A Guide for Small and Emerging Businesses

Armstrong Teasdale LLP offers a full range of services to start-up and emerging businesses at an affordable cost. We provide representation in all types of legal matters ranging from conventional, personal and business issues to complex legal matters. Our commitment is to furnish experienced, aggressive and high quality legal representation that is result-oriented and cost-effective.

We recognize and appreciate the value of entrepreneurs and small businesses. We are also familiar with the issues involved in starting and maintaining a small business, and we frequently provide advice and recommend solutions as new and more complex issues arise during growth and expansion. The wide range of legal issues facing businesses requires a law firm that is readily equipped to address those issues. What differentiates us from our competitors is the depth of resources available to represent a business from conception of an idea to maturity. The varied backgrounds and interests of our attorneys also allow us to bring a multi-disciplinary approach to legal problem solving.

We realize that during this period of growth, resources are limited. That is why we have developed the Business Enterprise Program, staffed by attorneys who practice primarily on small and emerging business matters at a reasonable cost. We want to be part of your success and have developed a fee structure that is sensitive to the financial constraints associated with starting a new business.

"START-UP" BUSINESS ISSUES

Business Organization

• Determine the organizational structure of your business
• Have related documents drafted and filed
• Have any necessary partnership agreements drafted
  

Developing a Business Plan

• Establish clear goals and strategies
• Consider financial, marketing, expansion, and legal goals when developing your business plan
  

Financing

• Enlist assistance in negotiating and obtaining loans to finance your business
• Obtain financing to cover initial costs, as well as expansion needs
  

Employment Issues

• Enlist assistance in interpreting employment laws to ensure compliance
• Develop appropriate policies and manuals, employee handbooks and employment contracts
  

Tax Planning

• Solicit counseling in connection with tax planning and compliance with business tax laws
  

Contracts

• Develop basic contracts, agreements and releases related to the marketing, distribution and sale of your service or product
  

Intellectual Property

• Take necessary steps to protect your product or service with trademark and copyright filings
  
  

"EMERGING" BUSINESS ISSUES

Estate and Business Succession Planning

• Pre-plan to shelter your family and your business from unnecessary taxes and obligations
• Decide who will eventually inherit the responsibility for running your business
  

Venture Capital

• Enlist help in obtaining venture capital for further business growth and expansion costs
  

Business Expansion Components

• If you are considering a merger, acquisition or joint venture arrangement, retain adequate representation in order to maximize shareholder value and protect your company from liability
  

Franchise and Distribution

• If you are considering the sale or purchase of a franchise, retain assistance in reviewing and negotiating related documents
• Relevant commercial forms and supply and distribution agreements should be drafted and reviewed
  

GUIDING YOUR BUSINESS:
FROM START-UP TO SUCCESS

Many successful businesses begin with a single idea...an idea that so inspires its creator he or she can think of little else. That kind of focus and vision creates such energy, one would assume the business was sure to succeed. While ideas and enthusiasm will certainly take a business far, there are several preliminary factors that will affect its ultimate success. First, it must be determined if an idea has commercial application. Is there a market for your invention or service? Next, financing must be considered. How much money will you need to start up your new business? The organizational structure for your business is important, too. How should your business be structured to take full advantage of tax and other benefits? Issues to be considered when starting and maintaining a small business include:

BUSINESS ORGANIZATION

Determining the organizational structure for your business is vital. You may need to seek advice regarding the organization of your new business in order to effectively manage the mechanics of organization so that it is in the appropriate form. Choice of entity affects your benefits, responsibilities, tax treatment, and more, all of which must be well-planned to effectively meet your current and future needs. Options include partnership, limited liability company, corporation, sole proprietor, association, and more. Depending on your choice of entity, there will be organization documents, such as state and federal tax applications and registration filings, to be drafted and filed.

DEVELOPING A BUSINESS PLAN

Developing a business plan involves establishing clear goals for your business, as well as strategies to accomplish those goals. Composing a mission statement is often helpful in keeping your goals focused over a period of time. A business plan should include financial, marketing, and expansion goals to ensure that your business prospers. Establishing reasonable financial goals for your business and the means by which to achieve those goals will not only keep your business running smoothly, it will allow you to enjoy the profits. In addition to financial goals, an effective business plan should include a marketing component which outlines the methods you will use to create awareness and interest in your service and/or product. As the owner of a new business you must determine which marketing vehicles should be utilized to reach your customer market. A strategy or plan for new product development and distribution should also be considered when formulating your long term business goals, as well as the necessary legal components to ensure compliance with any additional regulations you will encounter through such growth.

FINANCING

Many small business owners face tremendous obstacles when trying to obtain financing for their business. Often times your accountant, lawyer, or banker can assist you in negotiating and obtaining the financing you need to implement your business plan. Obtaining the necessary loans to cover initial costs and expansion needs is vital to a small business entrepreneur.

Professionals who maintain strong relationships with local banks can be instrumental in your obtaining the financing needed for start-up costs, debt restructuring, as well as other financial needs encountered as your business matures.

EMPLOYMENT ISSUES

As you begin to hire employees to help run your business, you should consider various city, state and federal employment laws. All types of employment matters, including contracts with independent contractors, confidentiality agreements, and noncompetition agreements should be carefully considered and addressed. In addition, preparing employee policies and manuals can help your company avoid unnecessary risks involving discrimination, sexual harassment, and related issues. It is of great importance that your policies comply with the ever-changing employment laws.

TAX PLANNING

An additional operating issue facing new business owners is taxes. Advice should be sought in connection with tax planning and compliance with laws involving all areas of tax at the federal, state, and local levels. Be sure to choose a professional who regularly reviews, analyzes and remains abreast of current legislation, regulations, new cases and administrative interpretations of tax laws at all levels.

CONTRACTS

New business owners often need basic agreements for selling their product or service. Contracts such as distributorship and agency agreements, blending and tolling agreements, franchise agreements, agreements for the lease, purchase or sale of inventory or equipment, joint venture and participation agreements, terms and conditions of printed sale forms or purchase orders, indemnification and hold harmless agreements, and releases may be necessary to conduct your business legally and properly.

INTELLECTUAL PROPERTY

Patents, trademarks, copyrights, trade secrets and other intellectual property are often very important to a new business. You should take steps to protect your intellectual property with patent, trademark and copyright filings. Many of the basic forms can be obtained from the U.S. Patent Office although appropriate legal advice may be necessary as well.

BEYOND START-UP:
ISSUES FOR THE EMERGING BUSINESS

As your business grows and prospers, new issues will arise that are different from the start-up issues you have previously encountered. You will need to begin to plan for the future as estate and succession planning, venture capital, and business expansion move to the forefront of your business plan.

ESTATE AND BUSINESS SUCCESSION PLANNING

As an individual your personal estate and financial planning needs are important. As a business owner you may also be concerned about succession planning, or who will eventually inherit responsibility for running the business. Smart pre-planning by individuals who are familiar with tax laws governing federal gift, estate, or income tax aspects can minimize tax consequences for you, your business and your heirs. Whether your concerns involve a credit shelter trust, a qualified interest property trust, a buy-sell agreement, or a family limited partnership, you should execute the pre-planning necessary to shelter your family and your business from unnecessary taxes and obligations, and to help you take advantage of the full benefits afforded you.

VENTURE CAPITAL

Our firm regularly represents both clients seeking venture capital financing as well as providers of venture capital. We are familiar with the structure of such investments and the various issues and negotiating points. Our experience and contacts in the venture capital area allow us to help meet your needs in this often complex area.

BUSINESS EXPANSION COMPONENTS

As your business grows you may decide to expand further through a plant expansion, merger, or an acquisition. For instance, you may want to purchase additional real estate. Before doing so, however, seek advice regarding related aspects of real estate development, acquisition and sale, financing, leasing, and zoning matters. Also, when a company is considering an acquisition or disposition it needs timely and intelligent representation in order to maximize shareholder value and protect the company from unwanted liabilities. Simple merger transactions can involve complex questions of securities, antitrust, tax, pension, and environmental laws. Choose a professional who has advised acquiring companies and target companies in preparing and responding to tender and exchange offers, and who has handled numerous stock and asset purchase and merger transactions.

FRANCHISE AND DISTRIBUTION

As your company grows, you may need to consider issues involved in franchising, licensing, and distribution, including development of new franchise systems, preparation of franchise offering circulars, compliance with federal and state requirements, contract negotiation and dispute resolution. Franchises are regulated by a host of federal and state laws and regulations. Disclosure requirements differ throughout the country and carry harsh penalties for violations.

OTHER

There are a host of other issues to be considered, including pension plan matters, risk analysis and regulatory issues involved in product development and production, rules governing product defects and recalls, storage and transportation matters, special trucking rate issues, as well as workers compensation and OSHA compliance matters.

For additional information, contact Tim McFadden.