Business Startup

Independent Contractor vs. Employee: a guide to properly defining your staff’s employment status

Do I hire an independent contractor or employee? Do I need an independent contractor agreement? What’s a 1099 form and who needs to fill it out? These common questions have frustrated countless business owners over the years. It’s the holiday season, an incredibly busy season for some businesses, and an incredibly slow season for others. Many businesses hire seasonal help during this time. Today we hope to shed some light on the less-than-crystal-clear independent contractor versus employee dilemma. Whether you’re hiring additional help for the holidays or looking to implement new hiring practices and policies for the new year, this article may be valuable.

Understanding the Consequences First, it is difficult to understand why this is a dilemma at all without understanding...

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Intellectual Property

News Roundup 12/8 – 12/14: IPO’s, Piracy, Censorship, Google Apps, and Tech Funding

Antipiracy Bill AKA Censorship Bill May Pass This Week The House of Representatives is expected to vote as early as this week on the Stop Online Piracy Act. The House bill, and similar legislation that is likely to pass in the Senate (the “Protect IP Act“), would allow the Justice Department to seek court orders requiring U.S. Internet-service providers, search engines, payment processors and ad networks to block or stop doing business with foreign websites linked to online piracy. It would also make it a felony to stream copyright-protected materials, leading a Harvard Law Professor believing that the law could put Justin Bieber in prison for three years due to videos he has uploaded to YouTube. Businesses in the entertainment industry...

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Business Startup

Creating a Social Media Policy?: An introduction to our series about the legal issues you should consider and how to avoid the legal hype.

At some point every business will need to decide whether to adopt a comprehensive social media strategy, including creating guidelines for employees to follow while using social media. While not every company will necessarily require such a strategy, the vast majority will benefit from adopting social media as a marketing tool. Accordingly, the vast majority of businesses will want to define how social media is used to promote their brand. And even those companies that decide not to adopt a comprehensive social media policy to promote their brand will still want to define how employees and others within the company must behave while using social media (even in their personal lives), in order to prevent costly social media gaffes.

The web...

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Mergers & Acquisitions

Latest Update- AT&T and T-Mobile move to re-structure the failing merger

Yesterday AT&T released a statement that it will attempt to restructure the T-Mobile acquisition in order to achieve the necessary regulatory approvals. AT&T is working closely with Deutsche Telekom, T-Mobile’s parent company, to find a way to revise the current transaction. This news comes just a day after Deutsche Telekom and AT&T appeared before the judge to request the court proceedings to be delayed to allow the two companies time to evaluate the current available options for the deal. The Justice Department weighed in on the situation, arguing that an expedited trial is no longer necessary since AT&T pulled its merger application from the FCC.

Meanwhile, Deutsche Telekom is looking to other options for selling off T-Mobile, including cable and satellite...

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Business Startup

Who doesn’t like to save money? An overview of 83(b) Elections

For those of you who like to save money, here’s some info on 83(b) elections.

What is an 83(b) Election? Founders often receive restricted stock, which is stock that vests over time (for a refresher, check out our post on vesting). Section 83(b) allows founders to choose when they are taxed on restricted stock, either when they are granted rights to the stock or when the stock actually vests.

Section 83(a) of the Internal Revenue Code provides that founders will not recognize the value of stock until it vests. Usually delaying (and minimizing) taxes is a primary goal of tax planning. Under 83(a), founders would be required to recognize the value of the vesting stock at the time the stock vests, not at...

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Business Startup

Considering Your Exit Strategy- It’s Never Too Early to Start Planning Your Business Exit Strategy

When starting a business and creating a business development strategy, many entrepreneurs and business owners forget one of the most important considerations: the exit strategy. Especially at the beginning, it’s not easy to think about how your business will end. However, when your business is just starting out, it is often the best (and least complicated) time to discuss an exit strategy. At this point, your business is small (in number of employees and cash), there aren’t significant liabilities, and the business has only a few contracts with individuals outside the company. It will become increasingly difficult to discuss exit strategies as your company grows in size financially and in the number of employees, investors, and shareholders. Today we’ll lay...

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Business Startup

Key Term Sheet Provisions: Antidilution

What’s an Antidilution Provision? It’s time for another post on our continuing series on key term sheet provisions. Today we’re addressing antidilution provisions. These provisions protect investors from future financing rounds where company stock is offered at a lower price (these rounds are often referred to as “down rounds”). You can think of antidilution provisions as similar to “best price available” guarantees. If there’s never a lower price offered, the terms don’t come into play.

Here’s an example of when these provisions become an important factor: the A round investors buy their shares at $1 per share, and then one year later the company offers to sell stock at $.50 per share. The A round investors might think it’s unfair that they...

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Business Startup

The “Lean Startup”- an entrepreneur’s guide for building a sustainable, successful business

The Traditional Approach We’ll set the stage. You’re an entrepreneur looking to start up a business. You’ve got a new idea for an innovative product, something you’re fairly certain will sell. You need to create a business. You don’t have tons of capital. You’ve been down this road before. The last time you did this you read the “how to start up a business” guide, and you received extensive start up advice. Last time you spent lots of time and money developing a finished product for the last start up company you created. Unfortunately, when you launched your business your product didn’t sell. Fortunately for you, there’s a new, different recipe for success.

A New Approach Entrepreneur, I’d like to introduce you...

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Business Startup

News Roundup 12/1-12/7: Mergers, Trademarks, Venture Captial Rounds, Vesting, and Spin Offs

RIM Walks Away From BBX Brand Name After Trademark Dispute Blackberry producer Research In Motion, Inc. has agreed to change the name of its new operating system from BBX to BlackBerry 10 after Basis International, Ltd. won a court order seeking an injunction in a trademark infringement claim. In October RIM announced that it would call its newest operating system BBX, and days later Basis International filed suit to protect its registered trade mark “BBx”. In what has been an already dismal year, RIM’s stock dipped further today on the heels of this news that it would have to rename its upcoming operating system.

Expedia Shareholders Approve Spin Off of Trip Advisor Earlier today we discussed the advantages to spin offs, here’s an...

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Business Startup

Should I spin off a division of my business to form a separate company?: Legal issues to consider.

There may be a time in your career as a business owner or entrepreneur when you consider a corporate spin off or other business divestiture (also known as a “divesture” ). The legal, accounting, and other business issues surrounding such a transaction can be complex. However, every business owner will likely need to address the following issues when considering “spinning off” a part of the business to form a separate company, and addressing these issues before making your decision will undoubtedly save you time and money:

1. Why should I “spin off” a division of my company to form a subsidiary?

There are a number of reasons a spin off may be beneficial to your organization. A few common reasons that may...

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