1. 1 Starting a Business Legal Issues Stephen R. Cook, Esq. Stephen R. Cook, Esq. Clinical Professor of Law University of Akron School of Law University of Akron School of Law scook@uakron.edu scook@uakron.eduscook@uakron.edu 330-972-2358 330-972-2358

2. 2 Why a business? Make a profit Make a profit Participate in management of business Participate in management of business Liability protection from business obligations Liability protection from business obligations Minimize taxes for business/owners Minimize taxes for business/owners Recognition as a business Recognition as a business Orderly exit from business Orderly exit from business

3. 3 “FLIC” Formation – entity selection Formation – entity selection Liability – personal indemnity/insurance Liability – personal indemnity/insurance Intellectual Property – types/protection Intellectual Property – types/protection Contracts - creation/issues Contracts - creation/issues

4. 4 Entity Selection Sole Proprietor Sole Proprietor Partnership Partnership LLC LLC Corporation S/C Corporation S/C

5. 5 Entity Selection Liability Liability Ease of formation Ease of formation Formalities Formalities Organization Organization Dissolution Dissolution

6. 6 Entity Selection Secretary of State Secretary of State Name selection Name selection Proper form Proper form Statutory agent Statutory agent Filing fee Filing fee Charter number Charter number

7. 7

8. 8 Liability Insurance – Business Owner’s Policy (“BOP”) Insurance – Business Owner’s Policy (“BOP”) Premises/product liability Premises/product liability Secondary market insurance Secondary market insurance Aggregate, per-occurrence Aggregate, per-occurrence

9. 9 Intellectual Property Patent Patent Copyright Copyright Trademark Trademark Service Mark Service Mark Also consider: Trade secret, trade name, fictitious name Also consider: Trade secret, trade name, fictitious name Confidentiality Agreement Confidentiality Agreement

10. 10 Contracts Offer, acceptance, consideration, mutuality Offer, acceptance, consideration, mutuality Meeting of the minds Meeting of the minds Lawful purpose Lawful purpose “Reasonable person” standard “Reasonable person” standard Statute of Frauds Statute of Frauds

11. 11 Taxation Sole Proprietor – Schedule C Sole Proprietor – Schedule C Single member LLC – Schedule C Single member LLC – Schedule C Multiple-member LLC – Partnership taxation Multiple-member LLC – Partnership taxation EIN number EIN number “Flow-through” taxation “Flow-through” taxation S Corp. v. LLC – distributive share S Corp. v. LLC – distributive share

12. 12 Due Diligence Primarily related to corporate acquisition and/or public securities offering. Primarily related to corporate acquisition and/or public securities offering. Reasonable investigation as basis for reasonable belief. Reasonable investigation as basis for reasonable belief. Shield parties from liability Shield parties from liability Evaluate viability of offering or acquisition Evaluate viability of offering or acquisition Affirmative duty to ensure compliance Affirmative duty to ensure compliance