When business owners offer their employees a retirement plan benefit they have a personal responsibility to make sure that the fees charged are reasonable. Realizing that many employers are unaware of all the fees they’re paying, the Department of Labor is requiring plan providers to more clearly disclose the fees being charged. Fees vary a great deal, but generally speaking, the smaller the plan, the higher the fees when measured as a percentage of participant assets.

Under the new regulations plan providers are required to provide employers with this information by July 1 of this year, and by August 30, the information needs to be provided to all participants.

A recent study by AARP found that 71% of respondents thought they didn’t pay any fees in their plan. The study suggests that for the millions of Americans who will be receiving information on how much they’re paying for their 401(k) retirement plans, these disclosures may come as a big surprise.

The logic behind the new requirement is twofold.  First, fees can make a big difference in the amount people are able to accumulate in their retirement accounts, and second, if plan sponsors understand how much they’re paying, they’ll be better able to fulfill their personal legal obligations to make sure the fees their employees are paying are reasonable.

In their publication “A look at 401(k) plan fees” the Employee Benefits Security Administration provides an example of how important fees can be.  Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000.  If returns on investments in your account over the next 35 years average 7 percent and fees and plan expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account.  If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000.  The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.

In a study done by Deloitte Consulting in November of 2011, they found that only about one-third of business owners had participated in a competitive review of their current retirement plan in the last two years.  Examples of a competitive review include a review of plan fees by a third party (an investment or benefits consultant) or a complete vendor search with a request for proposal (RFP).  By not actually checking their options, business owners may have a difficult time proving that they’ve fulfilled their responsibility to ensure that the fees charged are reasonable, thus exposing them to a potentially significant personal liability.

The new fee disclosure requirements are already having an impact in the market, creating more competition and driving costs down.  Business owners that check their options now to make sure the fees they are paying are reasonable may avoid problems this fall when their employees find out how much they’re being charged.

The author, Ken Perine, is a Certified Financial Planner ^TM at Meritage Wealth Advisory.  He provides personal financial planning and retirement plan consulting services to business owners.  For more information, go to www.meritage-wealth.com.

When is the right time to trademark your business name?  You worked long and hard to come up with a catchy name for your business, now how do you protect it?   Perfecting a trademark can be an important part of your asset and intellectual property portfolio. As your business grows and you become more well known, your protections will become more and more important.  These protections can lie in many areas including selecting the proper entity, having the right insurance coverage, and protecting your intellectual property, to include perfecting the appropriate trademarks.

When is the Best Time to Register Your Trademark?

Your business name may be all you have as you build your business, but as your business grows and your name becomes more well known others will become interested in using your name for their benefit.  The best time to protect your business name is right when you start your business because that is the time when no one else will be interested in it.  It will also place you on record as owning and using the name in your business ventures which can prevent others from using your name or another name that is confusingly similar to yours.

Trademark vs. Servicemark

A trademark is used for goods while a servicemark is used for services.  Both accomplish the same protections, it’s just that a distinction has been made between goods and services when it comes to the name of the mark that you will apply for.  A trademark is symbolized by the superscript style TM, or ™, while your application is pending and once registered, it will be represented by an R inside a circle, like this ®.  A servicemark is symbolized by the superscript style SM, or ℠, but when the servicemark is registered it will be represented by the same mark as a registered trademark, a ®.

What Does a Trademark or Servicemark Consist of?

Your mark can simply be your business name or a product name, but it could also be your logo.  It will be a word, phrase, symbol or design, or combination of these that describes your goods or services.  It can also be a common word but cannot be a common word that is descriptive of your product.  For instance, you will not be able to trademark the word Tulip if your product is a flower, however if your product was something other than a flower, you may well be able to use Tulip.  A good example that you will be familiar with is Apple, the computer company, they are using the brand Apple to describe their computer company.  Although apple is a common name, their use has nothing to do with apples as they are commonly known.  There are so many iterations of what your mark may consist of, if you are unsure it is best to contact your attorney to find out how best to protect your assets.

Fictitious Business Name vs. Trademark

In short, a fictitious business name and a trademark are not the same.  A fictitious business name will generally protect you in your local area against use of the same name by another company, but it will not protect you throughout the United States or beyond.

Trademark Protections

Your trademark can protect you from others using your name.  It is not an automatic protection, but it will be a deterrent for most.  However, if you find someone else is using your trademarked name, you should be able to get them to stop using your name for profit and you may even be able to have them pay to you any profits they have derived by using your name.  Of course, this is all dependent on having a valid mark as well as the specific facts in your case.  That’s not to say that if you do not have a trademark you will not be successful in your pursuit, however if you hold a validly registered mark it could make your potential fight a lot easier.  Alternatively, if you are found to be using or violating another’s mark, you could be liable to that person for the same damages discussed above.

The above is intended to be a general overview of trademark protections, what trademarks can gain for your business and what can happen if you don’t have the proper or necessary trademarks in place.  If you have a business you should seriously consider protecting your intellectual property by determining what exactly you need to protect and the best way to go about gaining the protections you need.  Your business lawyer should be able to help you with this determination and providing the services you need to accomplish this task.

If you have questions about proper protection of your intellectual property, Integrated General Counsel can help you determine your next steps.  If you are ready for a results-driven plan of action, contact us either by telephone at (925) 399-1529, schedule yourself into our calendar for an appointment at a time convenient for you, or complete the Contact Kristen form and we will get back to you.

 photo credit: Double–M

Why operate your small business under the proper business entity?  In short, it depends.  It depends on your goals and those of your small business, but don’t worry, when you work with the right business lawyer, all that will be fleshed out with you.  You should note that the best entity for you and your company may be different than the entity recommended to one of your competitors or someone else in your line of work.  Because a different business entity was recommended to you does not mean that you have been recommended the wrong one or someone else has, it just means that you probably have different goals you are trying to meet with your small business.

Of course, there are many variations on each entity, but the six main types of business entities are:

• Sole Proprietorship - No formal entity here, you are your small business and your business is you.  You should note, however that when you function as a sole proprietor your personal assets may be exposed to your company’s liabilities.
• General Partnership - A general partnership can exist without any formal agreement.  You form a partnership when two or more people go into business together.  Typically each partner will have have some responsibility for running the company.  Most importantly, you may open up your personal assets to settle the company’s debts even if the debt was not incurred by you.  If you decide to enter into a general partnership, you should be sure to document all the terms in writing.
• Limited Liability Partnerships - Generally, states reserve this type of entity for use by professionals only, such as accountants, attorneys and architects, so if you are not a professional you will probably end up forming one of the other entities listed.
• Limited Partnership- This business entity is similar to a general partnership except typically only one general partner exists and the remaining partners are limited partners.  The limited partners have limited involvement in the day-to-day operations of the business and, more importantly, limited liability.
• Limited Liability Company - A Limited Liability Company (or “LLC”) is available in most states and provides protection from liabilities similar to a corporation.  An LLC is much more flexible than a corporation in that you can structure your business formalities, such as meetings, etc. the way you want to structure them.  If you form this entity, you can elect to be taxed as a corporation or as a partnership or sole proprietor.  There are multiple ways to tailor the structure of an LLC to your liking while enjoying the protections it provides.
• Corporation – Various forms of corporate entities exist, not all of which will be discussed here.  A corporation is an entity that offers personal protection from your business liabilities, but also is the most document intensive and has the most formalities for the entities listed above.  Your choices may include an S-Corporation or a C-Corporation. The best selection for your needs will depend on several factors that include tax consequences and other cost considerations.

There are several business entities from which to choose.  To determine the best entity for you and your venture you should consult your accountant and your small business attorney for input and direction.  An attorney who knows your business will, undoubtedly, be able to provide the best advice.

If you have questions about the best business entity for you, Integrated General Counsel can help you determine your next steps.  If you are ready for a results-driven plan of action, contact us either by telephone at (925) 399-1529, schedule yourself into our calendar for an appointment at a time convenient for you, or complete the Contact Kristen form and we will get back to you.

 photo credit: mikecogh

So, you’re starting a small business…congratulations!  You are embarking on one of the best rides of your life.  I say that because starting a small business is enthralling, but definitely has its highs and lows.  Furthermore, starting a small business takes consistent work.  Yes, the grass can be greener, but it can be bleak.  I’m sure you have read all the statistics about how small businesses fail at an alarming rate.  Want to not be one of those statistics?  Well, then you need to get all of your ducks in a row before you actually throw open your doors.

What ducks? You are probably asking.  Well if it quacks…nevermind.  That is not where we are going here.  Before starting a small businesses there are several considerations to make when putting your plan in place.  Yes, you should have a plan, and I recommend you write it down.  First, start by outlining and drafting your business plan.  You will need to spend some time here, but it will be time well spent when you have a road map to help you get where you are going.

I also recommend writing down your goals.  We all have goals, but some of us never put them in writing.  Once you put them in writing, it’s funny how they become much more real.  This will also help you find your way.

Then, create a budget.  Once you create a budget you will know how much revenue you will need to have in order to cover your expenses, and better yet to actually make a profit.  Of course, you will note from my other posts, that I am big into documentation, and your budget is not an exception.  When you are starting a small business, you should create your budget in writing, just like your business plan, it can be changed, but it will provide you with a starting point.

Of course, the above suggestions are just that, suggestions for you when you are starting a small business.  What suggestions do you have for those who are starting a small business?

 photo credit: 68photobug

When does a small business need a lawyer?  That is a good question that most small business owners do not ask.  Actually, many small business owners may not even think about a lawyer until they have an issue that is causing them to lose sleep, such as being faced with a lawsuit.  What most entrepreneurs don’t think about is that if they were to bring an attorney into their planning process when they are just starting their business, they would probably be able to avoid many of the issues they are faced with later in the cycle of their small business.

A small business lawyer who works closely with entrepreneurs knows what the issues are that small business owners will face in growing their business and will be able to guide them through the planning and growth process.  The best time for an entrepreneur to start building a relationship with a lawyer is when you are just forming your business.  Why, you might ask?  Well, a small business lawyer who works with entrepreneurs will know the questions to ask you to get off on the right foot.  The topics a lawyer should cover with an entrepreneur begin with forming the correct business structure.  Now, a small business lawyer who works with entrepreneurs will know to ask you questions not only about your current plans, but what your plans are down the road.  All of the responses to those questions will back you into the correct entity to form for your budding business.

Furthermore, a small business lawyer who works with entrepreneurs will probably ask you questions about your risk tolerance and risk mitigation.  There are several ways to mitigate your potential risks as an entrepreneur, one is through having the proper insurance.  A small business lawyer who works with entrepreneurs will know what questions to ask about your insurance and should be able to guide you through the various types of insurance you should consider, and which insurances you should have as well as those you might want to consider, but are not necessarily mandatory.

Another aspect of your business a lawyer who works with entrepreneurs will discuss with you is the kinds of contracts entrepreneurs should have in place.  The correct contracts for you will depend on the kind of business you have, but having these contracts in place will help mitigate your risks, too.

A lawyer who works with entrepreneurs should also be able to provide a road map for your business and provide advice beyond the strictly or traditional legal advice.  These are all great reasons to consult with and hire a lawyer who works with entrepreneurs as you launch your business.  When do you think an entrepreneur should first hire a lawyer?

 photo credit: iphwin

In California, workplace violence is not as uncommon you might think.  Here, in California, an employer may be able to convince a judge to issue a restraining order, which is a court order, that may be used to curtail threats of violence against its employees. Under the right circumstances and allegations of actual or potential workplace violence, a judge may order a specific person not to:

Threaten or harass your employee; or
Approach or contact one or more of your employees.

A restraining order against workplace violence may protect multiple employees or even stretch to cover the employees’ family members.  As a business owner, why do you care if your employees are protected?  Well, a restraining order can be used to protect an employee where ever he or she goes, including work, therefore an order of this type may turn out to be fairly inexpensive insurance to help protect all your employees against threats of workplace violence.

How to obtain a Restraining Order

If you, as the employer, are not organized as a corporation, you can apply for one by yourself, or pro se, which means without a lawyer.  However, in California, if you are organized as a corporation then you must be represented by a lawyer and your lawyer must file the application on your behalf.

After the question of who will apply for the order gets sorted out, a restraining order will take several steps to obtain:

1.  You will have to submit what is called a petition for orders to stop workplace violence and seek a temporary restraining order.  You should have evidence that the employee for whom you are seeking the order is being assaulted, stalked or otherwise harmed, or that someone has made a threat of violence against that employee.  If you have no evidence, your petition will most likely fail. Upon submission of your paperwork, you can expect to receive a hearing date, which is the date you will plan to be in the court house and speak to a judge.

2.  At the same time that you make your application for your restraining order, you should request a temporary restraining order or TRO.  The TRO will put in place a restriction that should eliminate any contact by the alleged  perpetrator to your employee, from the date of filing up to and including the hearing date.  If the court grants (or approves) the TRO, you will have to deliver (or serve) all the documentation, in person, to the alleged perpetrator.

3.  Both you or a representative from your company and  the affected employee, if possible, should plan to attend the hearing.  At the hearing you can anticipate the judge may ask some questions about your request.  If the judge decides to grant your request, the order can remain in effect for up to three years. If your restraining order is granted and the alleged perpetrator has attended the hearing, you can have him or her served with the documentation while in the courtroom. However, if the alleged perpetrator does not attend the hearing, you are responsible to make sure he or she receives a copy of the documentation as soon as reasonably possible because until he or she receives official notice, he or she cannot be alleged to have knowledge of it.  You may also consider delivering the restraining order to your local law enforcement agencies.

If after receiving a copy of the documentation the alleged perpetrator violates the terms of the order, call the police!  If you contact the authorities, the alleged perpetrator may be arrested and charged with a crime.  Any restraining order can be enforced in all of the 50 United States as well as any U.S. territories and all tribal lands.  You should know that once a judge issues an order such as this, it can only be cancelled by a judge, meaning it will take more than an agreement between you and the alleged perpetrator to cancel any order that has been issued.

I hope you will never have to us this information, but can you fathom an instance where this might be a helpful tool?

 photo credit: Vectorportal

“What is small business?” is an often asked question.  The Small Business Administration defines small in terms of average number of employees over a period of time and “average annual receipts.”  But to determine whether your small entity qualifies under their parameters, you need to make several assessments to get there, actually you almost need a flow chart.  No wonder everyone has their own answer to the question, “What is small business?”

As a self proclaimed small business lawyer who works with California entrepreneurs, my definition is surely much different than the next person.  The one thing I think we can all take comfort in is that there really is no right answer.  For my purposes as a small business lawyer, my definition includes companies from the start-up phase up to, and including, entities incurring up to $5 million in revenues annually.  However, my neighbor may make $20 million in revenues annually and classify her company as a small business.  You see, it does not really matter what I think, or what your neighbor believes, what really matters is your answer to the question, “What is small business?”

When you ask, “What is small business?” some people will respond with an answer in terms of revenues, some will make a classification in terms of profit, still others will define it in terms of numbers of employees.  Believe me, in working with these small businesses and entrepreneurs, there are about as many definitions as there are people.  I guess what comes of all this is there really is no firm definition of a small business, it can be defined by many people in many ways, and, the best part is, that we can all be correct in our assessment.

If you were to answer the question, what is small business?  What would your response be?

 photo credit: kenteegardin

The application for a Fictitious Business Name also known as Doing Business As (DBA) depends on many factors in California.

If you are operating your business as any one of the below-listed entities

• Corporation
• limited liability partnership (LLPs)
• limited liability company (LLCs)

then you do not need to file for a fictitious business name if your company is operating under the exact same name as the name used in the Articles of Incorporation filed with the Secretary of State (yes, that includes the Inc. or LLC at the end of your entity’s name), then, generally, you do not have to file for a fictitious business license.  Alternatively, you might want to try to add and Inc. to your DBA application to make your company sound more official. Don’t try this, you may not add Corp., Inc., etc. to your fictitious business name if you are not a corporate entity.  Similarly, if you are not a Limited Liability Company registered in the State of  California, you may not add LLC or the like to the end of your DBA.  The county clerk will reject your filing if you do append one of these suffixes to your requested name.

Additionally, if your company name includes at least your last name, then you may not need to file for a DBA.

As you can see there are several factors that should be considered to determine if a fictitious business name statement must be filed.  In California, these statements are not filed with the state but are filed in your county and you may also consider filing in other counties in which you conduct a reasonable amount of business. If you have questions about whether or not you need to file for a DBA, you should contact a business lawyer in your area.

photo credit: ReillyButler

An entire book has been written on what a trusted advisor is, but basically a trusted advisor is a person you might trust to be in the inner circle of your business or someone you might rely to help you run your company in an efficient and effective manner.  You may need more than one trusted advisor, for instance, you might want to have a trusted advisor for accounting, legal, financial advising, banking, insurance, and coaching, among others.  Your accountant or tax attorney will keep the financial piece of your business in check; your attorney should help you build a solid legal foundation by helping you choose the right entity by which to operate your business, assist you in finding any holes in your foundation, and put proper procedures in place to minimize any legal risks; your financial advisor should be able to help you effectively plan for your future; your banker should be able to recommend the best products for your business be they the best bank accounts, credit cards, lines of credit, or loans; your insurance agent should help you have the right lines of insurance in place and should help you determine what the correct policy limits as well as the best deductibles are; and your business coach should guide you in growing your business.

How do you choose your trusted advisors?  That comes down to your comfort level with each of these people.  Let’s face it, if you’re not comfortable and don’t respect the ideas and suggestions of those you rely on for your business, your company may not grow in a way that you would like.  You also should think about choosing people who are interested in learning about your operations and how you go about your daily tasks because those people will have the best insight and therefore be able to provide the best direction when you seek it.  In some of these trusted advisor positions, you may want to choose those who are entrepreneurs themselves rather than an employee of a larger corporation because they may be a little bit more in touch with your needs.  That said, however, in some of these areas, specifically banking and financial advisors, someone who has a large corporation behind them could be most beneficial to you.

When you are establishing relationships with your trusted advisors you may want to ask them how they work with their clients, what kinds of time frames they usually work within, what benefits they provide, and the services they may be able to offer you.  You need to be sure that those people you are choosing as your trusted advisors are intent on building a relationship with you that will last throughout the lifetime of your business, not just be interested in the one off, one time transaction.  Yes, building these relationships with the trusted advisors will take time and often it’s time you don’t have while you’re an entrepreneur starting or building your business.  However, as tough as it may be, building these relationships when you don’t really need your trusted advisors will save you when you do need their advice.

You probably will also want your trusted advisors to be able to refer you to people with specific as expertise that your team of trusted advisors does not have.  Therefore, you might want to determine how deep their connections in your community are.  Chances are, however, that your trusted advisors surround themselves with those who are much like them and so if you feel you are in good hands with those advisors, you should be comfortable with those they would refer you to.

Choosing the best team of trusted advisors may take a while, you may not get it right the first time however as you build your empire you have a better understanding of what you need and who you work well with and in time you will have a team of trusted advisors that you can go to for any of your business concerns.

Do you have at least one trusted advisor that you rely on?

photo credit: Magnus D