|
Learn about the pros and cons of hiring an independent contractor versus an employee.
Hiring an independent contractor (IC) has many advantages, but also some disadvantages. Before deciding how to staff a particular position, you will need to weigh the pros and cons and ensure that your selection will be accepted by state and federal auditors Benefits of Using Independent Contractors There are some big advantages to using independent contractors instead of employees, with financial savings at the top of the list. You will probably save money. While most employers pay CI per hour more than they would pay employees to do the same job, it often costs employers more to hire employees. When you hire an employee, you'll have to pay a number of costs that you don't have to pay credit unions, including employer-provided benefits, office space, and equipment. You will also need to make the necessary payments and contributions on behalf of your employees, including:
All together, these expenses can easily increase your payroll costs by 20% to 30% -- or more. You have flexible employees. Working with CIs allows employers more flexibility in hiring and firing workers, which can be especially beneficial for employers with fluctuating workloads. You can hire a microchip for a specific task or project, knowing that workers will be gone when the job is done. You won't have to deal with the potential injuries, costs, and legal issues that can come with layoffs and layoffs. You can also enjoy greater efficiency when using integrated circuits. Since most credit institutions bring specialized expertise to the job, they are often productive immediately, eliminating training time and costs. You reduce your exposure to lawsuits. Workers have many rights under state and federal law, so there are many legal claims they can bring against their employers for violating these rights. Because credit unions are independent traders, they are not protected by many of these laws. Among the rights available to employees but not to credit institutions are:
Employees can also sue their employer for unfair dismissal. ICs cannot bring this type of lawsuit Disadvantages of Using Independent Contractors After reading through the possible benefits of hiring a CI, you might think that you will never hire an employee again. But there are also significant limitations to the use of integrated circuits, and the risk is that your classification decision will be questioned by government agencies. You have less control over your workers. Unlike employees, whom you can supervise and keep a close eye on, independent contractors have a certain degree of autonomy in deciding how best to complete the task you have hired them to do. . If you interfere too much with an IC's work, you run the risk of making the IC look like an employee, who by law requires you to pay payroll taxes, workers' compensation insurance premiums, etc. If you want to have significant control over what and how your employees do it, categorize them as employees. Your workers come and go. Many employers only use CI when necessary for relatively short-term projects. This means workers are constantly coming and going, which can be frustrating and disruptive. And the quality of work you get from different integrated circuits can be very evident. Employers who want to rely on the same workers day in and day out are more interested in hiring employees than credit institutions. Your right to terminate your IC is subject to your written agreement. You don't have unlimited rights to enable ICs, like you can with your employees. Your right to terminate IC's services is limited by the terms of your written IC agreement. If you fire an IC in breach of the agreement, you may be liable for the breach of contract. You may be liable for injuries caused by CI on the job. Employees injured on the job are usually covered by workers' compensation insurance. In exchange for the benefits they receive for their injury, these employees waive their right to sue their employer for damages. Credit unions do not compensate workers, which means that if they are injured on the job, they can sue you and pay damages. You cannot own copyright to works created by IC. If you hire an IC to create a copyrightable work, such as an article, book or photograph, you may not be considered the owner of the work unless you use a written agreement to transfer ownership of the copyright from the IC to you. On the other hand, if an employee creates a work like this. So in most cases you automatically own the copyright. You are at risk with government audits. Federal and state agencies, especially the IRS, want to see as many workers as possible classified as employees, not ICs. The reason is financial: the more workers are classified as employees, the more tax and insurance money flows into government coffers, and the harder it is for workers to report or hide their income. them with the tax authorities. Some state and federal agencies may inspect your business if they believe you have misclassified an employee as a CI. At the federal level, you may face an audit from the IRS; The Department of Labor, which enforces federal minimum wage and hourly laws; The National Labor Relations Board, which advocates for workers' rights to form unions; or the Occupational Safety and Health Administration, a workplace safety law enforcement agency. At the state level, you may be able to bring to the attention of your state unemployment compensation or workers' compensation agency if a worker you have classified as an IC is claiming benefits. You may also face an examination from your state's tax office. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more about his and more!
0 Comments
If you're hiring your first employee, you'll need to file paperwork with various government agencies and pay taxes to them.
Congratulations on hiring your first employee! It's critical to get off to a good start as an employer by making sure you follow all of the new legal requirements. Being an employer comes with a slew of new responsibilities, ranging from tax forms to government registrations to insurance requirements and beyond. Our to-do list for new employers can be found below. 1. Obtain a tax identification number for your company. When you hire employees, you must obtain an employer identification number (EIN) that you can use on your tax returns and other IRS documents. To obtain an EIN, fill out IRS Form SS-4. The IRS website, www.irs.gov, has the form available for download. 2. Register with the labor department in your state. You'll have to pay state unemployment compensation taxes once you hire employees. These funds go to your state's unemployment compensation fund, which helps workers who have lost their jobs in the short term. A list of state unemployment insurance tax agencies can be found on the Department of Labor's website. 3. Get workers' compensation insurance. Workers' compensation insurance should be in place to protect employees from on-the-job injuries. The vast majority of states require workers' compensation insurance, though some make exceptions for very small businesses. 4. Set up a payroll system to withhold taxes. You need to withhold and submit a portion of each employee's income to the IRS, and pay social security and health insurance taxes to the IRS. For more information, see IRS Publication 15, Circular E, Tax Guide for Employers on the IRS website www.irs.gov. (You may also need to withhold taxes for your state. For more information, please contact your state tax authority; for links to each state authority, please visit the Association of Tax Administrators website www.taxadmin.org /State tax authority.) 5. Have each employee fill out IRS Form W-4, Withholding Allowance Certificate. Employees will use Form W4 to tell you how many allowances they have applied for for tax purposes so that you can deduct the correct tax from their salary. (You do not need to submit a form to the IRS.) This form can be found at www.irs.gov. If an employee wants to change the allowance, you should ask the employee to fill out a new W4 form every year. 6. Fill out Form I-9, Employment Eligibility Verification for each new employee. The United States Citizenship and Immigration Services (USCIS, formerly known as INS) requires employers to use this form to verify whether any employees they hire are eligible to work in the United States. (You do not need to submit this form to USCIS, but you must keep it on file for three years and provide it to immigration and customs officials called ICE for review.) You can obtain this form online at www.uscis.gov. Please note that these are completed The form should be stored in a separate I9 folder for all employees, not in each employee’s personnel file. 7. Report each new employee to your state's new hire reporting agency. The New Employee Reporting Program requires employers to report information on all new employees for the purpose of identifying parents who owe child support. Each state has a different new hire review agency. To find the name and address of your state's new hire reporting agency, see the New Hiring State page on the Children and Families Administration website (www.acf.hhs.gov). 8. Post required notices. Some government agencies require employers to publish notices of workers' rights to their employees. For more information on federally required posters, see the Department of Labor website at www.dol.gov/elaws/posters.htm. DOL's "Poster Advisor" will help you determine which posters to display in your workplace. In addition, you must comply with your state's department of labor poster requirements. A list of state labor departments is included on the website of the Federal Department of Labor 9. File IRS Form 940 each year. You must complete IRS Form 940 to report your federal unemployment taxes for any year you paid $1,500 or more in a quarter or for any year an employee worked for you. for 20 or more weeks of the year. You can find the form at www.irs.gov 10. Adopt workplace safety measures. Virtually all employers must comply with the requirements of the Occupational Safety and Health Act (OSHA) by providing, among other things, a hazard-free workplace, training employees to do their jobs safely, notify government administrators of serious workplace accidents, and keep details of safety records. For more information on these rules, see the Occupational Safety and Health Administration's website at www.osha.gov 11. Create an employee handbook. Although not required, it is best to have a manual outlining your company’s employee policies and clearly stating that employment is free, unless the employee has signed a written employment contract. 12. Set up personnel files. For each employee you hire, create a file to save work-related documents, such as application forms, job vacancies, IRS Form W4, performance evaluation, and employee benefit registration forms. Medical records should be kept in a separate confidential file and kept in a locked cabinet. The I9 form that records the employee's immigration status should also be kept in a separate file. 13. Set up employee benefits. If your company has an employee benefit plan, such as health insurance or a 401(k) plan, you will need a registration process so that employees can register, name their dependents, and select options. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more about his and more! Owning and managing a home company has never been easier thanks to modern technologies. To contact consumers, all you need is a mobile phone and a laptop. But there are a few things you should know before you put up your sign and start promoting
Advantages of a Home Business A home-based business is both easy and cost-effective. The costs of starting a conventional brick and mortar firm are significantly lower. You don't have to worry about paying rent, utilities, or commute costs. Low overhead implies less risk and greater profit potential. Home companies also provide independence and flexibility to its proprietors. You may work on your business in your jammies during your leisure time. Running a home company also has tax advantages. Choosing the Right Business The possibilities for a home company are virtually limitless. A few suggestions are photography, dog walking, house painting, and home décor. A virtual assistant, graphic designer, or social media professional are all options. Consider your passions and hobbies. What do you excel at? What do you like to do in your spare time? What is the most common topic on which individuals seek your advice? The answers to these questions may be able to assist you in making the appropriate decision. Many people work as associates or consultants for a well-established firm. This "company in a box" option assists novice entrepreneurs with marketing and communications. You'll also get the opportunity to work with seasoned mentors. Picking a Business Structure After you've decided on a business name, you'll need to decide on a business structure. Sole proprietorships, limited liability companies (LLCs), and S corporations are the most common types of home enterprises. You can create a partnership if you have two or more owners. For many company owners, a single proprietorship is the most convenient choice. A sole proprietorship, on the other hand, does not provide personal liability protection against your business's debts and other responsibilities. Instead, if your company has the potential for legal liability, you should consider forming an LLC. Make sure you do your homework on the many business entity options and which one is ideal for you. Securing a Business License Location-specific licensing and permission restrictions apply. Visit the Small Business Administration for a list of state-specific regulations. Home companies, in general, require a business license from the local government. The needed license can be obtained through your city's business or tax department. You should also look at zoning laws. Operating a company from your house may be prohibited by homeowner's associations or zoning regulations. You might be able to acquire a variance if this is the case. Before you open, make sure you have the permissions you need. Health & Safety Permits Additional licenses may be required for some enterprises. A fire permit may be required if you welcome consumers into your house or keep hazardous merchandise. Food and personal care product manufacturers and sellers are frequently subjected to health inspections. It's possible that you'll need to obtain a health or environmental permit. For additional information, contact your local business office. Professional and Sales Tax Licenses Professional certification is also required in businesses such as hairdressers, legal and financial advisers, and home childcare services. For a comprehensive list of businesses that require professional license, go to your state's business website. A sales tax license may be required if you offer goods or services. This is sometimes included with the business license, and other times it is a distinct document. Insurance Considerations Your business is not covered by your homeowner's insurance. If you run a company out of your house, your insurance coverage may be voided. Notifying your homeowner's insurance carrier about your business venture is a smart idea. To safeguard against business losses, you should get business insurance. General liability insurance is required by all enterprises. Property damage, inventory and product damage, and personal injury coverage are all available. Data breach insurance is required for every company that stores sensitive information online. In the event of a calamity, business interruption insurance replaces revenue. Make careful to read the tiny print to understand what the policy does not cover. Bookkeeping and Accounting Keep track of your company's revenue and expenditures. You may use a basic Excel spreadsheet or accounting software to track all of the money coming in and out of your firm, but you must keep track of it all. To keep your personal and company funds distinct, open a separate banking account for your business. It's also a good idea to get a separate credit card for your business. To keep track of your finances, make copies of all receipts and income statements. Make sure you're on top of your documentation. Set aside one day every week to focus on invoicing, bill payment, and record keeping. Taxes You are self-employed when you run a home business. Taxes, including Social Security and Medicare, are your responsibility. The IRS usually requires you to make estimated quarterly payments. Tax Deductions All home business owners may deduct ordinary and necessary business expenses. These include:
The Home Office Deduction You could be eligible for a home office deduction. This deduction is only applicable to spaces that are only utilized for business. You cannot claim the deduction if you work from your bedroom or kitchen. The storage of merchandise and samples, as well as home daycares, are the only exceptions. You can deduct a percentage of your homeowner's insurance, homeowners' association fees, cleaning fees, mortgage and interest, and utilities under the home office deduction. Home repair expenditures can also be deducted, however the amount depends on whether the repairs are direct or indirect. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more about his and more! 27/9/2021 0 Comments How to start a Consulting BusinessBefore you decide to start a consulting firm, there are a few legal concerns you should be aware of.
Starting a consulting company has a specific set of legal issues. Choosing the right company entity, acquiring licenses and permissions, dealing with tax difficulties, creating policy statements and contracts, obtaining appropriate insurance, and dealing with workers are just a few examples. Keep in mind that "consulting business" can refer to a variety of activities. Some consultants work primarily in their own offices, while others work in other people's offices or on project sites, both indoors and outdoors. Furthermore, some consultants are "professionals" in some legal senses; for example, they may be licensed by the state. Make allowances for your specific type of consulting as you go through this text. Choosing the Business Entity You may be able to operate as a sole proprietorship or partnership, depending on the specifics of your consulting firm. You should, however, think about selecting a legal structure that protects you from personal culpability. If you are a member of a recognized profession, you have extra alternatives, such as a professional corporation or professional limited liability company, in addition to the more usual ones, such as a limited liability company or corporation.. In many circumstances, consulting work may not appear to be particularly hazardous, and personal responsibility scenarios may appear improbable. However, if you are in charge of important data, physical property, or even specific persons, you may be exposed to the danger of anything being destroyed or lost, or someone being hurt. This may happen at your own business location or somewhere else, but in any case, you want the company to be accountable for any liabilities, not you personally. Licenses and Permits Even if you operate as a single proprietor, you should consider getting a federal tax identification number, often known as an Employer Identification Number (EIN); an EIN is required for other legal types of company. The procedure is straightforward and may be performed entirely online at the IRS website. Furthermore, even if you work as a single owner, you may be required to get a general business license from a state or local government agency. If your consulting firm will operate under a name other than your own, for example, you may need to file a "doing-business-as" (DBA) certificate (also known as a fictitious business name certificate). In addition, each state requires state licenses for at least certain vocations and professions, ranging from conventional professions like physicians, attorneys, dentists, and accountants to occupations like barbers, cosmetologists, real estate agents, and insurance agents. Before putting yourself up as a consultant, be sure you hold the necessary professional or occupational licenses. Most states need you to get a sales tax permit for the sale of most products if you will be selling things as part of your consulting firm. Finally, even if your consulting firm is "low-key" or office-based, local zoning regulations may restrict your firm from operating in some areas. If you plan on running your business out of your house and live in a plainly residential, rather than commercial, neighborhood, this is more likely to be an issue. Even if the business is permitted under the local zoning code, you may be needed to get a zoning compliance certificate. In summary, before you begin for business, you need to look into zoning restrictions. Health and Safety Health and safety are unlikely to be a top priority for office-based consultants. If you will be working "in the field" in potentially dangerous situations, such as construction sites, or if you will be working with hazardous materials in any way, you should research federal OSHA and EPA regulations, as well as your state's occupational health and safety and environmental regulations. Tax Matters Depending on the legal structure of your firm, your tax status will be different (corporation, professional limited liability company, partnership). You must attach a separate schedule (Schedule C) to your personal income tax return, even if you are a sole owner. You'll have to work with whole new tax forms in more sophisticated structures, such as a S Corporation or a multimember LLC. If you're used to working as an employee, this extra degree of complexity might be perplexing at first; in which case, hiring a skilled accountant may be a smart investment. Self-employed consultants are the most common type of consultant. If you're leaving a job, you'll have to deal with a new tax form issued by customers that pay you for your services: IRS Form 1099-MISC. While there may be certain exclusions based on your business's legal structure, you should be aware that as a self-employed person, you will be liable to the federal self-employment tax. With this increased tax liability comes the necessity to make quarterly estimated tax payments; IRS Form 1040-ES contains information and instructions on how to make these payments. Your status as an independent contractor is another problem that is sometimes lumped together with tax concerns. The word "consultant" may make you think you're a freelancer rather than an employee. However, it's a good idea to study the IRS's independent contractor rules, which are included in IRS Form SS-8, as well as any parallel state guidelines that are accessible. Finally, you may be eligible to claim a deduction for business use of your home if you conduct your consulting firm from your house. IRS Publication 587 explains how to calculate the deduction in detail. Insurance Appropriate insurance for a consulting firm will differ based on the specifics of the company. Even if you plan to work primarily from home, you'll need appropriate premises liability insurance in case a customer or other business-related visitor slips and falls or is harmed in any other way at your place of business. You'll also want appropriate property coverage for your actual company equipment, as well as insurance for the loss of your personal data. Professional liability insurance should also be thoroughly considered – or may even be needed – depending on your field of competence. If you'll be working in settings that are plainly physically hazardous, you should check into personal injury insurance, both for yourself and, if required, for others. Similarly, if you'll be driving between job locations, you'll want to be sure you've got the right insurance. You may discover that working with multiple different insurance agents with different areas of experience is necessary to receive the greatest information and coverage. Look for agents that have written policies in the areas that are important to your business. If you'll be advising on dangerous chemicals, for example, look for an agent who is familiar with hazardous substance coverage. Policy Statements and Contracts By its very nature, "consulting" is usually a very flexible company, and various customers may want somewhat different services from you; as a result, you may be interested in meeting these varied demands. While you don't want to limit what you may offer potential clients, it may be in your best interests to create and give broad principles about how you work in advance—and in writing. You might consider putting your policies on your website if you have one. Whether or not you have a website, you should develop a printed document including basic policy information that you provide to each of your clients before you make any agreements or start working. Depending on the type of consulting you provide, general policy components may differ significantly. Billing issues (whether you bill by the job or by the hour; any minimum charges or hourly billing increments; how you charge for travel time; whether you bill bi-weekly, monthly, or only at the end of a project), payment issues (do you take retainers; do you expect monthly or other periodic payments), and who pays for certain expenses are just a few examples (such as special equipment, airfare, or hotels). The unique agreements you establish with each individual customer are at least as essential as generic principles. These should ideally take the form of service contracts that describe a variety of issues, including those already stated (invoicing, payments, and costs), as well as the specifics of the job you are required to complete. Remember that in order for a contract for services to be legally binding, (a) you and your client must agree on what the contract is for (a "meeting of the minds"), and (b) there must be an exchange of value (also known as "consideration"—in the case of a consulting business, usually the exchange of your services for money from your client). If the services will be finished in less than a year, the contract does not need to be in writing; nonetheless, most consultants will not provide services without first receiving a formal, signed agreement. In fact, you should consider creating (or having a lawyer create) a standard contract that you may customize for each client. Employees If you plan to hire people, you should educate yourself on fundamental employment law topics including illegal discrimination, workers' compensation, and how to conduct the recruiting process. Learn how to do the following when it comes to hiring:
Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more about his and more! 26/9/2021 0 Comments In an employment separation agreement, how do you protect your company's goodwill?When an employee departs on shaky terms, how can I safeguard my company's reputation?
Employees frequently leave their employers on sour terms, whether they are fired or willingly quit. In many situations, rather than risking a lawsuit or other potential dispute, the firm and the employee will agree that entering into a separation agreement is in their mutual best interests Protecting Your Company's Goodwill A separation agreement's fundamental concept is that the firm agrees to provide the employee something of value (consideration), usually in the form of a separation payment, in return for the employee fulfilling specific obligations to safeguard the company's interests. One of the main goals of any separation agreement should be to safeguard the company's reputation. Goodwill refers to the intangible, difficult-to-quantify qualities that distinguish your organization. All of these things offer value to your business, but are difficult or impossible to reproduce by another firm. The brand, reputation, employee relations, client list, and supplier base of your firm are all examples. When an employee leaves, this article outlines ways to safeguard these important assets. It's worth noting that goodwill is frequently calculated using the company's secret information and proprietary rights. What Is a Non-Compete Clause? An employee often learns important secret knowledge about a firm's business procedures, clients, know-how, and plans, information that may hurt the organization if the person left to work for a competitor. A non-competition clause (noncompete) is a typical term in a separation agreement that states that departing workers will not compete with the company for a specified period of time and within a particular geographic area. Working for a rival or launching a competitive firm are examples of this. One effective way to structure the non compete is to:
Despite a company's natural desire to make the noncompete's length and geographic scope as onerous as possible for the employee, the law acknowledges that it is in the public interest for workers to be able to earn a living. As a result, each state has its own rules limiting the length of noncompetes and the geographic extent of noncompetes. What Is a Non-Solicitation Provision? A nonsolicitation clause is frequently included with a noncompete agreement, although it is occasionally disregarded (nonsolicit). Because individuals commonly confuse the two, or think that the noncompete sufficiently resolves the concerns addressed by the nonsolicit, the nonsolicit is frequently overlooked. The fact is that the noncompete and nonsolicit agreements function in tandem. While the noncompete clause states that the employee will not work for a competitor, the nonsolicit clause states that the person will not recruit your company's customers, suppliers, employees, or other representatives. The nonsolicit is essential in defending your company against both sides of a competitive onslaught. What to Include in a Non-Disparagement Provision For a variety of reasons, employees may quit or be fired. The mere presence of a separation agreement suggests that the employee is dissatisfied and intends to leave on poor terms. Because the separation agreement is based on the contractual necessity that the employee be compensated for signing the agreement, it is in the company's best interests to guarantee that the employee cannot in any way harm the company's brand or reputation while collecting the separation payment. A non-disparagement provision states that the employee will not make any negative remarks about the firm, whether verbally or in writing, and will not take any other acts that might harm the company's brand or other parts of its goodwill. The non-disparagement clause should also include a statement that the employee has not damaged or badmouthed the firm in any way prior to the separation agreement's effective date. Ensuring Compliance With Restrictive Covenants Because they limit the employee's future behavior, these three limitations (non-competition, non-solicitation, and non-disparagement) are known as restrictive covenants. If the firm has not yet given the whole consideration to the employee, it is simpler to control the employee's adherence to these restrictive covenants. If the firm delivers the separation money to the employee in installments, for example, the employee will be motivated to rigorously adhere to the restrictive covenants until the employee is paid in whole. To protect itself from the inevitability of the employee receiving the whole separation compensation and having no motivation to comply with the agreement, the separation agreement must include extra possible consequences for violation. The firm's power to seek the full separation compensation (including any profits generated), issue a temporary or permanent injunction, sue the employee, and have the employee refund the company for any attorney's costs paid are all common repercussions. Furthermore, the separation agreement should include a severability clause, which states that if a court finds any of the restrictive covenants to be unlawful, the court will alter the provision as little as possible to bring it into compliance with the law. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! Learn what clauses to put in a volunteer agreement to best protect your company.
Volunteers are used by businesses for a variety of reasons. Nonprofit organizations, for example, routinely use a large number of volunteers to help with their activities. Even for-profit organizations regularly provide unpaid internships or externships to enthusiastic applicants looking to learn a new skill, network, or add important experience to their résumé. If your firm is employing or contemplating hiring volunteers, there are some interests you may wish to safeguard, even from individuals who are providing services to your company for free. On the one hand, you don't want to insult or alienate anyone who is assisting your business in any manner, especially if they are not getting compensated. This article, on the other hand, addresses several issues you might wish to address, including volunteers. If any of the issues listed below are very important to you, you or your legal counsel should draft a standard agreement that each volunteer must sign and return (the Volunteer Agreement) Consideration Having a volunteer sign a contract that cannot be enforced is useless. Every contract requires both parties to receive something of value, commonly referred to as consideration, in order to be legally binding (see Consideration: Every Contract Needs It). Because most contracts include the exchange of money for an item, a service, or a right, this is typically not a problem. Because volunteers aren't compensated, your contract must first demonstrate that they're getting something in return for their time. As an example, take the following description of the compensation given to volunteers who worked for a for-profit life coaching company: "The Parties acknowledge and agree that the Volunteer will receive significant benefits as a result of the Volunteer's performance of the Volunteer Services, including, but not limited to, I administrative and support training in a professional environment, (ii) marketing experience, (iii) complimentary attendance at Company events, and/or (iv) training in writing skills and other creative disciplines." When drafting this portion of the agreement, feel free to be thoughtful and imaginative. Your explanation of the volunteer's advantages should be as thorough, broad, and meaningful as possible, making it simpler to show that the parties legitimately transferred valued consideration in good faith. Confidential Information Volunteers, like regular workers, frequently have access to non-public, confidential information that your organization may want to keep private for a variety of reasons. Even nonprofit organizations have an incentive to keep their secret information (such as client lists, suppliers, financial information, personnel data, know-how, and processes) safe from the private sector and others. Furthermore, extra legal requirements for the protection of sensitive information may exist in your business. If your company is in the healthcare industry, for example, your Volunteer Agreement may need to include explicit references to HIPAA rules for the security of patient information. Protecting Company Property Volunteers may be able to enhance or establish new procedures, or even innovations, that can benefit your company as a result of their service. This is especially problematic in the technology industry, where companies want to be absolutely confident that they control all intellectual property rights to everything generated by their employees. If this is a problem for you, your Volunteer Agreement should include a proprietary rights section that requires your volunteers to surrender to your firm all intellectual property rights that may attach to their work output automatically (and forever). See How to Protect Your Intellectual Property Rights in Contractor-Created Works for more information on this issue. Furthermore, your agreement might ask volunteers to return any business property in their possession (for example, papers, equipment, keys, memoranda, CDs, and so on) either before or after their services end. Non-Solicitation During their tenure with a firm, volunteers, like normal employees, typically form deep, good working connections. You may be concerned that volunteers may take advantage of such connections by approaching your workers, contractors, or other representatives after they leave. Include a typical non-solicitation provision in your Volunteer Agreement if you have any such worries. Non-Disparagement Volunteers are frequently viewed as a valued commodity due to the unusual nature of working for a company without remuneration; as a result, one would assume that they would be less inclined to trash the firm after their leave than a normal employee. However, because no one can foresee the reasons behind a person's departure, whether they're a paid employee or a volunteer, feel free to include a non-discrimination clause. Volunteer Status Your Volunteer Agreement must state that volunteers are not regarded "workers" for legal purposes, and that your firm will not be liable for paying any taxes on behalf of any volunteer, just as it does when hiring independent contractors. The following are some examples of clauses: Nothing in this Agreement creates or should be construed as creating an employment relationship, partnership, joint venture, or agency relationship between the Company and its affiliates on the one hand, and the Volunteer on the other, or entitling the Volunteer to control the Company's or any of its affiliates' conduct of business in any way. Returns on taxes. The Volunteer is responsible for filing all applicable tax returns and reports on the assumption that he or she is a volunteer rather than an employee. All relevant taxes, including federal, state, and local income taxes, must be paid in full by the Volunteer in connection with the Volunteer's performance of any Volunteer Services under this Agreement. On behalf of or in relation to the Volunteer, the Company will not pay any unemployment or workers' compensation taxes or premiums. Ensuring Compliance With Restrictive Covenants Confidentiality, assignment of property rights, non-solicitation, and non-disparagement are all terms used to describe limitations on the volunteer's future activity. Given that volunteers labor for no pay, you'll have to be creative when it comes to incorporating consequences and penalties in your Volunteer Agreement that are convincing enough to drive the volunteer to follow these rules to the letter. Drafting Your Volunteer Agreement If you don't have access to a corporate counsel to help you create your Volunteer Agreement, use the instructions in How to Draft a Letter Agreement or an MOU and Ten Tips for Making Solid Business Agreements and Contracts. Presenting the Agreement to Your Volunteers It's important to remember that you should have each volunteer sign your Volunteer Agreement before they start working for your company. Given that volunteers are volunteering their time and effort to your organization, delivering such an agreement to them might be a touchy subject. Always remember, though, to portray the agreement in the most casual and regular manner possible. Explain that it's a typical administrative paperwork that all volunteers must sign if necessary. And if things get too much for you, you can always blame it on your attorneys – that generally works. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! The following are the essential first steps to establishing an internet business for long-term success.
Putting your internet company concept into action involves 10% inspiration and 90% perspiration, much like many other things in life. It's time to go to work now that you've nailed down the ten percent (the concept) and done your due research on viability Make a Business Plan If you want to seek money from outside investors or a lender, you'll need a business plan. You should have a business plan even if you're planning to bootstrap your internet business with your own money. It will assist you in ironing out the intricacies of your business, estimating when it will become profitable, and establishing milestones and targets to measure your progress. Your business plan should include, at a minimum, what items or services you'll offer, your target market, expenditure and income estimates, and deadlines for achieving your objectives. Decide on a Business Structure How you form your company will be determined by how much personal liability protection you want, the tax advantages you seek, and the kind of investment prospects you seek. A single proprietorship, partnership, limited liability corporation (LLC), and corporation are the most popular company formations. A sole proprietorship is the simplest option if you are the only owner, but it does not give personal liability protection from your business's debts and responsibilities. As a result, many business owners prefer to create a limited liability company or corporation. Choose a Business Name When it comes to picking a business name, the best advice is to keep it short and simple, and make sure it accurately represents your company or product. If you're selling shoes, for example, a name like "Walking on Clouds" isn't a good idea, no matter how comfy your shoes are. People looking for your goods online will use the product name as a keyword, so be sure to include it in your company name. Companies like Nike and Red Bull can afford to spend millions of dollars branding their products; you can use your name to do the same. Register a Domain Name Your website is your store as an online business, and it, like a physical store, need a name so that consumers can discover it. A domain name is the name you give to your website. Your company name and domain name should, ideally, be the same. If the name you choose isn't already used, you may register it using a domain registrar like GoDaddy. If the business name you wish to use is already used, try adding the state or city where you are located or adding your name to make it distinctive. If you're a school or organization, your domain name will end in ".com," ".biz," or ".org." Because it is the most familiar, it is recommended to remain with ".com" for an internet business. Obtain an EIN The IRS website may help you get a federal tax identification number, often known as an Employer Identification Number (EIN), for your firm. While sole proprietorships and single-member LLCs aren't needed to have an EIN (as long as they don't have workers), it's generally a good idea for all firms to obtain one. You won't have to use your Social Security number this way, and most banks demand an EIN to create a business bank account. Check for Permits and Licenses Different sorts of companies require different permits and licenses in different states, counties, and localities. To find out what is necessary, contact the relevant agencies for your company location. See How to Get a Business License for information on business licensing requirements in all 50 states. You should also check to determine whether a fake business name is necessary for your company. You may want to consider purchasing business insurance depending on the nature of your internet business and the sort of business organization you pick. Trademarks, Patents, and Copyrights If you wish to protect a product, logo, creative creation, or other intellectual property, you should apply for a trademark, patent, or copyright. These safeguards provide you with legal protection in the event that you require it. You can file a trademark or patent application with the United States Patent and Trademark Office, or a copyright license with the United States Copyright Office. You may also use these offices to double-check that your logo, written work, invention, or other intellectual property isn't already held by someone else. You might be held accountable for damages if you infringe on an existing copyright or trademark, so it's a good idea to check before you start selling online. Conducting a search will assist you in avoiding potential legal problems such as selling t-shirts or other goods containing trademarked or copyrighted logos or photos without the owner's consent. Select a Platform for Your Online Business Choosing to build your own website gives you complete control over your company. However, development and maintenance expenses are considerable, and you'll almost certainly need to engage a team of specialists to set up and manage all of the necessary features. Shopify or BigCommerce, for example, are third-party platforms or marketplaces that perform a lot of the work for you. Most platforms enable you to establish a website on their platform or utilize their website to sell your products. Many provide templates for building a website as well as expert designers for a charge. The platform you select will be determined by your company's needs and budget. Compare the customer service supplied, security methods used, payment choices offered, and general services provided while determining what is ideal for you. Check out what platforms your rivals are using to ensure that the platform you pick meets the demands of your sector. The design of your website will be crucial to your success. PCI Compliance The credit card business requires Payment Card Industry (PCI) compliance. Not only must online companies provide safe payment alternatives, but they must also protect the client data they gather and retain. The PCI Standards Council establishes the standards and criteria that must be followed by your online business in order to be compliant. If you sell your items through a third party, these safeguards are almost certainly integrated into their platform. Third-party platforms, often known as SaaS-based ecommerce businesses, generally save all credit card data, reducing your responsibilities as a business owner. PCI compliance must be included into your system if you create your own website. Collecting Sales Tax Customers in the state where the firm is situated are no longer solely responsible for paying sales tax to online enterprises. Many states require internet companies selling to residents of their state to register with the state and collect sales taxes from their consumers. If you utilize a third-party platform, it is probable that the platform has sales tax obligations built into it. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! Here's everything you need to know about turning your hobby into a lucrative business.
Whether you enjoy knitting hats or creating music, you never know when your passion will develop into a lucrative business endeavor. To be successful in business, you'll need to master a new set of skills. You will, however, be in the greatest position to introduce your goods or services to new clients if you do some study and preparation Establish Your Objectives Setting objectives will provide you direction and inspiration as you start and grow your new company. There are a few key questions to ask oneself in the early stages:
Having a clear objective in mind for how much money you hope to make from the enterprise, as well as how much time and effort you can devote to it, can aid in determining your next steps. Make a business strategy. Creating a business plan with your goals in mind can give you a roadmap for your company's next stages. First, conduct some research on the present state of your hobby's market, including what your rivals are doing. Examine your potential consumers to see what they require and where you might locate them. A thorough description of what your company will accomplish, including what services you will give, what items you will sell, your target audience, and how you will contact your consumers, should be included in your business plan. You may write a mission statement, which is a concise explanation of your company's aims and philosophy. Include details about your finances as well. Consider all potential startup and continuing costs, such as business registration, renting space, advertising, and maintaining an internet presence. Determine how you will pay for the startup costs, whether you will do it with your own money or with the assistance of investors or company loans. Estimate how much money you may anticipate to bring in over the following several months and years based on your study. Promote Your Products or Services Marketing is the process of marketing your company and determining how clients will discover you. To begin, inform your friends, family, and coworkers about your new venture. You can send a letter or postcard to all of your contacts to announce the endeavor, and be sure to promote it whenever you get the opportunity. Depending on your target clients, you may want to consider paid web commercials, print ads in your local newspaper, or radio adverts. You'll use the research you did for your company strategy to figure out how to reach out to your consumers. For example, if you're targeting adolescents, you'll have better results with social media advertising than with AM radio ads. Create a strong online presence For most firms, having an internet presence is a critical component of their marketing strategy. This includes building and maintaining a brand website as well as communicating with customers on social media. Consider sending a monthly email newsletter to consumers to keep them informed and engaged in your product or service. Connect with Customers and Mentors Networking is a phrase used to describe the process of forming new relationships, which can take place either online or in person. It helps you expand your knowledge base, discover mentors, and spread the word about the services or goods you provide. You may network with other professionals in your field, such as a wedding photographer who participates in online forums with other wedding planners or photographers. You can also participate in general professional gatherings, such as those hosted by your local Chamber of Commerce. Make sure you have a good explanation of your company and how it might benefit potential clients before attending your first networking event. Make time to write your "elevator speech," which is a short persuasive presentation intended to pique people's interest in what your company does. Bring plenty of business cards with your contact information printed on them. Get Your First Sale The first sale or client will be the most challenging step for most organizations. You may rely on your marketing and networking efforts here. Offering a free or reduced service is an efficient approach to attract new first-time clients. Remember that for every business with online reviews, the first few reviews may make or destroy the company. Make sure to provide the greatest possible experience for your initial clients, and then follow up to see how you can better fulfill their requirements in the future. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! 22/9/2021 0 Comments Why Do You Need a Business Plan?Learn why you should write a business plan even if you aren't looking for funding.
The process of creating and writing a blueprint for your business, known as a business plan, will help you determine whether your business will be strong from the start, just as a builder uses a blueprint to ensure that a building will be structurally sound. You leave far too many things to chance if you don't have a business plan. A business plan includes a description of your company, including operational information, a section on market research and marketing strategies, a competitive analysis, and numerous financial projections The Benefits of Writing a Business Plan Writing a well-thought-out and well-organized business plan greatly improves your chances of becoming a successful entrepreneur. A solid business strategy may assist you in the following ways:
If you require financial assistance, If you need to raise funds for your business, you'll need to write a solid, formal business plan. Business owners who wish to borrow money or attract investors will only be successful if their business plans are well-written and well-researched. Before determining whether or not to fund your firm, all of your potential lenders or investors will want to learn as much as possible about how it will operate. Financial Forecasting's Importance Predicting and planning your company's finances can demonstrate to potential investors that your business concept is viable. Even if you don't need to raise startup capital, creating financial forecasts is a good idea. The discipline of creating financial projections for your business plan, which include an estimate of start-up costs, a break-even analysis, a profit-and-loss forecast, and a cash flow projection, will help you decide whether your business is worth starting, or if some of your key assumptions need to be rethought. In other words, a good business plan will persuade you whether or not you're on the right track. As any seasoned entrepreneur will tell you, the business you decide not to start because the numbers don't add up might be more essential to your long-term success than the one on which you stake your financial future. Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! 21/9/2021 0 Comments Structures of Business OwnershipLearn about the advantages and disadvantages of corporations, limited liability companies, partnerships, single proprietorships, and other business forms.
You'll need to know your choices before you can select how you want to organize your company. Here's a quick summary of the most prevalent business structures:
Sole Proprietorships A sole proprietorship is a one-person business that is not incorporated or registered with the state. To start a sole proprietorship, you don't need to do anything specific or file any paperwork; you simply go into business for yourself. A sole proprietorship is legally inseparable from its owner; the company and the proprietor are one and the same. This implies that the business owner is personally accountable for any business-related responsibilities, such as debts or court judgements, and declares business revenue and losses on his or her personal tax return. Sole proprietorships are appropriate for businesses where personal responsibility isn't a major concern, such as small service businesses where you're unlikely to be sued and won't need to borrow much money for inventory or other expenses.
Partnerships A partnership, on the other hand, is a company owned by two or more persons that hasn't filed papers to become a corporation or a limited liability company (LLC). To create a partnership, you don't need to file any paperwork; the agreement takes effect as soon as you start a business with another individual. The partnership's owners pay taxes on their share of the business revenue on their personal tax returns, much like a sole proprietorship, and they are personally responsible for the full amount of any business obligations and claims. Both sole proprietors and partners in a partnership may qualify for the 20% pass-through tax deduction established by the Tax Cuts and Jobs Act (TCJA). Partnerships, like sole proprietorships, are appropriate in businesses where personal responsibility isn't a major concern.
Limited Partnerships Limited partnerships are difficult to set up and manage, making them unsuitable for the ordinary small business owner. Limited partnerships are often formed by a single person or corporation (the "general partner") who will seek investment from others (the "limited partners"). The general partner is responsible for the day-to-day operations of the limited partnership and is personally accountable for any business obligations (unless the general partner is a corporation or an LLC). Limited partners having little influence over day-to-day business decisions or operations in exchange for not being personally responsible for business debts or claims. If you're interested in starting a limited partnership, speak with a professional.
Limited Liability Companies (LLC) Forming and running an LLC is a little more difficult and expensive, but it's well worth the effort for certain small enterprises. The major advantage of forming an LLC is that it reduces the owners' personal liability for corporate obligations and court judgements. Limited liability companies (LLCs) restrict personal liability for company debts and claims. However, LLCs are more like partnerships when it comes to taxes: the LLC's owners pay taxes on their portions of the business revenue on their personal tax returns. LLCs are ideal for business owners who are concerned about being sued by customers or accumulating a large amount of corporate debts, or who have significant personal assets they wish to shield from business creditors.
Corporations Creating and maintaining a corporation is more difficult and expensive than forming and operating an LLC, but the structure restricts the owners' personal liability for business obligations and court judgements against the company. The fact that a corporation is a separate legal and tax entity from the persons who own, control, and manage it distinguishes it from all other forms of companies. Because of this distinction, a company's owners do not use their personal tax returns to pay taxes on corporate earnings; instead, the business pays these taxes. The TCJA introduced a single flat tax rate of 21% for businesses, which is substantially lower than the 15% to 35% rate that firms paid previously. Owners only pay personal income tax on money they get from the business in the form of wages, bonuses, and other benefits. Corporations make sense for business owners who either (1) face consumer lawsuits or a large amount of business debts, or (2) have significant personal assets they want to safeguard from business creditors.
Nonprofit Corporations A nonprofit corporation is one that was established for the purpose of pursuing philanthropic, educational, religious, literary, or scientific goals. Individual and corporate gifts, as well as public and private grant money, can help a nonprofit raise much-needed finances. Because of the advantages they provide to society, the federal and state governments do not usually tax nonprofit businesses on money they receive that is connected to their charitable mission.
Cooperatives Some individuals fantasize of creating a genuine equals business, one that is owned and run democratically by its members. These grassroots business organizers frequently refer to their companies as a "group," "collective," or "co-op," however these terms are typically used informally rather than legally. A consumer co-op might, for example, be founded to manage a grocery shop, a bookstore, or any other type of retail business. Alternatively, a workers' co-op might be formed to produce and sell arts and crafts. Most states have rules governing cooperative formation, and in certain jurisdictions, you may file papers with the secretary of state's office to get your cooperative recognized by the state.
Yoel Molina, Esq. (AKA “Mo”) Feel free to join our WhatsApp group if you want to know more aboutt his and more! |
AuthorYoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters.. Archives
April 2022
Categories |
RSS Feed