Business Articles and Videos

1. Criminal Investigation

State and federal law enforcement and governmental agencies proliferate with each passing day. Depending on your industry, you could be regulated by as many as ten agencies, not counting the normal and customary policing departments. The power of government agencies is blinding. Recently, a trend has emerged targeting more and more businesses, executives and owners for investigation and prosecution. It has become so prevalent that all companies should focus considerable effort toward insulating their owners, employees and operations from risk.

Adopting a policy that your company will cooperate in all government inquiries and investigations with the assistance and counsel of an experienced criminal law attorney is the best way to insulate you and your employees from waiving your rights or creating more risk. Educate yourself and your employees on your constitutional rights and what procedures to follow with the advice of a criminal law specialist or attorney familiar with this trend and danger.

2. Employee Lawsuit

Employment law is the new lottery for Plaintiffs' lawyers who have watched tort reform narrow their playing fields. For every perceived harm - real or imagined, there is a creative lawsuit waiting to be filed. Sexual harassment, age discrimination, pregnancy discrimination, racial discrimination, gender discrimination, disability discrimination, wrongful termination, retaliation, and injuries, are only some of the fertile ground for disgruntled employees.

Clear and thorough employee rules and policies are the first area of defense against this kind of legal threat. Develop an employee manual and document employee files. Treat all employees with respect and with equality and consistency. Engage a business or employment lawyer to review your policies and rules.

3. Cyber Issues

With the move of all businesses toward more and more dependence on technology and the use of internet communications and resources, cyber legal issues grow exponentially every day in ways that are just beginning to be understood and anticipated.

Specific rules and policies regarding employee computer usage, privacy and access are critical in today's business. Adopt, revise, review or amend your policies and rules as soon as possible. Neglecting this area of legal threat is just asking for trouble.

4. Marital and Divorce Issues

If you are married or if any of your fellow owners or partners are married, significant risk exists in the divorce arena should any marriage fail.

Contractual protections in your entity documents or business agreements should address these risks so that you can continue conducting business regardless of someone's divorce claims and proceedings. Marital property agreements can also provide additional insulation from this threat.

5. Business Contract Lawsuits

Attorneys' fees and expenses can wreck your bottom line and distract you and your employees from your core business operations. Your goal should be to utilize contractual provisions to minimize the chance of being sued or having to sue third parties with whom you do business.

With the appropriate contractual clauses, you can avoid being drug into a courtroom by requiring arbitration, choose the state in which you will be sued or in which the arbitration will be conducted, limit damages, and require that the loser pay the costs of dispute resolution. Many more advantages can be built into contracts in order to give you control over the legal process.

All business owners and executives have the obligation and duty to their employees, shareholders, partners and families to insulate and protect their companies and operations from the legal threats that haunt businesses. By understanding the threats and risks, and by taking proactive measures to prevent lawsuits and legal disasters, you can control your own legal destiny and win the advantage in any future legal battles.

WASHINGTON — Senate Republicans on Thursday rejected a bill to aid small businesses with expanded loan programs and tax breaks, in a procedural blockade that underscored how fiercely determined the party’s leaders are to deny Democrats any further legislative accomplishments ahead of November’s midterm elections.

The measure, championed by Senator Mary L. Landrieu, Democrat of Louisiana, had the backing of some of the Republican Party’s most reliable business allies, including the United States Chamber of Commerce and the National Federation of Independent Business. Several Republican lawmakers also helped write it.

But Republican leaders filibustered after fighting for days with Democrats over the number of amendments they would be able to offer. A last-ditch offer by Democrats to allow three was refused by the Republican leader, Mitch McConnell of Kentucky. “The majority leader has graciously given us three amendments and what I’m saying is three amendments is not enough; he knows that,” Mr. McConnell said on the Senate floor. “We are not expecting to have an unlimited number of amendments, but three amendments will not suffice.” The demise of the measure, at least for now, signaled that Democrats would fare no better on other legislation that they had hoped to finish before summer recess begins at the end of next week, including a scaled-back energy bill.

The Senate is expected to confirm Elena Kagan to the Supreme Court, but that may be its only substantive action. With 60 votes needed to advance the legislation, the tally was 58 to 42, with Democrats unanimously in favor and Republicans all opposed. The majority leader, Harry Reid of Nevada, switched his vote to no at the last minute, a parliamentary step that allows him to call for a re-vote. Some lawmakers said a deal was still possible. Meanwhile, the Senate turned to a bill that would provide $26.1 billion in aid to states to help cover Medicaid costs and prevent teacher layoffs. The vote on the small-business bill followed several emotional exchanges on the floor.

“That is the tradition in the United States Senate: majority rules, but you accommodate the rights of the minority,” said Senator Olympia J. Snowe of Maine, who is the senior Republican on the small-business committee. “We’re faced with a procedural impasse here because we’re being denied the opportunity to offer some amendments.” She also chastised Democrats as dillydallying on the measure, repeatedly pulling it off the floor to deal with other matters. “We need to create jobs in America,” she said. “This bill has been on the floor for three weeks and three substitutes — 81 days.” Ms. Landrieu harshly criticized Mr. McConnell for blocking the measure, and warned that some businesses might fail. “Our businesses have picked up enough weight; they can’t handle that weight,” she said in a floor speech. “And if we don’t give them some help now, today, many of them aren’t going to be here — I want the senator from Kentucky to know — when we show up in September.” The bill would create a $30 billion lending program within the Treasury Department, to be administered through local banks. It would also provide more than $12 billion in tax breaks, and would expand or enhance existing lending programs.

The three Republican amendments that Democrats seemed open to debating would eliminate a provision in the new health care law requiring businesses to file 1099 forms reporting when they buy more than $600 in goods from other businesses, extend a tax credit for biodiesel fuel and extend a credit for research and development. Republicans had also wanted amendments on other topics, including the estate tax, nuclear loan guarantees, border security and the expiring Bush tax cuts. Senator George LeMieux, Republican of Florida, who helped draft the bill, said Democrats had taken a bipartisan measure and created a partisan fight over it. “This small-business bill should pass, and it should pass with relevant amendments,” Mr. LeMieux said. “Before I am a Republican, I am a Floridian and an American, and this bill is good for our country.” With tensions running high, Senator Sheldon Whitehouse, Democrat of Rhode Island, noted that “if just one” Republican had voted with the Democrats — a pointed reference to Mr. LeMieux — the bill would move forward. Mr. LeMieux shot back, “Half the truth is no truth at all.”

1. Criminal Investigation State and federal law enforcement and governmental agencies proliferate with each passing day. Depending on your industry, you could be regulated by as many as ten agencies, not counting the normal and customary policing departments. The power of government agencies is blinding. Recently, a trend has emerged targeting more and more businesses, executives and owners for investigation and prosecution. It has become so prevalent that all companies should focus considerable effort toward insulating their owners, employees and operations from risk. Adopting a policy that your company will cooperate in all government inquiries and investigations with the assistance and counsel of an experienced criminal law attorney is the best way to insulate you and your employees from waiving your rights or creating more risk. Educate yourself and your employees on your constitutional rights and what procedures to follow with the advice of a criminal law specialist or attorney familiar with this trend and danger. 2. Employee Lawsuit Employment law is the new lottery for Plaintiffs' lawyers who have watched tort reform narrow their playing fields. For every perceived harm - real or imagined, there is a creative lawsuit waiting to be filed. Sexual harassment, age discrimination, pregnancy discrimination, racial discrimination, gender discrimination, disability discrimination, wrongful termination, retaliation, and injuries, are only some of the fertile ground for disgruntled employees. Clear and thorough employee rules and policies are the first area of defense against this kind of legal threat. Develop an employee manual and document employee files. Treat all employees with respect and with equality and consistency. Engage a business or employment lawyer to review your policies and rules. 3. Cyber Issues With the move of all businesses toward more and more dependence on technology and the use of internet communications and resources, cyber legal issues grow exponentially every day in ways that are just beginning to be understood and anticipated. Specific rules and policies regarding employee computer usage, privacy and access are critical in today's business. Adopt, revise, review or amend your policies and rules as soon as possible. Neglecting this area of legal threat is just asking for trouble. 4. Marital and Divorce Issues If you are married or if any of your fellow owners or partners are married, significant risk exists in the divorce arena should any marriage fail. Contractual protections in your entity documents or business agreements should address these risks so that you can continue conducting business regardless of someone's divorce claims and proceedings. Marital property agreements can also provide additional insulation from this threat. 5. Business Contract Lawsuits Attorneys' fees and expenses can wreck your bottom line and distract you and your employees from your core business operations. Your goal should be to utilize contractual provisions to minimize the chance of being sued or having to sue third parties with whom you do business. With the appropriate contractual clauses, you can avoid being drug into a courtroom by requiring arbitration, choose the state in which you will be sued or in which the arbitration will be conducted, limit damages, and require that the loser pay the costs of dispute resolution. Many more advantages can be built into contracts in order to give you control over the legal process. All business owners and executives have the obligation and duty to their employees, shareholders, partners and families to insulate and protect their companies and operations from the legal threats that haunt businesses. By understanding the threats and risks, and by taking proactive measures to prevent lawsuits and legal disasters, you can control your own legal destiny and win the advantage in any future legal battles.

The term "small business" is virtually meaningless.

At least it is if you use a commonly accepted definition: a firm with a maximum of 499 employees. The Small Business Administration's Office of Advocacy uses that size-based definition and the FAQ on its Web site categorizes 99.9 percent of all U.S. businesses as "small businesses." But the differences between types of businesses with fewer than 500 employees are so great, it's almost impossible to talk about what's common among them. That's a bigger problem for policymakers and those impacted by their policies than you might think.

Policymakers Are Talking About All Kinds of Small Businesses at Once

To illustrate the range of small businesses out there, consider these two examples. The first is a sole proprietorship that generates less than $50,000 per year in revenue and is run on a part-time basis by an individual with a full-time regular job. He started it with money from his own savings. The second is a corporation with 490 employees run by a team of experienced entrepreneurs that generates $25 million in annual sales and is funded by an equity investment from a venture capital firm. Both are small businesses. When journalists, academics, policymakers, and politicians talk about small businesses, the vast differences are often ignored, because they neglect to explain what type or types to which they're referring.

Size Matters

It's pretty obvious that corporations differ from sole proprietorships. It's also clear that businesses run on a full-time basis vary from those managed part time. And it should go without saying that self-financed companies aren't the same as those that receive outside equity. Same for high-revenue companies differing from low-sales ones. Perhaps less talked about is the fact that the business owners' problems, contributions, and aspirations vary a great deal depending on their number of employees.

This point became very clear during the recent debate on the health-care bill. The Kaiser Family Foundation's 2009 report on health care found that 87 percent of companies with 25 to 49 employees made health insurance available to their personnel in 2009, compared with only 46 percent of companies with 3 to 9 employees. The inability to offer employee health insurance isn't a small business problem so much as it is a very small business problem.

Similarly, the provision of retirement plans to employees varies greatly by the number of employees in small businesses. As I mentioned in an earlier column, one government study showed that only 29 percent of businesses with fewer than 25 workers offer a retirement plan to employees, while another study showed that the odds that the owners of businesses with fewer than 10 employees have a 401(k) plan for themselves is much lower than that of owners of larger small businesses. Not surprisingly, a recent Guardian Life Small Business Research Institute study that surveyed 1,100 owners of small companies in 13 different industry sectors in May 2009 shows that retirement planning increases in importance to owners as small companies become larger.

The business challenges that small business owners focus on varies with the number of employees in the company. The Guardian Life study showed that employees become a more important focus of small business owners' attention as companies become larger. The report shows that the perceived value of employees, the top management team, and outside advisers like lawyers and accountants goes up with the size of the firm. Moreover, strategies for finding employees become more important to the company owners.

Large Small Businesses Are the Most Economically Important

Small businesses don't all make an equal contribution to economic activity. Larger small companies account for most of the contribution to wealth and job creation. U.S.

Census data show that businesses with no employees (the smallest small businesses) account for a whopping three-quarters of all companies in this country but generate only 4 percent of sales.

Similar differences can be seen in job creation. In an earlier blog post, I summarized Bureau of Labor Statistics data which showed that from 1992 to 2008, firms with 9 or fewer workers made up 79 percent of companies but created only 15 percent of the jobs. And those with 10 to 49 employees accounted for 17 percent of companies but created 20 percent of the jobs. However, those with 50 to 499 employees made up only 4 percent of firms but created 30 percent of the jobs.

Implications

If we are going to forge meaningful domestic economic policy, we need to break small businesses into different size categories. Based on what the data show, I would propose defining businesses as non-employer businesses, microbusinesses (1 to 9 employees), small businesses (10 to 24 employees), medium-sized businesses (25 to 99 employees), and large small businesses (100 to 499 employees).

We need only look at one of the most talked-about topics today—access to credit—to see the value of disaggregating small businesses. Because companies of different sizes obtain their financing from different sources, we can't talk accurately about the problems or the solutions if we lump small businesses together in one group.

Is drying up of lines of credit a big part of the problem small businesses face today? According to data from the National Federation of Independent Business, that's more likely to be the case for businesses with 1 to 9 employees, since 52 percent of businesses that size which sought to renew or extend a line of credit last year failed to get credit on satisfactory terms. That's in contrast to only 29 percent of businesses with more than 20 employees.

What about difficulty getting credit from a commercial bank? Data from the Federal Reserve Survey of Small Business Finances indicate this is more likely to be an issue for businesses with 100 to 499 employees, 86 percent of which had such loans before the financial crisis, than for non-employer businesses, only 21 percent of which did at that time.

Not all of the small businesses in each of these categories will have common needs or face the same problems, but, on average, small businesses in these different size categories are much more similar than all small businesses are to each other.

Of course, dividing small businesses into different categories will reveal that non-employers and microbusinesses, which are by far the majority of all small businesses, contribute less to economic activity than the much smaller group of large small businesses. Our political leaders might not like that pattern. The confusion generated using the umbrella of "small business" to discuss the wide range of issues facing 99.9 percent of U.S. companies might suit their goals much better.