For over 50 years, Wisconsin has been deciding cases related to covenants not to compete in working relationships under Wisconsin Stat. § 103.465. On July 14, 2009, in an opinion authored by Justice Michael J. Gableman, Wisconsin’s Supreme Court changed the way that statute will work, much to the benefit of employers. Here’s what they did.
Continue Reading...Think first before getting into an LLC. While the LLC has become the entity of choice, there are plenty of reasons to avoid them and consider the use of other forms within which to operate. This article will expose and arm you with the 10 best reasons for you to consider avoiding LLC’s.
LLC's are not unique. When LLC’s first came into vogue about 20 years ago, everyone – attorneys, accountants, bankers, insurance experts – all said that LLC’s would change the business world. In those 20 years I have attended dozens of business seminars related to the type of entity within which to do business. I’ve asked the experts what you can do with an LLC that you couldn’t have done with the already existing entities, such as an S corporation. I have never gotten a good answer
1. How do I deal with problems?
Business is a chain of decisions. A good business person has to be able to make decisions. You don't always have to be perfect: the teams that make the World Series can win two and lose two, but they then win the critial next game to be at 60% for the season. The same is true in business: mistakes will be made, but you have to be right more than wrong, and on critical issues, you have to be right most of the time. So if you don't have the ability to deal with problems and make decisions, either pick a partner who does, or work for someone else who has that ability.
2. Am I a good judge of people?
A good business person starts by selecting the right people. As Jim Collins says in Good to Great, you pick the right people to put on the bus, and then they will tell you what direction the bus should go. If I'm not willing or unable to be very focused on getting others who will work well in my business, then maybe I should see who has a business that I could help if I were on their team.
This goes beyond selecting good employees. It goes to selecting good customers and good vendors. If you have something to sell and only need to sell it to someone once, then maybe customer relations isn't important. But, most businesses grow based on long term relationships and referrals. Seek customers who need you as much as you need them.
Seek vendors who want long term relationships, as well, so that as you start out or if things get tough, they will extend accommodations to you to assure your business remains strong and healthy.
3. Am I passionate about what I want to do?
There are hot dog vendors and cupcake makers that are awesomely successful. They are passionate about their products and have developed a "core concept" to make their customers just as passionate. For example, "the best deal on two dogs and a drink in America, for just $4."
Continue Reading...The 2009 Wisconsin Budget Bill contains proposed changes in condemnation law which may substantially impact on the ability of business property owners to successfully challenge condemnation or contest the amount of compensation awarded.
The Wisconsin Department of Transportation is sponsoring the proposed modifications. Currently, an owner of land subject to condemnation may recover attorneys fees incurred in litigation with a condemnor. The DOT's proposal would limit the amount of an owner's attorneys fees paid by the condemnor to 1/3 of any increase in the amount proposed as an award by the condemnor prior to an attorney's involvement. For example, if an owner is offered $50,000 for property, and through litigation the award is increased by settlement or judgment to $200,000, resulting in an increase of $150,000, the amount of attorneys fees for which the condemnor is liable will be $50,000.
The DOT claims that this change in the law will not result in any decrease in the amount an owner receives for the property being taken. However, the likely result will be that property owners will be less likely to contest condemnation and condemnation awards, and more willing to accept the amount they are initially offered.
The fact that the law currently allows the owners of business property to recover all their attorneys fees provides owners with a great deal of leverage in negotiating successful compensation awards when their property is taken by the state. If the law is changed as proposed, the governmental entity seeking compensation will be placed in a much better position, and property owners will be much more inclined to accept the governments offer rather than contest the matter through litigation.
In D.L. Anderson’s Lakeside Leisure Co. v. Anderson, 2008 WI 126 (filed 2 Dec. 2008) the Wisconsin Supreme Court addressed the interplay between tradenames, noncompete agreeements, and tort law. Anderson involved an asset purchase agreement whereby Seller agreed to sell certain assets, including seller’s tradename, to buyer and seller agreed to a noncompete agreement with buyer. The lower court found that the Seller breached the noncompete agreement and infringed on the tradename that Buyer purchased. On appeal, the Seller argued that the noncompete agreement restricted the tradename rights the buyer purchased; thus, any action against defendant must be controlled by contract law, not tort law. The Buyer argued that the noncompetition clause prohibited other commercial use of the tradename not covered by tradename protection. The Supreme Court found that it was not reasonable to read the noncompetition clause language as Seller wants; “to do so would mean that the expiration of the noncompetition clause after seven years would render the tradename purchase meaningless” and that “the tradename infringement claim arises under the contract only in the sense that the contract is the instrument by which the tradename was purchased. A separate tort may be perpetrated once the tradename belongs to the purchaser.”
Businesses are rarely run by a single person. Instead they are run by a team of persons, each bringing certain expertise which in combination with the other gathered talents create a unique mix that is designed to make the business succeed. In the same fashion, the owner or owners of a small business often need the strength found in this teamwork approach to deal with the wide variety of business challenges each business owner faces.
There are some basic functions that each business must accomplish and some added functions unique to each business. The most common functions include: capital formation and management, risk management, marketing, legal issues, accounting and tax issues, and general advice. Let's take these one at a time.
Each business will either raise capital from within its owner-investors or its creditors or both. The stakeholders then become the owners and the lenders. If the lender is an institutional bank, it often provides other services, as well, such as depository and lending services, financing inventory and receivables, factoring, and the like. For that reason, it is often helpful to look for a banker as an adviser on the Business Advisory Team. This person will provide a great perspective from the standpoint of a lender.
It is impossible to avoid all risks. On the other hand, it is possible to manage the risks to which a business subjects itself so that it may succeed in the long run. Commercial insurance agents who have dealt with clients facing all kinds of risks become well tuned to see which risks are manageable and which risks put the business in jeopardy. Bringing such a person to the team will strengthen the team by helping the group assess how much coverage to carry, whether to enter into certain risks, and how to deal with claims when they arise.
The global economy has changed how business now must sell their goods or services. It is important not only to have a plan, but to have someone able to help direct that plan in a new arena of websites, blogs and twitters. Many things have now become commodities, and the only differentiating thing about the products are the way they are marketed. Get a good marketer on your team.
Anyone can sue anyone. To have a good defense, you need a good offense. To do that, you need a good legal mind on your team. Don't worry about whether that lawyer "does it all." Just be sure they have enough experience to direct your group the right direction in the event of a legal problem.
Accounting and Tax are two very specialized areas. Look for a CPA who is personable and willing to spend the time not only crunching the numbers, but meeting to explain what they mean and what result will most likely occur if certain changes are made.
Finally, consider who you would go for advice under certain very difficult situations, such as a discovery that a key employee was stealing from you. That adviser may be someone as close to you as a spouse or a trusted clergy person or other intimate adviser.
In summary, your Business Advisory Team would probably include at least your:
Such a team, coupled with advisers dealing with your business's special characteristics will lend a lot to insuring the success of your business.
Once coupled to a development idea, every entrepreneur faces the challenge of deciding which business entity would best suit his or her needs. While one would think that there is one right answer to this dilemma, in fact, the answer depends on a number of factors that are unique to each business, resulting in many different entities being the "right" choice, depending on the circumstances.
Factors affecting entity choice include:
Considering these factors, the owner has the following choices:
Perhaps the best way to compare all these choices is through a table which sets forth some of the most common advantages and disadvantages of each type of entity in comparison to the above factors:
Continue Reading...Enter keywords:
