Tài liệu The Law ( In plan English) for the small Business pdf

Doing it right is not.

Leonard D. DuBoff, Attorney at Law

forSmall

Business

Organize Your Business • Develop a Business Plan

Finance a New Business • Work with Contracts

Hire Employees • Collect Overdue Accounts

®

THE ENGLISH) (INPLAIN ®

DuBoff

UPC

EAN

SPHINX® PUBLISHING AN IMPRINT OF SOURCEBOOKS, INC.

®

NAPERVILLE, ILLINOIS

www.SphinxLegal.com

Business $19.95 U.S.

$29.95 CAN

Every decision you make today directly impacts your future success. Careful

planning is crucial for identifying your goals and creating a path to achievement.

Understanding the many legal obligations as well as legal protections available

to you is key.

The Law (In Plain English)® for Small Business is your one-stop guide for making

the right decision every time. It covers the topics that concern you the most and

provides clear and accurate explanations of the laws affecting your small

business. All the basic tools needed to begin operations are included such as—

Starting a small business is easy.

Doing it right is not.

• Succession Planning

• eBusiness Considerations

Small Business forSmall Business LAW

The Law (In Plain English)® for Small Business helps you keep an eye

toward the future by examining the unique issues of—

No matter what stage your business is at, it is never too late to get on track. So,

whether you are thinking about opening a small business, wanting to make sure

that you do it right, or ready to expand to the next level—

The Law (In Plain English)® for Small Business has everything you need!

• Incorporating

• Licenses

• Advertising

• Trademarks

• Taxes

• Insurance

• Franchising

• Multilevel Marketing

THE LAW (IN PLAIN ENGLISH)®

for SMALL

BUSINESS

Leonard D. DuBoff

Attorney at Law

SPHINX® PUBLISHING

AN IMPRINT OF SOURCEBOOKS, INC.

®

NAPERVILLE, ILLINOIS

www.SphinxLegal.com

Printed and bound in the United States of America.

VHO — 10 9 8 7 6 5 4 3 2

Library of Congress Cataloging-in-Publication Data

DuBoff, Leonard D.

The law (in plain English) for small businesses / by Leonard D. DuBoff.--

p. cm.

Includes index.

ISBN 1-57248-377-6 (alk. paper)

1. Business law--United States. 2. Small business--United States. I.

Title.

KF390.B84D83 2004

346.73'0652--dc22

2004001921

Copyright © 2004 by Leonard D. DuBoff

Cover and internal design © 2004 by Sourcebooks, Inc.®

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechan￾ical means including information storage and retrieval systems—except in the case of brief quotations

embodied in critical articles or reviews—without permission in writing from its publisher, Sourcebooks,

Inc.®

First Edition, 2004

Second Printing: July, 2004

Published by: Sphinx® Publishing, An Imprint of Sourcebooks, Inc.®

Naperville Office

P.O. Box 4410

Naperville, Illinois 60567-4410

630-961-3900

Fax: 630-961-2168

www.sourcebooks.com

www.SphinxLegal.com

This publication is designed to provide accurate and authoritative information in regard to the subject

matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal,

accounting, or other professional service. If legal advice or other expert assistance is required, the serv￾ices of a competent professional person should be sought.

From a Declaration of Principles Jointly Adopted by a Committee of the

American Bar Association and a Committee of Publishers and Associations

This product is not a substitute for legal advice.

Disclaimer required by Texas statutes.

Dedication

To my wife, Mary Ann Crawford DuBoff,

for all you have done and for all we have together,

and to my mother, Millicent DuBoff,

for giving me the tools necessary to create this work

and the drive to actually do it.

Finally, to my grandson, Brian Michael Haak,

with hopes that he will carry on the tradition.

Acknowledgment

There are a host of individuals who have aided me in preparing The Law (in Plain

English)®

for Small Business for publication. It is impossible to identify all of them

within these pages, but some deserve special recognition. I would like to thank the

following friends, colleagues, former students, and associates for their valuable assis￾tance. In particular, I would like to thank Christy O. King, principal in the law firm

of DuBoff Law Group, LLC, for her aid in spearheading much of the revision work

that contributed to this book. Without her attention to detail, this revision would

not have been possible.

Jed Macy of The Macy Company was extraordinarily helpful in providing up-to￾date and accurate information about pensions and profit-sharing plans. I am also

indebted to John Stevko, CPA, speaker for and CEO of the tax and accounting edu￾cation company Gear Up, Inc., for his aid with the numerous changes in tax law. I

would also like to thank Mary L. Culshaw, CPA/PFS, CFP, of the accounting firm

of Napier and Company, for her help in revising the tax chapter of this book. John

and Mary are extremely knowledgeable with respect to small business tax issues.

Dan Clark, Vice President of Banner Bank, was kind enough to review Chapter 4,

“Borrowing from Banks”, and provide me with practical, useful recommendations.

His years of banking experience provided invaluable insight into the process of deal￾ing with banks.

My colleague and former student, Emil Berg, was extremely helpful in providing

recommendations with respect to the material contained in the chapter on insur￾ance law. I would also like to thank John Smith-Hill of the law firm of Smith-Hill

and Bedell for his help in reviewing the patent chapter. John’s knowledge of patent

law is extraordinary, and his help in understanding some of the newer, more com￾plex developments has been important to the quality of this book.

A special thanks to my brother, Michael H. DuBoff, of the law firm of Davidoff &

Malito, for his astute comments and recommendations.

I would also like to thank everyone, and I mean everyone, at Sphinx Publishing for

their cheerful service with this book. In particular, I would like to recognize the spe￾cial help of the division manager, Dianne Wheeler and my editor, Michael Bowen.

I am also indebted to Lynn Della for the countless days she spent assisting me in

reworking the earlier version and compiling the myriad changes that have occurred

in the law. Lynn’s knowledge of law and business and their real-world application

have proved to be a valuable resource. I could not have revised this book without

her help. My secretary, Peggy Reckow, deserves special recognition for her extra

effort in converting my numerous interlinings and cryptic notes into a readable vol￾ume. Her special talent in working with the foibles of the computer system and

transmitting the manuscript to the editors has been extremely beneficial.

My daughters, Colleen and Sabrina, were a tremendous aid in proofing this work

and verifying much of the material that appears in this text. In addition, my son,

Robert, was extremely helpful in educating me on the intricacies of the World Wide

Web and new computer technology. My grandson, Brian, has provided a special

kind of assistance and understanding. There are many days when I would have pre￾ferred to play with him rather than remain closeted with this revision, yet, he

encouraged me to complete this work before enjoying our time together.

Finally, I would like to recognize the aid of my partner in law and in life, Mary Ann

Crawford DuBoff, for all of her work on this text. Words are inadequate to express

the appreciation I feel for all she has contributed to this and all of my projects.

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

Chapter 1: Organizing Your Business. . . . . . . . . . . . . . . . . . . . . . . . . . 1

Sole Proprietorships

Partnerships and Joint Ventures

Limited Partnerships

Corporations

S Corporations

Limited Liability Companies and Limited Liability Partnerships

Hybrids

Chapter 2: Business Organization Checklist. . . . . . . . . . . . . . . . . . . . 17

Accountant

Business Name

Business Structure

CONTENTS

Chapter 3: Developing Your Business Plan. . . . . . . . . . . . . . . . . . . . . 27

Executive Summary

History

Products and Services

The Market

The Competition

Source of Work

Management

Financial Data

The Business Plan Team

Chapter 4: Borrowing from Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Loan Proposal

Business Outlook

Application

Lender’s Rules and Limitations

Details of the Agreement

Communication when Problems Arise

Venture Capital

Chapter 5: Going Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Advantages of Going Public

Disadvantages of Going Public

Federal and State Securities Laws

Initial Public Offering

Privatization

Chapter 6: Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Contract Basics

Types of Contracts

Understanding Contract Principles

Proving an Agreement

Essentials to Put in Writng

viii • The Law (In Plain English)® for Small Business

No-Cost Written Agreements

Contracting Online

Consumer Protection Laws

Chapter 7: Consignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Advantages

Disadvantages

Special Laws for Artists

Chapter 8: Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Point-of-Sale Payments

Consignment

Invoicing

Ways of Encouraging Payment

When Payment Never Comes

Bankruptcies

Chapter 9: Expanding Your Market . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Franchising

Mulitlevel Marketing

Chapter 10: Patents and Trade Secrets . . . . . . . . . . . . . . . . . . . . . . . 103

Patents

Trade Secrets

Chapter 11: Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Definition

Prohibited Trademarks

Protecting a Trademark

Confusingly Similar

Federal Registration

Applications Based on Actual Use

Applications Based on Intent-to-Use

Contents • ix

Constructive Use

Benefits of Registration

Duration

Supplemental Register

Loss of Protection

Infringement

Antidilution

International Protection

State Registration

Using an Attorney

Chapter 12: Copyrights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Copyright Law Foundation

Copyrightable Material

Scope of Protection

Ownership

Works Made for Hire

Derivative Works

Collective Works

Copyright Protection for Utilitarian Objects

Notice Requirement

Application Process

Period of Protection

Infringement

Chapter 13: Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Government Regulation

Comparative Advertising

Publicity and Privacy

Unauthorized Use of Trademark

Trade Dress

x • The Law (In Plain English)® for Small Business

Chapter 14: Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

General Consideration

Licensing Hazards

Method of Payment

Acknowledgement of Ownership

Quality Control

Signature

Chapter 15: The Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

Protecting Business Property

Protecting Consumer Information

Domain Names

Internet Advertising

Audits

Copyright Concerns

Server Protection

Email

Spam

Viruses, Worms, and Traps

Security for Online Commerce

Chapter 16: Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

Express Warranties

Implied Warranties

Disclaimers

Magnuson-Moss Warranty Act

Using an Attorney

Contents • xi

Chapter 17: Product Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Defective Products

Types of Defects

Federal Laws

Product Liability

Liability Insurance

Chapter 18: Business Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Basics of Insurance Law

Property Covered

When and How to Insure

Chapter 19: People Who Work for You . . . . . . . . . . . . . . . . . . . . . . 193

Independent Contractors

Employees

Employment Contracts

Other Considerations in Hiring

Hazards in the Workplace

Termination of Employment

Chapter 20: Keeping Taxes Low. . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

Income Spreading

Spreading Income among Family Members

Family Corporations and Limited Liability Companies

Qualifying for Business Deductions

Deductions for the Use of a Home in Business

Other Professional Expenses

Travel Expenses

Entertainment Expenses

Conventions

Logbooks

Charitable Deductions

Grants, Prizes, and Awards

Health Insurance

xii • The Law (In Plain English)® for Small Business

Chapter 21: Zoning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

Local Zoning Restrictions

Federal Regulations

Telecommuting and Web-Based Businesses

Chapter 22: Renting Commercial Space. . . . . . . . . . . . . . . . . . . . . . 231

Premises

Cost

Term

Restrictions

Remodeling

Utilities

Security and Zoning

Written Document

Chapter 23: Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237

Defined Benefit Plans

Defined Contribution Plans

Designing and Documenting a Plan

Employer-Sponsored Plan

Investments in a Qualified Plan

Chapter 24: Estate Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

The Will

Payment of Testator’s Debts

Disposition of Property not Willed

Advantages to Having a Will

Estate Taxes

Distributing Property Outside the Will

Probate

Contents • xiii

Chapter 25: Finding a Lawyer and an Accountant . . . . . . . . . . . . . . 261

Finding a Lawyer

Finding an Accountant

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295

About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

xiv • The Law (In Plain English)® for Small Business