_ Purchasing Real Estate and leasing the property to tenants warrants the formation of an Ohio LLC or Corporation just like any other company.
Creating a separate legal entity limits potential liability to the assets of the company; rather than the company assets plus your personal assets. In some cases, businesses and customers can develop different expectations about of the cost for goods or services. This can be the product of a simple misunderstanding about the terms and conditions.
The best way to avoid this type of dispute, is to do not allow any money to change hands or work to begin before there is a written agreement, signed by both parties. Within the agreement, make sure there is a clear cost for all services, potential variables on delivery, date of completion, and an objective statement for what services will be provided. Most disputes are based on a misunderstanding on what work was going to be done and what the cost would be. For example, if the company is providing roofing services, the agreement should specify what type of shingle would be provided. If the contract just says "roof replacement," your shingle expectation may be different from the customer's expectation. This protects both sides and sets a verifiable expectation of services. As with all Agreements, the best practice is to have the terms reviewed with legal counsel. Small businesses typically have one primary person who is authorized to sign checks, call in payroll, or execute agreements. If this person is also the business owner and he or she is ever incapacitated or incompetent it may be impossible for the business to operate. With everyday the business is stagnant, it losses customers, employees, and value.
That is why every business owner needs to have a Power of Attorney in place. Giving this Power to a trusted family member or employee will ensure that if you are alive, but unable to transact business, the business itself will continue to operate. Yes. A registered Trademark can be assigned or transferred; subject to some restrictions on Intent-to-Use applications. Assignments must be recorded with the United States Patent and Trademark office.
If a business is sold, in full, the Trademark will be transferred along with the company. If, however, the sale is an asset purchase agreement, an assignment will be necessary; this type of asset will typically be referred to as intangible property or Goodwill. We have all seen posters with disclaimers on the wall of an office before. The purpose of these posters is to provide notice to employees about certain rights provided by state or federal law.
The issue of interest for small business owners is: what posters are required by state and federal law? The Department of Labor has created a website for this very purpose: Department of Labor. You can answer a series of questions and the site will now generate the list of posters for you with links to download each poster. While you are conducting this assessment it would be best to also review your current employee review procedures and employee handbook to ensure everything is up-to-date (and to make sure there are procedures and a handbook). Why is this important?
When a person has a medical need, there are symptoms which physically manifest as a warning. There are also preventative check-ups which are used to limit future risks. When businesses have a legal need, it can be hard to recognize the symptoms or circumstances where preemptive action is necessary. When a legal problem does present itself, the cure is always more costly and time consuming than prevention. How does a business owner know what legal questions he or she should be asking? Business owners focus their work on maintaining a profitable and sustainable company. In this pursuit, legal well-being plays a vital role but can be overwhelming when the issues are unknown. To address this universal business problem, I have created a concise (one page) Legal Check-up. This Check-up is written specifically for small business owners to do a self-exam. The Check-up will provide insight into the company's current legal well-being and a road-map for action on future legal needs. Business owners often wonder "what legal questions should I be asking about my company." Not knowing what should be done next can be overwhelming. Inaction always results in more problems if legal matters are not addressed.
I have created a one page checklist the describes every legal topic a business owner should address. Here is a link to download the Checklist for How to Start and Maintain a Legally Sound Business. A large majority of companies are being purchased by way of an Asset Purchase Sale. This type of transaction allows the buyer to acquire all of the assets without any of the liabilities. An Asset Purchase limits the risk of a lawsuit that stems from the previous entity's actions. There is an asset that some forget to add to these transactions which could be devastating to a company.
If there are employees or independent contractors of the company being purchased, it may be necessary to secure existing non-compete agreements and non-solicitation agreements as part of the transaction. Without ownership of these agreements there is a risk that the employees or contractors could quit and immediately open a competing business. See: Dexxon Digitial Storage, Inc. v. Haenszel et al. 161 Ohio App.3d 747, 832 N.E.2d 62, 2005 -Ohio- 3187 No. There is a common misconception that anyone can be made into an independent contract. That is not true. Further, there can be serious repercussions if you mislabel someone an independent contractor who is not one. Whether a person can be an independent contractor v. an employee generally relates to the degree of control the owner has
Before making the decision to hire or contract for the first time it is best to work with qualified counsel. There needs to be a clear agreement between the company and the contractor and assessment to determine if the person can even be a contractor. If you have an independent contractor now and want to see if you are in trouble or in compliance you can do an evaluation using IRS form SS-8. Here is a link: http://www.irs.gov/pub/irs-pdf/fss8.pdf 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 file a Federal Trademark to provide the highest level of protection to your business. |
Elliott Stapleton Attorney with CMRS Law
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