You may be preoccupied with the hustle and bustle of running your homebased business, and you should be. But are you so preoccupied that you're forgetting to pay vital fees? From domain names to business license renewals, forgetting to pay essential fees can mean the death of your business.
For Orlando, Florida-based entrepreneur John D. Smith, forgetting to pay a $15 annual domain name registration fee meant losing the domain name for his company, Clever Covers Inc., which makes sports-team-themed wheel covers and handheld plastic fans. After switching e-mail addresses and forgetting to update the domain registrant, Smith never received the e-mail notifying him that his domain name registration for www.clevercovers.com was about to expire. The result: The domain name got picked up by a Taiwanese company that agreed to return it to him.for $290 plus ambiguous "attorney's fees"-- though it only costs $40 to transfer ownership of a domain name.
Hoping to find redress in the fact that he has the name Clever Covers trademarked, Smith soon found that he would have to pay $1,500 in arbitration fees just to get ICANN to listen to his case (with no guarantee that he'd actually get the domain name back). "I thought it was going to be as simple as faxing a copy of the trademark, but I'd have to file suit with my own patent attorney or [go through] ICANN 's resolution policy," says Smith--both prohibitively expensive options.
Smith ended up instead registering www.clevercover.com for the next several years, a variation on his original domain name. But domain name registrations are not the only fees that are often neglected by business owners. Fees for renewal of a business license and trademark and patent fees are often forgotten as well, many times due to a change in personnel. If an employee who has been handling payment of annual fees doesn't keep thorough records and leaves the company, you could have problems, notes Jim Gale, a trademark attorney with Feldman Gale & Weber PA in Miami: "When [that employee] leaves, a lot of history leaves with them."
Gale suggests establishing yourself as the main contact person for domain registrations. However, the consequences of losing a domain name may not compare to other types of losses, such as:
- You could lose a patent for failure to pay patent maintenance fees. Failure to pay means the patent is abandoned, and though you may have the ability to continue to manufacture your product, so does anyone else, says Gale.
- Failure to pay property taxes can result in liens and even foreclosures and judgments against you.
- Failure to pay franchise licensing fees can result in the loss of your rights to the franchisor's name. "If franchisees do not pay their franchise fees, they go into default under the contract," says Gale, and the franchisee no longer has the right to use the name of the franchise. Refusing to give it up can lead to being sued for franchise infringement.
So how can you keep track of recurring fees? Gale suggests using Microsoft Outlook or a similar program, where you can docket things on a regular basis and set alerts to remind you when payments are due. Or you can simply enter recurring annual fees into your accounting system as a budget item so they come up automatically in your payment system. You can also tie them to a credit card account and have the payments deducted automatically.