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Most Recent Questions in Legal Basics For Startups

I'm starting a landscaping business as a sole proprietor. Can I hire an employee and 1099 him or use a staff leasing company without filing for an EIN number?

By definition, you cannot hire an employee as a 1099. A "1099" is an independent contractor. Lack of clarity about whether you have hired an employee or an independent contractor can get... (more)

How do I update my corporate minutes years later?

You are not falsifying records if you are accurately recording (albeit at a later date) what transpired in the past. If you start making up stuff or inserting information that didn't actually... (more)

My brother is working in another country that has fresh water pearls he can buy cheaply. How do we arrange to bring the pearls in legally to sell through my LLC?

Commercial merchandise (which this would be, as you're intending to sell the pearls) cannot legally enter the United States unless and until the U.S. Customs Service authorizes it. The... (more)

How do you go about making a business legal?

Some businesses by their nature (e.g., bootlegging) cannot be made legal. Others simply need to adhere to the different legal regulations to ensure their legality. Consult with a business... (more)

I own 51 percent of an LLC. If I plan to split with my business partner what am I responsible to pay him?

Your operating agreement should have set out the way to value the interest of the departing business owner. Sometimes, those amounts can vary depending on the reason for the split: Did you catch... (more)

I have an idea to improve on an existing product. Do I have to have a patent prior to having a manufacturer make a prototype of this product?

You do not need to have a registered patent prior to manufacturing a prototype of a product. However, you could be stumbling into a number of thorny areas. First, does your... (more)

Making products from vintage magazine photos

Using vintage photos can be a rich source of designs for your products, as anyone is free to use photos that have passed into the public domain. However, determining whether certain photos are... (more)

I am purchasing scarves overseas at low cost. Can I put my business logo on the scarves and sell them in the U.S. for more money?

You can certainly develop your own scarf designs and have them manufactured overseas. Plenty of apparel companies do that. And you would be remiss if you did not sell them for more than you paid to... (more)

My cousin and I are in business together, and I want to branch out into other ventures. How do I determine a fair split in terms of ownership and profit?

You can be an owner and/or investor of more than one business. However, you want to be sure that your obligations to one business (e.g., use of machinery, understanding of confidential information)... (more)

Is it legal for a majority owner of the family business to invest in a competitor because the competitor would sign a 5-year contract to buy products from you?

Generally, a majority owner has the right to control the decision-making of the company. However, he runs into a possible conflict of interest/fair dealing situation if he hampers the business's... (more)

How can we handle a disgruntled co-owner?

Whether an owner can force a sale of the business in court depends on the terms of your ownership agreement (assuming you have one). Ownership agreements can (and should) set out procedures for... (more)

Can I legally sell a brand-name item if I decorate the item with my designs?

You’re treading in murky waters here. Generally, you are not legally permitted to trade off the brand name of another. However, you may be able to get trademark protection on the designs you... (more)

How can I turn a for-profit business into a nonprofit business?

It can be very thorny to convert a for-profit to a not-for-profit corporation. First of all, in most states, the companies are qualitatively different and have different formation requirements.... (more)

We split the cost of an ecommerce site package, but have decided not to be partners.

If the software license was purchased for one user (the company), having the two of you share it for your individual ventures is probably a violation of your software license agreement. You may... (more)

How do you determine the value of a law firm? This particular one has a $1.4 million dollar contract with the county and also gets private referrals.

Law firms can be difficult to value. You have to take into account the hard assets and the practice sources for immediate revenue. However, the valuation for divorce purposes may be different... (more)

Is it legal to do accounting in the U.S. for foreign companies?

While there doesn't seem to be anything amiss with this arrangement on its face, make sure you do your due diligence to find out whether the foreign companies are on the up-and-up. Ask about... (more)

What are the legal implications of disclosing an employee's private medical information?

Improper disclosure of an employee's private medical information (also known as "protected health information") may be deemed a violation of HIPAA in addition to other state and federal... (more)

How can I request proof for what an employee says is medically necessary leave?

Bad luck can befall the best of us, but the fact that it keeps occurring on Fridays smells very fishy. As a woman myself, I'm hard-pressed to think of a medical condition that requires all-day... (more)

Can I resell products I buy at wholesale to other retailers?

Generally, companies such as Maybelline require that you have a direct arrangement with them to buy and sell their products. They want to ensure that the distributor--who is trading and making a... (more)

What permits and licenses are generally required to run an online retail business?

Generally, the permits required for an online retail business are not substantially different from those of a storefront business. You'll want to form a business entity in your state and register... (more)
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