How To Start a Business in Arizona

National Geospatial-Intelligence Agency Ribbon Cutting by US Army Corps of Engineers, Carter Law Firm, Ruth Carter

National Geospatial-Intelligence Agency Ribbon Cutting by US Army Corps of Engineers

This week I had two speaking engagements on the basics of starting a business in Arizona. I thought I’d expand my list of tips into the ideal timeline an entrepreneur should follow for setting up their business.

  1. Figure out what type of business you want to have.
  2. Select a name for your business. From a trademark registration perspective, it’s best to pick a name that contains a word or words that don’t already exist. Also be mindful of any business name restrictions that exist in your industry.
  3. Do a search on the U.S. Patent and Trademark Office (USPTO) website to see if someone in a similar business has registered a similar name for their business. If they have, they can prevent you from using your desired trade name. Run a Google search as well to see if someone has a similar name but hasn’t registered it with the USPTO.
  4. Create a business entity by sending the appropriate form and payment to the Arizona Corporation Commission.
  5. Open a bank account for your business. Never use your personal accounts for business expenses or your business accounts for personal expenses.
  6. If you have more than one owner, create an operating agreement. This is a contract that dictates how the company is owned, how you will run your business, and how you will resolve problems. You need this no matter who your partners are, including your spouse and family members.
  7. When you have a business, you have intellectual property – at least copyrights and trademarks, and perhaps trade secrets and patentable ideas. Create an intellectual property strategy to protect these things. This is another time when you should at least buy an hour with a lawyer.
  8. Draft contract templates for documents you will regularly use with vendors and customers. Many business owners get contract templates from the internet. This is an acceptable way to start this project, but you should have a lawyer review them to make sure they are legal and address your needs.
  9. Register your trademark with the USPTO.
  10. If you have employees, you will need employment contracts and an employee handbook that includes a social media policy that complies with the National Labor Relations Act.

Ideally, every new business would have a lawyer to help them set up avoid any legal missteps, but many entrepreneurs can’t afford it. There are a lot of things you can do without a lawyer’s help, but you need to be well-informed about what your’e required to do when going into business for yourself and when it’s worth it to pay for a lawyer (like me).

It’s much easier and cheaper in the long run to consult a lawyer a few times when you’re starting your business than to have to hire one to clean up the mess that can result if you do it the wrong way.

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Please visit my homepage for more information about Carter Law Firm.

Ruth Carter’s Speaking Schedule – May 2012

Ignite Phoenix #5 by Sheila Dee

Ignite Phoenix #5 by Sheila Dee

May is going to be an exciting month for me because I have four speaking engagements in Phoenix! I’m really excited to get out and talk about intellectual property and social media law. I like to keep my talks casual, interactive, and provide useful information to the audience.  I hope you’ll come out and have fun with me. Here’s where you can find me . . .

Trademark Basics
Wednesday, May 9, 2012 – 6pm
Midweek Mind Tweak – Co+Hoots
This is an interactive discussion about what a trademark is, the strength of attendees’ trademarks, and the benefit of registering your trademark with the U.S. Patent and Trademark Office.

Why You Need a Social Media Policy
Wednesday, May 16, 2012 – 5pm
Midweek Mind Tweak – Co+Hoots
Every company needs a social media policy for their employees, but if you create one that is too broad, you might have to pay over $10,000 for violating the National Labor Relations Act. It’s a problem that is easy to fix, if you know what the law is.

The Legalities of Blogging
Wednesday, May 23, 2012 – 12pm
GP Brownbag – Gangplank Chandler
A spoke a few weeks ago at Gangplank Academy about the legal side of blogging, and they asked me back to present a condensed version as a brownbag discussion. I’ll be presenting the 8 questions you should ask yourself before you publish a blog post.

Adapting Licensed Properties to Comics
Thursday, May 24, 2012 – 7pm
Phoenix Comicon – Phoenix Convention Center
I’m so excited to speak at Phoenix Comicon. The thought fills my little geek heart with joy. I’m going to be talking with sci-fi and comic book fans about copyright issues related to creating fan fiction, fan art, and slash fiction. It’s going to be so much fun!

I hope I get to see you at one or all of my talks!

You’re Screwed if your Social Media Policy Violates the NLRA

Money by 401K from Flickr

The National Labor Relations Act (NLRA) protects private employees, in particular their rights to “to join together to improve their wages and working conditions, with or without a union,” and it’s enforced by the National Labor Relations Board (NLRB). Employees are allowed to engage in “protected concerted activities,” which includes discussions about wages and work conditions on publicly accessible social media sites.

According to a 2010 survey, nearly 50% of small to medium size businesses don’t have a social media policy, and based on the recent report from the NLRB, I suspect many companies that have social media policies, are in violation of the NLRA. If you’re an employer, you need a social media policy, but it’s critical that it complies with the NLRA.

So, if you fire or discipline an employee based on a social media policy that violates the NLRA, you could be in a world of hurt. Here’s what happens. The employee will file a charge against you with the NLRB. The NLRB will conduct an investigation and have a decision about the merits of the case in 7 to 12 weeks. The NLRB receives 20,000 to 30,000 charges each year.

Here’s the good news – more than 50% of these charges are withdrawn or dismissed.
Here’s the bad news – if the case has merit, you’re probably going to be paying a lot.

If the NLRB decides the case has merit, there’s usually a settlement between the employer and employee – meaning you have to pay the employee for violating their rights. If you can’t come to settlement, the case is decided by an NLRB Administrative Law Judge. The judge may make you provide a remedy to your employee such as giving them backpay and reinstating them in their job.

In 2010, 8,257 cases were decided by NLRB judges. Employers were required to pay over $86 million in backpay and fines. That’s an average of over $10,000 per case! The NLRB judges also required 1,633 employers to offer an unlawfully discharged employee reinstatement of their job – and most of them accepted!

So what’s the worse-case scenario if your social media policy violates the NLRA?

  • You have to pay your unlawfully discharged employee over $10,000 in backpay,
  • Offer them their job back (even though you’d rather they be gone),
  • Fire the person you hired to take the unlawfully discharged person’s place if they accept,
  • Deal with the expense and hassle of an NLRB investigation, and
  • Revise your social media policy so it complies with the NLRA.

If you want to avoid all this financial and professional heartache, make sure your company has a social media policy that’s drafted by an attorney who understands social media and who keeps up with developments from the NLRB. The cost of not doing so is too high.

New Rules for Company Social Media Policies

Snark by Loozrboy

The National Labor Relations Board (NLRB) released an update last week with the latest developments in social media and employment. In a nutshell, this report says that you can say a lot online about your workplace and your employer and not get fired.

The law protects employees when they are engaged in a “protected concerted activity.” This includes discussions for mutual aid and protection about wages and work conditions with co-workers and third parties, statements where you are representing your coworkers or are outgrowths of previous employment discussions, and statements that are intended to induce group action. You can be pretty critical of your employer and/or coworkers without getting fired.

You can still get fired if your posts are defamatory, disparaging, or threatening or are simply gripes or rants.

The unexpected take-away from this report was how hard it is for employers to draft a social media policy that isn’t overly broad or doesn’t impede a protected concerted activity. You could tell that many of the employers in the report were thoughtful about their policy’s verbiage, and it was still found to be unlawful.

Based on the NLRB report, here’s what you can’t do with your company social media policy:

  • Restrict all public statements regarding the company,
  • Prohibit disparaging comments about the company on any media,
  • Prohibit employees from communicating with the media without prior authorization
  • Tell employees to avoid identifying themselves as the company’s employees or require approval to identify themselves as an employee,
  • Require all communications on social media sites to be honest, professional, and appropriate,
  • Prohibit “inappropriate conversations” and “disrespectful conduct,”
  • Prohibit engaging in unprofessional communication that could negatively impact the employer’s reputation,
  • Prohibit the disclosure of “confidential, sensitive, or non-public” information unless you provide examples,
  • Require employees to state on every post that they are stating their opinion and not the employer’s (but it’s ok to require this somewhere on their personal accounts), or
  • Require employees to bring “work-related concerns” to the company first.

The only policy described in the NLRB report that found to be lawful was narrow and specific. It prohibited “the use of social media to post or display comments about coworkers or supervisors or the Employer that are vulgar, obscene, threatening, intimidating, harassing, or a violation of the Employer’s workplace policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status, or characteristic.”

These policies are hard to write and a lawful one requires the employer to accept that they can’t control what their employees say outside of work and that, in a lot of cases, the employees can voice harsh judgment about the company without being at risk of getting fired as long as it’s a protected concerted activity.