Safeguarding Your Business with Insurance

Business owners form LLC’s or corporations in order to shield themselves from personal liability, but many are left unsure of what to do about business liability.  What if a customer trips and falls on the business premises?  What if an employee sues the business, claiming some sort of wrongful conduct?  What if a customer or client makes a claim about the products or services of the business?  Even though the formation of a corporation or a limited liability company offers the small business owner substantial protection from personal liability, most business attorneys and advisors strongly recommend adequate insurance coverage as well. 

How Can A Standard Business Contract Be Helpful in Running Your Business?

One of the most common matters that a business attorney addresses with his or her client is the preparation of a standard business contract that the client (usually a small business owner) can use in providing its products and/or services to customers or clients.  This is an important aspect of managing the legal risks of any business, particularly smaller businesses, because a standard business contract can address in clear and concise ways the matters that are most often problematic for the small business.  Whether you are a consultant, sell products, or provide specialized services to customers, a standard business contract will be beneficial in clarifying the terms and conditions of your transactions with your customers in a number of important ways.

The preparation and use of a standard business contract can be extremely useful because it then becomes a kind of checklist of both economic and legal items that are most important to address and agree upon between the business and its customers or clients.

How Can Your Attorney Help Reduce the Risks of Running a Business?

The core of any business attorney’s job is working with businesses to reduce or eliminate risk.  This is done in a variety of ways, some of which are reviewed below.  The most important thing for any business is to establish an ongoing relationship with a competent and trusted attorney so that, working together, risk can be analyzed and handled.

Following are some of the ways business attorneys work with businesses to reduce and eliminate risk:

1.  If the business is not formed as a limited liability entity (either a corporation or a limited liability company) and its activities involve any significant level of risk, a business attorney can analyze and work with the business to evaluate whether such an entity makes sense and, if it does, work with the business to form that entity.

Should Your Business Hire a Lawyer?

As an attorney who has specialized in small businesses and mid-sized businesses for over 30 years, I am often asked by business people whether or not they should have an ongoing relationship with an attorney.  Most business people work hard to conduct their businesses and want to maximize time with their families, and they wonder why they should spend time and money to consult with an attorney when there is no present legal problem.

The truth is that business attorneys, particularly those of us who work with small businesses and mid-sized businesses, spend a lot of time helping clients try to prevent legal disputes before they arise.  Our primary functions are risk avoidance and risk minimization since legal disputes can be very destructive to

Corporate Records: An Ounce of Prevention

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Many small businesses choose to form corporations through which to operate because of the limited liability afforded to corporate shareholders.  This is a wise choice, but merely incorporating is not enough.  In order to actually enjoy the ongoing protections of limited liability, California law requires corporations to keep certain records.  This is true regardless of how the incorporation is accomplished (with the help of an attorney or through a self-help book or service).  Failing to keep proper records puts the corporation's shareholders at risk of personal liability for corporate debts and liabilities.  Since personal liability is exactly what the shareholders wish to avoid by incorporating, every corporation should calendar and complete the following basic minimum paperwork (in addition to the filing of tax returns with the state and federal government, and you should contact your accountant about that):

1.  Statement of Information.  Every corporation must file a Statement of Information with the California Secretary of State each year during the month of its incorporation (or during any of the five preceding months).  For example, if incorporation occurs in February of 2014, the corporation would then file an annual Statement of Information during the month of February, or sometime during the five preceding months, in subsequent years.  The Statement of Information deadline should be carefully calendared by the

Should You Incorporate Your Business?

Forming an entity like a corporation or an LLC (limited liability company) may limit your liability.

One thing many entrepreneurs and budding business owners think about is whether to incorporate a business.  While forming a corporation or a limited liability company (LLC) can cost a little time and money in the short term, it can actually save you a lot of time and money in the long run.    

The primary benefit of forming a corporation or a limited liability company to operate your business is that, by doing so, you protect your personal assets from your business debts, obligations and liabilities.  That is, when you form a corporation or a limited liability company and fund it properly, the entity becomes a separate “person” in the eyes of the law so that when the business becomes subject to a debt, obligation or liability, only its assets (i.e., the money and other assets that exist at the time of the debt, obligation or liability) can be taken and not the personal assets of the person or persons that own and/or operate the business.  This is what is referred to as the “limited liability” you receive when you form a corporation or a limited liability company.  In other words, your liability is limited to the assets in the corporation or limited liability company, and your personal assets are protected.

Deciding whether or not to form a corporation or a limited liability company for your specific business requires an analysis of the debts, obligations and liabilities likely to be faced by the business.  In other words, the business person must analyze, with the assistance of a qualified professional, the types and amounts of liabilities that are likely to arise in the conduct of the business.  If the potential liabilities of the business are significant, then a limited liability entity, either a corporation or a limited liability company, should be carefully considered.

 

If you live in the San Francisco Bay Area and are considering starting a business, or you have already started a business that is not currently incorporated, contact Jeffrey Miller to find out how he can help you strategize.  (650) 321-0410 or jeff@jeffmillerlaw.com

About Me

For over twenty-five years, I have practiced business law and alternative dispute resolution (ADR) in Palo Alto, California.  I assist businesses with formation and planning; purchases and sales of existing businesses; termination of business entities; commercial leasing matters; and employment matters.  My other focus is on mediation and arbitration, where I help clients settle disputes outside of the courtroom.

What I enjoy most about being a business law attorney is helping people transform their hobbies and passions into successful businesses.  Whether I'm helping someone start a restaurant or a software company, I'm always mindful of the goal, which is to take care of the legal aspects of a business pursuit, so my client can focus on growing it.  A lot of people think attorneys can get in the way of a transaction, but my philosophy is just the opposite; I help the client achieve his or her goal while avoiding potential pitfalls as much as possible. 

I intend to use my blog to reach business owners and entrepreneurs by providing helpful information and relevant resources.  Enjoy!

If you live in the San Francisco Bay Area and are considering starting a business, or you have already started a business but are in need of legal advice, contact Jeffrey Miller to find out how he can help you strategize.  (650) 321-0410 or jeff@jeffmillerlaw.com