With so many demands on an entrepreneur’s time, important- but-not-urgent legal issues may sneak beneath the radar.
The following topics are relevant to a wide range of industries and fields, according to Charles Torres, partner at Reitler Kailas & Rosenblatt LLC (and Attorney of the Year in NY Report’s 2010 Best Attorneys and Advisors for Growing Businesses):
Protection of intellectual property
This term encompasses inventions, copyrights, trademarks, and also critical, proprietary, and confidential information such as pricing, future plans, and client lists. “A small business should, as a condition of employment, have all employees sign confidentiality and propriety rights agreements to ensure that critical information is not disclosed to the public, and that there can be no claim to right by an employee over any of the company’s intellectual property,” Torres says.
Stockholder and operating agreements
“When a business is owned by just one person, the decision-making process is easy; but when several are involved, differences in management, goals, equity split, salaries, buy-out rights and the like all come up consistently,” Torres says. While business owners cite “trust” and “friendship” as common rationales for not putting these issues in writing, Torres believes more relationships can be spared by “simple stockholder or operating agreements addressing these issues.”
The Internet has made it easy for employees to transition from one job to another, thus causing employee retention to become a critical issue for small businesses, according to Torres. “Small businesses have limited bandwidth to be able to attract and train new talent, so retaining talent currently on the team becomes important,” he says. “Employee stock ownership or bonus incentive plans do help build a sense of collaborative ownership.”
For how-to guides on legal services, visit nyreport.com/how-to/understand_legal_issues
Lindsay Tigar is the Editorial Assistant at The New York Enterprise Report. She can be reached at firstname.lastname@example.org.