As the Day of the Dead approaches, it is a time that business owners need to be thinking about what will happen to their businesses if something happens to them. Without the proper planning, everything you dreamed and built for your family can crumble as quickly as a row of dominos. Proper planning helps ensure that your family can be supported and that your business can continue to provide for them when you are gone.
All business owners need to have an estate plan. When you are discussing your estate plan with a professional estate planner, you need to make sure they know that you have a business. The estate planner will need to know what type of business you have (i.e. LLC, corporation, sole proprietorship, etc) and how the interest in the business is titled. If you co-own the business with someone else, the estate planner will want to know if you hold the interest in the business individually or if it is as joint tenants with rights of survivorship. Depending on how the interest in the business is titled, your estate will deal with the interest differently.
When you are coming up with your estate plan for your business, there are a lot of questions you will need to ask yourself. Who is going to take over the business, if anyone? If you have a business such as a law firm, it may be that no one in your family can take it over unless a family member is a licensed attorney. Even if you have someone in your family that can take over your business, you may find that no one wants to. You want to make sure that your business is a gift to your family members and not a burden.
If you do have someone that wants to take it over, or even just need someone to take it over in order to dissolve or sell it, you need to make sure that person has a basic understanding of how the business is run. Where do you bank? Who are your vendors? Who are your main accounts with? Do you have employees? Who does your taxes? These are just some of the questions that you want to make sure that there are answers to.
When you have a business, it can be rewarding. However, just as you plan for the day to day growth of your business, you must also plan on what will happen if something happens to you. If you have any questions about running a business or need information about business estate planning, please call me, your Denver business attorney, Elizabeth Lewis, at 720-258-6647.
Recently, I came across an article about wayward ice cream truck owners. Most of us remember these trucks from our youth – they brought us frosty treats on warm afternoons while toons played throughout the neighborhood. However, this article showed the darker side of the ice cream truck business.
In something that sounds like a bad tv show script, CBS reported that Sno Cone Joe pushed Mr. Ding a Ling out of the market. The dispute had been ongoing, but this year it really heated up after Sno Cone Joe was accused of trying to lure customers from Mr. Ding a Ling. The turf war between ice cream trucks ended in in the arrest of two ice cream truck operators after multiple incidents, including a heated meeting that resulted in one person yelling “This is my town!”
After Googling the dispute, come to find out this isn’t an isolated incident. In 2006, a man murdered another man after a dispute over the building of an ice cream truck. Two men died after a dispute over a family ice cream truck in 2009. And in 2011, a California legislator accused a 73 year old ice cream truck operator of trying to run him over.
So, the lesson from these incidents? Think long and hard before purchasing an ice cream truck business. And if you do, make sure to advise your business attorney that you may need a criminal attorney on speed dial before you sell your first cone!
If you are thinking about starting an ice cream truck business, or any other business, call me, your Denver business attorney, Elizabeth Lewis today at 720-258-6647.
By Phil Chavez, Strategic Insurance Consultants
Today’s business leaders have enough to juggle without the added stress of employment practices liability. Unfortunately, employers and other business leadership are now more vulnerable to employment practices suits than ever before. In fact, according to Bloomberg BNA, employment-related lawsuits recently reached a record high, with more than 7,000 cases filed in the year-long period ending in March 2012. And the Dayton Business Journal explains that they grew 35 percent between 2007 and 2010 alone. Meanwhile, other estimates suggest roughly three out of every five employees will sue their employer at some point—it can happen in any size business no matter how careful you are.
This clear upward trend is due in large part to the economic climate—more layoffs and increased economic concerns mean more concerned individuals are looking for a new cash stream.
Fortunately, business leaders can protect themselves from this growing threat with employment practices liability insurance.
What You Need to Know About Employer Employee Liability
Before we discuss the value of this particular form of coverage, we’ll walk you through the key points of employment practices litigation. Suits alleging violation of the Fair Labor Standards Act, also referred to as the Wages and Hours Bill, are the most common and easy to track—they are indeed the source of the statistics mentioned above. But a series of other laws apply to business leadership, too, including the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family Medical Leave Act.
Together, that legislation may give all your employees—past, present, and future included—grounds to allege that you or other business leaders have abused their rights as individuals and employees. This means your entire business is held responsible, including directors.
There are several grounds for litigation. Many are based on the simple fact that the FLSA is outdated, coupled with outdated state law provisions, which can make it difficult for employers to properly classify employees as exempt or nonexempt. This misunderstanding can be extremely costly, considering that uncompensated “work” performed off the clock can be grounds for suit years after the fact. Other potential grounds for litigation focus around questions of discrimination, which, as difficult as they may seem to prove or disprove, can take a heavy toll on your bottom line. Questions of wrongful termination are also common, with multiple forms of legal grounds.
Unfortunately, even if your leadership team is made up of only the most trustworthy individuals, every single director has the potential to be a target for a suit no matter how good their intentions may be. And even if you are able to prove innocence in a court of law, the expenses of mounting legal defense are costly.
This all changes when you have reliable employment practices liability coverage.
Finding the Right Employment Practices Liability Insurance for Your Business
The bottom line is that litigation alleging wrongful employment actions is costly and difficult to address—and instances of it are on the rise. That means that nowadays, a strategic business plan must take employment liability risk into consideration. The loss you might face from even a single suit filed by a single employee—current, past, and potential—could itself be devastating. Multiply that by current trends and you can see the clear importance of protecting yourself from this liability.
The best forms of employment liability insurance will cover all your directors and officers. A comprehensive insurance plan will protect you against allegations and, when necessary, mitigate damage.
It is all part of maximizing your business success by lowering the total cost of human capital and maximizing your return on investment.
Talk to your insurance provider about their employment liability solutions. Or, for a quote on cost-effective coverage that services your bottom line and enhances your risk management, contact Phil Chavez, Strategic Insurance Consultant, today.
thedenverchannel.com recently reported that only 5% of lenders have eased their standards to loan to small businesses. This confirms what many small businesses already know – it is tough to get funding. So what is a small business to do when it needs money?
If your business needs a loan to survive, there are several things that you should do as a small business owner first. While these strategies cannot guarantee a loan, they can help you have the best chance to secure funding when you need it.
1. Get your personal credit in order. If you are borrowing money from a financial institution, the institution is going to want to see your personal credit unless your business has substantial assets and financial backing. In most cases, you will need to personally guarantee the loan. If your credit score is low, you have had recent bankruptcies, or you are requesting a large loan amount and have no collateral, you may need to look at other funding sources.
2. Have a good business plan. Banks want to know you have thought about your business. The lending officer will want to see the business plan and know that the financial targets are achievable. As part of the business plan, be able to clearly define where the funds will be used. If you can’t explain your business and its goals (and why you have), a bank can’t determine what type of risk you are.
3. Have good tax and legal records. Make sure you have copies of your Articles filed with the Secretary of State and any periodic reports (and make sure your periodic report has been filed!). Have current bylaws or an operating agreement. Have proper paperwork between the owners of the business. Have intellectual property agreements when needed. Have copies of the business’s tax returns for at least the previous three years (and maybe up to five). If the business is closely held (especially with fewer than four owners), have copies of the owners’ personal tax returns. Make sure all local, state, and federal taxes are current – including employment taxes and unemployment insurance. Finally, do a checks to see if there are any liens or UCC filings.
4. Lastly, schedule a small business checkup with your attorney and your CPA. I can go through all your paperwork and see what is missing from a legal perspective, make sure everything is up to date, and then be a reference for the bank to call with any questions. A CPA would be able to do the same thing from a financial perspective.
If you have any questions, don’t hesitate to call me, your small business attorney serving the Denver Metro Area, the Front Range, and beyond at 720-258-6647.
There are multiple events coming up this month that me, your Denver business lawyer, will be at that may be of interest to you:
June 4, I will be at the UnJob Fair at Colorado Free University. I will be presenting on legal issues for small business owners as part of this information-packed day.
June 7, I will be presenting my first Brown Bag for the Denver Small Business Development Center on online liability issues for small businesses.
June 11, I will be presenting on online liability issues when blogging for B4W4.
June 15, I will be presenting employment law issues at Front Range Community College.
June 17, I will be the featured speaker at the Social Media Meetup.
For more information about any of the above, or if you need help with your small business, please email me, your Denver business attorney, at elizabeth.lewis at eclewis.com!
Many businesses have confidential information – whether it is credit card receipts with business credit card information on them, contracts with client names and addresses on them, or bank statements with financial information on them. Businesses need to keep this information secure for multiple reasons – rarely does a business owner think about consequences such as business identity theft, lawsuits from clients, or denial of trade secret status if confidential information isn’t confidential.
By allowing confidential information to be stored on desks that are available to everyone’s eyes, thrown away without being shredded, or stored insecurely on laptops, a businesses faces threats like the above. If your business has any confidential information it collects, it is important to have a confidential documents policy for both soft and hard copies of documents. For financial information, you should speak with both your Denver small business accountant and Denver small business lawyer to see what you should store and how. For all other documents, you should speak to your Colorado small business lawyer and Colorado insurance agent to make sure you are protected. As always, you can call me, your Denver Business Lawyer, at 720-258-6647, email me, or click on the right to Book an Appointment now!