Archive of ‘Business Law’ category

10
Feb
2022

Building Your Small Business Avengers Team

categories: Accounting, Business Law, Small Business Attorney, Small Business Team

Avenging the Analogy

Beneath the lore and storyline, the Avengers are a group of uniquely qualified individuals. They each have their own story, but when the world is in dire need, they come together to form the Avengers: an unstoppable force of personality and skill. An entrepreneur is an impressive force, just like Iron Man or Black Widow fighting evil solo. However, nobody can deny the benefits of assembling the Avengers team to combat the greatest challenges.

Admittedly, small business owners today will not likely face large-scale alien invasions. Yet, the challenges they encounter may be just as tricky. That is why it is a good idea for every entrepreneur to build their “Avengers Team.” Iron Man is talented, especially when the fight is in the air, but he cannot be in two places at once. That is why he has a plethora of teammates covering him on the ground.

What an Attorney Brings to the Team

For a small business, the optimal Avengers team includes an attorney. Business attorneys can help entrepreneurs make practical decisions. In addition, prevention and foresight are essential to small business success. These two skills are in every competent business attorney’s arsenal. Below are a few of the other “superpowers” attorneys may bring to the small business Avengers team.

Choosing an Entity: Attorneys advise clients what form of business is best suited for each startup. For example, there are pros and cons to selecting a partnership, limited liability company (LLC), or corporation. A business attorney explores those options, makes reasoned recommendations, and files the necessary legal paperwork. Other startup protocol includes obtaining a business license and providing notice of your intent to start a business- this varies by state. Thus, an attorney guides clients through all the relevant business considerations unique to their situation.

Contracts: Business attorneys frequently review contracts. This process protects small businesses by spotting contractual risks and ensuring the entrepreneur receives sufficient value from the terms of the agreement. One could say attorneys have X-ray vision, at least when seeing through legal jargon.

Hiring Employees: Employment is a specialized area of state and federal law that creates compliance requirements for employers. Working with an attorney to build employment practices protects small businesses against lawsuits. It also ensures your business is compliant with relevant laws. Even preparing a handbook has more nuances than one might imagine, and an attorney can help with that too.

Intellectual Property: If the business involves trade secrets, patents, trademarks, or copyrights, a business attorney can offer advice on maintaining the intellectual property rights associated with each. Additionally, consulting an attorney is essential to properly manage situations where another business or individual infringes on those intellectual property rights.

For more information on selecting a small business attorney, check out the following articles: “How to Choose an Attorney for Your Small Business” and “Finding the Right Lawyer for Your Business” located on the Penn State Dickinson Law Inside Entrepreneurship Law Blog.

What an Accountant Brings to the Team

Certified accountants are wizzes with numbers. They make sure no one overlooks the financial details and fine print. Small businesses are often strapped for cash as-is. Therefore, protecting capital from expensive accounting mistakes can help an entrepreneur in the long run. Some of the “superpowers” an accountant will bring to an Avengers team are highlighted below.

Tax Expertise: Taxes are one area that can run an unnecessarily large bill if done improperly. Accountants ensure that financial filings are complete and accurate. This function is crucial for complying with relevant tax laws and federal regulations.

Financial Statements: Financial statements provide snapshots and overviews of the state of the business. These are crucial for internal planning, budgeting, growth forecasting, and understanding how the business performs. Financial statements are also important because banks and investors often require them before small businesses can access financing. Relatedly, accountants create financial forecasts for personal use and financing requests.

Making Decisions: An accountant who understands the business is an asset to the team when considering opportunities and growth avenues. Accountants can evaluate the business’s financial position and determine the viability of new product or service ideas. Managing cash is often a problem for new businesses, and accountants guide clients to savvy spending practices that help entrepreneurs sustain their businesses long-term.

For more information on the “powers” of an accountant, check out “Dynamic Delegation: When to Use your Accountant Versus You Attorney,” located on the Penn State Dickinson Law Inside Entrepreneurship Law Blog.

“A” is for Accountant and Attorney. Anyone Else?

Yes! “A” is also for anyone else who can serve the entrepreneur and small business. Fortunately, some excellent organizations and professionals want to be part of the small businesses’ Avengers team. Business owners should consider connecting with a banking professional who can provide them with the best advice regarding financing and loan options. Additionally, maintaining business bank accounts is very important. Thus, the relationship with a banking institution is an excellent addition to the team.

Entrepreneurs should also consider connecting with SCORE. SCORE is a nonprofit organization that provides free services to entrepreneurs, including one-on-one mentoring with a dedicated volunteer. SCORE also offers connections to valuable business planning resources, financing advice, licensing guidance, and more. In addition, entrepreneurs may familiarize themselves with the Small Business Administration website, which offers numerous resources and helpful information. Ultimately, there is no limit on finding valuable additions to a small business Avengers team. However, starting with these few key members is a great way to ensure a small business is ready to tackle any challenge.

Sources:

https://www.score.org/blog/does-your-small-business-need-lawyer

https://www.kamlawfirm.com/10-reasons-hire-small-business-attorney-for-startup/

https://mileiq.com/blog-en-us/do-i-need-lawyer-start-small-business

https://www.forbes.com/sites/theyec/2020/02/07/when-and-why-your-small-business-needs-an-accountant/?sh=7a46e7d249cb

https://www.freshbooks.com/hub/accounting/why-is-accounting-important

https://www.score.org/about-score

Photo Credit:

https://www.amazon.com/Birthday-Place-Avengers-Edible-Cupcake/dp/B008VUPQKK

https://ashacpa.com/

https://covid19relief.sba.gov/

12
Feb
2021

The Importance of Employment Agreements for Small Businesses in Pennsylvania

categories: Business Law

Better to Be Safe Than Sorry

Sealing the deal with an oral agreement may sound like enough, especially with people you trust. However, regardless of whether your business is large or small, your employee is a friend or an acquaintance, or it is your first or tenth employee, it is much safer to have a formal, written employment contract. One of the most significant benefits is the legal protection that can save you from a costly lawsuit in the event something happens.

If you are a small business owner, you would likely prefer to spend your money investing your business. An employment contract will protect your businesses cash and develop a clear plan for resolution in the event a dispute arises. For instance, you could encounter a dispute over letting an employee go and what happens when an employee learns a trade secret necessary to perform their job and then leaves.

Articles Cannot Replace an Attorney

Although it is great to do your research ahead of time and learn the basics online, it is no match for consulting with a qualified attorney. It is important to consult an attorney to ensure that your contract offers you and your employee the best possible protection and will hold up under legal scrutiny. Each provision and decision will have consequences for you and your employees that a professional can explain in detail. In the meantime, here are some elements of an employment contract that you may want to consider and bring up with an advisor.

Performance Expectations

The employment agreement will explain what is expected of you and your employee. Basically what the relationship entails. It will likely out the job functions you want them to perform and how much you will pay them for their services

Ask yourself what performance looks like on either side and describe in detail what is expected even if to you it would seem rather obvious. If you want your employees to interact professionally and respectfully with customers, state it in the agreement. This ensures your employees will find it hard to later claim you never told them it was expected. These statements will protect you in the event that the employee later disputes what is required of them and why you may have to let them go for not performing their job.

At-Will Employment

Pennsylvania is an “at-will” employment state which means that as an employer, you can terminate an employee at will except for an lawful reasons such as discrimination. This is true even if you do not have a written agreement which states so. This is another concept that can be included in the employment contract which puts your employees on notice of your ability to let them go with or without cause at any time. The exception to this “at-will” rule is if an employment contract specifies a duration such as two years. If a time for the employment is stated, then the employer can only fire they employee for “just cause”. This includes things such as drug use of failing to adequately perform their job. In this case, the description of the employee’s job will be important for establishing “just cause”. Additionally, this standard may be a reason why you as an employer prefer not to specify a time frame and keep employees on an “at-will” level.

 

Additional Provisions

Some other provisions to consider including are whether you offer your employee benefits such as health, life or disability insurance or retirement accounts. Reasons for termination and grounds for termination. Vacation days and sick day policies. An attorney can help you comply with federal laws such as the Americans with Disabilities Act that may require certain times of leave. An important point to consider when offering paid or unpaid vacation or sick time is that once you have established your policy, you must comply with it. Generally, Pennsylvania does not require paid vacation time, however, if you choose to offer those days, you then must stick to your word. Pennsylvania labor laws currently do not require employers to offer severance pay. However, if as an employer you choose to include it in the employment contract, you then must stand by your offer and abide by your stated policy.

Recap

Business has never been a “one size fits all” situation. What works for some businesses may not work for yours. The most important thing is to gather information and learn as much as possible, that way every decision you make is well-informed. So whether you decide to use employment contracts, agreements, or handshakes is up to you and should be based on your specific circumstances and goals. This post is starting point for considering your options and learning more about employment agreements. Please consult an attorney for more information and thank you for your interest in my blog!

Sources:

https://www.goingandplank.com/5-key-points-to-include-in-business-contracts/#:~:text=An%20employment%20contract%20should%20outline,without%20fear%20of%20legal%20liability.

https://dced.pa.gov/business-assistance/international/trade/labor-workforce/

https://www.findlaw.com/smallbusiness/employment-law-and-human-resources/pros-and-cons-of-written-employee-contracts.html

https://sites.psu.edu/harris/2018/02/16/navigating-pa-employee-leave-laws-what-you-can-and-cant-do/

https://www.phillysmallbusinesslawyer.com/employmentcontracts.html

https://www.employmentlawhandbook.com/wage-and-hour-laws/state-wage-and-hour-laws/pennsylvania/

Photo Credit:

https://www.nc.gov/state-employees

How to Draft an Employee Restaurant Contract

https://www.abc.net.au/science/articles/2015/05/14/4235587.htm