Limit Your Liability to Protect Your Assets

If your business runs into serious difficulty, will it bring you down too? For example, what if one of your employees got involved in a serious car accident while working for you? Will the resulting lawsuit bankrupt you personally?

Here are just a few ways of protecting yourself against catastrophic losses and lawsuits.

1. Obtain Adequate Insurance Coverage

If someone slips on the sidewalk of your home and injures himself, he could sue you for damages. Your tenant`s or homeowner`s policy may cover you for liability in such an event.

However, what if it is your customer who falls on his way to visiting your home-based business? You will need an extra rider on your house insurance to cover such incidental business use. The extra charge for this additional coverage is well worth it.

If you use a car for business use, insure it for such. Some people think that they are being clever writing off automobile expenses for income tax purposes but at the same time not informing the insurance company that the car is being used for business.

This is false economy. If you ever get into an accident, police and insurance investigators will certainly find out that you used the vehicle for business purposes. If you`re not paying for business coverage, why would the insurance company cover your claim?

As well, what do you think an income tax auditor would think of your claimed business expenses on the vehicle when your insurance policy indicates personal coverage only? Avoid this additional exposure to tax liability.

Be sure to obtain required workers` compensation coverage. Some have been held responsible for all the medical and other expenses of an injured worker, as well as fines for non-compliance to the law. These costs can be quite substantial and even bankrupt you.

Consider obtaining product liability insurance. This applies not just for any products you manufacture but also for products you sell that are made by others.

2. Incorporate Your Business

Insurance may give you some protection against loss. However, you may suffer business losses and lawsuits that may not be covered by your insurance fully. What then?

An extra level of protection can be obtained by forming your own corporation. Even though incorporating yourself will result in extra paperwork and costs, it could be the best insurance you ever bought.

This is because the corporation is a separate legal entity or person. Even though you may own the corporation, if the corporation operates the business, it is the corporation that will be sued or suffer loss.

If, for example, the corporation had severe business losses resulting in debts that could not be repaid, the corporation would be insolvent. You, as a shareholder, would lose your investment in the company but would generally not be responsible for any of its debts. Thus, you would not have to sell your home or other personal assets to cover the corporation`s liabilities.

On the other hand, there are cases where directors of a corporation can be held responsible for liabilities if they didn`t act responsibly. You can`t hide behind a corporation, commit criminal acts and expect to escape accountability.

For more information about incorporation, visit: http://www.yenommarketinginc.com/incorporation.html

3. Protect Yourself With Legal Agreements

Properly drafted written agreements can protect you in many ways. First of all, they can sometimes prevent misunderstandings that can lead to legal problems. Secondly, they may limit your exposure to lawsuits and losses.

Contracts can limit your exposure to liability by including provisions restricting the scope of your work and responsibility, having disputes handled by arbitration rather than through the Courts, and specifying that the maximum damages payable shall not exceed the amount of the contract.

A special area to watch out for is the Internet. There are many laws that impact on websites including matters affecting children, privacy, earnings claims, and unsolicited e-mail ("spam"). Certain agreements and notices on your website may help to protect you.

For more information about Internet law, visit: http://www.yenommarketinginc.com/internet-law.html

Protect yourself from catastrophic losses and lawsuits. Take steps today to protect your assets by limiting your exposure to liability.

Extending Consumer Credit Requires Compliance With Federal Laws

It is important for any prospective business purchaser to perform due diligence in researching a potential target business. Some of the documents you will need to collect and review in your analysis of whether a particular business would be a good acquisition include the following types of documents.

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

1. Corporate and Organizational

o Certified copy of articles of incorporation and bylaws of company and subsidiaries as currently in effect;

o Partnership agreement and any amendments thereto;

o A copy of the most current organization chart available of the company;

o A list of states and foreign countries (if any) in which the Company is qualified to do business; and

o All names under which the company has done business in the past five years; this includes registered and unregistered trademarks, fictitious name statements (commonly referred to as "d/b/a filings").

2. Financing Documents

o All loan agreements, debt instruments, and other financing instruments, and all related material documentation, to which the company is a party.

o A list of all mortgages, liens, pledges, security interests, charges, or other encumbrances to which any property (real or personal) of the company is subject and all related material documentation;

o Schedule of all short-term and long-term debt (including capitalized leases, guarantees, and other contingent obligations).

3. Financial Statements

o All audited and un-audited financial statements;

o Brief description of contingent liabilities involving the Company, such as pending lawsuits and threatened litigation;

o Name of accountants and length of relationship with accountants; indicate whether the accountants own any interest in or hold any position with the Company or its subsidiaries;

o Budgets, business plans or projections (for the Company and any of its subsidiaries) made on a quarterly, annual or other basis during the past 3 fiscal years.

4. Contracts & Leases

o Real estate leases. Consider the term of the lease and the quality and location of the space and decide whether your business needs would be satisfied;

o Equipment leases;

o Purchase and sale contracts for goods and services [uniforms; food suppliers]

5. Tax Matters

o Are back taxes owed?

o Are there any pending tax suits?

o Does any local, state or federal taxing authority have any liens against the real property or business personal property you would be acquiring? If so penalties, interest and attorney's fees could greatly increase the cost of satisfying the tax lien.

6. Identities of All Directors, Officers & Shareolders

o You ought to perform a background check on each of these people to see whether there is any pending litigation against them.

7. Owned Real Estate

o Need a list of owned real estate to help in valuing the business and determining liabilities.

8. Insurance

o You would want to have copies of the insurance policies, as well as the name and contact information for the insurance agent, going back four years from the time of purchasing the business. Check to see whether the insurance policies would cover you, as the new company, for any damages alleged to have occurred before you acquired the business.

Finally, many other factors related to financial and other matters must be considered before taking the plunge.

Limit Your Liability to Protect Your Assets

If your business runs into serious difficulty, will it bring you down too? For example, what if one of your employees got involved in a serious car accident while working for you? Will the resulting lawsuit bankrupt you personally?

Here are just a few ways of protecting yourself against catastrophic losses and lawsuits.

1. Obtain Adequate Insurance Coverage

If someone slips on the sidewalk of your home and injures himself, he could sue you for damages. Your tenant`s or homeowner`s policy may cover you for liability in such an event.

However, what if it is your customer who falls on his way to visiting your home-based business? You will need an extra rider on your house insurance to cover such incidental business use. The extra charge for this additional coverage is well worth it.

If you use a car for business use, insure it for such. Some people think that they are being clever writing off automobile expenses for income tax purposes but at the same time not informing the insurance company that the car is being used for business.

This is false economy. If you ever get into an accident, police and insurance investigators will certainly find out that you used the vehicle for business purposes. If you`re not paying for business coverage, why would the insurance company cover your claim?

As well, what do you think an income tax auditor would think of your claimed business expenses on the vehicle when your insurance policy indicates personal coverage only? Avoid this additional exposure to tax liability.

Be sure to obtain required workers` compensation coverage. Some have been held responsible for all the medical and other expenses of an injured worker, as well as fines for non-compliance to the law. These costs can be quite substantial and even bankrupt you.

Consider obtaining product liability insurance. This applies not just for any products you manufacture but also for products you sell that are made by others.

2. Incorporate Your Business

Insurance may give you some protection against loss. However, you may suffer business losses and lawsuits that may not be covered by your insurance fully. What then?

An extra level of protection can be obtained by forming your own corporation. Even though incorporating yourself will result in extra paperwork and costs, it could be the best insurance you ever bought.

This is because the corporation is a separate legal entity or person. Even though you may own the corporation, if the corporation operates the business, it is the corporation that will be sued or suffer loss.

If, for example, the corporation had severe business losses resulting in debts that could not be repaid, the corporation would be insolvent. You, as a shareholder, would lose your investment in the company but would generally not be responsible for any of its debts. Thus, you would not have to sell your home or other personal assets to cover the corporation`s liabilities.

On the other hand, there are cases where directors of a corporation can be held responsible for liabilities if they didn`t act responsibly. You can`t hide behind a corporation, commit criminal acts and expect to escape accountability.

For more information about incorporation, visit: http://www.yenommarketinginc.com/incorporation.html

3. Protect Yourself With Legal Agreements

Properly drafted written agreements can protect you in many ways. First of all, they can sometimes prevent misunderstandings that can lead to legal problems. Secondly, they may limit your exposure to lawsuits and losses.

Contracts can limit your exposure to liability by including provisions restricting the scope of your work and responsibility, having disputes handled by arbitration rather than through the Courts, and specifying that the maximum damages payable shall not exceed the amount of the contract.

A special area to watch out for is the Internet. There are many laws that impact on websites including matters affecting children, privacy, earnings claims, and unsolicited e-mail ("spam"). Certain agreements and notices on your website may help to protect you.

For more information about Internet law, visit: http://www.yenommarketinginc.com/internet-law.html

Protect yourself from catastrophic losses and lawsuits. Take steps today to protect your assets by limiting your exposure to liability.

Electronic Evidence as the Smoking Gun

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

Electronic communications--particularly email--may contain a treasure trove of evidence in commercial litigation matters. There are three key reasons for this fact. First, email is a very informal means of communication. Why? I don't know, it just is. Though I personally insist on specific grammar and sentence structure in my "hardcopy" written correspondence, court pleadings, etc., in emails I sometimes choose not to follow the rules of written English.

Second, though intellectually many of us know it is not, email "feels" anonymous. I'm sure there have been studies conducted in effort to understand why email feels anonymous. Maybe it's because of the instantaneous nature of email--you can simply vent your emotions and knee-jerk reactions immediately and press the send button, rather than having time to reflect on your written thoughts as you otherwise would if you were forced to sit down and write a letter; sign it with your own hand; put it in an envelope; put a stamp on in it; and take it to the mailbox and mail it. Whatever the reason(s), the fact of the matter is that email does feel anonymous.

The third reason email evidence can contain critical evidence in a commercial litigation case: permanence and retrievability. Most people don't realize that when they "delete" an email from their email program it actually remains on the computer or network unless and until the portions of the computer's memory containing the email are overwritten by other information. You can be certain, however, that every single electronic commuincation you make--email or otherwise--is being recorded somewhere. Perhaps on your company's network server, perhaps at your Internet service provider, or perhaps on your own computer's hard drive. Savvy litigators know this fact and, depending the stakes of the case, you could end up receiving a letter such as this should your business find itself in a business dispute:

Dear Mr. John Doe:

This is a notice and demand that evidence identified below in paragraphs 2 through 5 must be immediately preserved and retained by you until further written notice from the undersigned. This request is essential, as a paper printout of text contained in a computer file does not completely reflect all information contained within the electronic file.

The continued operation of the computer systems identified herein will likely result in the destruction of relevant evidence due to the fact that electronic evidence can be easily altered, deleted or otherwise modified. THE FAILURE TO PRESERVE AND RETAIN THE ELECTRONIC DATA OUTLINED IN THIS NOTICE CONSTITUTES SPOLIATION OF EVIDENCE AND WILL SUBJECT YOU TO LEGAL CLAIMS FOR DAMAGES AND/OR EVIDENTIARY AND MONETARY SANCTIONS.

For purposes of this notice, "Electronic Data" shall include, but not be limited to, all text files (including word processing documents), spread sheets, e-mail files and information concerning e-mail (including logs of e-mail history and usage, header information and "deleted" files), Internet history files and preferences, graphical image format ("GIF") files, all other graphical format images, data bases, calendar and scheduling information, computer system activity logs, and all file fragments and backup files containing Electronic Data.

1. Please preserve and retain all Electronic Data generated or received by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

2. Please preserve and retain all Electronic Data containing any information about the following subjects:

Emails sent to or received from any employee or representative of ABC Company, DEF Company, or XYZ Company.

3. You must refrain from operating (or removing or altering fixed or external drives and media attached thereto) standalone personal computers, network workstations, notebook and/or laptop computers operated by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

4. You must retain and preserve all backup tapes or other storage media, whether on-line or off-line, and refrain from overwriting or deleting information contained thereon, which may contain Electronic Data identified in paragraphs 2 through 4.

In order to alleviate any burden upon you, we are prepared to immediately enlist the services of a computer forensic expert to image and examine all drives and media in your custody and control which may contain Electronic Data relevant to this matter. If you enlist your own computer forensics expert to generate evidentiary images of all electronic evidence identified above, demand is made that such expert utilize industry standard computer forensic software in order to facilitate and enable the processing and exchange of such evidence in this matter.

Should your company receive a letter like this, you should take it extremely seriously. Continuing to use any computers or other devices identified in such a letter will result in data being overwritten, which the courts would interpret as destruction of evidence. Destroying evidence can not only result in serious sanctions against the company or individual in the case at hand, as we saw during the Enron mess it can also result in criminal prosecution.

Electronic Evidence as the Smoking Gun

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

Electronic communications--particularly email--may contain a treasure trove of evidence in commercial litigation matters. There are three key reasons for this fact. First, email is a very informal means of communication. Why? I don't know, it just is. Though I personally insist on specific grammar and sentence structure in my "hardcopy" written correspondence, court pleadings, etc., in emails I sometimes choose not to follow the rules of written English.

Second, though intellectually many of us know it is not, email "feels" anonymous. I'm sure there have been studies conducted in effort to understand why email feels anonymous. Maybe it's because of the instantaneous nature of email--you can simply vent your emotions and knee-jerk reactions immediately and press the send button, rather than having time to reflect on your written thoughts as you otherwise would if you were forced to sit down and write a letter; sign it with your own hand; put it in an envelope; put a stamp on in it; and take it to the mailbox and mail it. Whatever the reason(s), the fact of the matter is that email does feel anonymous.

The third reason email evidence can contain critical evidence in a commercial litigation case: permanence and retrievability. Most people don't realize that when they "delete" an email from their email program it actually remains on the computer or network unless and until the portions of the computer's memory containing the email are overwritten by other information. You can be certain, however, that every single electronic commuincation you make--email or otherwise--is being recorded somewhere. Perhaps on your company's network server, perhaps at your Internet service provider, or perhaps on your own computer's hard drive. Savvy litigators know this fact and, depending the stakes of the case, you could end up receiving a letter such as this should your business find itself in a business dispute:

Dear Mr. John Doe:

This is a notice and demand that evidence identified below in paragraphs 2 through 5 must be immediately preserved and retained by you until further written notice from the undersigned. This request is essential, as a paper printout of text contained in a computer file does not completely reflect all information contained within the electronic file.

The continued operation of the computer systems identified herein will likely result in the destruction of relevant evidence due to the fact that electronic evidence can be easily altered, deleted or otherwise modified. THE FAILURE TO PRESERVE AND RETAIN THE ELECTRONIC DATA OUTLINED IN THIS NOTICE CONSTITUTES SPOLIATION OF EVIDENCE AND WILL SUBJECT YOU TO LEGAL CLAIMS FOR DAMAGES AND/OR EVIDENTIARY AND MONETARY SANCTIONS.

For purposes of this notice, "Electronic Data" shall include, but not be limited to, all text files (including word processing documents), spread sheets, e-mail files and information concerning e-mail (including logs of e-mail history and usage, header information and "deleted" files), Internet history files and preferences, graphical image format ("GIF") files, all other graphical format images, data bases, calendar and scheduling information, computer system activity logs, and all file fragments and backup files containing Electronic Data.

1. Please preserve and retain all Electronic Data generated or received by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

2. Please preserve and retain all Electronic Data containing any information about the following subjects:

Emails sent to or received from any employee or representative of ABC Company, DEF Company, or XYZ Company.

3. You must refrain from operating (or removing or altering fixed or external drives and media attached thereto) standalone personal computers, network workstations, notebook and/or laptop computers operated by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

4. You must retain and preserve all backup tapes or other storage media, whether on-line or off-line, and refrain from overwriting or deleting information contained thereon, which may contain Electronic Data identified in paragraphs 2 through 4.

In order to alleviate any burden upon you, we are prepared to immediately enlist the services of a computer forensic expert to image and examine all drives and media in your custody and control which may contain Electronic Data relevant to this matter. If you enlist your own computer forensics expert to generate evidentiary images of all electronic evidence identified above, demand is made that such expert utilize industry standard computer forensic software in order to facilitate and enable the processing and exchange of such evidence in this matter.

Should your company receive a letter like this, you should take it extremely seriously. Continuing to use any computers or other devices identified in such a letter will result in data being overwritten, which the courts would interpret as destruction of evidence. Destroying evidence can not only result in serious sanctions against the company or individual in the case at hand, as we saw during the Enron mess it can also result in criminal prosecution.

Electronic Evidence as the Smoking Gun

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

Electronic communications--particularly email--may contain a treasure trove of evidence in commercial litigation matters. There are three key reasons for this fact. First, email is a very informal means of communication. Why? I don't know, it just is. Though I personally insist on specific grammar and sentence structure in my "hardcopy" written correspondence, court pleadings, etc., in emails I sometimes choose not to follow the rules of written English.

Second, though intellectually many of us know it is not, email "feels" anonymous. I'm sure there have been studies conducted in effort to understand why email feels anonymous. Maybe it's because of the instantaneous nature of email--you can simply vent your emotions and knee-jerk reactions immediately and press the send button, rather than having time to reflect on your written thoughts as you otherwise would if you were forced to sit down and write a letter; sign it with your own hand; put it in an envelope; put a stamp on in it; and take it to the mailbox and mail it. Whatever the reason(s), the fact of the matter is that email does feel anonymous.

The third reason email evidence can contain critical evidence in a commercial litigation case: permanence and retrievability. Most people don't realize that when they "delete" an email from their email program it actually remains on the computer or network unless and until the portions of the computer's memory containing the email are overwritten by other information. You can be certain, however, that every single electronic commuincation you make--email or otherwise--is being recorded somewhere. Perhaps on your company's network server, perhaps at your Internet service provider, or perhaps on your own computer's hard drive. Savvy litigators know this fact and, depending the stakes of the case, you could end up receiving a letter such as this should your business find itself in a business dispute:

Dear Mr. John Doe:

This is a notice and demand that evidence identified below in paragraphs 2 through 5 must be immediately preserved and retained by you until further written notice from the undersigned. This request is essential, as a paper printout of text contained in a computer file does not completely reflect all information contained within the electronic file.

The continued operation of the computer systems identified herein will likely result in the destruction of relevant evidence due to the fact that electronic evidence can be easily altered, deleted or otherwise modified. THE FAILURE TO PRESERVE AND RETAIN THE ELECTRONIC DATA OUTLINED IN THIS NOTICE CONSTITUTES SPOLIATION OF EVIDENCE AND WILL SUBJECT YOU TO LEGAL CLAIMS FOR DAMAGES AND/OR EVIDENTIARY AND MONETARY SANCTIONS.

For purposes of this notice, "Electronic Data" shall include, but not be limited to, all text files (including word processing documents), spread sheets, e-mail files and information concerning e-mail (including logs of e-mail history and usage, header information and "deleted" files), Internet history files and preferences, graphical image format ("GIF") files, all other graphical format images, data bases, calendar and scheduling information, computer system activity logs, and all file fragments and backup files containing Electronic Data.

1. Please preserve and retain all Electronic Data generated or received by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

2. Please preserve and retain all Electronic Data containing any information about the following subjects:

Emails sent to or received from any employee or representative of ABC Company, DEF Company, or XYZ Company.

3. You must refrain from operating (or removing or altering fixed or external drives and media attached thereto) standalone personal computers, network workstations, notebook and/or laptop computers operated by the following persons:

John Doe, CEO

Mary Smith, CFO

Bill Brown, COO

4. You must retain and preserve all backup tapes or other storage media, whether on-line or off-line, and refrain from overwriting or deleting information contained thereon, which may contain Electronic Data identified in paragraphs 2 through 4.

In order to alleviate any burden upon you, we are prepared to immediately enlist the services of a computer forensic expert to image and examine all drives and media in your custody and control which may contain Electronic Data relevant to this matter. If you enlist your own computer forensics expert to generate evidentiary images of all electronic evidence identified above, demand is made that such expert utilize industry standard computer forensic software in order to facilitate and enable the processing and exchange of such evidence in this matter.

Should your company receive a letter like this, you should take it extremely seriously. Continuing to use any computers or other devices identified in such a letter will result in data being overwritten, which the courts would interpret as destruction of evidence. Destroying evidence can not only result in serious sanctions against the company or individual in the case at hand, as we saw during the Enron mess it can also result in criminal prosecution.