Business Law

Corporate Transparency

ravosalegalpadLeave a comment

In recent years, there has been a growing emphasis on corporate transparency and accountability. Massachusetts, as a state known for its strong business environment, has taken significant steps to promote transparency within its corporate sector.

One of the key initiatives in this regard is the requirement for companies to disclose their financial information and corporate governance practices. This includes providing detailed reports on their financial performance, executive compensation, board composition, and other relevant information.

By implementing such measures, Massachusetts aims to foster trust and confidence among investors, shareholders, and the general public. Transparent corporate practices not only enhance accountability but also contribute to the overall stability and sustainability of the business ecosystem.

Furthermore, Massachusetts has established regulatory bodies and frameworks to ensure compliance with transparency standards. These bodies monitor and enforce regulations, conduct audits, and investigate any potential violations. This proactive approach demonstrates the state’s commitment to maintaining a fair and transparent business environment.

As a business operating in Massachusetts, it is crucial to prioritize corporate transparency. By adhering to the state’s regulations and voluntarily disclosing relevant information, your company can build a positive reputation, attract investors, and establish long-term relationships with stakeholders.

If you have any questions or require further information on corporate transparency in Massachusetts, I encourage you to reach out to the appropriate regulatory authorities or consult legal professionals specializing in corporate governance. You can contact our office through ravosalaw.com.

Thank you for your attention to this matter. Together, we can contribute to a more transparent and accountable corporate landscape in Massachusetts.

This is only intended to be information and does not constitute legal advice nor does it create any attorney-client relationship with the firm.

9 Key Business Mistakes that May lead to Litigation:

ravosalegalpadLeave a comment

Whether you are a veteran business owner or just starting out, there are some key mistakes you can make that often lead to litigation. No one wants to be the object of a lawsuit, so I thought I would take a minute and highlight some common mistakes that sometimes lead to suits and how to avoid them:

  • Form a business entity. Make sure you know what type of entity to form and that you check all the correct boxes as you move through the process. 
  • Obtain insurance. We insure our homes, our cars, and even our wedding rings. Your business should be no exception. Where there is equity, there is risk, and insurance ought to be one of the first things on your checklist as you build your business. 
  • Write it down. It’s important that you require all business agreements be hammered out in contract form, looked over by an attorney, and signed on the dotted line. Leaving this to chance never ends well. 
  • Protect your intellectual property (IP). If you think of it, you own it. Do not dismiss the importance of IP and how imperative it is to protect it as you scale your business. 
  • Trust your employees. No one likes to be micromanaged, and traditionally speaking, employees who are trusted to do their jobs correctly are more content and less likely to cause issues down the road. 
  • Hire smart. If you hire the right employees, making sure to flesh out references and pay attention to red flags, you will build a business that runs smoothly and help avoid litigation.  
  • Understand local laws. From copyright laws to taxes, there is a lot to wade through. Failure to put in the work to understand these laws can cause real problems down the road. Be sure to get a lawyer involved earlier than later to help navigate these issues. 
  • Prioritize accurate bookkeeping. Messy accounting has been the nemesis of many business owners. If this is not your cup of tea, consider hiring someone to help out.
  • Pay quarterly taxes. Getting behind on taxes is a bad way to run a business. Keep up on all of your accounts, especially taxes, to avoid issues later. 
  • Under promise and overdeliver. Customers do not like to be disappointed. Be careful not to make promises you can’t keep. Under guarantee results so you can overdeliver, ensuring customer satisfaction.

As always, please reach out if you want to chat more about this topic. We have attorneys ready to discuss your needs. More information on our team is available at ravosalaw.com.

Benefits of Incorporating Your Business

ravosalegalpadLeave a comment

Incorporating your business can provide numerous benefits that can help you achieve long-term success and protect your personal assets.

First and foremost, incorporating your business separates your personal and business liabilities. By forming a legal entity, such as a corporation or a limited liability company (LLC), you create a distinct legal entity that is separate from yourself. This means that your personal assets, such as your home or savings, are protected in case of any business-related lawsuits or debts.

Incorporating your business also enhances your credibility and professionalism. When you incorporate, you gain a professional image that can attract more customers, clients, and investors. It demonstrates that you are serious about your business and are committed to its long-term growth and success.

Furthermore, incorporating your business can provide tax advantages. Depending on your jurisdiction, you may be eligible for various tax deductions and benefits that are not available to sole proprietors or partnerships. This can help you save money and reinvest it back into your business.

Lastly, incorporating your business can facilitate easier access to funding. Many lenders and investors prefer to work with incorporated businesses as they offer more stability and legal protection. By incorporating, you may have better access to loans, lines of credit, and investment opportunities that can fuel your business growth.

If you are serious about taking your business to the next level and safeguarding your personal assets, it is highly recommended to consider the option of incorporation.

If you have any questions or would like further information, please feel free to reach out to our office.

What You Need to Know About Non-Compete Agreements

ravosalegalpadLeave a comment

As you may have heard, there have been some key developments recently regarding the legality of non-compete agreements. 

Given that this news will have implications for businesses across the United States, I wanted to reach out with an overview of the situation:

  • Earlier this year, the Federal Trade Commission (FTC) proposed banning companies from enforcing non-compete agreements as part of their employment arrangements. 
  • While that proposal remains pending, the National Labor Relations Board (NLRB) recently released a memo stating that it found non-compete agreements to violate labor laws unless “narrowly tailored.”
  • All of the activity around noncompete agreements is not limited to the federal level. Several states have already adopted legislation rendering certain non-compete agreements invalid, and new legislation has been proposed in New York, New Jersey, and Minnesota. 
  • While this may be a positive sign for the just-under one in five U.S. workers impacted by such arrangements, many businesses now find themselves wondering how to best protect their intellectual property from the impacts of employee turnover. 
  • With changes pending and pronouncements potentially still to come, it’s important that business owners and operators reevaluate their current employment contract procedures to remain compliant with any required alterations or impacts. Whether a contract is compliant – at least at this time – is likely to be on a case-by-case basis, so it’s worth individual review by an attorney. 

On that note, if you have questions about your existing contracts or would like one of our professionals to review them for compliance, please do not hesitate to respond to this email or give the office a call.

As always, our team of legal experts is here to help you navigate the business law landscape with confidence and clarity. 

Tips For Starting a Small Business

ravosalegalpadLeave a comment

Given there are 33.2 million small businesses in the United States, I find it’s a good idea to periodically reach out to people in my network and see if any have plans to open a small business — and that’s exactly what I’m doing today!

If you or someone you know is planning to start a small business, I want to note that our office is here if you need any legal assistance – and unfortunately, many do. I don’t say this to scare you, but the stats do speak for themselves: 

  • 36% to 53% of small businesses are sued every year.
  • 43% of all small businesses are threatened with a lawsuit every year.
  • Approximately 45% of small businesses are currently involved in litigation.
  • 90% of all businesses experience a lawsuit at some point in their lifespan.
  • Around 12 million contract lawsuits are filed every year against small businesses.

The good news is that a lot of these legal issues are avoidable. Business lawyers can help to clarify any loopholes in a contract, make sure clear guidelines are set between employees and owners, and even provide ways to back out of a contract (e.g., due to a change in business strategy). This kind of assistance is especially necessary in the first couple of years when owners will be interacting with many new faces.

With that said, if you or someone in your network is considering opening a business or is in the process of doing so, feel free to reach out.

Small Business Month

ravosalegalpadLeave a comment

May is Small Business Month, and as a small business ourselves, we know the challenges businesses of our size face — and the importance of having a strong network of supporters. 

That’s why we want to express our appreciation for your continued trust and support. It’s clients like you who keep us afloat and allow us to continue to provide the highest level of service and guidance to our community. We consider our work a privilege, and we couldn’t be more grateful. 

Let’s all support the small businesses in our community! And if you are looking to start your own business, we may be able to help. Contact us today with your business formation questions.

10 Business Mistakes That May Lead to Litigation

ravosalegalpadLeave a comment

Whether you are a veteran business owner or just starting out, there are some key mistakes you can make that often lead to litigation. No one wants to be the object of a lawsuit, so I thought I would take a minute and highlight some common mistakes that sometimes lead to suits and how to avoid them:

  • Form a business entity. Make sure you know what type of entity to form and that you check all the correct boxes as you move through the process. 
  • Obtain insurance. We insure our homes, our cars, and even our wedding rings. Your business should be no exception. Where there is equity, there is risk, and insurance ought to be one of the first things on your checklist as you build your business. 
  • Write it down. It’s important that you require all business agreements be hammered out in contract form, looked over by an attorney, and signed on the dotted line. Leaving this to chance never ends well. 
  • Protect your intellectual property (IP). If you think of it, you own it. Do not dismiss the importance of IP and how imperative it is to protect it as you scale your business. 
  • Trust your employees. No one likes to be micromanaged, and traditionally speaking, employees who are trusted to do their jobs correctly are more content and less likely to cause issues down the road. 
  • Hire smart. If you hire the right employees, making sure to flesh out references and pay attention to red flags, you will build a business that runs smoothly and help avoid litigation.  
  • Understand local laws. From copyright laws to taxes, there is a lot to wade through. Failure to put in the work to understand these laws can cause real problems down the road. Be sure to get a lawyer involved earlier than later to help navigate these issues. 
  • Prioritize accurate bookkeeping. Messy accounting has been the nemesis of many business owners. If this is not your cup of tea, consider hiring someone to help out.
  • Pay quarterly taxes. Getting behind on taxes is a bad way to run a business. Keep up on all of your accounts, especially taxes, to avoid issues later. 
  • Under promise and overdeliver. Customers do not like to be disappointed. Be careful not to make promises you can’t keep. Under guarantee results so you can overdeliver, ensuring customer satisfaction.

If you have questions about how to best protect your business, reach out to us today.

Business Entity Overview

ravosalegalpadLeave a comment

When you start a business, you have thousands of decisions to make. One of the most important is how you will classify your business legally. 

And while you’ve probably heard the terms floating around — sole proprietorship, partnership, LLC, and corporation — it’s crucial to understand the differences so you can choose the structure that works best for you. It will impact how much you pay in taxes, the liability you face, and your ability to raise money.

Here are a few thoughts I often share with my clients as they make decisions about their new business venture: 

1. Sole proprietorship. A sole proprietorship is the most common form of business organization. These businesses’ owners report business income and expenses on their personal tax returns and pay tax on any profit.

ADVANTAGE: It’s easy to form and gives the owner complete control of the business.

DISADVANTAGE: The owner is personally liable for all financial obligations.

2. Partnerships. A partnership involves two or more people who agree to share in the profits or losses of a business. 

ADVANTAGE: Partners do not bear the tax burden of profits or the benefit of losses — they are simply reported on partners’ individual income tax returns.

DISADVANTAGE: Each partner is personally liable for the financial obligations of the business.

3. Corporations. A corporation is a legal entity created to conduct business. The corporation becomes separate from those who founded it. The corporation can be taxed, held legally liable for its actions, and make a profit.

ADVANTAGE: Corporate status allows owners to avoid personal liability.

DISADVANTAGE: The cost to form the corporation and the extensive record-keeping keeps many new business owners from pursuing this option. Setting up an S Corp or C Corp can sidestep some of the liability by allowing income or losses to be reported on individual tax returns (similar to a partnership).

4. Limited liability corporation (LLC). An LLC is a hybrid form of partnership that’s growing in popularity. 

ADVANTAGE: Profits and losses can be passed to owners without taxation of the business itself, while owners are shielded from personal liability. 

DISADVANTAGE: Compared to a sole proprietorship or partnership, an LLC is a little more expensive to operate. Additionally, owners must keep personal business separate from the business of the company. 

Now that you know a little bit about the different structures, here are a few questions to ask yourself when choosing one: 

  • To what extent do you need to be protected from legal liability? Consider whether your business lends itself to potential liability and, if so, if you can personally afford that risk.
  • Based on your personal tax situation and business goals, where are your opportunities to minimize taxation? Keep in mind there are more tax options available to corporations than to proprietorships or partnerships.
  • What funds do you have for setting up (and running) your chosen business structure? The tax advantages of a corporation may be nice, but they may not be enough to offset the costs of conducting business that way.

Note that no two business situations are the same–I’m happy to help guide you based on your personal circumstances.

If you’d like help deciding how to move forward with your business, contact our office today for a consultation. Go to ravosalawoffices.com for more information, or call us at 508-755-3202 or 617-720-1101.