The LegalitiesThe Legal Issues Your Small Business and Non-profit

Should Be Aware OfPresented by: Erin McClarty Esq.

When Legal Issues Can AriseIncorporation

General Operation Issues

Advertising/ Transactions

Labor

Trademarks/Intellectual Property

Dissolution/ Winding Down

Sole Proprietorship

One person doing business

Liable for all debts

General Partnership

Group of two or more carrying on all business.

Limited Partnership

General partners have liability. Limited partners liability limited to their share.

Choosing A For-profit Structure

Choosing A For-Profit Structure

Corporation

Limited Liability Company

Limited Liability Partnership

Choosing a Non-profit Structure

Trusts

• Created by a settlor

• Very rigid in structure

Unincorporated Association

• 3 or more people come together for a common non-profit purpose

• Less formality and fewer reporting requirements than a corporation

Choosing a Non-profit Structure

Limited Liability Company

Corporations

Telephone Solicitations

Telephone Consumer Protection Act

Texas Law Enforcement Telephone Solicitation Act

Must file a registration statement and pay fee.

WebsitesPrivacy Concerns

• Have a privacy policy in place

Internet Regulations

• Children’s Online Policy Protection (COPPA)

Jurisdictional Issues

• Post “Terms of Use” on your website

E-commerce

Email

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM)

Governs “commercial mail”

Other Texas Laws

Criminal and civl offenses for fraud or misrepresentation

Example: Texas Deceptive Trade Practice Act

Operations

Insurance

Worker’s Compensation

General Liability

Licenses and Permits

Does your business require a certain license?

Labor

Managing Employees

Create an employment agreement

include a confidentiality agreement

Employee v. Independent Contractor

Classification is a hot-button issue

Avoid employee problems and many taxes using independent contractors.

Several Factors to determine who is an IC

Determination of Worker Status (IRS Form SS-8)

Texas workforce commission also has a test at http://www.twc.state.tx.us/news/efte/ics_contract_labor.html

IC’s make you more susceptible to IRS audits

Labor Laws

Fair Labor Standards Act (FLSA)

Department of Labor has a handbook for guidance: www.dol.gov/asp/programs/handbook/main.htm

Family Medical Leave Act (FMLA)

Texas Labor Code

Non-profit IssuesCharitable Solicitation Laws

May require registration in each state you plan to solicit in

Fill out Uniform Statement Kit at www.multistatefiling.org

Losing tax-exemption status

Unrelated Business Income Activies

1. Trade or business; 2. Regularly carried on; 3. Not substantially related to furthering the exempt purpose.

IRS Publication 557 Tax-Exempt Status for Your Organization gives guidance

How Can You Protect YourselfEducate yourself on all the applicable laws

Sign up for department RSS feeds and newsletters

Take how-to books with a grain of salt

Get together your “team”

Bring in knowledgeable people

Get what you pay for

Utilize development centers, groups and associations

Look for “Meet-ups” and Networking Groups

Why Do I Need An Attorney?

Guidance and Counsel

Sound-board

Can’t know every law

Draft or review contracts

Pre-emptive action and mitigation

Advocate and representative in case of business transactions

mediation, mergers, negotiations

But I can’t afford one…..

Be Creative

Some attorneys allow you to buy “credits”

Do package deals

Hire counsel on a contract basis

Attorney Resources

Houston Volunteer Lawyers Program

S.C.O.R.E

Houston Lawyers Referral Service

Texas Accountants and Lawyers for the Arts

Texas C-bar

Contact

Erin McClarty Esq.

erinemcclarty@gmail.com

www.notationsonnonprofit.com