The Five C’s of Software Licensing

The Five C’s of Software Licensing

by | Jul 5, 2017 | Business News, Internet Law, Software Licensing

The Five C’s of Software Licensing

Software licensing can be a daunting combination where the perplexing realm of technology meets legal jargon. Defined as legal documents or contracts that govern the use and distribution of software, these licenses provide necessary protection for your business. Without proper licensing, you may be prone to someone stealing your intellectual property, or you may unwittingly commit copyright infringement. As a small business owner, it is essential to understand the importance of software licensing in order to protect your business’s brand or product and to avoid illegally using someone else’s. When the terms and contracts are beyond an IT issue, Attorney Elizabeth Lewis will help you work through it. Here are 5 essential areas of software licensing.

  1. Copyright
  2. Contracts
  3. Codes
  4. Confidentiality
  5. Compliance

1. Copyright

Whether you are a mom and pop store or an expanding enterprise, your intellectual property is as valuable as your merchandise. A lot of work goes into creating marketing concepts, a logo, a business plan, and overall operations/procedures. If you neglect to protect these assets through software copyright, you will be defenseless against others profiting from what you created. Registering your software copyright with the U.S. copyright office reinforces your copyrights, especially if you ever have to take someone to court. A small business attorney will help you determine what aspects of your business – a website, a product, or an idea – need to be protected by a software license.

2. Contracts

No one hires a disgruntled employee, but people can become dissatisfied over time and want to damage your business. There are contracts to safeguard your company from any employees who may try to exploit the knowledge they have accessed while working for you. Non-compete agreements are clauses under which employees cannot create businesses like yours while you employ them or start a similar one for a determined amount of time after they leave your employment; however they are only allowed in certain situations in Colorado so it is important to know if one will really protect you or if you need to use other means as well. Other employment agreements state simply that you own any work that your employees do for you. Confidentiality agreements protect your trade secrets and prohibit others from giving damaging insight into the operations of your business. An attorney will
help you take all of the necessary precautions to protect your intellectual property and represent you in the event of these types of theft.

3. Codes

Open source code licenses allow anyone to use, modify, and share your licensed software. You may not be able to govern every single user’s actions, but you are still protected as the original creator and are entitled to credit for your contributions. These licenses can make it easy for others to share, contribute, and build upon your project without having to obtain special permission. Issues with noncompliance and proper licensing can arise when using open source code licenses. An attorney will help you with these issues as well as any open-source versus proprietary software dilemmas.

4. Confidentiality

Your business’s success depends on your competitive advantage, something you can maintain by protecting your intellectual property. Keeping your trade secrets a secret takes measures, including confidentiality agreements and nondisclosure agreements. Software licenses keep some of your most valuable information – ideas, practices, applications, websites – safely guarded.

5. Compliance

We have all scrolled rapidly to the end of the terms of an agreement and clicked “I agree” without necessarily comprehending or even reading all of the words. As a software user, it is crucial to obtain your software through legal means, know precisely who is allowed to use it and how many copies are covered by the license, and read and understand the license agreement. Many small business owners do not purchase enough copies of software, thinking they can use one copy for everyone. This will inevitably lead to consequences from having your software disabled to facing huge fines or litigation. A small business attorney will ensure you have taken the necessary precautions and represent you in the event of a software licensing violation.

If you need help with software licensing, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

Foreign National Business Formation and the EB-5 Visa Process in Colorado

by | May 16, 2017 | Business News, Misc. Legal Tidbits, Random Thoughts

Foreign National Business Formation and the EB-5 Visa Process in Colorado

Congress, in its quest to keep our economy healthy, looks for ways to invite business owners and entrepreneurs from other countries here, to our shores, to build, manufacture, and employ our citizens. The good news, if you are a foreign national looking for a chance to become a U.S. business owner, is that you don’t have to be a multi-national conglomerate to own a business here in the United States.

USCIS administers the EB-5 program, created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.

The EB-5 program doesn’t restrict visas to large corporations like Toyota and Siemens. Instead, it requires foreign investors invest in a new commercial enterprise or rescue a troubled business where they will continue to employ the existing employees for at least two years.

U.S. Citizenship and Immigration services (USCIS) describes new commercial enterprise as for-profit activity formed for the ongoing conduct of lawful business including by not limited to:

  • A sole proprietorship
  • Partnership (whether limited or general)
  • Holding company
  • Joint venture
  • Corporation
  • Business trust, or
  • Other entity, which may be publicly or privately owned

There are a few catches, but if you can overcome them, you can set up shop in the United States as a foreign national. What seem to be the more challenging requirements? You have to be able to hire or employ 10 qualifying employees, and you need to be able to invest a substantial amount of capital.

A Foreign National Owned Business Must Provide Employment for 10 Qualifying Employees

Keeping in mind that the qualifying employees can be existing employees, as an Eb-5 foreign national owned business you must provide employments for 10 qualifying employees. A qualifying employee is described by USCIS as follows:

A qualifying employee is a U.S. citizen, lawful permanent resident or other immigrant authorized to work in the United States including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation.

However, “this definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any non-immigrant status (such as an H-1B non-immigrant) or who is not authorized to work in the United States.” Which means your family can of course come with you, but if you hire a friend or family member who is also a foreign national, their job may not count toward the requirement to employ ten qualified people.

EB-5 Capital Investment Requirement

The EB-5capital investment requirement is pretty steep, but you can cut the amount required in half if you are willing to invest in a High Unemployment or Rural Area. The minimum general qualifying investment amount is $1 million, but the investment requirement in a Targeted Employment Area (High Unemployment or Rural Area) is on only $500,000.

There are a lot of rules and requirements that extend beyond this surface explanation, but if you are a foreign national who has a business idea or an entrepreneurial skill set that you believe would prosper well in the United States, it is worth your time to talk to an attorney who is familiar with the law and has experience preparing EB-5 visa applications.

Foreign National Business Formation in Colorado

Our state, like many U.S. States, has a Regional Investment center designed to attract Foreign National business formation in Colorado. The Colorado Regional Center describes EB-5 investment as “an alignment of interests” which allow immigrant investors the opportunity to “live, work, attend school, or retire anywhere in the U.S.” Their website lists a host of benefits, including a path to citizenship if that is your ultimate goal.

  • The investor does not have to be sponsored
  • The process for approval is relatively fast compared to other visa programs
  • The investor has more freedom of travel
  • The investor has increased US educational opportunities (including residency benefits for dependent students) and
  • The investor has the opportunity to become a U.S. citizen after five years

The EB-5 visa program is thriving in Colorado, and many areas of the state are welcoming and diverse, making it a popular alternative to more expensive East and West coast investment possibilities. If you are a foreign national with an interest in investing in or operating a business here in the United States, or have questions about foreign national business formation and the EB-5 visa process in Colorado, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

3 Timely Colorado Business Formation Tips

by | Apr 28, 2017 | Business News, Misc. Legal Tidbits

3 Timely Colorado Business Formation Tips

There is a lot to think about when forming a new business, and some concerns need to be addressed right away or you may face problems down the road. Here are three time sensitive Colorado business formation tips and where to get help with them:

  1. What form will your business take?
  2. What taxes and licenses will your business be liable for?
  3. Who will review the contracts your business enters into?

What Form Will Your Business Take?

By form, I mean the legal structure your business will take. Will you form a corporation? If so, which type of corporate status is right for your business? Should you form a Limited Liability Company (LLC) instead? The form your Colorado business will take has a major impact on your tax liabilities, how much risk you expose yourself to personally, and even who is (and is not) a business partner. This question is perhaps the most timely of all the questions you will ask yourself when forming a new business because of the consequences should you run into trouble without a properly, legally formed business.

Perhaps the most important time for you to consult a small business attorney will be when you select the form your Colorado business will take. An experienced business attorney has the background needed to explain the pros and cons of the various forms your business can take and how the form you choose will impact you, including how your choices will affect dissolving a partnership or selling the business down the road. The Colorado SBDC has excellent resources for explaining the legal structures you can choose from, but in the end, you will want the advice of an attorney when drawing up the actual documents that form your new business in Colorado.

What Taxes and Licenses Will Your Business be Liable For?

This list seems to be getting longer every year, but the fact is, taxes and licenses are very time sensitive. You don’t want to find yourself in a situation where you have overlooked a tax your business owes, missed a payment deadline, or failed to obtain a required license or permit. Each of these mistakes can mean penalties or fines, some of them substantial. The Small Business Administration (SBA) has a fantastic and thorough list of Colorado resources for researching taxes and licenses, and the Colorado Secretary of State has a new business checklist that covers insurance and regulatory issues. There is a lot to know, and it is easy to overlook a requirement even with all of the resources offered. Making sure you have taken care of all required taxes and licenses is another good reason to consult a Colorado small business lawyer.

Who Will Review The Contracts Your Business Enters Into?

Contracts provide you with legal protections – if they are well constructed. Some of the contracts your small business may enter into include:

  • employment contracts
  • vendor contracts
  • purchase agreements
  • commercial and equipment leases
  • partnership agreements

Of all the frustrating legal entanglements I see small business owners struggle with, a poorly worded contract is typically the most expensive and demoralizing. Poorly worded contracts can make it difficult for you to end a relationship with a supplier, partner, or landlord, no matter the circumstances. An equipment lease that hasn’t been reviewed by your attorney can result in you owning equipment that doesn’t function properly but for which you are still required to pay every month. It is much less expensive to pay a small business attorney to look over a contract before you sign it than to engage one to help you get out of a bad contract.

There are other issues you will want to address as you think about your new Colorado small business, but these 3 timely Colorado business formation tips will help you right at the get go. If you need small business start-up advice, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

Your Small Business, For Sale

by | Mar 21, 2017 | Business News, Misc. Legal Tidbits

Your Small Business, For Sale

If you’re Joyti Bansal, you’re pretty happy these days. Your company, AppDynamics was just purchased by Cisco for 3.7 Billion dollars! As a Colorado small business owner, Cisco might not by eyeing your company for acquisition, but there could still be time when you might want to find a buyer for your business. This post will discuss some legal issues to consider, thoughts on establishing a value, and tips on finding a buyer in preparation for listing your small business for sale.

Legal Issues to Consider When Selling a Small Business

There are a plethora of legal issues to consider when selling a small business, but one of the first you will face is the form of your business. The sale of a C-corp transpires in a much different manner than an LLC. If your company has issued stock, there may be provisions that restrict how that stock can be sold. If you have partners, your contract with them may include clauses about when, how, and to whom you are permitted to sell your share. If you are considering the sale of your small business, one of the first things you should do is obtain a legal review of the business. Your Colorado small business attorney can help you determine how existing contracts or encumbrances will affect the sale, and make suggestions about the best way to proceed.

Other legal issues include the transfer of licenses associated with the business, any leases or equipment contracts you may have, the wording of the sales contract, non-competition concerns, non-disclosure agreements, tax implications, and current contracts with employees and customers. While there are several professionals you will want to enlist as you plan for the sale of your business, your business attorney is probably the first person you should talk to.

Establishing a Value for Small Business

Once your are clear about the legal details of selling your business, you will want to obtain input on the potential value. It is common to value a business as a multiple of annual cash flow. On average, the multiple is two times the annual cash flow, but this figure changes depending on the volume of cash. For example, if the annual cash flow is below $100k, you may get offers slightly below $200k. If it is above $500k, you may see offers closer to $1.5 million. Of course, cash flow valuations are dependent on market considerations – will the business continue to perform well moving forward, or are their indicators that sales may decline?

If cash flow isn’t a good measure of the value of your small business, there are several ways for establishing a value for your small business. The Small Business Administration (SBA) provides some definitions on the most common methods:

  • Capitalized Earning Approach: This method refers to the return on the investment that is expected by an investor.
  • Excess Earning Method: Similar to the capitalized earning method, except that it separates return on assets from other earnings.
  • Cash Flow Method: This method is typically used when attempting to determine how much of a loan the cash flow of the business will support. The adjusted cash flow is used as a benchmark to measure the firm’s ability to service debt.
  • Tangible Assets (Balance Sheet) Method: This method values the business by the tangible assets.
  • Value of Specific Intangible Assets Method: This method compares buying a wanted intangible asset versus creating it.

Your accountant can help you establish a valuation based on these models, and give you feedback on which model makes the most sense for your type of business. In addition to the straight forward number crunching your accountant may be able to discuss other business valuation standards that will help you arrive at a fair price.

Finding a Buyer for Your Small Business

There is an abundance of companies willing to take a percentage of the sale of your business in exchange for help finding a buyer. Not all of them are entirely scrupulous. If you are going to pay for help finding a buyer, you should consider asking your attorney for advice about a reputable firm. If you need help with resources for valuing you small business, or finding a buyer, or if you would like help with a legal review of your business in preparation for listing your small business for sale, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

Eight Important Questions For Your Small Business Attorney

by | Mar 8, 2017 | Business News, Misc. Legal Tidbits

Eight Important Questions For Your Small Business Attorney

Asking a Colorado small business attorney about these important aspects of your business now can save you a lot of frustration and expense down the road.

Whether you are a Colorado small business just getting started, or an established company with locations throughout the United States (and growing!), it is important that you work with an attorney throughout the life of your business. This post will cover the following list of typical reasons entrepreneurs with new or established businesses should seek out a business attorney:

  • business formation advice and documentation
  • business development and planning consultation
  • creation and/or review of business contracts
  • employment and independent contractor agreements
  • non-disclosure agreements
  • review of leases
  • software licensing contracts
  • website documentation

Business Formation Advice and Documentation

The form your business takes (ex: corporation, s-corporation, or a limited liability company) affects how you pay taxes, and how your personal assets are protected by the law. Business formation also has a role in your record keeping, and document filings. If you are in Colorado, there are some things you can do on your own, but before you get started, speaking to a small business attorney to get business formation advice and documentation instruction for your specific situation can be one of the most important decisions you make. Even if you want to handle some of the paperwork and filing on your own, you should still have an attorney review your situation and make a business form recommendation. Once you have good advice on which form of business to choose, your attorney can help you file the paper work, direct you on how to keep necessary records, or do it for you.

Business Development and Planning Consultation

Even if you are a brand new business, having an experienced small business attorney provide business development and planning consultation is a smart move. No entrepreneur has every skill-set needed to grow a business – you might have fantastic sales skills, but terrible record keeping practices. Let a good business attorney refer you to trusted resources in the areas where you need help.

Consulting with your attorney about gaps in your business plan is a good idea, too. While no attorney enjoys seeing a business fail, a big part of any small business law practice unfortunately involves helping people clean up after a business fails. This puts your small business attorney in an ideal position to advise you about what not to do.

Creating and Reviewing Business Contracts

Just do it! Whether you are a small business writing your first contract, or an established business sending out a contract you have used for years, it is critical that an attorney help with creating and reviewing business contracts. Even if you are familiar with contract law in Colorado, laws change over time, and what was a good contract five years ago may no longer be.

Employment and Independent Contractor Agreements

Employment law is one of the most complicated and confusing aspects of business. It is easy for a small business owner to get tangled up in a bad employment contract, or to set requirements for workers that disqualify them as independent contractors. Without the advice of an attorney, it is fairly easy to break the law unintentionally when it comes to your employment and independent contractor agreements.

Non-disclosure Agreements

If you are not sure if you need non-disclosure agreements in your line of work, ask your attorney. The answer may surprise you. There are many instances an NDA is a good idea, even if you are not discussing an invention or new idea.

Review of Leases

This is another “just do it” recommendation on our list of important questions to ask your Colorado small business attorney. There is no such thing as a “standard” lease agreement. Your attorney can provide a review of leases before you sign them and tell you exactly what you are committing to and how the lease can be terminated (or not!). You do not want to be stuck with a $20k widget that you can’t use and you can’t return. Your attorney can protect you, so let her!

Software Licensing Contracts

Even if you don’t write code or work in technology, it is a good idea to find out whether any of your ideas, practices, applications, or web sites should be protected by software licensing contracts . To do so, you will need the services of a good intellectual property attorney such as myself.

Website Documentation

You probably have a website, but have you properly posted your privacy and copyright policies, terms of service, etc.? If not, you could be placing your business in a precarious position. If you haven’t covered yourself with the correct legal statements, your small business attorney may have a broiler plate recommendation for the website documentation legalese that belongs on your public website.

Whether you have eight important questions for your small business attorney, or just one, the sooner you ask, the better. If you need legal advice about business formation, non-disclosure agreements, website documentation or any other legal advice for your small business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets