing business in Carlsbad. Business Growth Opportunities More than 93% of Carlsbad establishments are small businesses. And according to the City Council, the percentage of new businesses in Carlsbad increased from 20-34 percent, revealing a strong entrepreneurial environment. Thriving business growth affords opportunities for businesses in all sectors to startup, grow and thrive. This robust dynamic for growth provides California business attorney, Kelly Bagla, with continual access to new clients including entrepreneurs, small businesses, corporations and international businesses to help them start, run and protect their assets through legal strategies. Location, Location, Location Carlsbad is conveniently located between Los Angeles and San Diego providing easy access to national and world-wide clients and vendors. At the same time, Carlsbad is also located near surrounding local neighborhoods. The coastal city has a commuter train and great bus service making it easy for employees, owners, and clients alike to travel to Carlsbad establishments. “We are located conveniently close to our Carlsbad business clients,” explained Kelly. “As their business attorney, I can meet at their offices or ours, on a moment’s notice.” These three reasons, (and more) make Carlsbad the perfect place for Bagla Law Firm to help clients with everything from business formation to asset protection. And these same reasons apply to most businesses who are looking for an ideal place to locate their business.
Have you ever wondered if that contract you were reading actually needed all those legal terms? Every term, condition, and individual facet of a legally binding contract can make a world of difference. Wording can make or break obligations, definitions can simplify the language or cause confusion, and missing or included elements can be the difference between a valid or void contract. A null and void contract is an illegitimate agreement, making it unenforceable by law. Null and void contracts are never actually executed because they are missing one or more of the required elements of a legal agreement. To draft a valid contract, you need to understand the necessary elements of a contract, what makes a contract void or voidable, and how to terminate an agreement. Elements of a Contract: A contract must include the following six elements to be legally binding and enforceable: Capacity: Contractual capacity refers to an individual’s ability to enter into an enforceable contract. People who are under age, mentally disabled, or intoxicated provides for lack of legal capacity and can not be held liable for their end of the agreement. They can choose to move forward with the agreement if they wish, but they can also exit the contract at any time without breaching. Offer: An offer is the initial draft of a contract that includes the terms of the contract to which the person you are entering into an agreement with is willing to be bound. Most offers include a promise to act or not act in a certain way or an exchange of promises. If the offer is accepted and signed, it becomes legally binding at that moment. Acceptance: Acceptance is an agreement to abide by the terms and conditions in the contract. An offer’s acceptance must be made by the person who is accepting the offer. If the offer is not accepted, then the person not accepting the offer can make a counter offer and the process then starts over with that new offer and the acceptance of that new offer. Legality: Legality simply refers to whether or not the terms, conditions, and the overall agreement abides by law. If the subject matter of a contract is not legal, it is not enforceable. For the agreement to be valid, the transaction must be legal. Consideration: Consideration is the exchange of one thing for another. Contract law states that both parties in the agreement need to provide something of value for the agreement to be valid. Consideration can include money, an item, or completing a certain action or service for someone. Mutuality: Mutuality is a contract element that states both parties need to be bound to the agreement for it to be valid. If one party is not legally bound, then neither are. The agreements that lack mutuality are not valid contracts. For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
With the 2021 COVID-19 Supplemental Paid Sick Leave law, which became law effective March 29, 2021, many qualifying employees now have access to 80 hours of paid time off for virus-related reasons. Covered employees in the public or private sectors who work for employers with more than 25 employees are entitled to up to 80 hours of COVID-19 related sick leave. Here’s what workers are now entitled to, and what employers are obligated to do in response to the law: Covered Employee A covered employee may take leave if the employee is unable to work or telework for any of the following reasons: Caring for Yourself – the employee is subject to quarantine or isolation period related to COVID-19 Caring for Family Member – the employee is caring for a family member who is subject to the COVID-19 quarantine or isolation period, or is caring for a child whose school or place of care is closed due to COVID-19. Vaccine Related – the employee is attending a vaccine appointment or cannot work or telework due to vaccine related symptons. Companies with 25 or more Employees Employees who cannot work or telework due to COVID-19 related reasons are entitled to paid sick leave if they work for an employer with more than 25 employees. The Supplement covers the period of time between January 1, 2021 through September 30, 2021. This means that employees who took qualifying leave prior to the law taking effect can request retroactive payment. Employees are entitled to up to a maximum of $511 per day and $5,110 as a whole as part of the 2021 COVID-19 Supplemental Paid Sick Leave Companies with less than 25 Employees Those who work for employers with under 25 employees are not entitled to the 2021 COVID-19 Supplemental Paid Sick Leave. Workers may be able to get partial pay through programs such as state disability insurance and paid family leave. Employer Obligations Employers with more than 25 employees must provide 2021 COVID-19 Supplemental Paid Sick Leave, including retroactive payments for qualified leave that was taken going back to January 1, 2021. Employers are obligated to make the leave available to covered employees immediately upon the employee’s oral or written request and must provide payment for the leave no later than the payday for the next regular payroll period after the employee took the leave. Employers are required to make retroactive payments only if the employee makes an oral or written request to be paid for the leave. The retroactive payment must be made by the payday for the next full pay period after the worker requests payment, and the employer is obligated to indicate how many 2021 COVID-19 Supplemental Paid Sick Leave hours are left to the employee on their itemized wage statement. 2021 COVID-19 Supplemental Paid Sick Leave must be made available in addition to regular paid sick leave, and employers are required to list it separately from regular paid sick leave on employees’ itemized pay stubs or in separate writing when wages are paid. Burden on Employers The new paid sick leave requirement is challenging for employers. One issue is the relatively short period of time employers have had to come into compliance with the rules. Another issue relates to the retroactive payment to employees as employers going back in time, may or may not have done a very good job on documenting the reasons why employees were out. And trying to reconstruct that to see whether it meets one of the qualified reasons is going to be a challenge. The 2021 COVID-19 Supplemental Paid Sick Leave poster must be displayed where employees can easily read it or disseminated to employees electronically. For more information on how to legally start and grow your business please visit my website at www.golegalyourself.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
With the new year comes new laws and the one that every employer needs to know is the minimum wage increase in California. The minimum wage is the minimum hourly rate that nearly all California employees must be paid for their work by law. In California, the applicable minimum wage depends on the size of the employer. STATE MINIMUM WAGE California law establishes annual increases in the minimum wage until 2023. The increases are scheduled to take effect on January 1st each year. On January 1, 2021, California’s minimum wage became $13.00 per hour for employees that work for employers with 25 or fewer employees, and $14.00 per hour for larger employers. LOCAL MINIMUM WAGES The California Constitution allows local governments to set a minimum wage, applicable within the government’s jurisdiction, that is higher than the state minimum wage. Several cities and counties have enacted ordinances that set a higher minimum wage for some or all employees who work within the boundaries of the local government. Several of California’s larges cities’ current minimum wage rates range from $14.00 per hour to $16.00 per hour. MINIMUM WAGE CANNOT BE WAIVED A California employer must pay the California minimum wage to employees even if an employee agrees to work for less. An employment agreement that attempts to pay an employee at a lower than the minimum wage is unlawful and will not be enforced. MINIMUM WAGE AND INDEPENDENT CONTRACTORS California’s minimum wage law applies only to employers and thus only protects employees. It does NOT protect independent contractors. Importantly, however, the fact that an employer labels a worker as being an independent contractor does not necessarily mean that the worker is not an employee. Whether a worker is an independent contractor or an employee will depend on several factors, including the degree of control that the employer exercises over the work performance. You can incorporate your business, find contracts, and download a free COVID-19 liability waiver form from www.GoLegalYourself.com For more information on how to legally start and grow your business please visit my website at www.golegalyourself.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
Starting your own business can be a difficult task and complying with all of the legal requirements can be overwhelming. The following list includes the most important elements any startup should meet to avoid a list of potential legal issues. 1) Form the proper business entity Choosing the proper business entity for your startup is crucial because it affects your personal liability, how much you and the entity pay in taxes, and your ability to raise funding. It’s a good idea to first decide whether you want to raise capital from any outside investors. If so, it’s usually best to form a C-corporation. A C-corporation’s structure could result in double taxation, but investors are usually more open to investing in this type of structure and startups that raise venture capital are unlikely to distribute dividends. For that reason, double taxation usually is not as large an issue. An S-corporation would be the best structure for a business that intends to stay small with only a few owners who are all U.S. citizens or residents. 2) Incorporate in Delaware You should incorporate your startup in Delaware no matter where you are located, but you should also look into incorporating in your home state. Delaware’s court system is known to provide maximum flexibility in business entity structures with its well-developed case law. Corporate attorneys are more familiar with Delaware law mainly because more than 80% of U.S. publicly traded companies have their legal home in Delaware. Your startup will reflect credibility as a Delaware incorporated business when approaching outside investors as well, since most require it. 3) Create a written agreement between your business owners If you are working with multiple business owners, it’s important to make sure that each person knows and understands his/her rights and responsibilities. If you are forming a corporation, this means creating a shareholder agreement and the Articles of Incorporation. The Articles must contain the number of authorized shares, state the purpose of the company, identify the incorporators and the agent authorized to receive service of process, and provide the name of the corporation. 4) Apply for an Employer Identification Number (EIN) In order to open a corporate bank account and to properly file your business tax returns, you will need an Employer Identification Number (EIN). You must request one from the IRS and may apply over the phone or by using an online application on the IRS website. You will need the social security number of the person completing the form for the company (usually the President or CEO). Include information on your business entity and date of incorporation. Make sure to keep a signed copy of this application in your files – ask for one if you apply over the phone. 5) Perform due diligence on your investors Venture capitalists and angel investors are certainly doing an abundant amount of research on your startup; therefore, as a founder you should do the same. You want to make sure that your investors are just as committed as you are to your brand because they will be your long-term partners. You also want to make sure you know enough about their background and industry expertise. Conduct LinkedIn searches, learn about their expectations, and even get to know them on a personal level to make sure they are the right fit for you. 6) Create a vesting schedule for the founders A common issue among founders is the level of commitment each person brings to the table. Upon incorporation, founders should create a vesting schedule that states that stock ownership will vest over time. This is important not only because it prevents one founder from quitting and being able to keep all of his/her stock, but it is also usually required from investors before the first round of financing. You want to have a vesting schedule created before negotiations with investors take place or else, they may want to impose a certain schedule. If you already have an existing system, they are more likely to follow what you have implemented. 7) Protect your Intellectual Property The road to success requires that you maintain a strong intellectual property (IP) portfolio. Remember that IP not only includes patents but copyrights, trademarks, and trade secrets as well. File any patents as soon as possible, for the process to issue a patent can take more than 5 years. Investors are more likely to invest in a company that has protected its IP. Make sure you have the exclusive right to reproduce and display your work. Pick a name for your company that is specific to the products/services you provide and prevent others from using a similar mark. Decide what is considered a trade secret and keep that information secure against unauthorized access. Since IP can entail a vast array of legal to-do’s, you should consult an experienced IP attorney who can help you through the process and provide you the utmost protection. 8) Know how your employees are classified A very common mistake when startups first hire employees is misclassifying them. Know the difference between an employee and an independent contractor. The main difference between the two boils down to control, regardless of what the worker may be called in any sort of agreement. If the startup requires that the worker show up at a certain time, work a certain number of hours, and be under a great deal of supervision, it is unlikely that he/she is an independent contractor. More control over the worker means it is more likely that a court will deem the worker an employee. 9) Comply with Securities Laws Founders and investors of LLC’s, corporations, and partnerships are subject to federal and state securities laws. These laws were made to require companies to provide reliable and accurate information about their businesses to enable a fair market. They also protect from insider trading and trading fraud. Failure to comply with these laws can result in the startup having to repurchase…
There is much confusion around what people can trademark or copyright. A copyright is a type of legal protection given to content creators and artists. When a person creates a story, a work of art, or a piece of software, the copyright provides legal ownership of the work. The creator receives exclusive rights to the use and distribution of the work for a set amount of time. What Is Eligible for a Copyright? The following works are eligible for a copyright: All literary works: These include short stories, poems, newspaper articles, blogs, plays, and reference materials. Advertisements Architecture Artistic works: These include drawings, paintings, pictures, and sculptures. Technical Drawings Films Television shows Podcasts Choreography Musical compositions Concerts and other live performances Computer software Computer hardware For any of these works to qualify for a copyright, they must meet what the law describes as “some minimal degree of creativity.” What Is Not Eligible for Copyright Claim? The primary areas where someone cannot claim copyright status are: Facts Ideas Methods of Operation Systems Which Protections Does a Copyright Give? Think of a copyright as your ownership of something that you’ve created. Whether you take a picture, write a short story, or compose a piece of music, it’s your work. A copyright gives you legal protection over that creation. As the copyright owner, only you have the right to: Reproduce the Work: You can make copies of the content you created. You may distribute your work as you see fit. Create Other Works Based on the Original Work: For example, you may want to combine a series of blog posts into a book. Display the Work in Public: When you create art, you may want others to look at it. Your painting, statue, or installation is yours to show wherever you like. Ability to sell copies of your work: You can profit from your copyrighted idea by selling it. Perform the Work in Public: When you write music, a book, a play, or anything else you can display in public, you have the right to do so. For example, you have the right to play your own music at a concert. You as the content creator with a copyright hold these rights for a period of time. You cannot lose them unless you legally give them up. You own the rights to your works in the same way that you own your house or car. Nobody else can use any of it without your express permission. How Long Does a Copyright Last? The time limit for a copyright depends on the date of the work. Anything created after January 1, 1978, has a copyright for the life of the author plus 70 years. That means that a person who dies tomorrow would have a copyright on their work for 70 years and one day. Does a Person Have to Register a Copyright? No, creating the work automatically gives a person a copyright. Registration of the copyright is voluntary. A person may register their work at any point during the timeframe when their work is eligible for copyright. Still, official registration lets the creator: Have a public record of their copyright claim File an infringement lawsuit in court For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
