Business & Technology Law Blog

Mar 30
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Clayton Makepeace, Troy White and Outsourcing

By | Internet Lawyer | No Comments

employees outsourcingTroy White has posted at copywriter Clayton Makepeace’s site some good information about outsourcing to grow your business quickly. Let me weigh in on some of the legal issues.

As a preliminary matter, you should be very careful to distinguish between hiring employees and outsourcing to independent contractors. Many business owners who are non-lawyers will refer to “hiring” an independent contractor. That’s a mistake. If you’re going to outsource to an independent contractor, nothing you say or put in writing should suggest that the person doing the work on a freelance basis is actually an employee.

From a taxes and benefits standpoint, employees are a costly pain in the @ss. Unless you want to be responsible for Social Security contributions, workers compensation, and unemployment compensation, don’t hire employees.

In contrast, independent contractors are generally responsible for all of their own taxes (caveat – there may Read More

May 12
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Partnerships – Should You Form One?

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A partnership is created when two or more persons jointly own and operate a business. Although a written partnership agreement is often used, sometimes partnerships are created through conduct or by verbal agreement instead of with a contract between the partners.
When people refer to a partnership, they usually mean a general partnership. General partners typically share profits and losses equally. The down side to this arrangement is that one partner can create liability both for the partnership and for the other partners. If there is a lawsuit, the partner with the deepest pockets can end up paying the damages even if that partner did nothing wrong. General partnerships can be dangerous because of this potential for liability.

To reduce liability, different types of partnerships have been created over the years. This includes limited partnerships and limited liability partnerships. Your lawyer can discuss the pros and cons of each. Many business owners don’t want the headaches of a partnership in any form. Instead, they find it more beneficial to operate as corporations or limited liability companies.

In addition to liability issues, each type of entity has taxation issues. You may want to discuss your options with your certified public accountant (CPA) in addition to your lawyer before making a decision.

Jan 13
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Federal Trade Commission Consent Orders

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Dealing with a Federal Trade Commission investigation or lawsuit can be a lengthy and expensive event for you. Few businesses can afford to fight the FTC.

In addition to the legal fees, there are the lost opportunity costs. Every moment you spend dealing with a government investigation or lawsuit is one less that you can spend on growing your business.

The Federal Trade Commission knows this…and now you do too.

Many business owners find that it is less damaging to settle with the FTC than to fight regardless of the merits.

Although FTC investigations are usually non-public, it is a different story for trials and consent orders. If you and the FTC decide to settle, a proposed consent order with the settlement terms is published for public comment. After 30 days, the FTC can make it a final settlement.

If you subsequently violate the consent order, the Federal Trade Commission can go to court to enforce it.

The good news is that you don’t have to admit liability in a consent order.

Unfortunately, it doesn’t end there.