This week we continue our series on raising money from investors. In Part 1, we covered why this complex area of law matters, even if you’re just raising money from friends and family. Complying with securities laws requires that you register at both the federal and state level or comply with an exemption (again, at both levels). In Part 2, we explained the common exemptions to registration at the state level. In Part 3, we looked at the common exemptions at the federal level. As we explained there, some of the federal exemptions leave quite a bit of room for interpretation, causing some businesses to rely instead on certain “safe harbor” provisions. 

Just what are the "safe harbor" provisions? Can you ever advertise that you're seeking investors? And is an offering document really necessary?

In Part 1, we went over the steps to establish a non-profit organization as a legal entity. But that step alone will not grant the organization tax-exempt status. Only the IRS can recognize an organization as a tax-exempt entity. So once your legal entity is formed, how do you apply for tax-exempt status? 

This week we’ll take a look at Form 1023 versus 1023-EZ and dive into the requirements for using the EZ version of the form. In future posts, we’ll cover Form 1023 in more detail and look at fiscal sponsorship as an alternative to applying for recognition as a tax-exempt organization. 

We’ve previously discussed protecting your brand by registering and enforcing your trademarks. But what about the unique content you create? Enter copyright law. Copyright protects “original works of authorship.” This can be anything from written works like books and articles, to musical and artistic creations, even computer programs and architectural plans. Copyright is an important area of law, not just for creatives, but any entrepreneur who creates content or uses content created by someone else. 

Just what does copyright protect? And why should you register your copyrights?

In Part 1, we covered why securities laws matter for small business owners who are trying to raise money to start or grow their business. Remember, anytime you raise money by promising some sort of return on investment, then securities laws apply. And if securities laws apply, then you must either register at both the federal and state levels or be exempt from registration. Not surprisingly, most small businesses try to fit within an exemption from registration to avoid some of the legal complexity. In Part 2, we discussed common exemptions to registration at the state level. This week, we turn to some of the common federal exemptions.

​These days there are so many charitable organizations seeking our time, our services, and our financial support that it might feel like there is already an organization out there for every cause. But many people still have a strong desire to start their own nonprofit organization. Often, I’ll hear from individuals who are looking for ways to fund a passion project and who realize that it’s really difficult to raise more than trivial amounts of money without being a recognized tax-exempt organization. (In a future post, we’ll discuss fiscal sponsorship as an alternative to forming a new entity.) Other people I talk to have an idea for a mission-driven project that could potentially be a for-profit business, a nonprofit organization, or a hybrid social enterprise, but they’re just not sure what all goes into establishing and maintaining a nonprofit entity. 

​Forming a nonprofit and then gaining (and keeping) the organization’s tax-exempt status is definitely more complicated than starting an LLC or other for-profit business. So what do need to know if you’re considering this path?

​Regardless of size, every business or nonprofit with employees needs to have certain policies in place. In this series, we’ll be discussing what you need to know when putting these policies into place. But first, which policies should be considered essential, whether you’re hiring your first employee or you’re dusting off an old employee handbook that desperately needs updating?

The Coronavirus pandemic has turned life upside down for most of the world, and has been especially difficult for small businesses and nonprofits. However, this hasn’t completely eliminated legal obligations and deadlines. I have said before, and I will say it again, I firmly believe that we will get through this. Many small businesses and nonprofits will find ways to pick back up and re-open their doors. Many of you have already found creative ways to transition to online sales. Small businesses and nonprofits are an essential part of the economy, and that will still be true on the other side of this pandemic. 

One of the many legal obligations that you may be tempted to set on the backburner (or may simply have forgotten about in the midst of the current crisis) are your trademark deadlines. The USPTO is not granting waivers of fees or extensions of time for most trademark related filings. These include:

• Deadlines for filing statements of use or requesting an extension of time;
• Deadlines for filing trademark renewals, including affidavits of continued use; and 
• Time periods related to proceedings before the Trademark Trial and Appeal Board. 

There are 2 major loan programs currently being offered by the SBA to help small businesses and nonprofit organizations minimize the economic impacts caused by the current Coronavirus pandemic. This post will cover the Economic Injury Disaster Relief loans and the extension of the 7(a) loan program under the CARES Act. 

TLDR: If you are considering borrowing funding to cover payroll costs, mortgage or rent obligations, or utility payments for your business or nonprofit, or if you are an independent contractor or sole proprietor, consider waiting for your bank to start providing 7(a) lending. Otherwise, turn to the Economic Injury Disaster Relief loans. ​

As a small business owner or non-profit director, you probably already had a lot on your to do list before Coronavirus became a global pandemic. As we all adjust to the rapid changes in our daily lives and businesses, it’s important to not panic and make well-informed decisions regarding the day to day operations of your organization. This is especially important if you manage employees who may be impacted by the announcement of an extended spring break for schools throughout the state.

Even before Coronavirus broke, many small business owners found it difficult to offer sick leave or paid time off. It’s difficult to pay someone to not work when you are sacrificing your own pay to build a business. And it can be burdensome to ask a small team to pick up the slack when someone is out. But in times like this, when lives are at stake, it’s important to prioritize health and safety:

• Review the CDC’s Guidance for Business and Employers and their Cleaning and Disinfection Recommendations, both available here.
• Consider ways in which your staff can work remotely. Of course, this isn’t possible in many B2C situations, i.e. restaurants, retail stores, gyms, etc. But most office work can be done from anywhere with a laptop and internet connection.

And while we will eventually get through this crisis, now is a good time to review the time and attendance policies you do have in place. It’s not just about being flexible in this current climate, but also preparing for what will likely be a new normal going forward. We’re all likely to be much more sensitive to employees showing up for work while sick and just how dangerous and reckless that can be. Do your current policies make sense, not just for the current pandemic, but also, for example, next flu season?

Building a successful business is hard work. You need a great product or service, a marketing plan for getting the word out, skills in sales to convert your product or service into actual money, a head for numbers and finance, and innumerable leadership skills to tie it all together. Today, let’s talk about the marketing/branding piece. We’re often asked: Should my business name and brand name be the same? What is a DBA, and do I need one? And how do I file one here in Ohio? The Secretary of State doesn’t have a DBA form. And what is the difference between a trade name and a fictitious name?