1 starting a business legal issues stephen r. cook, esq. stephen r. cook, esq. clinical professor of...
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Starting a Business Starting a Business Legal Issues Legal Issues
Stephen R. Cook, Esq.Stephen R. Cook, Esq.
Clinical Professor of LawClinical Professor of Law
University of Akron School of University of Akron School of LawLaw
330-972-2358330-972-2358
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Why a business?Why a business?
Make a profitMake a profit Participate in management of Participate in management of
businessbusiness Liability protection from business Liability protection from business
obligationsobligations Minimize taxes for business/ownersMinimize taxes for business/owners Recognition as a businessRecognition as a business Orderly exit from businessOrderly exit from business
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““FLIC”FLIC” Formation – entity selectionFormation – entity selection
Liability – personal indemnity/insuranceLiability – personal indemnity/insurance
Intellectual Property – types/protectionIntellectual Property – types/protection
Contracts - creation/issuesContracts - creation/issues
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Entity SelectionEntity Selection
Sole ProprietorSole Proprietor PartnershipPartnership LLCLLC Corporation S/CCorporation S/C
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Entity SelectionEntity Selection LiabilityLiability Ease of formationEase of formation FormalitiesFormalities OrganizationOrganization DissolutionDissolution
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Entity SelectionEntity Selection Secretary of StateSecretary of State Name selectionName selection Proper formProper form Statutory agentStatutory agent Filing feeFiling fee Charter numberCharter number
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LiabilityLiability Insurance – Business Owner’s Insurance – Business Owner’s
Policy (“BOP”)Policy (“BOP”) Premises/product liabilityPremises/product liability Secondary market insuranceSecondary market insurance Aggregate, per-occurrenceAggregate, per-occurrence
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Intellectual PropertyIntellectual Property PatentPatent CopyrightCopyright TrademarkTrademark Service MarkService Mark Also consider: Trade secret, trade Also consider: Trade secret, trade
name, fictitious namename, fictitious name Confidentiality AgreementConfidentiality Agreement
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ContractsContracts Offer, acceptance, Offer, acceptance,
consideration, mutualityconsideration, mutuality Meeting of the mindsMeeting of the minds Lawful purposeLawful purpose ““Reasonable person” standardReasonable person” standard Statute of FraudsStatute of Frauds
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TaxationTaxation
Sole Proprietor – Schedule CSole Proprietor – Schedule C Single member LLC – Schedule CSingle member LLC – Schedule C Multiple-member LLC – Partnership Multiple-member LLC – Partnership
taxationtaxation EIN numberEIN number ““Flow-through” taxationFlow-through” taxation S Corp. v. LLC – distributive shareS Corp. v. LLC – distributive share
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Due DiligenceDue Diligence Primarily related to corporate Primarily related to corporate
acquisition and/or public securities acquisition and/or public securities offering.offering.
Reasonable investigation as basis for Reasonable investigation as basis for reasonable belief.reasonable belief.
Shield parties from liabilityShield parties from liability Evaluate viability of offering or Evaluate viability of offering or
acquisitionacquisition Affirmative duty to ensure compliance Affirmative duty to ensure compliance