The VT Womenpreneurs fall showcase is tomorrow and as I have already mentioned I am very excited to be a presenter. I have had a bit of a hard time figuring out exactly what I am going to talk about. It’s kind of like giving a wedding toast- you want it to feel spontaneous yet be well-spoken. Anyway, one thing I want to leave everyone with is this simple mnemonic for key areas of liability that you can work with your attorney to address:
A- Agreements. A stands for written agreements. You should assess what key relationships you have related to your business and reduce the terms of those relationships to writing.
E- Employment / Equity . These 2 Es are unrelated but equally important. First, if you hire people to work on or in your business you need to make sure you are complying with both state and federal employment laws, and if you are hiring contractors you need to be sure that they are properly classified.
The second aspect of E is related to how you are funding your business. Are you getting loans or money from friends and family? Thinking of soliciting investors? You need to work with someone familiar with securities laws to make sure that you are not violating them.
I- Intellectual Property. Do you have a logo, company name, product names, labels or other creative works as integral parts to your business? Those are all examples of intellectual property that should be protected in some way.
O- Operating Agreement. In an LLC the Operating Agreement functions like the playbook for the company, and it includes key language that you would find in a partnership agreement if there is more than one owner of the business. If you have a business partner it is ESSENTIAL that you get together a well thought out partnership agreement together that will function like the pre-nup to your business (I may have discussed this elsewhere).
U- YOU! It may be a little cheesy but you are the key player to shoring up your own business. You have to make sure that you understand what your potential liabilities are and what the smart choices are in how to protect yourself and your personal assets and family from the liabilities of the business. As someone wise once said- “pay now or pay later”.