TABLE OF CONTENTS
Your Legal Companion for Starting and Running a Small Business 1
Chapter 1
Which Legal Form Is Best for Your Business? 3
Sole Proprietorships 6
Partnerships 9
Corporations 12
Limited Liability Companies 22
Choosing Between a Corporation and an LLC 25
Special Structures for Special Situations 27
The Benefit Corporation 31
Chapter 2
Structuring a Partnership Agreement 35
Why You Need a Written Agreement 36
An Overview of Your Partnership Agreement 37
Changes in Your Partnership 46
Chapter 3
Creating a Corporation 47
The Structure of a Corporation 50
Financing Your Corporation 52
Compensating Yourself 53
Do You Need a Lawyer to Incorporate? 54
Overview of Incorporation Procedures 54
Twelve Basic Steps to Incorporate 55
After You Incorporate 63
Safe Business Practices for Your Corporation 63
Chapter 4
Creating a Limited Liability Company 69
Number of Members Required 70
Management of an LLC 70
Financing an LLC 71
Compensating Members 72
Choosing a Name 74
Paperwork for Setting Up an LLC 75
After You Form Your LLC 78
Safe Business Practices for Your LLC 80
Chapter 5
Preparing for Ownership Changes With a Buyout Agreement 85
Major Benefits of Adopting a Buyout Agreement 87
Where to Put Your Buyout Provisions 90
When to Create a Buyout Agreement 92
Chapter 6
Naming Your Business and Products 93
Business Names: An Overview 95
Mandatory Name Procedures 96
Trademarks and Service Marks 101
Strong and Weak Trademarks 101
Before the Trademark: Name Searches 102
How to Use and Protect Your Trademark 104
Chapter 7
Licenses and Permits 107
Federal Registrations and Licenses 109
State Requirements 110
Regional Requirements 112
Local Requirements 112
How to Deal With Local Building and Zoning Officials 114
Chapter 8
Tax Basics for the Small Business 117
Employer Identification Number 118
Becoming an S Corporation 121
Business Taxes in General 122
Business Deductions 127
Tax Audits 133
Chapter 9
Raising Money for Your Business 137
Consider Writing a Business Plan 138
Two Types of Outside Financing 141
Thirteen Common Sources of Money 146
Document All of the Money You Receive 152
Chapter 10
Buying a Business 157
Finding a Business to Buy 159
WhatÕs the Structure of the Business You Want to Buy? 160
Gathering Information About a Business 164
Valuing the Business 165
Other Items to Investigate 167
Letter of Intent to Purchase 170
The Sales Agreement 172
The Closing 180
Selling a Business 181
Chapter 11
Franchises: How Not to Get Burned 185
What Is a Franchise? 187
The Downsides of Franchise Ownership 188
Investigating a Franchise 192
The Franchise Disclosure Document 193
The Franchise Agreement 199
Resolving Disputes With Your Franchisor 202
Chapter 12
Insuring Your Business 203
Working With an Insurance Agent 204
Property Coverage 206
Liability Insurance 210
Other Insurance to Consider 213
Saving Money on Insurance 215
Making a Claim 217
Chapter 13
Negotiating a Favorable Lease 219
Finding a Place 221
Leases and Rental Agreements: An Overview 221
Short-Term Leases (Month-to-Month Rentals) 222
Written Long-Term Leases 223
Additional Clauses to Consider 235
Shopping Center Leases 236
How to Modify a Lease 237
Landlord-Tenant Disputes 237
Getting Out of a Lease 239
When You Need Professional Help 239
Chapter 14
Home-Based Business 241
Zoning Laws 242
Private Land Use Restrictions 246
Insurance 248
Deducting Expenses for the Business Use of Your Home 249
Chapter 15
Employees and Independent Contractors 255
Hiring Employees 257
Job Descriptions 260
Job Advertisements 261
Job Applications 261
Interviews 262
Testing 262
Background Checks 266
Immigration Law Requirements 274
Personnel Practices 275
Illegal Discrimination 276
Wages and Hours 278
Occupational Safety and Health 281
Workers' Compensation 282
Termination of Employment 283
Unemployment Compensation 284
Independent Contractors 285
Chapter 16
The Importance of Excellent Customer Relations 295
Developing Your Customer Satisfaction Policy 297
Telling Customers About Your Policies 299
Chapter 17
Legal Requirements for Dealing With Customers 301
Advertising 302
Retail Pricing and Return Practices 305
Warranties 308
Consumer Protection Statutes 313
Dealing With Customers Online 314
Chapter 18
Cash, Credit Cards, and Checks 317
Cash 318
Credit and Debit Cards 318
Checks 320
Chapter 19
Extending Credit and Getting Paid 325
The Practical Side of Extending Credit 326
Laws That Regulate Consumer Credit 332
Becoming a Secured Creditor 333
Collection Problems 334
Collection Options 337
Chapter 20
Put It in Writing:
Small Business Contracts 339
What Makes a Valid Contract 341
Unfair or Illegal Contracts 343
Misrepresentation, Duress, or Mistake 343
Must a Contract Be in Writing? 344
Writing BusinesstoBusiness Contracts 347
Signing Your Contracts 350
Electronic Contracting 353
Enforcing Contracts in Court 354
What Can You Sue For? 356
Chapter 21
The Financially Troubled Business 359
Thinking Ahead to Protect Your Personal Assets 360
Managing the Financially Troubled Business 363
Seeking an Objective Analysis 366
Workouts 367
Selling the Business 370
Closing the Business 371
Understanding Bankruptcy 372
Chapter 22
Resolving Legal Disputes 381
Negotiating a Settlement 382
Understanding Mediation 383
Arbitration 385
Going to Court 387
Chapter 23
Representing Yourself in Small Claims Court 393
Deciding Whether to Represent Yourself 394
Learning the Rules 396
Meeting the Jurisdictional Limits 396
Before You File Your Lawsuit 396
Figuring Out Whom to Sue 399
Handling Your Small Claims Court Lawsuit 399
Representing Yourself If You're the Defendant 402
Appealing Small Claims Decisions 402
Collecting Your Judgment 402
Chapter 24
Lawyers and Legal Research 405
How to Find the Right Lawyer 406
Fees and Bills 408
Problems With Your Lawyer 410
Do-It-Yourself Legal Research 411
Appendix
Checklist for Starting a Small Business 415
Index 421
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