Frequently Asked Questions About Business Law

A: The "best" structure depends on your goals for liability protection, taxes, and management.

Sole Proprietorship: Simple to start but offers no separation between your personal assets and business liabilities.

Limited Liability Company (LLC): Popular for small businesses because it protects your personal assets (house, car) from business debts and lawsuits while offering flexible "pass-through" taxation.

Corporation (C-Corp or S-Corp): Best for businesses planning to raise venture capital or go public. It has more rigid formalities (e.g., board meetings, bylaws) but provides strong liability protection.

A: This is a legal term where a court holds business owners personally liable for the company's debts. This usually happens if the owner treats the business like a personal "piggy bank"—mixing personal and business funds or failing to follow corporate formalities (like keeping meeting minutes).

A: Not always, but it is highly recommended. While oral "handshake" deals can be binding, certain contracts must be in writing under the Statute of Frauds, including:

Real estate transfers.

Agreements that take more than one year to complete.

Sale of goods valued over $500.

A: To be legally binding, a contract typically requires:

Offer: One party proposes terms.

Acceptance: The other party agrees to those terms.

Consideration: An exchange of value (e.g., money for services).

Capacity: All parties must be of legal age and sound mind.

Legality: The purpose of the contract must be legal.

A: Each of them have their own benefits.

Trademark: Protects brand identifiers like names, logos, and slogans (e.g., Nike’s "Swoosh").

Copyright: Protects original creative works like books, music, code, and photography.

Patent: Protects inventions and functional designs for a set period (usually 20 years).

A: You can only use the ® symbol if you have a federally registered trademark with the USPTO. If your application is pending or you are relying on "common law" rights, you should use ™ (for goods) or ℠ (for services) instead.

A: This is a high-risk area for businesses. The IRS and Department of Labor look at the level of control:

Employees: You control when, where, and how they work. You must pay payroll taxes and benefits.

Contractors: They generally use their own equipment, set their own hours, and provide a specific result. Misclassifying an employee as a contractor can lead to massive fines and back-tax penalties.

A: This depends heavily on your state. In Florida, this agreement are allowed if they are "reasonable" in terms of time (e.g., 6 months to 1 year) and geographic area.

Note: The Federal Trade Commission (FTC) has recently proposed rules that could ban non-compete agreements nationwide, so it is vital to stay updated on current regulations..

A: Both are "Alternative Dispute Resolution" (ADR) methods used to avoid a public courtroom:

Mediation: A neutral third party helps both sides reach a voluntary agreement. It is non-binding unless a settlement is signed.

Arbitration: An arbitrator acts like a private judge and makes a decision. This is usually binding and very difficult to appeal.

A: Yes. Under the legal doctrine of Respondeat Superior, an employer can be held liable for the wrongful acts (like a car accident or harassment) committed by an employee while they are acting within the scope of their employment.