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What is the risk of creating your own Contract?

In Contract law, it is often what you do not know that causes the most damage. 

An example of this is as follows: You own a consulting business that provides services to Generic Co. at a rate of $150/hour. For the month of January, you worked 20 hours for a total of $3,000 worth of services rendered. Despite the fact that services were provided and you have a written agreement, Generic Co. refuses to pay the invoice and is in breach of contract.  The only way to recover this amount is to file a lawsuit. The filing fees and attorney’s fees for this lawsuit will be more $3,000. Will you be able to recover your attorneys’ fees from Generic Co.?  

In Ohio, the answer is no. That is, unless your Consultant Agreement awards attorneys’ fees to the prevailing party.  With a provision that awards attorneys’ fees, Generic Co. is less likely to refuse to pay your invoice because they could end up paying your attorney’s invoice as well as the amount of services rendered?

To ensure all of the proper procedures are followed, the best investment is in a qualified counsel.

 Can I use the same contract template for every transaction?
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There is no uniform contract template for every agreement.  Each type of transaction has special considerations that can have significant, unintended consequences if not properly addressed. 

That does not mean you need to contact your business attorney every time there is a transaction, just that each type of transaction should be evaluated to put the proper terms and variables in place.

Additionally, the laws are not uniform in every state. Thus, a contract found online may work perfectly in California but be a disaster in Ohio. Thus, the best course of action is to have your agreements drafted by a qualified business attorney in Ohio.
What is a Contract?

A contract is a combination of words that create obligations between two parties. The trick is to both understand the legal effect of those words and to know what words should (or should not) be included.

As a business owner, you are skilled at your profession and people use your services or goods because it is too time consuming for them to figure out how to create it themselves.  That same principle applies to Contract law.
Essential Legal Information for Ohio Companies

Business owners must consider compliance at the federal, state, county, and local governmental levels.  Not every type of business requires action be taken, but consideration is essential to protecting the future of your company.

Here are some helpful tips on keeping your business up-to-speed on government compliance:

  • Set calendar reminders for continuing registration or licensing requirements.
  • Establish procedures with your Accountant/CPA to set up automated payment of income taxes and sales taxes.
  • Establish payroll processing for employee payments and tax withholdings.
  • If a relevant statute affects your industry, add a Google Alert for articles that apply to the relevant statute.
 
To ensure all of the proper procedures are followed, the best investment is in a qualified counsel.

Feel free to contact Elliott Stapleton with questions.

(Source: http://tax.ohio.gov/faqs/Sales/sales_vendors.stm)
What an Ohio Business Owner needs to know about Trademark law

Business owners are often excited about their new company. Before investing in designing logos, printing business cards, or buying domain names, you will want to make sure there is not a strong likelihood your selected name is going to infringe on a registered trademark.

Before choosing a business’ name, it is best to conduct a trademark search to determine if there are existing registered trademarks using a similar name. The legal standard for infringement is a likelihood of confusion between marks.

Using the Trademark Symbol
It is important to understand how to use the Trademark symbol correctly. Before you have a federally-registered mark, you can only use the trademark symbol “TM” with a trademark or “SM” with a service mark (which is a form of trademark). 

Once a company’s mark is registered with the United States Patent and Trademark Office and on the federal registry, then the trademark symbol, ®, can be used.

To ensure all of the proper procedures are followed, the best investment is in a qualified counsel.
Do you own the rights to the work your employee or independent contractor creates for you?

Work created by an employee, within the scope of his or her position, is presumptively the property of the employer. Unless there is an express agreement to the contrary, employers own the intellectual property created by employees. It is best to have the scope of employment clearly defined in a contract so there is no confusion on this point.

The same is not true for Independent Contractors, Freelancers, or Consultants. For these outside contractors you will need a Work for Hire Agreement to ensure you own all rights to the work created. Thus, every Ohio business owner should have a well-drafted work for hire agreement with contractors and consultants.

A Work for Hire Agreement only applies to contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas. For more information visit the Copyright Office website.

What is the defense of fair use?

In general, infringement can be avoided if it can be demonstrated there was a “fair use” of the work in question. Fair use is proven by showing that proper credits were given to the author of the work and that the portions reproduced were for a limited purpose not in direct competition.

There is no bright-line test to determine fair use, however,  the following factors are considered when determining if use of a work is "fair":

1.      The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2.      The nature of the copyrighted work;

3.      The amount and substantiality of the portion used in relation to the copyrighted work as a whole;

4.      The effect of the use upon the potential market for or value of the copyrighted work.

If I have an exclusive license, can I sue for infringement?

The answer depends on the terms of your license agreement. Every license agreement conveys a part of the owner's "bundle of rights". (For example: the owner of a photograph can license that work to be used online to one party and license reproduction in hard copy form to another party). A license can be all rights or just a small portion. 

The Copyright owner can reserve the right, in full, to file suit against a potential infringement on the work. This is part of the bundle of rights, which can be conveyed in a license agreement.  Failure to address this issue in the agreement may cause a potential dispute between the owner and licensee if a suit is filed.

A non-exclusive licensee would likely never be able to file suit for infringement. However, the extent of a license is not always as clear as the title of the agreement may suggest.

To ensure all of the proper procedures are followed, the best investment is in a qualified counsel.
Why should I register a Copyright?

There are also important considerations for a business in Ohio concerning Copyright law. US copyright laws provide additional protections to those who file obtain registration.

The Copyright act provides attorneys’ fees, statutory damages, and the presumption of validity to those who properly register the work.  Failing to address these considerations will result in copyright infringement disputes without the ability to receive these benefits. 

There is a common misconception that by mailing a copy of the work, without opening it, there are additional copyright protections. This “mailing copyright to yourself” does not provide the added protections or defenses that would be received with a proper registration.
Copyright law for Ohio Start-up Companies

Copyright law is an important consideration for any Ohio business.  For any work created by you, your LLC or Corporation, there should be a proper copyright symbol used once the work is distributed in commerce. The copyright symbol should include © with the name of the company, date(s) of publication, and that statement that “all rights are reserved.” Further, the work should be registered with the copyright office in the Library of Congress. 
Business owners can use this information to get clear answers to questions about Ohio Business law topics.  These answers will provide a general understanding of legal risks and implications of business decisions.

For a startup business, there is more to forming your company than simply filing with the Ohio Secretary of State. A charter from the State of Ohio may give you the right to start your business, but there is more to protecting your personal assets than just filing your Articles of Incorporation. 

If you would like to learn more about forming an Ohio LLC, have questions on operating agreements, trademark law, incorporation, or general business law, click here.

What does an Ohio business owner need to know about Contracts?
Every business uses contracts to transact business. The livelihood of a business is based on these transactions.  If one party is in breach of contract, courts will enforce state contract law (depending on which choice of law the contract has listed).  Contract law assumes both sides have read the agreement and understand the terms.

If you end up on the wrong side of a breach of contract case, the costs for litigation are substantial. With a well-drafted agreement, you will understand your obligations and the risks involved in a given transaction.

For more information about contracts such as a service contract, land contract, sales contract, confidentiality agreement, employment contract, license agreement, or other questions about agreements, click here.

If I want to start a new company, where do I begin?

For new business owners, I have created a one page, comprehensive checklist on how to Start and Maintain a Legally Sound Business. Download the Checklist Here. This will give you a foundation of information to keep your business on the right track.

What is the purpose of an Ohio LLC or Corporation?

Forming a Limited Liability Company or Corporation, if properly created, allows you to invest into the business and limit your liability to that investment.

If you are not using an LLC or Corporation and, instead, operate as a sole proprietorship or partnership everything your business owns and everything you personally own is at risk if the business is sued.


How do you create an Ohio LLC or Corporation?

To operate as an Ohio LLC or Corporation, you must have authorization with the State of Ohio; Articles of Organization or Incorporation.  But this merely gives you authority to act as the company, it does not guarantee you have the limited liability protection.

The company must also have a formal structure, keeping the owner's personal assets separate from the assets of the business. This includes a Tax Identification Number, bank account, membership certificates, an Operating Agreement, and Resolutions giving the owner authority to act on behalf of the business.

If the business is not kept separate from the owners, there is a risk that the owners could lose the limited liability protections; thereby putting personal assets at risk.

How can an Attorney help with the creation of a Company?

To have a successful business, it is imperative to start with a solid foundation. This foundation includes addressing all legal matters including government filings, preparing agreements between members if there is a dispute, and providing guidance on day-to-day legal questions. 

There are a lot of legal questions a business owner may not even know they have to ask. Using qualified counsel ensures that those questions are asked and answered. 

How do I select a name for my Company?

Business owners are often excited about their new company. But before you invest in designing logos, printing business cards, or buying domain names you will want to make sure there is not a strong likelihood your selected name is going to infringe on another company's name. 

You can do this a few different ways: 1) Search on Google using “____” around the name and other, similar name combinations; 2) Search on the United States Patent and Trademark Office website; and 3) Search the Ohio Secretary of State’s website under business name. This will give you a better idea of what is already in existence.

The best practice is to obtain a Federal Trademark. Obtaining a Federal Trademark will give you the highest level of protection
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How much are Attorney's fees to create a Company?

Before representation begins, clients will know exactly how much the services will cost and will have a clear understanding of what is going to be done. The cost is typically a fixed fee which gives clients certainty and allows them to budget for the costs.
Elliott Stapleton - Cincinnati Estate Planning Attorney | 123 Boggs Lane, 1st floor, Cincinnati, Ohio 45246 | Phone: 513-334-0099
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THIS IS A LEGAL ADVERTISEMENT ONLY. GENERAL INFORMATION ONLY, NOT TO BE CONSTRUED AS LEGAL ADVICE. ALL LEGAL DECISIONS SHOULD BE ADDRESSED WITH LEGAL COUNSEL

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