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Business Formation

Sunday, February 26, 2017

Lubbock Becomes the Franchise Capital of Texas


What steps should I take if I am considering opening a franchise?

Franchise businesses are booming in Lubbock, Texas and across the state.  In recent years, entrepreneurs have flocked to Lubbock to open a wide array of franchises.  Well known businesses like Dunkin’ Donuts, Panera Bread, Baskin-Robbins, and BurgerFi are experiencing success in the region, despite initial concerns from national franchise corporate owners.  As a smaller city, some franchise owners were reluctant to open locations in Lubbock, but attractive real estate prices and a strong customer base have leant themselves to franchise success.  


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Wednesday, January 18, 2017

Starting Your Own Small Business in Texas


What steps should I take to open my own business in Texas?

So you have decided to open your own small business. Congratulations! You have taken an important step towards obtaining financial security and becoming your own boss, but there are several critical steps you must take to start your business off right.  Review our guide to opening your own small business in Texas and contact our Austin, Texas business startup and formation lawyer at the Kumar Law Firm PLLC when you are ready to get started.


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Thursday, June 30, 2016

Medical Marijuana Business Expected to Grow in Texas


What is the state of the medical marijuana industry in Texas?

For some time it has been known that marijuana has many medicinal uses. Over the past couple of years there has been huge support for legalizing marijuana for medical use. Legislators finally listened and many states have passed laws that make it legal to use certain forms of the drug in these instances. So what are the business implications of legalizing pot? We can get a good idea by examining the happenings in our Southern most state.

One state that has recently passed a


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Saturday, May 28, 2016

Austin Food and Beverage Start-Ups Attract Venture Capital


Start-ups based in Austin, Texas have faced some headwinds in the past year, with reports showing a decline in new venture capital investment. In the first quarter of 2016, Austin start-ups suffered a 49% decline in investment. Experts say venture capitalists lost enthusiasm because of economic unease and high valuations on untested start-ups.

But there has been at least one bright spot: the food and beverage industry. Start-ups offering consumer packaged goods ranging from healthy snacks to gourmet cider have attracted new investment interest even as others have suffered setbacks.


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Monday, May 2, 2016

Partnership Dispute Over YouTube Channel Offers Lessons for Start-Ups


What basic mistakes should entrepreneurs avoid when seeking investors?

A recent case decided in a Dallas, Texas courtroom shows that YouTube videos can be big business — and that traditional legal rules still apply to an area of the web that may seem like a free-for-all. The losing parties' response to the case also suggests that conduct that is commonplace online may not play well in court.

Avoid making unrealistic contractual commitments

The litigation centered on a partnership between two outside investors, David T. Moss and Brandon Keating, and YouTube channel owner/operators Brian Martin and Marko Princip, who were seeking funding for their videogaming channel. The outside investors signed a contract agreeing to put up $1500 in exchange for 30% ownership and 30% of the profits of the partnership for each of them.


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Wednesday, February 24, 2016

Reasons for Employee Handbooks

According to the Small Business Administration, what topics should employee handbooks cover?

While it is not legally required that every small business have an employee handbook, it is highly recommended for companies with more than a few employees. Employee handbooks work to standardize expectations for both employers and employees, and offer the company legal protection. Since employee handbooks set forth company policies clearly in black and white, they can help to keep friction and disputes to a minimum.

What Your Employee Handbook Should Cover

So that everyone understands the rules of the road from the first day of employment, employee handbooks typically cover standards that must be met by both employees and employers, including:

  • Non-disclosure agreements (NDAs) and statements concerning conflict of interest
  • Anti-discrimination policies: compliance with equal opportunity laws, including the Americans with Disabilities Act; information about discrimination and harassment
  • Compensation information: wages, overtime, performance reviews, raises, time-keeping records, breaks, bonuses and workers' compensation
  • Employee Benefits: including health insurance, retirement plans, wellness programs
  • Work schedules: work hours, attendance, punctuality, flexible hours and telecommuting
  • Leave Policies: vacation, sick leave, holiday, bereavement, family medical leave, jury duty, military leave, leave for voting and court cases
  • Conduct standards: code of dress, legal obligations, ethical behavior (avoiding harassment), privacy rules, particularly in activities under government regulation

In addition, employee handbooks should provide employees with an overview of the business and its general policies, including:

  • Hiring practices:  job postings and employment eligibility
  • Referrals, probationary periods, transfers, relocations, union information
  • Resignation and termination procedures

Safety and Security

As the owner of the company, you are responsible for creating a safe and secure workplace for your employees, meaning the premises should comply with Occupational Safety and Health Administration (OSHA) laws. Your employee handbook, therefore, should state clearly that all accidents, injuries, safety hazards and safety suggestions should be promptly reported to management.

In addition, the employee handbook should make abundantly clear that employees also have a responsibility to maintain a safe and secure work environment -- keeping pathways unobstructed, turning off appliances when not in use, and being committed to securing electronic information on their computers.

If you are starting up a new business or taking over an established one, you should consult with a firm of skilled and experienced business attorneys to make sure that you proceed in a legal, ethical, and efficient manner.


Wednesday, February 10, 2016

Insurance That Can Protect Your Small Business

What types of insurance do I need to protect my business?

In addition to choosing the right business organization, starting a small business requires obtaining the maximum protection for your company. By having the following types of insurance, your business will have maximum protection from a variety of situations that can lead to lawsuits.

Property Insurance

 

 

Obtaining property insurance should be a primary consideration for protecting your tangible investment, including essential merchandise, equipment, tools, and buildings. It is critical to protect your business property from the potential for loss and damage from a number of events, including fires, vandalism, theft and storms. In addition to protecting the actual building, furnishings, inventory and equipment, business property insurance may also cover other costs such as equipment breakdowns or the cost of clean up after a covered loss like a fire or storm.

General Liability Insurance

Regardless of the size or type of business, it is critical to obtain general liability insurance. This type of insurance protects you in the event you are faced with a lawsuit arising from accidents, injuries or claims of negligence. General liability insurance coverage protects you if your products, services or employees cause property damage or bodily injury to a third party. For example, if someone is injured on the premises of your business and files a lawsuit against you, general liability insurance may help to recover some of the costs, depending on the situation.

Professional liability Insurance

Errors and omissions (E&O) is insurance that typically covers doctors, accountants and lawyers. For medical professionals, E&O usually comes in the form of malpractice insurance. At the same time, lawyers, accountants, architects and engineers are covered by professional liability insurance. Moreover, even businesses like advertising agencies and commercial printers, in fact any business that provides a service to a client for a fee, needs E&O coverage.  In short, E&O coverage protects you from error or omission on your part that has caused a financial loss for your client.

Workers’ Compensation Insurance

While the particular rules differ from state to state, employers are required to buy workers' compensation insurance. Generally, this type of insurance protects businesses from lawsuits arising from workplace accidents. Workers' compensation also covers medical bills and compensates lost income for employees injured on the job, whether on the premises or elsewhere, regardless of who was at fault. Workers' compensation also covers employees who are injured in auto accidents while on company business or who suffer work-related illnesses. It also provides death benefits to surviving spouses and defendants.

Business Interruption Insurance

Small business owners should consider how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. If you are conducting business in an area that has a high risk of natural disasters, investing in business interruption insurance will compensate you for lost income if your company has to vacate the business premises due to disaster-related damage.

The Bottom Line

Every business is different, and each faces a variety of risks; however, by investing is the right types of business insurance, a company can protect itself from a wide range of losses and liabilities. 


Thursday, January 28, 2016

Why Branding is Essential for a Small Business

“Authentic brands don't emerge from marketing cubicles or advertising agencies. They emanate from everything the company does...” (Howard Schultz, CEO Starbucks)

Whether you take coffee or not, most people are familiar with the Starbucks brand. Not every company is a renowned franchise like the international Barista. Branding , however, is essential for every small business. A brand helps customers identify a company's products and services and distinguish them from the competition.

Brands, Logos Trademarks

A company's brand stands for its reputation, and this is often a matter of customers' perceptions. Customers need to know who you are and a brand identity helps to clarify your target customers. Having an effective brand strategy allows a business to communicate with customers in a variety of ways.

Often, this starts with a logo or a trademark which serves as the basis for packaging, the domain name of a website, media communications, as well as advertising and promotional materials. Having a trademark, moreover, requires registering that mark with the US Patent and Trademark Office. This is a complicated process that requires the advice of an attorney in order to prevent a trademark infringement lawsuit that could possibly damage your brand.

How to Develop a Brand

 There are a number of steps a small business needs to take in order to develop its brand. The first is to define the brand and its purpose so that you capture the interest of customers. One way to do this is with a "mission statement" that explains what your business stands for and what your products and services do.

Once your mission is established, the next step is to identify your target market. Not every customer will be drawn to your product or service. However, there is a customer base that is likely to buy from your business, especially those that identify with your brand. In the end, your target customers will decide whether or not your brand has value.

Lastly your brand must have a personality and represent your values. The values of your brand are the core principles that foster relationships with your employees, customers and vendors. Ideally, these values should be the foundation for a positive business culture. Put simply, a brand is important to a company and its products and services much like someone's personal or professional reputation is to him or her. 

The Bottom Line:

Your brand tells customers what to expect from your products and services and distinguishes you from the competition. Your brand strategy is essential for communicating and delivering your message which is really a promise to your customers. In other words, a brand flows from who you are, influences customers' perceptions and allows them to identify with you. Ultimately an effective brand strategy can give you an edge in the market place.

If you are considering starting a business or have already done so, an attorney can advise you on legal matters affecting your business.


Friday, October 30, 2015

Mark Cuban Says Texas is a Startup-Friendly State

Is Texas a good place to start a business?

When we think of new business startups, our minds wander to places like New York City, Los Angeles and Silicon Valley. While these are great places for entrepreneurs to get started, are they any better than the state of Texas? Billionaire Mark Cuban doesn’t think so.

Cuban is a self-made billionaire who got started in the Lone Star State. Initially, he made his money by creating a streaming radio service, which was eventually bought by Yahoo! in 1999.  Now, he is a star of the hit TV show "Shark Tank." On this reality show, entrepreneurs have the opportunity to pitch their companies to wealthy investors who might financially back them if they like what they hear. Cuban has now invested in over 100 companies as a result of his spot on the show. 

Cuban was asked to speak at the North Texas Commission annual meeting. His topic was “how to think beyond the pitch.” During his presentation, he explained to the audience that he thinks Texas is one of the best states in which to start a company. While places like Silicon Valley are known for billion dollar buyouts, Texas is a great place to grow a business into an empire.  He also mentioned that he is trying to move some of the manufacturing he does in China back into the United States, specifically to Deep Ellum, Texas. Some of Cuban’s companies had booths at the meeting and were selling products or handing out samples and coupons to attendees.

According to Mark Cuban, if you are an entrepreneur in Texas, you can rest assured that you are in one of the best locations in the country. Nonetheless, nothing does more for your business than the representation of a knowledgeable and experienced business law attorney.


Saturday, October 10, 2015

Texas Ranked as Friendliest State for Small Businesses

What are the benefits of incorporating my small business in Texas versus other states?

When starting a business, one of the first steps to consider is where to incorporate? Legally speaking, deciding where to incorporate is one of the most pivotal decisions an entrepreneur can make, as the company will be subject, as it grows, to the laws of not only the state(s) where it does business, but its state of incorporation as well. Accordingly, businesses should take into consideration the various tax, civil, procedural, and dispute resolution laws in place when making this decision – all of which will undoubtedly impact at some point during the life of the business.

In a recent survey conducted on thousands of small business owners in Texas, the Lone Star State ranked first as the friendliest small business state in the U.S. The survey reviewed several areas, including: ease of starting a business, state employment regulations, taxes, zoning, and environmental laws. Receiving an “A” in nearly every category, small business owners touted the relative ease with which a start-up in Texas can obtain the necessary licensing  as well as benefit from the overall unobtrusiveness of state environmental and zoning regulations. Small businesses also reported favorable tax treatment, including paying virtually no income taxes in most cases.

If you operate a start-up business and are considering incorporating in Texas, working with a reputable business attorney is one of the first steps to take to ensure a seamless transition. While the steps to incorporate and gain legal recognition of your business entity may seem straightforward, working through the state and federal hiring and employment regulations may not be as easy. An experienced Texas business attorney can help ensure that your enterprise meets applicable zoning and permit laws. This is especially important if your business is in the industrial or manufacturing sector.

If you are in need of assistance with your start-up business, please contact the Kumar Law Firm in Austin, Texas today: 512-323-6060.


Friday, July 10, 2015

New Provision Added to 2012 JOBS Act Designed to Make Crowdfunding Easier

What are the limitations on private equity funding, and how does this impact start-ups in need of capital? 

Start-ups are the cornerstone of American industry, particularly within the booming technology sector. As a business just starting out, one of the most difficult aspects of growth and development is finding the necessary capital and liquidity to get off the ground – which in turn requires sizable investments from willing venture capitalists. Over the past several years, several private equity companies have endorsed the concept of “crowdfunding,” which allows for contributions by several smaller investors as opposed to one or two large donors. Problem is, federal and state corporate laws have made crowdfunding an administrative nightmare, and start-ups are facing increasingly burdensome paperwork and reporting requirements that are often required within all 50 states as well as by the federal government. 

To alleviate the burden a little, in June, 2015, the federal government lightened this bureaucratic load by amending the 2012 JOBS Act to increase the amount of capital a business can raise from private individuals to $50 million under what is often called a Regulation A filing – which is a major jump from the former $5 million cap. Under the former rules, publicly-traded companies could not accept more than $5 million from individual corporate investors, which significantly dampened the available crowdfunding sources obtainable by blossoming start-ups. Now, this amount has been greatly expanded to allow companies the opportunity to accept offerings from anyone willing to pitch in. 

Also under the new rules, exhaustive paperwork requirements have been somewhat lessened, thereby allowing start-ups the opportunity to focus on business growth and expansion instead of concentrating on dozens of filings (and the associated fees). Previously, once a business hit $20 million in capital investments, it was required to adhere to the recording, filing, paperwork, and fee schedules of any state wherein an investor was located – along with the Securities and Exchange Commission. Now, most companies can file a single report and audit with only the SEC, however additional oversight might be required in certain situations.

Despite these steps in the right direction to enable crowdfunding easier, the new amendments have specific requirements in the area of eligibility, disclosure, caps on amount as well as percentage of shares being offered to individual investors, etc. especially for offerings in excess of $20 million - being referred to by the new moniker of Tier 2 Regulation A filing.

If you have questions about starting a new business or would like to speak to a reputable business attorney, please do not hesitate to contact the Kumar Law Firm based in Austin, Texas today: (512)960-3808. 


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