Posts Tagged ‘law’

Small business Congress-watch: new laws and your company

Monday, May 23rd, 2011

Periodically I check in on the good people in our nation’s capital to see what they are up to and what they have been doing lately for (to?) us and our businesses. Our Congress has the ability to impact what we do every day and how we do it. The profitability of our companies, the welfare of our workers, and our ability to run our businesses effectively is directly dependent on their ability to pass law, provide oversight, and set priorities.

There are currently several pieces of legislation proposed or pending in Congress that you should be aware of, which have the potential to affect us in ways small and large – here are 5 currently proposed laws and short summaries for each. Use your own judgement about whether they will have a positive or negative impact and be sure to contact your elected representative to let them know how you feel! (AND be sure to leave a comment here to let us know, too!)

H.R. 585: Small Business Size Standard Flexibility Act of 2011 (Introduced 2/9/2011)
This change to the Small Business Act allows the SBA to change or specify the definition of what constitutes a small business, based on the size of that business. Potential impact: the SBA could adjust the definition such that businesses which are then deemed as too large, could no longer quality for certain programs, such as loans, tax incentives, etc. While this limitation would mean that many businesses would no longer be eligible for these programs, it could also provide savings within the program and limit it to businesses that most need the support.

H.R. 448: Small Business Innovation Enhancement Act of 2011(Introduced 1/26/2011)
This law will increase the SBA budget for awards to business via the Small Business Innovation Research (SBIR) programs over the next 5 years. Potential impact: more dollars could flow to small business to pursue research and innovation, but the additional dollars would have a budgetary impact in a time of large deficits.

S. 128/H.R. 1770: Small Business Paperwork Relief Act of 2011 (Introduced 1/25/2011)
This amendment to the Paperwork Reduction Act specifically disallows the imposition of fines for first-time paperwork violations be small businesses, unless a direct threat of criminal activity or “harm to the public interest” is determined. As long as a business corrects the violation within 6 months of being notified. Potential impact: small business would gain relief from certain fines for errors in their paperwork, but does limit agencies from the rapid enforcement of regulations.

S. 257: Small Business Broadband and Emerging Information Technology Enhancement Act of 2011 (Introduced 2/2/2011)
This law will require the SAB to assign an employee to specifically oversee all programs related to broadband and emerging information technology (BEIT). The SBA will also be required to train SBA employees in BEIT and to assist small businesses in the use of broadband and information technology. Potential impact: small businesses would have much greater support from the Federal Government in the areas of technology and internet access, but with an added layer of bureaucracy within the SBA.

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Posted in business, start-up tips, Strategy, Technology | No Comments »

The Law on Fonts and Typefaces: Frequently Asked Questions

Wednesday, March 23rd, 2011

The right typeface is often the key to a great logo, graphic or web design. But there’s much confusion and misinformation about typefaces, fonts and the law.

Many people do not understand the law governing the use of typefaces and fonts. Others incorrectly assume that they can freely use any typeface or font for any project.

When you purchase a commercial font, you are purchasing a license to use the font software. Your rights and obligations are defined in the End User License Agreement (EULA). Those agreements will vary among fonts and among font makers – so read them very carefully to understand what you can and cannot do with the fonts you’re licensing. For example, some agreements will restrict the number of computers on which you can install a font.

How is a font different from a typeface?

Technically, a “font” is a computer file or program (when used digitally) that informs your printer or display how a letter or character is supposed to be shown. A “typeface” is a set of letters, numbers and other symbols whose forms are related by repeating certain design elements that are consistently applied (sometimes called glyphs), used to compose text or other combination of characters.

Although many people would call “Helvetica” a font, it’s actually a typeface. The software that tells your display or printer to show a letter in “Helvetica” is the font.

What is copyright?

Copyright is a form of legal protection provided to those who create original works. Under the 1976 Copyright Act (United States), the copyright owner has the exclusive right to reproduce, adapt, distribute, publicly perform and publicly display the work. Any or all of these rights can be licensed, sold or donated to another party. One does not need to register a work with the U.S. Copyright Office for it to be automatically protected by copyright law (registration does have benefits – but we won’t be covering those in this article). For more about copyright law, you can read Small Business Legal Issues: Copyright Basics.

Does copyright law protect typefaces and fonts?

Generally, copyright law in the U.S. does not protect typefaces. Fonts may be protected as long as the font qualifies as computer software or a program (and in fact, most fonts are programs or software). Bitmapped fonts are considered to be computerized representations of a typeface (and are not protected by copyright law). On the other hand, scalable fonts (because they are incorporated as part of a program or software) are protected by copyright.

This means that copyright law (at least in the U.S.) protects only the font software, not the artistic design of the typeface.

You should remember that copyright law, and more specifically, as it relates to typefaces and fonts, varies by country. For example, the U.S. may be the only country in the western world not to recognize intellectual property rights in typeface design. The U.S. Copyright Office has unequivocally determined that fonts are not subject to protection as artistic works under the 1976 Copyright Act.

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Posted in business, crowdsourcing, design, How To, start-up tips | 17 Comments »

Small business and startup issues: net neutrality and H.R. 1

Monday, February 21st, 2011

Small businesses which are built on the Internet and dependent on it for their livelihoods are threatened by an amendment to the spending bill passed by the House last week. The amendment introduced by Oregon Representative Greg Walden, specifically prohibits the FCC from enforcing its Net Neutrality rules, passed late last year. These rules would effectively maintain a level playing field for small companies, startups, and entrepreneurs. The Net Neutrality FCC rules were designed to prevent large  Internet Service Providers, such as Verizon, AT&T, Comcast and others from controlling web content and determining levels of service and from discriminating in any way against content, applications, or services.

The FCC rules are common sense and fairly straightforward and include several important provisions:

  • Transparency will be required and ISPs would have to disclose information about their network management practices, performance metrics, and commercial terms.
  • “No blocking” rules would prohibit providers from jamming or obstructing any legal content, applications or services. Mobile providers would be exempt from this rule and would be allowed to block certain services and content that might compete with their own services.
  • Discrimination of web traffic would also be forbidden and providers could not unreasonably distinguish between traffic sources or provide one traffic source advantage over another. The FCC would be empowered to monitor the broadband industry and maintain legal competitive practices.
  • Paid prioritization of web traffic would also be banned and providers could not “sell” faster service or better routing to companies.
  • A complaint structure will be implemented which will allow businesses and consumers to file informal complaints through the FCC’s website as well as formal complaints after first notifying the target of the complaint.

    • The threat that the FCC is addressing with the neutrality rules is a serious and looming issue. The largest providers are in a position to control which sites users can easily access and the speed at which they can do so. The providers are in a position to determine what content will be easy to find in a search and what will remain virtually hidden from view.

    It is critical for internet-based businesses and startups that we all have the same ability to reach our audiences, to find customers, and to produce content that we consider valuable without having to worry that a competitor has paid for access or speeds that we have not paid for nor can afford to pay for. The FCC rules are designed to give all businesses, bloggers, media outlets, and individuals equal access to the tubes and to not permit broadband providers to determine who gets that access and how much they will have to pay for it.

    No matter what you may think of the budget proposed by the House last week, and no matter how you look at our government, the least they can do is the right thing for small business and allow us to compete fairly and transparently without having to worry that someone else has an advantage that we don’t.

    Photo: acroll

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    Posted in business, community, inspiration, Strategy, Technology | 2 Comments »

    Small business and startup issues: paperwork galore

    Monday, November 29th, 2010

    Last year’s healthcare bill, love it or hate it, contained a provision that slipped in under the radar, but that will have a substantial impact on small businesses and startups. The bill contains two important changes to how 1099s have been used historically. First, 1099s will now have to be issued for goods as well as services, and second 1099s will now have to be issued to corporations as well as individuals. This means that small businesses will now be sending out literally millions of 1099 forms and will be responsible for keeping track of every one of these throughout the tax year. Beginning in 2012, businesses will be required to issue 1099 tax forms not just to freelancers and contract employees, but to ANY individual or corporation from which a business buys more than $600 in goods or services.

    This means that in addition to the 1099s that you already prepare, you will also be preparing a flood of these for your office supply provider, office cleaner, caterer, accountant, computer hardware supplier, office furniture vendor, and on and on and on. The bill will drastically alter tax reporting by highlighting payments that have typically gone unreported – the idea is to increase government revenues by helping the IRS to account for millions of these payments.

    Small businesses and lobbyists have started to push back hard against this change, realizing the profound impact it will have on their operations and accounting procedures. And the Congress is listening; two bills have been introduced which would repeal this provision and if passed, small business will be spared another regulatory hurtle which could threaten to drown us all under a new flood of paperwork.

    And the revenue that will be “lost” to unreported payments? We will all have to live within the honor system as we know it and report those expenses as well as the income we derive from our businesses. Honesty is always less taxing than paperwork.

    photo: luxomedia

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    Posted in business, start-up tips, Strategy | 16 Comments »

    Small Business Legal Issues: Copyright Basics

    Monday, October 26th, 2009

    Prior to crowdSPRING, I was a lawyer for 13 years – focusing on complex commercial and intellectual property litigation. This is the first in what will be a regular feature in our blog discussing important legal issues that impact every small business.

    What is Copyright?

    Copyright is a form of legal protection provided to those who create original works. Under the 1976 Copyright Act (United States), the copyright owner has the exclusive right to reproduce, adapt, distribute, publicly perform and publicly display the work. Any or all of these rights can be licensed, sold or donated to another party. One does not need to register a work with the U.S. Copyright Office for it to be automatically protected by copyright law (registration does have benefits – but we won’t be covering those in this article).

    Copyright laws around the world can differ in significant ways. Most countries are signatories to various International treaties and agreements governing copyright protection (such as the Berne Copyright Convention). Under the Berne Copyright Convention, if your work is protected by copyright in your own country, then your work is protected by copyright in every other country that signed the Berne Copyright Convention.

    What does Copyright protect?

    Copyright protects works such as poetry, movies, writing, music, video games, videos, plays, paintings, sheet music, recorded music performances, novels, software code, sculptures, photographs, choreography, and architectural designs.

    To be protected by copyright, a work must be “fixed in a tangible medium of expression.” This means that the work must exist in physical form for at least some period of time. A tangible medium includes paper (even a napkin will do!) and digital forms of storage. Additionally, the work must be original. It doesn’t matter if the work is similar to existing works, and copyright law is blind to whether the work is good or bad – so long as the work is original, it is protected by copyright. Finally, a work must be the result of at least some creative effort by the author.

    Copyright doesn’t protect an idea, system or process (you would need to obtain patent protection for those). So, for example, if your small business is creating software programs, you would generally be unable to protect under copyright law the algorithms, methods, systems, ideas or functions of software (your code, however, is protected – nobody can sell or distribute your code without your permission).

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    Posted in business, How To, start-up tips, Strategy | 8 Comments »

    10 Legal Mistakes That Can Destroy Your Small Business And How To Avoid Them

    Monday, September 14th, 2009

    Prior to co-founding crowdSPRING, I spent 13 years practicing law (representing small, medium and Fortune 500 clients around the world). Along the way, I advised many small businesses and startups. Entrepreneurs and small businesses often ask me about legal problems facing most small businesses and startups and for tips on how to avoid those problems. Here are the top 10 mistakes and tips on how to avoid them:

    1. Choosing The Wrong Ownership Structure. This is your most important first decision when starting a business. The decision you make will impact whether or not you’ll be able to accept investors, how many and what types of investors, whether you’ll easily be able to sell your company, what your personal legal liability will be, what your tax liability and benefits will be, and many other significant issues.

    Why This Is A Problem: If you’re going to be looking for outside investment, you’ll want to create an ownership structure that’s friendly to those investors. For example, most outside investors prefer the stock structure of a corporation (or limited liability company) as opposed to a partnership. If you select the wrong ownership structure, you might expose yourself to unlimited personal liability for your company’s debts. Keep in mind that you should create your ownership structure BEFORE you enter into any agreements/contracts.

    How You Can Avoid This Problem: Consider the following issues when deciding on what type of entity to start: what are the potential liabilities/risks? What are the anticipated tax benefits from being taxed as a partnership as opposed to a corporation? Do you intend to have outside investors? Do you anticipate selling your company in the future? Are you pursuing a risky business where you might be sued?

    If you’re a sole proprietor, you are personally liable for your business debts. While this is generally the simplest form of ownership, it is also risky.

    In a partnership, the partners can be personally liable for the debts of the business. One benefit of both sole proprietorship and partnership is that the income/loss from the business flows directly to you (the corporation doesn’t pay a separate corporate tax).

    To insulate yourself from legal risk, you can form a corporation. Corporations have the most demanding record-keeping requirements and are subject to a separate corporate tax (in additional to your personal liability for your share of the money distribute by the corporation). As long as you follow all corporate formalities (hold periodic meetings, keep good corporate records, etc.) you’ll generally insulate yourself from personal liability for the debts of your company. Because of the expense involved in maintaining corporate records, many small businesses don’t use the corporate ownership structure (although many startups do – because that structure often makes it easier to sell the company).

    You can get the tax benefits of a partnership and the legal protection benefits of a corporation by organizing as a limited liability company (LLC). LLCs are subject to annual taxes or reporting fees (typically, hundreds of dollars) but have far fewer corporate records requirements than do corporations. After considering our own situation, we organized crowdSPRING as an LLC.

    image credit:SplaTT

    2. Lack of or Poor Organizational Documents. It’s not enough to decide on the right ownership structure for your business. If you decide on a structure that requires documentation – such as a corporation – you must follow the formalities and create/maintain such documents.

    Why This Is A Problem: If you don’t have solid organizational documents or fail to follow corporate formalities (such as for a corporation), you expose yourself to personal risk because courts may “pierce the corporate veil” and find you personally liable if they believe that the corporation wasn’t properly established or maintained. You also will lose credibility before your investors if they believe you don’t know how to properly maintain your entity.

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    Posted in business, crowdsourcing, How To, start-up tips, Strategy | 15 Comments »