Buying a business is a huge decision but when you pull the trigger on buying an existing business, you get the opportunity to become an entrepreneur without starting a small business completely from scratch. Every year more than 500,000 businesses change hands, and that number is expected to skyrocket in the next several years as millions of baby boomers begin retiring and selling their businesses.
The year is quickly coming to an end and as a small business owner, you’re probably already thinking about the new year and all of the exciting projects you have lined up. But before you get in too deep with future plans, be sure that your business is currently in good standing before the year ends. Here are some important steps to complete on your end of year legal checklist: ANNUAL MEETING: If you’re a corporation, it’s important that you hold an annual meeting before the year ends, if you have not done so already. This is where you make important decisions for the year and make sure the shareholders and board members are all on the same page. An important part of holding annual meetings is recordkeeping through corporate minutes. These minutes summarize what’s been decided and what’s been discussed at these meetings. Each state has its own code sections for your business to comply with so make sure you are listing the right code section in your corporate minutes. At this meeting, you’ll also reappoint the directors and the directors reappoint the officer. To stay compliant with corporate law, it’s important that you treat your corporation separately from yourself and holding annual minutes is one way of complying with the law. STATEMENT OF INFORMATION: A Statement of Information is usually required from all business entities in most states. The Statement of Information is filed with your state’s Secretary of State and contains updates on important information about your business, including the names of your directors, members, and registered agent. If your state requires you to file a Statement of Information, there is usually a specific due date (usually the anniversary of your business’s incorporate date). If you miss this filing, you can be subject to penalties and late fees. OWNERSHIP: With the global pandemic we all have experienced, no doubt your business has been affected too where you may have undergone a number of internal changes, such as co-owners leaving, retiring or simply took a reduced salary. Your company’s governing documents should be updated to accurately memorialize any changes in ownership, including any new or revised agreements between owners. CONTRACTS: The end of the year is an ideal time to review all of the company’s outstanding contracts and current relationship with vendors. All outstanding contracts should be reviewed to determine whether their stated term expires in the upcoming calendar year, so you can determine whether or not to seek a renewal or look for another vendor. This is also a perfect time to renegotiate some terms to be more favorable for your company. INSURANCE POLICIES: As your business operations grow and otherwise change from year to year, it is likely that your company’s insurance needs will likewise evolve. You should take some time to reevaluate the coverage and to determine whether your current insurance polices are sufficient for your growth and expansion. In addition to the business insurance coverage, you should also look into getting some ‘key man’ insurance that will help the company financially if one of the owners or a ‘key person’ leaves or dies. With this insurance, your company could continue without any interruptions and will provide you time to fill that ‘key person’ role. While the end of each calendar year is a busy time for everyone, especially business owners, taking some time to review your legal checklist will save you both time and money. We are always available to answer any questions that you may have and to assist you in conducting the annual legal review of your business. 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 follow your passion. Wishing you and yours a Merry Christmas, Happy Holidays, and a very Prosperous New Year! 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.
As we celebrate the greatest country on earth – AMERICA, great businesses also should be celebrated, as some companies seem able to weather any storm – the dream of a true entrepreneur.
April is designated as the Month of the Military Child, underscoring the important role military children play in the armed forces community.
The Month of the Military Child is a time to applaud military families and their children for the daily sacrifices they make and the challenges they overcome.
[img src=”/wp-content/uploads/sites/2/2019/04/Homeland-cover.png” class=”aligncenter”] Starting and running your own business can be incredibly rewarding, but it is also inherently risky. Maybe you’re doing something entirely new and putting your money, time and dreams on the line to make it a success. But sometimes things don’t go as planned. Getting sued, for example, could destroy everything you have worked so hard to build. So, what are your chances of getting sued? What can you do to protect your business? The threat of a lawsuit is very real: over 100 million cases are filed in the US state courts every year. To assess your chances of being sued, the first step is to figure out where you could potentially be liable or otherwise legally responsible. Contract disputes are a very common source of liability for businesses and this liability expands when you have employees. Even your own success may expose you to lawsuits as competitors could file claims for infringement of logos, which is very common as business owners neglect to file a registered trademark for their logo or name. WHAT WILL A LAWSUIT COST YOU? The cost of a lawsuit will depend heavily on the cause of action, whether or not you proceed to trial, and if you win or lose. Pursuing a lawsuit in any capacity can be an expensive endeavor: hiring a lawyer, court filing fees, and discover; it all adds up fast and that doesn’t even include the trial itself. The median costs for a business lawsuit start at $55,000 and can reach well over $100,000. HOW CAN YOU PROTECT YOURSELF? There will always be some risk that goes along with being a business owner, but that should not discourage you. Here are simple ways to protect yourself and mitigate some of the potential damage: Incorporate your business – this can limit your personal exposure Consider alternative dispute resolutions in your contracts – this can avoid the high costs of trial. File for registered trademarks for your business name and logo – this could save you thousands and time in rebranding your business. Always keep a good business attorney on retainer – never make business decisions without talking to your business attorney first. For more information on how to legally protect your business please pick up a copy of my bestselling book: ‘Go Legal Yourself’ on Amazon or visit my website at www.golegalyourself.com NOTHING COMPARES at this price to Go Legal Yourself® Startup Essentials Package. This specialized, customizable package of legal contracts and documents includes everything a startup company needs to protect its assets from the beginning. You won’t find these contracts online anywhere but here. Compare Go Legal Yourself® Startup Essentials Package against the rest: [img src=”/wp-content/uploads/sites/2/2019/04/SMALL-BUSINESS-LAWSUITS-WHAT-ARE-MY-CHANCES-OF-GETTING-SUED-table.png” class=”aligncenter”] GO Legal Yourself! LEGAL DOCUMENTS YOU CAN TRUST. All documents are backed by BAGLA LAW FIRM, APC, a trusted name in law.
[img src=”/wp-content/uploads/sites/2/2019/02/Get-It-In-Writing-feature.png” class=”aligncenter”] With agreements being the cornerstone of most business arrangements, I am surprised by the number of business owners who continue to ignore the importance of putting it in writing – that’s right, a written contract. No matter how well-intentioned both parties are, operating on a handshake is far too risky for your business. I think we can all agree that the days of doing business on a handshake are long gone. Some might ascribe this to a decline in business ethics. More charitably, we might attribute it to the overload of information (resulting in “selective memory” regarding verbal agreements). Whatever the causes, the solution is to always GET IT IN WRITING! This is true whether you’re doing business with family, friends or strangers. The purpose of a contract is to outline terms and conditions that are mutually agreed upon by both parties. When you reduce those terms and conditions to writing, you will be surprised at how many additional factors there are to consider. Not putting your agreement in writing, however, prevents you from having that full discussion with the person on the other side of the deal, and sets you up for possible misunderstandings down the line. Good intentions and trust are important to business relationships, but they are not a substitute for a written agreement. 1. Partnership Agreement This document should define among others, such issues as: Each partner’s financial investment as well as non-monetary investment or “sweat equity.” The share of ownership each will relinquish if more capital is raised. How ownership will be redistributed when a partner leaves the business. 2. Employment Agreement Clearly describe expectations and guidelines for employees. Make sure to designate if employees are “at will,” meaning they can quit or be terminated at any time for any reason. Also, if employees are creating copyrightable works, it is important to indicate that their work is “made for hire,” thus, the employer— not the employee—is considered the legal author. Confidentiality and invention assignment agreements could be essential depending on the nature of your business. 3. Business Practices Document your practices including hiring, firing, receiving income, making expenditures, shareholders meetings, stock transfers, and other practices involved in the operation of your business. [img src=”/wp-content/uploads/sites/2/2019/02/Sign-in-Here-img.png” class=”alignleft”] 4. Contracts All business arrangements should be agreed to in writing. Some arrangements require formal contracts with signatures by both parties. You may not think you need to take such formal steps to protect yourself when you are dealing with close friends or family. But my advice is that the closer the relationship the more important it is to put your agreement in writing. Not only will it protect you legally and financially, but perhaps more importantly, this could prevent misunderstandings, hurt feelings, and damaged relationships. For more information on how to legally protect your business please pick up a copy of my bestselling book: ‘Go Legal Yourself’ on Amazon or 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.
[img src=”/wp-content/uploads/sites/2/2018/08/cover.jpg” class=”aligncenter”] Fact: People with military experience tend to make excellent entrepreneurs. Starting a business involves planning, making key financial decisions, and completing a series of legal activities. If you are a veteran or active military and you are thinking about taking the plunge into small business ownership, there are plenty of advantages available to you. Here are some tips to get you stated. CONDUCT MARKET RESEARCH Market research will tell you if there’s an opportunity to turn your passion into a successful business. It’s a way to gather information about potential customers. There are free useful tools you can use online to help get you started. WRITE YOUR BUSINESS PLAN Your business plan is the foundation of your business. It’s a roadmap for how to structure, run, and grow your new business. You’ll use it to obtain loans or raise money from private sources. There are thousands of business plans offered online but make sure you get the one that will help you get money for your business. FUND YOUR BUSINESS Your business plan will help you figure out how much money you’ll need to start your business. If you don’t have that amount on hand, you’ll need to either raise or borrow the capital. Fortunately, there are more ways than ever to find the capital you need through veteran focused loans specific to veteran owned businesses. CHOOSE A BUSINESS STRUCTURE The legal structure you choose influences everything from day-to-day operations, to taxes, to how much your personal assets are at risk. You should choose a business structure that gives you the right balance of legal protection and benefits. You will need to choose a business structure before you register your business with the state. Consulting with business counselors, attorneys, and accountants can prove helpful. CHOOSE YOUR BUSINESS NAME It’s not easy to pick the perfect name. You’ll want one that reflects your brand and your passion. You’ll also want to make sure your business name is not already being used by someone else. Do a google search for the name and check the state’s business directory and if the name is available make sure you buy the domain first. PROTECT YOUR BUSINESS NAME Once you have settled on a name, you need to protect it. There are two different ways to register your business name. Incorporating your name as a business name protects you at a state level and trademarking your name protects you at a federal level. GET FEDERAL AND STATE TAX IDS You’ll use your employer identification number (EIN) for important steps to start and grow your business, like opening a bank account and paying taxes. It’s like a social security number for your business. APPLY FOR LICENSES AND PERMITS Keep your business running smoothly by staying legally compliant. The licenses and permits you need for your business will vary by industry, state, location, and other factors. For more information on how to legally protect your business please pick up a copy of my book: ‘Go Legal Yourself’ on Amazon or 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.
Having been a start-up lawyer and entrepreneur, I have been asked many of the following questions over the years from entrepreneurs when starting their company.
As a San Diego business attorney, I am frequently asked: “What type of business should I be?” It generally depends on what kind of business you want to conduct. The type of business entity should reflect the kind of business you do.
As a San Diego business attorney, I am frequently asked: “What type of business should I be?” It generally depends on what kind of business you want to conduct. The type of business entity should reflect the kind of business you do.
