Blog – The SJS Law Firm, PLLC

Tax Season 2026: Key Tax Considerations for Operating & Partnership Agreements

Tue, 07 Apr 2026 17:38:04 GMT

As tax season approaches, small businesses often focus on filing deadlines, but one of the most important tax planning tools is often overlooked: your operating or partnership agreement.

Partnerships and multi-member LLCs are widely used for business and investment activities due to their tax advantages, particularly pass-through taxation. They generally do not pay federal income tax at the entity level. Instead, income, deductions, gains, and losses pass through to the owners, making governing documents essential for allocating and managing tax obligations.

Understanding the Tax Structure

Partnerships and LLCs taxed as partnerships must allocate their tax items to owners annually. Each partner or member receives a Schedule K-1 , which reports their share of the entity’s income, deductions, and credits.
Even if no cash distributions are made, owners are still required to report their allocated income on their individual tax returns. This makes it essential that agreements address how tax burdens will be handled.

For additional information related to Schedule K-1 and Partner’s Instructions for Schedule K-1, click here.

Three Key Tax Considerations to Address in Your Agreement

1. Guaranteed Payments to Partners: Guaranteed payments are payments made to partners for services or the use of capital that are not dependent on partnership income.

These payments are generally deductible by the partnership, treated as ordinary income to the receiving partner, and must be reported based on the partnership’s tax year, even if paid later. Clearly defining guaranteed payments in your agreement helps ensure consistent treatment and avoids confusion during tax reporting.

2. Allocation of Profits and Losses: While many businesses allocate profits and losses based on ownership percentage, partnerships may adopt alternative allocations if structured properly.

Your agreement should clearly define allocation methods, ensure allocations align with economic reality, and anticipate potential tax implications if allocations are challenged.

3. Tax Basis and Partnership Liabilities: A partner’s ability to deduct losses and receive distributions depends on their tax basis in the partnership.

A partner’s basis increases with contributions and their share of liabilities.
Classification of liabilities (recourse vs. nonrecourse) affects how the basis is calculated.
Basis limitations may restrict the ability to claim losses.
Your agreement should address how liabilities are allocated and classified to avoid unintended limitations.

Upcoming Tax Filing Deadlines for Businesses

As part of your tax season compliance review, ensure that required tax filings are submitted on time:

Maryland Entities: Most taxes must be filed and paid electronically through the Comptroller’s systems , including the Maryland Tax Connect portal.
Filing Corporation Taxes: Form 500 must be filed by the 15th day of the 4th month following the tax year end (April 15 for calendar year filers).
Filing Pass-Through Entities (PTE) Taxes: Form 510 is due by the 15th day of the 4th month following the close of the tax year. If the PTE has elected to pay tax at the entity level, Form 511 is also due on the same date. For calendar-year entities, this is typically April 15th.
Extension of Time to File: Maryland corporations may request up to a 7-month filing extension with Form 500E , and PTEs may request up to a 6-month filing extension with Form 510/511E.

DC Entities: Small businesses in DC are generally required to file and pay most taxes electronically through the Office of Tax and Revenue’s online portal, MyTax.DC.gov.
Filing Corporation Taxes: DC corporations, including LLCs electing corporate federal treatment, must file Form D-20 on or before April 15, 2026, for calendar year filers or before the 15th day of the fourth month following the close of the taxable year for fiscal year filers.
Filing Pass-Through Entities Pass-Through Entities (PTE): Partnerships and LLCs taxed as partnerships must file Form D-65 on or before April 15, 2026, for calendar year filers or on or before the 15th day of the fourth month following the close of the taxable year for fiscal filers.
Extension of Time to File: DC businesses may request a 6-month filing extension for Form D-20 using DC Form FR-120 and for Form D-65 using Form FR-165 , respectively, no later than the return due date. An extension of time to file is not an extension of time to pay. You must pay any tax liability with the extension request, otherwise the request will be denied, and you may be subject to penalties for failure to file or failure to pay.

We Are Here to Help

At The SJS Law Firm, we support businesses in navigating tax compliance and minimizing risk through proactive planning. Contact us at (202)-505-5309 to schedule a consultation.

Spring Cleaning Your Business: Clearing Out Risk and Creating Opportunity

Mon, 09 Mar 2026 17:10:08 GMT

March signals renewal. As the days grow longer and the air turns warmer, many of us embrace the tradition of spring cleaning to declutter our homes. Likewise, businesses should engage in a proactive legal “spring cleaning” to refresh, stabilize, and position your business for growth.

Start with Your Contracts

Contracts are the foundation of your operations. Vendor agreements, employment contracts, partnership arrangements, and client terms should be reviewed regularly to ensure they reflect current law and practice, as small inconsistencies can lead to costly disputes if left unaddressed.

Maryland Update: Changes to Consumer Contract Enforcement: Effective June 1, 2026, Maryland law will prohibit businesses from including contract provisions that shorten the time period a consumer has to file a legal claim. Any attempt to reduce the applicable statute of limitations in a consumer agreement will be unenforceable as a matter of law. As part of your spring review, businesses should examine standard consumer-contract terms and conditions to remove limitation provisions before June 1, 2026, and thereby avoid relying on language that will be deemed void.

Refresh Your Compliance Practices

Regulatory requirements continue to evolve at the federal, state, and local levels. From workplace policies to wage compliance, businesses benefit from a compliance review. Are your annual filings current? Are meeting minutes properly maintained? Regulatory compliance strengthens credibility with lenders and contracting agencies while preventing unnecessary risk.

Upcoming Annual Filing Deadlines for Businesses: As part of your spring compliance review, ensure that required annual filings are submitted on time to the state of formation.

Maryland Entities: The Maryland State Department of Assessments and Taxation requires all domestic and foreign business entities to file an Annual Report by April 15. Businesses may request a two-month extension through the online extension system, extending the filing deadline to June 15, 2026. Failure to file can result in loss of good standing and potential forfeiture of the entity's status.
District of Columbia Entities: The D.C. Department of Licensing and Consumer Protection requires all domestic and foreign business entities to file biennial reports to maintain good standing in D.C and avoid late fees. For entities whose reporting year falls in 2026, the filing deadline is April 1.

Evaluate Growth Opportunities

Spring cleaning is not only about removing what no longer serves you. It is also about creating room for what comes next. Whether pursuing government contracts, expanding into new markets, restructuring operations, or preparing for financing, strategic legal planning can help you move forward confidently. Taking steps now ensures you are prepared to seize an opportunity when it arises.

We Are Here to Help

At The SJS Law Firm, we partner with businesses to identify risk, resolve compliance concerns, and build strong legal foundations for sustainable growth. If it has been a while since you reviewed your contracts, policies, or corporate documents, consider making this the season you do.

Contact us at (202)-505-5309 for expert guidance or to schedule a meeting and start the season organized, protected, and positioned for success.

What a Good Attorney-Client Relationship Looks Like and How It Benefits Your Small Business

Mon, 09 Feb 2026 16:13:51 GMT

Strong attorney-client relationships are built on clear communication, early involvement, and an understanding of the client’s objectives. For small business owners, legal counsel is often viewed as something to engage only when a problem arises. In reality, a strong, ongoing attorney-client relationship can serve as a strategic asset, helping businesses manage risk, control costs, plan proactively, and make informed decisions that support long-term growth. This newsletter outlines what an effective attorney-client relationship looks like and how it can benefit your small business.

What Defines a Strong Attorney-Client Relationship?

An effective attorney-client relationship is grounded in communication, trust, and a clear understanding of the business’s goals and risk tolerance. Consider some of the core elements of an effective attorney-client relationship:

Proactive Communication and Early Engagement: Cultivating a relationship with an attorney at the early stages of your business allows you to clearly communicate your goals and gives the attorney an opportunity to gain valuable insight into your operations, workforce structure, and growth plans. This can look like providing the attorney with the organizational structure of your business, past or upcoming contracts, challenges in your industry, and your business’ operational practices.

Proactive communication is a core component of the attorney-client relationship, supported by both ethical duties and evidentiary protections. Attorney-client privilege and an attorney’s duty of confidentiality protect client communications and sensitive business information, enabling candid disclosures. In turn, the ABA and DC Rules of Professional Conduct require attorneys to keep clients reasonably informed, explain legal matters in a manner that supports informed decision-making, and consult with clients about the objectives and means of representation. These duties are best fulfilled when counsel engages with the business from the outset. (ABA Model Rules 1.4 & 1.6 ; DC Rules 1.4 & 1.6 ).
Clear and Practical Legal Advice: Having familiarized themselves with your business, the attorney can then quickly spot issues, provide straightforward guidance, and explain legal risks and options in practical terms that help business owners understand and assess risk without unnecessary complexity.

Attorneys are ethically required to provide competent representation, meaning they must possess the legal knowledge, skill, and preparation reasonably necessary for the representation. (ABA Model Rule 1.1 ; DC Rule 1.1 ). For small business owners, this duty of competence translates into advice that is both legally sound and meaningfully tailored to the business’ operations, industry, and strategic objectives.
Proactive Risk Management: Regular legal oversight of contracts, policies, and compliance obligations helps resolve issues before they escalate into costly disputes or regulatory violations. A good attorney-client relationship focuses on long-term risk management, instead of isolated and reactive legal strategy. It may include reviewing contracts before execution, flagging compliance risks early, or advising on employment decisions before they result in claims.

In providing this guidance, attorneys are bound by a duty of diligence and zealous advocacy to advocate for their client’s interests. This obligation requires counsel to do more than identify legal risks; it demands active and loyal representation aimed at protecting the client’s interests, minimizing exposure, and advancing the business’ objectives through informed, strategic decision making. (ABA Model Rule 1.3 ; DC Rule 1.3 ).

How a Strong Attorney-Client Relationship Benefits Your Business:

Risk Mitigation, Cost Control, and Operational Efficiency: When your attorney understands your business, routine matters such as contract negotiations, drafting, and review can be handled more efficiently. This proactive approach allows business owners to focus on core operations while controlling legal costs and minimizing risk. An attorney’s ethical duty of competent and diligent representation supports this efficiency by ensuring legal work is performed thoughtfully, accurately, and with attention to the business’s long-term interests.
Improved Decision-Making : Whether scaling operations, bringing on partners, or navigating ownership changes, access to consistent legal counsel allows business owners to evaluate risks associated with new opportunities, partnerships, or investments before committing business resources. With a better understanding of the obligations and risks your business is taking on, you can operate in confidence.

Best Practices for Small Business Owners:

To get the most value from legal counsel, small businesses should:

Engage legal counsel early, particularly when entering contracts, hiring employees, or expanding operations.
Share relevant business developments proactively so counsel can provide timely guidance.
Conduct periodic legal check-ins to assess compliance, contracts, and emerging risks.

A strong attorney-client relationship is a valuable business tool and better positions small businesses to manage risk and plan for the future. If you would like to discuss how ongoing legal counsel can support your business, The SJS Law Firm is here to help. Call (202) 505-5309 for a complimentary consultation.

Planning Ahead: Key Legal Updates for Businesses in 2026

Fri, 23 Jan 2026 18:23:00 GMT

As 2026 gets underway, it’s a good time for small businesses to reflect on last year’s developments and prepare for what’s ahead. This newsletter highlights relevant updates in employment law, tax policy, and regulatory obligations across the DC-Metro area to help small businesses stay compliant while positioning themselves for growth.

Consider the following key actions as you plan for 2026 and beyond:

Review Wage & Employment Law Developments:
Minimum wage increases across Washington, D.C., Maryland, and Virginia took effect or are scheduled for 2026, with additional compliance requirements for tipped employees. In July 2026, the DC and VA minimum wage will increase to $18.40/hour (or $10.30/hour for tipped workers) and $12.77/hour, respectively, while MD’s wage increases vary by county and number of employees, with different effective dates. It is especially imperative for small business owners to ensure that tipped employees’ combined wages and tips meet or exceed the required minimum wage to avoid liability under federal, state, and local laws.

In addition to wage compliance, employers should be aware of expanded restrictions on non-compete agreements, particularly in D.C. Effective January 1, 2026, D.C. employers can no longer enter non-compete agreements with employees earning less than $162,164 (or $270,274 for medical specialists). Small businesses should review restrictive covenants to mitigate compliance risk.
Assess Employee Leave and Statutory Obligations:
Recent legislative changes in Maryland expanded parental leave coverage for certain small employers not subject to the federal Family and Medical Leave Act. Effective October 1, 2025, covered employers under the Maryland Parental Leave Act are those that employ at least 15 but no more than 49 employees for each working day during 20 or more calendar workweeks in the current or preceding calendar year and are not covered by the federal FMLA. Eligible employees are those who request parental leave, have been employed by the employer for at least 12 months, and have worked 1,250 hours during the previous 12-month period.

Small businesses should confirm whether they fall within the revised coverage thresholds and that internal leave policies reflect current statutory obligations.
Overview of the One Big Beautiful Bill and 2026 Impacts:
Legislation enacted in 2025 as part of the One Big Beautiful Bill altered several provisions relevant to small businesses, including bonus depreciation, research and development expense deductions, and the qualified business income deduction.

Most notably, the legislation permanently restores 100% bonus depreciation, allowing businesses to immediately deduct the full cost of qualifying property placed in service after January 1, 2025, providing greater certainty for capital investment planning. Expanded deductions for domestic research and development expenses and the permanent extension of the 20% QBI deduction may also influence decisions regarding business structure, hiring, and long-term growth strategies. Strategic tax planning can help small businesses take full advantage of these changes in the 2026 tax year.
Confirm Contracting Compliance:
Maryland’s procurement reforms expanded access to state contracting opportunities for certified small businesses. The reform expanded Small Business Reserve thresholds by requiring that any procurement of $1,000,000 or less be awarded to a certified small business, provided the business is capable of performing the work. The reform also shortened payment timelines, requiring payment within 15 days of invoice approval, which may improve cash flow. Small Businesses interested in state contracts should ensure that required certifications are current and that internal compliance processes align with the updated procurement requirements.

A broader discussion of these developments and their implications for small businesses is provided in our comprehensive client alert which is available on our website .

Taking time now to review these areas, coordinate with legal and tax professionals, and update internal practices can help position your business for a compliant and successful 2026.

If you need help preparing your business for the new year, The SJS Law Firm is here to support you. Call (202) 505-5309 for a complimentary consultation.

Five Ways to Prepare Your Business for 2026

Fri, 12 Dec 2025 16:58:23 GMT

As 2025 comes to a close, small business owners are juggling year-end deadlines, holiday demands, and planning for a successful 2026. This is the perfect moment to pause, assess your business, and take intentional steps to protect your company, strengthen your foundation, and position yourself for growth in the new year.

Whether you’ve had a year of incredible wins or faced unexpected challenges, these five practical steps will help you enter 2026 organized, compliant, and ready to execute on your goals!

1. Review Regulatory Updates and Confirm Compliance for 2026

Laws and regulations shift every year— and 2025 brought several important changes that may affect how your business operates in the District of Columbia, Maryland, Virginia, and beyond. Now is the time to confirm that your business is fully compliant as you enter 2026.

Key areas to review include:

• Local licensing and tax obligations

• Employment law updates for 2025–2026

• Contract and privacy obligations

2. Reflect on Your Wins, Losses, and Lessons From 2025

Reflection is a critical—and often overlooked—business tool. Taking stock of your business’s performance helps you enter 2026 with clarity instead of clutter. Conduct a “Year-in-Review” Audit and assess the following:

What worked well?
What didn’t work?
What surprised us?
What should we stop doing?
Where did we exceed expectations?
What goals were not met—and why?

3. Evaluate Growth Possibilities and Determine What’s Next

A new year brings new opportunities—if you plan for them. Evaluate where you want the business to go in 2026 and what resources you need to get there. Some practical steps to evaluate growth possibilities include mapping out your 2026 visions, identifying your most profitable and least profitable offerings, evaluating operational bottlenecks and assessing team capacity and talent needs.

4. Schedule Year-End Meetings With Your Professional Advisors

Don’t enter 2026 without the support of your advisory team. Now is the time to align with your attorney, CPA, financial advisor, and insurance broker.

5. Perform an Internal Legal & Operational Health Check

Every business should conduct a holistic year-end legal and operational audit to strengthen the company’s internal foundations. This includes reviewing contracts, corporate records, intellectual property, insurance coverage, and operational systems.

Start 2026 with Clarity and Confidence!

If you need help preparing your business for the new year, The SJS Law Firm is here to support you. Call (202) 505-5309 for a complimentary consultation.

Negotiating with Giants: Strategies to Negotiate Contracts Against Bigger, Better-Resourced Companies

Mon, 17 Nov 2025 17:04:36 GMT

In the world of business contracts, small enterprises often find themselves negotiating with larger corporations that have more resources, leverage, and legal sophistication. It can feel intimidating, but small business owners can still protect their interests and build fair agreements through informed negotiation. This article explores practical strategies for leveling the playing field when you are not the biggest voice at the table.

UNDERSTANDING YOUR LEVERAGE

Every business has leverage, even small ones. It might come from specialized expertise, fast turnaround times, or local market insight. Before negotiations, identify what makes your business valuable. A 2024 survey by the National Federation of Independent Business found that small companies that highlighted unique service quality or niche skills achieved better contract outcomes in over 60% of cases. Recognizing and communicating your value allows you to negotiate from a position of confidence, even when the other party seems dominant.

KNOWING WHICH TERMS MATTER MOST

Not every contract term deserves equal focus. The most impactful provisions often involve payment timing, termination rights, indemnification, and dispute resolution. Larger companies sometimes include one-sided clauses in these sections that shift risk to smaller partners. The U.S. Chamber of Commerce recommends that small businesses prioritize “red flag” areas like indemnity and liability caps, as they determine who bears losses in the event of a problem. Negotiating even small changes, such as shortening payment terms from 90 days to 30, can make a major difference in cash flow and operational stability.

USING PLAIN LANGUAGE AND ASKING QUESTIONS

Legal jargon can hide risks. If a term is not clear, ask for clarification or propose simplified language. Many large organizations will agree to plain-English edits if they do not alter the clause’s substance. The American Bar Association’s Contract Standards Committee notes that unclear language is one of the top three causes of contract disputes for small businesses. Understanding every line you sign is not a sign of inexperience, it is a sign of good judgment.

SEEKING PROFESSIONAL HELP STRATEGICALLY

Hiring a lawyer does not mean derailing the deal. A brief contract review by an attorney familiar with small business law can identify high-risk provisions and propose fixes before signing. According to the Small Business Administration’s 2024 Legal Readiness Report, businesses that used legal review before finalizing major contracts were 40% less likely to experience disputes later. Even limited legal input can provide crucial protection at a manageable cost.

CONCLUSION

Negotiating with larger partners does not have to be an uneven fight. By recognizing your leverage, focusing on key terms, simplifying complex language, and seeking timely legal guidance, small businesses can build fairer, more sustainable agreements. Preparation and clarity turn negotiation into collaboration rather than confrontation.

The SJS Law Firm, PLLC is committed to empowering small business owners with the legal tools to negotiate confidently and protect their growth. To learn more or schedule a consultation, contact us at (202) 505-5309.

Source Notes: National Federation of Independent Business, Small Business Negotiation Practices Survey (2024); U.S. Chamber of Commerce, Contracting Risks for Small Enterprises (2023); American Bar Association, Contract Standards Committee Report (2024); U.S. Small Business Administration, Legal Readiness Report (2024).

Termination Clauses That Save You From Legal Trouble

Tue, 21 Oct 2025 16:37:19 GMT

When entering contracts, small business owners often focus on the deal’s terms, payment, scope of work, and deadlines, while overlooking how the relationship can end. Yet, a clearly written termination clause is one of the most valuable tools a business can have. It provides a roadmap for how and when a contract can be ended, minimizing confusion and costly disputes. This article highlights the key features and benefits of strong termination provisions for small business owners.

THE VALUE OF A WELL-DRAFTED TERMINATION CLAUSE

A well-crafted termination clause sets expectations from the start. It outlines the conditions under which either party can exit the contract, such as nonpayment, breach, or prolonged nonperformance, thereby reducing uncertainty if problems arise. According to a 2024 report by the American Bar Association’s Business Law Section, contract disputes involving ambiguous termination language were nearly 30% more likely to result in litigation. Clear exit procedures, including defined notice periods and cure windows, allow parties to correct issues before escalation. For example, giving a vendor ten days to fix late deliveries before termination encourages resolution rather than immediate contract breakdown.

AVOIDING ONE-SIDED TERMINATION RIGHTS

Small businesses should be wary of “termination for convenience” clauses that grant only one party the right to end the contract at any time. While these provisions may seem flexible, they can expose small vendors or contractors to sudden loss of income. To balance risk, small businesses can negotiate reciprocal termination rights or require a notice period that gives them time to adjust operations. Most small businesses benefit from requiring at least 30 days notice to protect against abrupt termination and associated costs.

MANAGING TERMINATION COSTS AND PENALTIES

Another key consideration is whether the contract imposes termination fees, penalties, or obligations to refund deposits. For service providers, this can be a major financial risk. The Federal Trade Commission has noted that many disputes stem from unclear refund or fee provisions when services are canceled mid-term. To prevent disputes, contracts should specify how costs will be allocated, such as allowing retention of payment for work completed to date. A well-defined clause reduces post-termination arguments over what each side owes.

DRAFTING FOR DIFFERENT RELATIONSHIPS

Termination provisions should reflect the nature of the relationship. In long-term service contracts, flexibility may be important, while in project-based agreements, finality and deliverable-based triggers may be better suited. Some businesses include “termination for cause” (e.g., nonperformance or breach) and “termination for convenience” (mutual or limited) options to balance certainty with adaptability. Including a mediation or notice step before final termination can also preserve business relationships by encouraging good-faith communication first.

CONCLUSION

Termination clauses protect both parties by outlining a predictable and fair exit process. For small businesses, they help avoid unexpected losses and strengthen contractual stability. The best clauses are transparent, balanced, and tailored to the specific transaction. Taking the time to review termination terms, before signing, can save a business significant expense and frustration later.

The SJS Law Firm, PLLC can help your small business draft, review, and negotiate termination provisions that protect their interests. For a consultation, contact us at (202) 505-5309.

TERMINATION CLAUSE CHECKLIST FOR SMALL BUSINESS OWNERS

When reviewing or drafting a termination clause, make sure it includes:

Grounds for Termination: Clearly define when either party may terminate (e.g., breach, nonpayment, prolonged nonperformance).
Notice Requirement: Specify how much notice must be given before termination (typically 10–30 days).
Cure Period: Allow time for the other party to fix issues before termination takes effect.
Termination for Convenience: If included, make it mutual or require reasonable notice to prevent unfair surprises.
Payment Obligations: Clarify whether fees, deposits, or partial payments will be refunded or retained.
Post-Termination Responsibilities: Outline what happens to outstanding work, materials, or confidential information.
Dispute Resolution Step: Consider including a mediation or notice requirement before final termination.

Source Notes: American Bar Association, 2024 Business Law Section Report on Contract Litigation ; Contract Termination Guidelines (2023) ; Federal Trade Commission, Common Contract Dispute Patterns in Service Industries (2024) .

Government Contracting 101: What Small Businesses Should Know Before They Bid

Tue, 23 Sep 2025 16:47:07 GMT

Government contracts can represent tremendous opportunities for small businesses, steady revenue, prestige, and potential growth. But bidding on government work isn’t like doing business in the private sector. The rules are stricter, expectations are higher, and missteps can cost you the bid or even lead to legal trouble. Before you put pen to paper (or cursor to form), here are key legal considerations every small business needs to address.

Register With the Proper Authorities & Get Your Identifiers in Place

You can’t bid unless you’re properly registered. For federal contracts, that often means registering on SAM.gov (System for Award Management). There you’ll obtain your Unique Entity Identifier (UEI) , a 12-character alphanumeric code that uniquely identifies your entity. Without this, your bid may be disqualified up front.

Determine your NAICS codes (North American Industry Classification System). These tell agencies what you do and how big your business can be (in terms of revenue or employees) for it to count as small. These registrations and codes are foundational.

Understand Small Business Certifications & Set Aside Programs

Because of programs run by the SBA (Small Business Administration), many government contracts are set aside exclusively for small businesses. There are also special programs like 8(a) (for socioeconomically disadvantaged businesses), HUBZone (businesses in historically under utilized zones), Women-Owned Small Business (WOSB), and service disabled veteran business status. If you qualify, getting certified under one or more programs can give you a competitive edge.

Know What Types of Contracts You’ll Encounter

Government contracts aren’t completely universal. Some of the common types include:

Fixed Price Contracts : You agree to a price ahead of time, and regardless of actual costs, you deliver for that price.
Cost Reimbursement Contracts : You can be reimbursed for allowable costs and then typically add a fee or profit. These carry much more risk but also more potential benefit.
Indefinite Delivery / Indefinite Quantity (IDIQ), Time & Materials (T&M) , and others, each have unique risk/benefit profiles. Understanding which your business is best suited for (or is asked to bid on) matters for pricing, compliance, and accounting.

Comply with Federal Acquisition Rules & Relevant Regulations

The FAR (Federal Acquisition Regulation) system is what governs the federal contract bidding process. It contains rules on everything from how you must represent your business size, how you must treat subcontracting, to labor laws, small business programs, and more. Violating FAR regulations, even unintentionally, can lead to disqualification or worse.

Also, stay current with procurement regulations and labor laws for the jurisdictions where the contract will be performed. If you do work in Washington D.C., Maryland, or Virginia (for example), you’ll need to cross check state and local procurement rules.

Build a Strong Bid or Proposal

Your technical proposal, pricing, deliverables, and compliance with RFP (Request for Proposal) instructions each matter heavily. A winning bid usually includes:

A clean, well organized statement of qualifications
References or past performance documentation showing you can deliver
Realistic pricing that accounts for compliance costs, labor, insurance, and required overheads
Proof that you meet all required certifications, registrations, and bonding or insurance mandates

Skipping any required document or misunderstanding the RFP instructions is one of the fastest ways to have your bid rejected.

In addition, small businesses should be ready to demonstrate financial responsibility, which often includes providing proof of how they handle payroll and vendor payments. Simple tools like business checks can help keep transactions professional, traceable, and aligned with the government’s preference for clear financial records.

Stay Prepared After You Win

Winning the contract is only half the battle. After the contract is won, there are legal obligations: performance standards, audit rights, submitting invoices properly, following security or data protection mandates, and ensuring any subcontractors follow required rules too. Contract non performance or regulatory non compliance can risk losing the contract or facing penalties.

Government contracting can be a game changer for small businesses, but only if you come in prepared. Register properly, understand which programs and certifications apply to you, know the types of contracts, make sure your proposal is thorough and compliant, and be ready to meet all ongoing obligations if you win. When you approach the process with the right legal groundwork, the 101 stage becomes your solid foundation for success.

Written by the staff writing team at HappyWriters.co

Data Privacy & Security: Legal Checklist for Small Businesses

Tue, 23 Sep 2025 16:41:16 GMT

In today’s environment, data privacy and security are no longer just “nice to have”, they’re legal necessities. Small businesses too often assume they’re under the radar, but state and federal legal obligations, consumer expectations, and litigation risk make privacy a serious concern. Below is a checklist of legal and practical steps that every small business should consider to protect customer data, avoid regulatory penalties, and build trust.

Determine Which Laws Apply to Your Business

Different jurisdictions impose different requirements. Some laws to check for include:

Federal laws like the FTC Act, HIPAA (for health data), GLBA (for financial institutions), and the Children’s Online Privacy Protection Act (COPPA).
State privacy laws such as the California Consumer Privacy Act (CCPA), even if you don’t operate in California but collect data from residents there.
Industry regulations that may overlap with federal and state frameworks.
In Maryland, businesses must comply with the Maryland Personal Information Protection Act (PIPA), which requires prompt notification of residents if their personal data has been compromised.
In Washington, D.C., companies handling consumer data must follow the Security Breach Notification Act, which sets strict timelines for notifying affected individuals after a data breach.

Make a list of the laws you must follow based on where your business is, where your customers are, and what kinds of data you process.

Audit What Personal Data You Collect, Store, and Share

Understanding your data flows is fundamental. Questions to answer:

Exactly what personal data do you collect? (Names, emails, addresses, geolocations, payment info, etc.)
Where is it stored? On-site servers, cloud-storage, third-party vendors?
Who has access, internally (employees) and externally (vendors, partners)?
Why is each piece of data collected? Is it necessary? (Minimization principle.)

Document this in writing. Data inventory is often required under privacy regimes.

Build & Publish a Clear Privacy Policy

Your privacy policy should accurately reflect your data practices. It needs to clearly cover:

What personal data you collect and why
How long you retain data, and when/how you delete it
Who you share data with (vendors, partners)
User rights (access, correction, deletion) under applicable laws
Security measures in place to protect data

If your policy is vague or doesn’t match what you actually do, it creates legal risk.

Implement Secure Data Handling and Retention Practices

Even with a policy, practice matters. Key elements include:

Using encryption for data at rest and in transit (SSL/TLS)
Strong password policies and multi factor authentication (MFA) for internal access
Regularly training employees on data security and privacy awareness
Limiting access to sensitive data to only those who need it
Deleting or anonymizing personal data once its purpose is over

Using management software that includes built in compliance and security features can also help small businesses streamline retention, access controls, and data deletion.

Vendor & Third-Party Risk Management

Often, small businesses outsource parts of their operations to CRM providers, payment processors and cloud services, but that doesn’t remove your legal obligations. You should:

Vet vendors: check their security certifications, privacy practices, breach history
Use written agreements: data processing agreements or vendor contracts that require vendor compliance with relevant laws and security measures
Know where vendor-stored data resides physically and legally (especially relevant under state laws or international jurisdictions)

Prepare for Consumer Rights & Data Subject Requests

Many privacy laws give consumers rights such as:

Requesting access to what data you hold on them
Deleting or correcting data
Opt-out of certain types of data sharing or sales

Set up internal procedures so you can respond to these requests within required deadlines. Document every step to show compliance.

Plan for Incidents & Breaches

Even the best systems can be compromised. You should:

Have an incident response plan: who does what, when, how to notify affected individuals
Buy appropriate cyber liability or data breach insurance
Maintain audit logs and monitor for unusual activity
Know the legal requirement for breach notification: which laws require you to notify affected persons and authorities, and within what timeframe

Maintain Ongoing Compliance & Review

Privacy isn’t a one-time project. Laws change, your business changes. To stay compliant:

Periodically review your data inventory, policies, and practices
Stay updated on changes in relevant privacy laws (state, federal, international)
Get external audits or legal review if possible

For small businesses, investing time and resources in data privacy and security isn’t optional, it’s vital. Litigations, fines, and customer distrust can cost far more in the long run than the cost of implementing sound policies today. Use this checklist as your framework. When you build good practices from the beginning, you protect your business, your customers, and your reputation.

Written by the staff writing team at HappyWriters.co

Are Arbitration Clauses Effective for Small Businesses?

Thu, 18 Sep 2025 16:22:48 GMT

When drafting contracts, many small business owners face the question of whether to include an arbitration clause. Arbitration is a private process where disputes are resolved outside of court, usually by a neutral third party. For small businesses, arbitration clauses can offer meaningful benefits, but they also carry important trade-offs. This newsletter highlights the key considerations for entrepreneurs weighing arbitration as part of their legal strategy.

THE POTENTIAL BENEFITS OF ARBITRATION

For small businesses, the most significant advantage of arbitration is efficiency. Proceedings are often faster and less formal than litigation, saving both time and legal expenses. Recent data from the American Arbitration Association shows that consumer arbitrations involving claims under $10,000 required claimants to pay an average of only $96 upfront, a fraction of typical court filing and service fees. Arbitration is also private, allowing businesses to resolve disputes without the public exposure of court filings, and it gives parties more flexibility to select arbitrators with industry-specific expertise. For example, in technical sectors or for construction disputes, the ability to choose an arbitrator familiar with the subject matter can be invaluable.

THE CHALLENGES AND RISKS

Despite these benefits, arbitration has drawbacks that small businesses must weigh carefully. One concern is the finality of the process: arbitration awards are binding and extremely difficult to appeal, even if the arbitrator makes a mistake. Costs can also escalate, where filing fees can start at $2,000 for two-party matters, significantly higher than the fees in many courts. In addition to paying arbitrators by the hour, parties must also account for the legal fees they pay to their attorneys, which can make the overall expense substantial. Another challenge is that arbitration clauses are widespread in contracts drafted by larger players, often skewing the balance of power. The Economic Policy Institute has reported that more than half of private-sector employers already require arbitration in employment contracts, and nearly a third of those also include class-action waivers. In consumer finance, the Consumer Financial Protection Bureau has found that arbitration clauses appear in about 53% of credit card agreements and more than 90% of prepaid card contracts, meaning small businesses may find themselves bound by terms they did not negotiate.

BALANCING THE DECISION

Ultimately, whether arbitration clauses are effective depends on the specific circumstances of the business and the contract. For ongoing relationships with trusted partners, arbitration may provide a streamlined and less adversarial path to resolution. But for small businesses engaging with larger corporations or consumers, arbitration clauses may limit options and restrict leverage. The prevalence of arbitration in both employment and consumer markets underscores its growing importance, but also signals the need for careful tailoring to avoid unintended consequences.

CONCLUSION

Arbitration can be a valuable tool for small businesses seeking efficiency, privacy, and subject-matter expertise in dispute resolution. At the same time, its finality, potential costs, and risk of imbalance must be considered before adopting these clauses wholesale. For many small businesses, the best approach may be to draft arbitration provisions narrowly, allowing arbitration for certain disputes while preserving the option to go to court in others.

The SJS Law Firm, PLLC remains committed to guiding small business owners through contract negotiations and dispute resolution planning. For a complimentary consultation, please contact us at (202) 505-5309.

Source Notes: American Arbitration Association, Consumer Arbitration Fact Sheet ; Economic Policy Institute, The Future of Mandatory Arbitration Clauses in Employment Contracts (2023); Consumer Financial Protection Bureau, Arbitration Clauses in Consumer Finance Markets (2024); JAMS, Arbitration Schedule of Fees & Costs .

Black Business Month: A Data-Driven Snapshot

Mon, 25 Aug 2025 17:24:30 GMT

As Black Business Month is celebrated this August, it is important to take a closer look at the realities and achievements of Black-owned enterprises in today’s economy. 2024 data from the U.S. Census Bureau and the Federal Reserve provide a clear picture of the scale and economic footprint of Black-owned enterprises, and their continued challenges with profitability and access to capital. This newsletter highlights the most up-to-date statistics available, offering a broad view of the landscape for Black-owned enterprises.

THE CURRENT LANDSCAPE OF BLACK-OWNED BUSINESSES

According to the Census Bureau’s December 19, 2024 release of the Annual Business Survey covering 2022, the United States had an estimated 194,585 Black- or African American-owned employer firms. Those companies generated about $211.8 billion in annual receipts, employed roughly 1.6 million workers, and paid approximately $61.2 billion in annual payroll. A quarter of Black-owned employer firms operated in Health Care and Social Assistance, underscoring the sector’s central role in Black business formation and job creation.

Most Black-owned businesses operate without employees. The Census Bureau’s Nonemployer Statistics by Demographics (released August 8, 2024, covering 2021) reported approximately 4,128,432 Black-owned nonemployer businesses. These businesses accounted for about 14.5% of all nonemployer businesses nationwide and generated an estimated $109.8 billion in receipts. This illustrates the breadth of Black entrepreneurship across sole proprietorships and microbusinesses, which often serve as pipelines for future employer firms.

PERFORMANCE AND EXPECTATIONS

The Federal Reserve Banks’ 2024 publication Firms in Focus: Chartbook on Firms by Race and Ethnicity of Ownership (based on the 2023 Small Business Credit Survey of small business employer firms) provides detail on performance and outlook. At the end of 2022, only 28% of surveyed Black-owned employer firms reported operating at a profit, compared with 50% of white-owned employer firms. Even with those challenges, expectations remained optimistic: going into 2024, 77% of Black-owned employer firms anticipated revenue growth over the next 12 months, and 58% anticipated expanding headcount. These optimistic expectations highlight the resilience and forward-looking confidence of Black business owners.

CHALLENGES IN ACCESS TO CAPITAL

Financing remains a binding constraint. Among credit applicants in the 2023 survey year, as summarized in the Federal Reserve Banks’ 2024 chartbook, only 32% of Black-owned employer firms were fully approved for the financing they sought, compared with 56% of white-owned firms. Denial rates showed a mirror image: 41% of Black-owned applicants were denied outright, compared with 18% of white-owned applicants. These disparities continue to shape growth trajectories of black-owned enterprises by limiting the ability to invest in inventory, equipment, and payroll when demand is rising.

CONCLUSION

Taken together, the 2024 releases point to a Black-owned business ecosystem that is broad in participation, increasingly present in employment-creating firms, and concentrated in service sectors like health care, while still contending with profitability headwinds and sharply uneven access to credit. For organizations looking to support Black businesses, the message is clear: pair demand-side opportunity with capital readiness, credit access, and working-capital solutions, so that promising firms can translate strong pipelines into durable job growth.

The SJS Law Firm, PLLC remains committed to supporting and advising entrepreneurs as they navigate these challenges and opportunities. For a complimentary consultation, please contact us at (202) 505-5309.

Source Notes: U.S. Census Bureau, Annual Business Survey , reference year 2022 (released Dec. 19, 2024); U.S. Census Bureau, Nonemployer Statistics by Demographics , reference year 2021 (released Aug. 8, 2024); Federal Reserve Banks, Firms in Focus: Chartbook on Firms by Race and Ethnicity of Ownership (based on the 2023 Small Business Credit Survey), 2024.

MAKE YOUR CONTRACTS WORK FOR YOU, NOT AGAINST YOU

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 30 Jun 2025 15:32:46 GMT

Contracts are not just legal formalities; they are foundational tools that clarify expectations, outline responsibilities, and provide recourse if an issue occurs. For small businesses, getting the details right can mean the difference between a smooth engagement and an expensive dispute down the line. Therefore, contracts should be drafted with careful consideration and should not be reused without revision. Whether you are working with clients, independent contractors or vendors, here are some tips to make sure your contracts work for you and not against you:

Be Precise About Scope, Deliverables, and Deadlines: Each contract should clearly define what work is being performed, what is included and excluded, when it is due, and how it will be delivered. Ambiguity around scope, deliverables, and deadlines can lead to disputes that will not only delay projects but also jeopardize business relationships because it erodes trust, creates friction over perceived obligations and can make future engagements less likely. Being detailed makes it easier to hold both sides accountable.
Protect your Intellectual Property and Confidential Information: If your business involves creative work, proprietary materials, or client data, you should include provisions addressing ownership and confidentiality obligations. The contract should clearly state who owns the final work product and the underlying materials used to make the final work product and whether your business can use the final work product in its portfolio. In determining ownership of intellectual property, it is imperative that you know both industry standards and your own preferences to strike a balance that protects your rights and meets the expectations of clients.
Include a Fair and Clear Termination Clause: A strong contract includes an exit plan. Contracts should state the conditions for either party’s termination, especially if there is a cure provision, how much notice is required, and what happens to any payments, works in progress, or confidential information upon termination.
Avoid One-Size-Fits-All Contracts and Seek Legal Opinion: Using the same contracts across different clients can expose you to unnecessary risk if the terms are not tailored to the specific relationship or work. Make sure each contract reflects your actual agreement, including key business terms, deliverables, and payment structures. Pay close attention to potentially risky clauses like indemnity provisions or overly broad non-competes. If you are unsure about certain language and potential implications, having a legal professional review the document can help identify red flags and ensure you are fully protected.

The SJS Law Firm, PLLC can help your small business draft effective contracts. For a complimentary consultation, please contact us at (202) 505-5309.

How Intellectual Property Protection Can Propel Your Small Business Growth

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 27 May 2025 22:43:47 GMT

As National Small Business Month unfolds this May, it's the perfect time to consider how intellectual property (IP) protection can become a cornerstone of your business strategy. For small businesses and startups, intellectual property often represents your most valuable assets—from your brand identity to your innovative products or services. Yet many entrepreneurs overlook the importance of properly securing these assets, potentially leaving their businesses vulnerable and missing opportunities for growth. This article explores how comprehensive IP protection, notably through trademark, copyright, patents, and trade secrets, can strengthen your small business and create pathways for expansion.

UNDERSTANDING YOUR INTELLECTUAL PROPERTY PORTFOLIO

Every business, regardless of size or industry, possesses intellectual property. Your company name, logo, product designs, proprietary processes, custom software, marketing materials, and even customer lists all fall under the umbrella of intellectual property. For service-based businesses, your methodologies and systems may constitute valuable trade secrets. The first step toward effective IP protection is identifying what assets you have that deserve protection. Many small business owners are surprised to discover just how extensive their IP portfolio actually is when they take proper inventory.

WHY IP PROTECTION MATTERS FOR SMALL BUSINESSES

Beyond simply preventing others from copying your work, proper IP protection can significantly impact your business valuation and growth potential. Registration of intellectual property creates tangible assets that can be leveraged for financing, licensing arrangements, or investment opportunities. For example, a patent portfolio can demonstrate innovation and market advantage to potential investors, while trademark registrations can allow you to expand through franchising or licensing. Additionally, in today's digital marketplace, IP infringement happens regularly—having established protections gives you legal recourse when someone uses your intellectual property without permission.

COMMON IP PITFALLS FOR SMALL BUSINESSES

Many small business owners make costly mistakes when it comes to intellectual property. One common error is failing to conduct proper trademark searches before launching a new brand or product line, potentially resulting in infringement claims from existing trademark holders. Another pitfall is sharing proprietary information without proper confidentiality agreements in place. Even seemingly minor oversights, like not having employees sign IP assignment agreements, can create complications down the road when questions of ownership arise. Additionally, international protection is frequently overlooked—while U.S. registration provides domestic protection, separate filings are generally needed to protect your IP in foreign markets.

CREATING AN IP STRATEGY FOR LONG-TERM SUCCESS

A proactive intellectual property strategy should be integrated into your broader business plan. This begins with comprehensive IP audits to identify assets requiring protection, followed by prioritizing which protections to pursue based on business goals and budget considerations. Developing clear policies for handling confidential information and creating standardized agreements for employees, contractors, and business partners ensures consistent protection across all business relationships. For businesses with digital presence, monitoring for online infringement and having enforcement protocols in place has become increasingly important. The most successful small businesses view IP protection not as a one-time legal task but as an ongoing strategic initiative.

CONCLUSION

This National Small Business Month, take proactive steps to evaluate how well your intellectual property is protected and how it can be leveraged for growth. Doing so can prevent costly problems later while potentially opening new revenue streams through licensing and strategic partnerships.

The SJS Law Firm, PLLC can help your small business secure necessary IP protection registrations and draft effective agreements for continued protection of your business’ proprietary assets. For a complimentary consultation, please contact us at (202) 505-5309.

Maryland’s Paid Family and Medical Leave Program

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 24 Mar 2025 14:41:54 GMT

In 2022, Maryland passed the Time to Care Act to establish a state-mandated family and medical leave insurance program which would provide eligible employees with job-protected paid leave to care for themselves or a family member with a serious health condition, to bond with a child, or to make arrangements for a family member’s military deployment. Under the Paid Family and Medical Leave (PFML) program, eligible employees will be paid up to $1,000 a week for up to 12 weeks (or 24 weeks under certain circumstances) of covered leave. The program will be funded through employer and employee contributions, although employers with fewer than 15 employees are not required to contribute to the program. Contributions to the program fund are scheduled to begin on July 1, 2025, with benefits becoming available starting July 1, 2026. Employers cannot outright refuse to provide paid family and medical leave but may choose between the state’s program or state approved commercial or self-insurance plan.

Who are the Mandated Employers; Are There Exceptions?

All employers with at least one worker in Maryland will be required to offer paid family and medical leave insurance. However, a sole owner of a sole proprietorship, LLC, C- or S-Corp who is also the only employee of that entity is not required to provide PFML; such employers may opt into the program.

Who are the Eligible Employees?

Employees who worked at least 680 hours in Maryland during the 12-month period before the leave is to begin are eligible for PFML.

How Much Must Employees and Employers Contribute to the State Program?

The rate of contributions for the state’s program will depend on the employer’s payroll size; the rate will be 0.90% of covered wages up to the Social Security cap and employers may withhold up to 0.45% of the contribution rate from the employees’ pay. Employers with less than 15 employees will have a rate of 0.45% and may withhold up to the full amount from paychecks. Private plans will set their own rates.

What is the Effective Date of the PFML?

Contributions are scheduled to begin in July, 2026. However, in February 2025, the Maryland Department of Labor proposed a new timeline for implementation of the PFML program, with Maryland Labor Secretary Portia Wu citing instability and uncertainties of the times; under the proposed timeline, contributions to the fund would begin on January 1, 2027 and benefits would become available as of January 1, 2028. The Maryland General Assembly has yet to take legislative action regarding the proposed timeline.

Notification of Employees

Employers must notify their employees of PFML when the employee is hired, once a year, and when the employer knows that an employee's leave request may qualify for PFML.

What are the Penalties for Non-compliance?

The Maryland Department of Labor may order employees to pay the contributions plus interest, twice the amount of contributions withheld, penalties of up to $1,000 per violation, etc.

Business To-Dos

Review payroll to determine which employees are eligible for PFML
Determine whether to opt into the state program or a private program
Set up payroll systems to manage applicable employer and employee deductions
Submit wage and hour reports each quarter as required by the Maryland Department of Labor
Ensure PFML eligibility is properly communicated to employees upon hire and at other required times; consider making changes to employee handbooks if applicable
Stay updated on PFML changes, especially regarding dates of contribution and benefit availability

BUSINESS INCOME AND THIRD PARTY PAYMENT PLATFORMS: NEW IRS THRESHOLD FOR FORM 1099-K REPORTING

sjsmith@thesjslawfirm.com (Shavon Smith) — Wed, 15 Jan 2025 22:12:51 GMT

This tax season, an IRS rule change may require many freelancers, contractors, gig workers, and small business owners who use third party payment platforms or online marketplaces like Cash App, Paypal, Venmo, Stripe to comply with new tax reporting requirements. The IRS’ rule, which requires third party payment platforms to issue 1099-K forms to certain users for tax reporting, was supposed to go into effect in 2021 but was postponed through 2023 and is now being implemented in phases.

Originally, the rule required third party payment platforms to issue 1099-K forms for users who had 200 transactions totaling more than $20,000 within a year. The new rule eliminates the number of transactions and lowers the dollar amount threshold per year. For instance, the dollar amount threshold for the 2024 calendar year is $5,000. In 2025, the threshold amount will be further reduced to $2,500, and in 2026, the threshold amount will be $600. With this new rule change, small businesses who previously did not receive 1099-K forms can expect to receive them and to report them on their tax returns. To small businesses in states like Maryland and Virginia, which already have a $600 reporting threshold, this IRS rule change comes as no surprise.

It is important to note that third party payment platforms are only required to issue 1099-K forms for business transactions—payment for goods or services, including tips, and rent payments—amounting to the dollar threshold on that particular platform; the rule does not apply to personal transactions. Further, businesses should know that business transactions on the Zelle payment platform are not subject to 1099-K reporting requirements since the platform doesn’t hold money in an account like other payment platforms. However, Zelle business transactions should be reported on Schedule C of Form 1040 for tax compliance.

Due to the nature of third party payment platforms, it is imperative to ensure that your business’ 1099-K form is accurate. Small businesses should consider setting up multiple accounts to keep reportable transactions separate from personal transactions. Additionally, businesses should promptly contact their payment platform if the platform issues an incorrect 1099-K to ask for a corrected form. Note that this rule change does not alter businesses’ tax obligations in any way.

The SJS Law Firm can help your small business navigate these new regulatory changes. For a complimentary consultation, please contact us at (202) 505-5309.

IMPLEMENTING AN EFFECTIVE TELEWORK POLICY FOR YOUR BUSINESS

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 23 Sep 2024 18:20:41 GMT

The COVID-19 pandemic significantly changed working conditions for most workers. One of the changes the pandemic brought to work culture was teleworking, which permits employees to work from their homes or in other locations. While many employers, like Amazon, have called their employees back to the office, teleworking is now a permanent fixture of the workplace. To keep up with the evolving landscape of work, employers must ensure that they have an effective telework policy in place to facilitate productivity; below are some tips on how to do so.

Include the Following Provisions in Your Telework Policy:

Scope of the Policy: The policy should be used for employees’ job responsibilities and should not serve as a way for employees to take care of their independent personal obligations. If the policy is intermittent, detail how long an employee may work remotely.
Employee Eligibility: State what type of employees will be eligible for remote work. For example, full-time employees, part-time employees, or those who have worked for 1 year.
Request and Approval: If telework is not a standing policy, put in place a procedure through which employees can request, and supervisors can approve telework requests. It is also important to lay out the criteria for approving or rejecting such requests.
Work Expectations: Set forth where employees may or may not work while remote, establish work hours when employees must be available, the method of communication with other workers, and any work policies employees must abide by; this should include any measures to protect company or client data as well as other confidential information.
Equipment and Supplies: If the company will provide equipment and supplies for remote work, the policy should include the conditions of such use and their return.
Failure to Comply with Policy: The company should reserve the right to deny or revoke an employee’s telework privileges in response to the company’s needs, an employee’s failure to abide by or abuse the policy, and any further consequences. The policy should also state whether or not an employee’s participation in or removal from telework is subject to a review or appeal process.

Conclusion

While these provisions are not exhaustive of the items to include in a telework policy, they are essential in any effective policy.

The SJS Law Firm, PLLC, can help your small business draft effective telework policies. For a complimentary consultation, please contact us (202) 505-5309.

What A Trump Or Harris Presidency Means For Your Small Business?

sjsmith@thesjslawfirm.com (Shavon Smith) — Wed, 28 Aug 2024 22:30:21 GMT

As the 2024 Presidential Election draws closer, many changes will come in the months ahead depending on which candidate wins the race this November. Following President Biden’s withdrawal from the race, the DNC elected VP Kamala Harris as Donald Trump’s opponent in November. While the policies of Trump, who has previously served as the President, may be a bit more foreseeable, the U.S. has yet to experience a Harris presidency. This article explores how a Trump presidency may differ from a Harris presidency as it relates to small business.

A Trump Presidency for Small Businesses

Neither Trump’s campaign nor the RNC’s policy platform includes small business support programs. However, Project 2025, an initiative pushed by Republican conservatives to guide their next presidential administration, addresses small business support in government contracts. Specifically, Project 2025’s contributors push for a shift in the U.S. SBA’s operations away from its focus on historically disadvantaged businesses and toward a scheme where all businesses should qualify for support on a first-come, first-served basis. While such a scheme would prove detrimental for many small businesses, it would not be surprising since, during his previous administration, Trump attempted to defund the Minority Business Development Agency entirely. Aside from small business contracting opportunities, Trump’s platform emphasizes industry deregulation, which small businesses could benefit from. Deregulation could mean a reversal of labor regulations implemented under President Biden’s administration. For instance, some of the regulations promulgated by the Department of Labor, the Federal Trade Commission, and the National Labor Relations Board which have faced many challenges already, may be reversed or suspended under a Trump Presidency.

A Harris Presidency for Small Businesses

Unlike the RNC’s platform, the DNC’s draft platform, which it released in July 2024, addresses plans to support small business contracting and expansion opportunities. The platform claims that the democratic administration is “expanding access to capital, business opportunities, and training to help those small businesses; while working for a fairer tax code, to level the playing field for small entrepreneurs who have to compete against corporate giants,” including providing funds aimed at state level small business programs. Under the Biden-Harris administration, the Minority Business Development Agency is now a permanent part of the Commerce Department. While the draft platform was crafted with President Biden in mind as the 2024 DNC candidate, it is likely that Harris’ stance on these issues will not change or deviate too far from it. This is evident since as VP, Harris established the Economic Opportunity Coalition to help small businesses access financing for capital and growth. On taxes, if Harris follows in Biden’s footsteps, corporate taxes will likely increase while the administration further pursues regulatory oversight—which could bode well for small businesses especially given the wrench that the Supreme Court’s overturn of Chevron deference has thrown in the regulatory works.

Conclusion

Whoever wins the 2024 Presidential election, the impact will be felt by small businesses. These insights should help small businesses anticipate and better prepare for the future. We’d love to talk with you further about business planning in general! Feel free to schedule an appointment.

What A Recent Supreme Court Decision Ending Chevron Deference Means for Your Small Business?

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 23 Jul 2024 22:15:38 GMT

On June 28, 2024, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo overturned its 1984 long standing precedent, Chevron v. Natural Resources Defense Council , also known as Chevron deference. The landmark Chevron deference required courts to defer to a regulatory agency’s, such as the Department of Labor and Small Business Administration, reasonable interpretation of statutes when such statutes were deemed ambiguous. The Court came to its decision after stating that Chevron undermined courts’ statutory authority to interpret the law and that agencies do not possess any special competence in resolving statutory ambiguities. Now, instead, courts will have to exercise their independent judgment but carefully consider an agency’s judgment when interpreting ambiguous statutes. The overturned decision has been met with mixed reactions as it creates uncertainty for regulated industries.

How does the End of Chevron Affect Small Businesses?

Uncertainty: The current regulatory scheme of notice-and-comment rulemaking ensures that both small businesses and big corporations alike are heard by federal agencies when they make rules pursuant to congressional legislation. Generally, this process fosters transparency and provides businesses with peace of mind in making business decisions based on set regulatory standards. However, now with the overturn of Chevron, the courts’ independent decision-making adds a layer of uncertainty that can prove burdensome for businesses in regulated industries. Not only this, the new decision puts small businesses at a disadvantage who may not be able to afford legal representation to challenge interpretations.
Legal challenges: While the overturn of Chevron does not apply retroactively to past court decisions under the Chevron framework, this new decision opens the door for legal challenges to agency regulations across industries. For example, following the Supreme Court’s decision, a federal judge in Texas blocked the Department of Labor’s recent increase in the minimum salary threshold for some exempt employees because of concerns about the definition of exemptions and the constitutionality of the rule. Other regulations like the Federal Trade Commission’s ban on non-compete clauses are sure to come under judicial scrutiny.

Conclusion

The decision to overturn Chevron deference will undoubtedly have a major impact in the business field. However, until lower courts further interpret and apply the Supreme Court’s decision, the full impact is yet to be felt.

The S.J.S. Law Firm can help your small business navigate these new regulatory changes. For a complimentary consultation, please contact us at (202) 505-5309.

DON’T IGNORE THE INDEMNIFICATION PROVISIONS IN YOUR CONTRACTS!

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 20 Jun 2024 19:14:45 GMT

In commercial contracts, indemnification provisions serve as a tool to designate who bears the cost of potential losses or damages typically for third-party claims; these provisions are powerful because they can transfer risk from one party to another. For this reason, it is essential to negotiate and draft indemnification provisions with your business and its risk-bearing capacity, the type of transaction, the partner with whom you are conducting business, and third parties to keep the contract in mind. Parties may choose between a one-sided indemnity or a mutual indemnification where desired. You may see indemnity provisions in documents such as Non-Disclosure Agreements, Construction Contracts, Purchasing Contracts, and Commercial Leases.

What is an Indemnification Provision?

To indemnify means to make compensation for incurred hurt, loss, or damage. Therefore, an indemnification provision is an agreement between two (or more) parties obligating one party (the indemnifying party) to compensate the other party (the indemnified party) for losses or damages that may result from the transaction taking place.

Why do Indemnification Provisions Matter?

Clarity: Indemnification provisions are important because they outline the party’s obligations to each other when losses or damages are incurred, with clear parameters on who, what, where, when, and why a party to the contract must or must not act. The benefit here is a lower likelihood of misunderstanding and disputes between the parties. Having allocated their responsibilities, the parties can fully attend to the transaction at hand and confidently grow their business relationship.
Protection for the Indemnifying and Indemnified Party: Because indemnification provisions can be mutual, both parties on each indemnity obligation can benefit from such risk allocation. Furthermore, indemnity provisions can be used by indemnifying parties to cap their liability to reduce their financial exposure if an anticipated loss or damage occurs. A limitation on liability promotes peace of mind since the indemnifying party knows ahead of time the (presumably negotiated) maximum it would potentially lose should the indemnified party incur a loss.

What does a Typical Indemnification Provision Include?

Definitions: Take advantage of the definitions section to specify whose claims the indemnifying party will cover, the types of specific events and recoverable damages, and the exclusions to those definitions.
Terminology/Words of Obligation: A n indemnification clause should include words evidencing the indemnifying party’s obligation to “indemnify, defend, and hold [the indemnified party] harmless” for certain claims. Note that in some states, “hold harmless” may expand the scope of the indemnity obligation.
Nexus: Nexus refers to the causal link between the subject of the contract and the harm for which the indemnity is sought. Examples of nexus phrases include: “arising from or relating to, directly or indirectly,” “solely and exclusively caused by,” and “resulting from.”

Conclusion

It’s common for business owners to skip over indemnity provisions in contract negotiations. However, the bottom line is that having well-drafted indemnity provisions in your contracts will promote peace of mind in conducting business by protecting each party from potential loss or damages. Remember that you should negotiate your indemnity obligations based on the types of potential losses or damages, the amount of risk you are comfortable assuming, and the transaction at hand.

The S.J.S. Law Firm can help your small business draft effective indemnification clauses whether you are the indemnifying or indemnified party. For a complimentary consultation, please get in touch with us at (202) 505-5309.

Celebrating National Small Business Month

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 16 May 2024 14:55:12 GMT

Did you know that May is celebrated as National Small Business Month? The SBA was signed into law by President Dwight Eisenhower in 1953 to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns." National Small Business Month celebrates Small Businesses which are integral to the framework of commerce in America. Small Businesses support local economies by providing jobs and engaging in grass roots philanthropic efforts. The SBA uses this month, as well as others, to celebrate diverse groups of small business owners throughout the U.S. Entrepreneurs of many different backgrounds and industries can benefit from programs and resources offered by the SBA. Virtual presentations from the 2024 National Small Business Week Virtual Summit may be viewed at sba.gov.

Do you own a Small Business in Maryland? There’s still time to register for the 2024 Maryland Small Business Week Awards Luncheon taking place June 6 ^th . This networking and awards event honors small business owners throughout the State of Maryland who have made a positive economic and charitable impact in their communities. Awards are presented to businesses owned by women, veterans, young entrepreneurs, and more.

Earth Day 2024 – Adding Everyday Sustainability Practices to Your Business

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 22 Apr 2024 00:18:17 GMT

Earth Day is quickly approaching and this year’s focus is plastics. The use of plastics for packaging and bottles causes excessive waste and poses harm to drinking water, food, and ocean life.

Members and patrons of your small business may be familiar with recycling and the need to reduce environmental harm. But Earth Day is more than an occasion to bring awareness to environmentalism. Celebrating Earth Day can be a great way to start sustainable practices for your small business. Sustainability can help save your small business money in the long term.

Three major ways to help your small business become more sustainable include the following:

Reducing Energy Usage

Whether by installing energy-efficient lighting, limiting water usage, installing automated appliances, permitting remote work, or carpooling, even small ways of saving energy can have a major impact on lowering your annual budget.

Reusing and Recycling

Consider utilizing recycled office supplies like paper and ink cartridges. Implementing paper limits or going paperless can also save your company money. Companies like Annapolis Recycling will actually purchase excess office supplies, toner cartridges, printers, and electronics from small businesses in the DC-Maryland area.

Certify your Small Business

Depending on the type of small business you own, certifications may be available to indicate to customers and business partners that your company is committed to sustainability. Having an official certification can help your business garner support from other companies committed to providing organic products or environmentally friendly services.

Earth Day is a great way to educate employees and the general public about the necessity for environmentalism. Methods to reduce waste, conserve energy, and recycle will vary depending on the type of small business you own, the products you sell, or the services you provide. Nonetheless, small changes and sustainability practices can significantly impact your small business. Not only will customers and business partners be aware of your sustainability efforts, they will benefit greatly from your commitment to conservation.

If you need legal assistance , contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

Empowering Women Entrepreneurs: Navigating Government Contracts

sjsmith@thesjslawfirm.com (Shavon Smith) — Wed, 13 Mar 2024 00:43:14 GMT

March heralds a celebration of women's achievements, particularly in the entrepreneurial arena. With over 7 million women-owned businesses flourishing across the United States, it's evident that women are driving forces in the economic landscape. States such as Washington, D.C., and Maryland, along with cities like Detroit, proudly host significant percentages of women-owned enterprises, showcasing the rich diversity of female entrepreneurship.

The collective receipts of women-owned businesses tally an impressive $1.2 trillion, underscoring their substantial economic influence. Notably, African American women-owned firms contribute significantly, generating a substantial $36.8 billion in revenue. As Women's History Month draws to a close, it's an opportune moment to shine a spotlight on the Women-Owned Small Business (WOSB) program, which serves as a gateway for women entrepreneurs to engage with the federal government.

In 2012 alone, WOSBs clinched contracts totaling $16.2 billion, constituting four percent of all small business federal contracts. The potential for growth and opportunity in this sector is vast. Whether you're an established entrepreneur or just embarking on your journey, delving into this market could catalyze transformative growth for your business.

Never underestimate the potential for your business to thrive in the government contracting sphere. Federal and state governments annually procure a vast array of goods and services, offering abundant opportunities for women-owned businesses to flourish. So, who qualifies for the WOSB program? The criteria are clear-cut: the business must meet the Small Business Administration's (SBA) definition of small, with at least 51% ownership and control vested in one or more U.S. citizen women. Control extends beyond mere day-to-day operations to encompass long-term strategic planning as well.

Certification serves as the gateway to accessing WOSB contracts. Whether through self-certification or third-party certification by governmental agencies or approved entities, obtaining WOSB status is pivotal for participating in contract bidding. Numerous industries stand eligible for WOSB contracts, particularly those where women-owned businesses are underrepresented or substantially underrepresented. From residential construction to transportation and design, a broad spectrum of opportunities awaits women entrepreneurs.

Thankfully, a wealth of resources exists to guide women business owners through the intricacies of bidding on government contracts. Organizations such as the Women's Business Enterprise National Council, the National Association of Women Business Owners Corp., and the Small Business Administration's Office of Government Contracting offer invaluable assistance and support.

If you're a small business already engaged in government contracts or aspiring to secure them, legal counsel can prove invaluable. We at The SJS Law Firm, PLLC are here to offer personalized legal assistance tailored to your business's unique needs. Reach out to us at 202-505-5309 or info@thesjslawfirm.com for expert guidance on navigating the complexities of government contracting.

Ready Your Small Business for the New Year Ahead

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 15 Feb 2024 17:41:33 GMT

Even though the new year is in full swing, if you haven’t already – it’s still a prime opportunity and time to assess and revitalize your business plans and objectives for 2024. Consider the following four actions to position your business for success in the New Year and beyond:

Stay Informed About Regulatory Changes: Annually, regulatory agencies make decisions impacting businesses. Ensure compliance with these changes to avoid potential civil and criminal penalties. The SBA is a good place for business owners to review all relevant laws. Meanwhile, check out our quarterly update sent to client’s last fall.
Evaluate Business Achievements and Challenges: Take this moment to analyze your business performance, examining whether you achieved revenue targets and improved aspects like employee relations. Review internal practices to ensure optimal business operations.
Explore Growth Opportunities: After confirming compliance and updating internal management, set new business objectives for 2024. Develop strategies to achieve sales goals, enhance client satisfaction, and improve employee retention.Establishing these targets provides clear direction for your team throughout the year.
Coordinate with Professionals: Schedule meetings with your attorney, insurance agent, and tax professional. Facilitate communication between these professionals to ensure comprehensive financial planning. Review tax documents, ensure adequate insurance coverage for business assets, and address any potential risks.Completing these tasks early in the new year positions your business for a successful 2024.

(Business) Relationship Bootcamp

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 13 Feb 2024 14:59:37 GMT

Post-pandemic, many small businesses are still reeling from the effects of isolation, shortages, and inflation. Early studies suggest interpersonal skills have declined for Americans in the wake of COVID-19. Today’s climate is heavy for various reasons, and as a result, many business and personal relationships are suffering under that weight. But even if your small business faces challenges outside its control, this doesn’t mean you can’t take control of building and strengthening your business relationships – and as any good business owner will tell you - business is all about relationships. As we celebrate Valentine’s Day, love your business by exploring ways to strengthen business partnerships and relationships.

First Date – Business Formation

Just as you wouldn’t swipe right without reading a dating profile, careful consideration of business partners can make or break the success of a partnership. Many presume a common goal or complementary skill sets will make for good partners, but a business partnership is much more and can be as delicate as any romantic relationship. Remember these important steps for ensuring strong business partner relationships:

Clearly define each partner’s role and responsibilities and revisit this over time – what makes sense in the beginning may change over the life of the partnership
Determine how decisions will be made (e.g., vote)
Determine how disagreements will be handled
Determine how profits are divided
Determine the percentage of ownership for each partner (e.g., 50/50 or 56/44)
Determine buyout procedures or dissolution practices in the event of death or split
Determine procedures for addressing disputes and deadlock - this is critical in 50/50 partnerships.

Honeymoon Stage – Engaging with Your Business Ecosystem

A business ecosystem includes your suppliers, distributors, and even your competition. Here are some basic principles for maintaining a healthy business ecosystem:

Consider engaging with a diverse range of contacts. Is a major supplier going out of business? Keeping a broad list of contacts can help avoid foreseeable pitfalls.
Use Artificial Intelligence (AI) and Data to your advantage. Spending time analyzing sales data, purchase data, and reviews can help save time and money. AI tools can further help manage data and can even make projections for sales or “what if” scenarios.
Networking and attending conferences, trade shows, or events can help directly advertise your business to members of your ecosystem. There may even be a local association or special interest group for your small business to join.

Keeping Things Interesting – Gaining and Retaining Clients

Everyone knows the customer isn’t always right, but establishing a connection with consumers of your product or patrons of your service can help increase business. Here are some ways to connect with clients:

A social media page can engage customers or clients. An active online presence can make way for positive reviews and increased business. Even negative reviews can help small companies to improve and identify areas where they fall short.
Increasing ways to communicate with clients, vendors, or patrons can help your business mitigate mishaps. For instance, drafting a detailed return policy can help businesses make matters right with customers while also protecting the business from fraud and other damages.
Consider establishing a mailing list or building a phone app if you don’t already have one. The more ways to communicate, the better.
Send out periodic surveys to understand your client’s pain points or how they rate your goods and services.

When things go wrong in any of your business relationships, seek legal counsel. Whether you need assistance forming or dissolving a small business or with policies or legal matters for an existing business, please contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

E-Commerce Check-In

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 12 Dec 2023 22:45:23 GMT

Does your small business have a website or social media page? Are you making online sales? If you conduct online business, it may be time to consult with a lawyer regarding e-commerce policies. Adding terms and conditions to your website guides customers on how to best interact with your business. Adding a privacy policy can further help shield your small business from liabilities.

Even if managed by a third party, small business websites are better protected with express policies that set forth what data is collected, how data is used, and the laws that apply in the case of illegal activity.

Terms and Conditions

If you sell merchandise online, having your own purchase and return policies can distinguish your business from others, improve customer rapport, and tackle unique supply chain or delivery issues. Terms and Conditions will vary depending on the type of business you operate or the service you provide.

Common terms include:

Return Policy - Shipping and return policies determine whether the buyer or seller is responsible for mail theft or delays and who to contact in case of a defective product or substandard service.

Limitation of Liability – Any waiver of liability on the part of the business, such as for injury, including loss or theft of data or identity.

Regulation of Use – This section covers terms of use of the website, product, or service provided. It sets forth what legal punishment violators will face for engaging in illegal or unpermitted activity, e.g., using robots to make bulk purchases, misusing chat forums, or submitting false claims.

Intellectual Property – This clause protects the company’s trademarks, logos, and copyrighted material.

Privacy Policy

A unique privacy policy can help shield your small business from liability for consumer identity theft and put customers at ease about how their collected data will be used. For instance, California consumers have increased legal rights that may be specifically addressed in a personalized privacy policy.

Privacy Policies must answer Who, What, When, Where, and Why.

Who – Inform customers who the business is and who manages private data. Let customers know who to contact should they opt out of marketing communications.

What – Inform customers what data is collected, including name, age, gender, payment method, etc.

When – Inform customers of how long data is stored.

Where – Inform customers where data is stored and which third parties, if any, have access.

Why – Give a brief reason why the information is collected and for what purposes data will be used.

As a small business owner, you set the terms and conditions for how consumers interact with your services and products. A strong privacy policy can help customers feel comfortable providing information vital to business operations.

If you need legal assistance drafting terms and policies for your small business, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

Exploring SBA Loans

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 28 Nov 2023 04:57:00 GMT

Even during tough economic times, the winter holiday months are marked each year by increased sales and consumer spending. Small businesses can take advantage of this time by seeking a small business loan to help keep operations thriving.

The US Small Business Association (SBA) offers three main types of loans to businesses that meet certain size requirements for their industry , are creditworthy, and have exhausted traditional lending options.

Three main types of SBA loans include:

Microloans – Small loans up to $50,000. SBA Microloans are provided by intermediary lenders that usually require a personal guarantee and collateral.

504 Loans – Large, long-term loans for equipment and existing real estate.

7(a) Loans – Loans from guaranteed lenders best for working capital. 7(a) can be used to purchase real estate, furnishing, supplies, and equipment. 7(a) loans can also be useful for refinancing existing business debt.

Maximum interest rates and repayment terms vary, but a key benefit of an SBA loan is that they are guaranteed by the government, which covers 85% of a defaulted loan up to $150,000 and 75% for loans greater than $150,000.

Documents you may need for your small business loan application:

In addition to a business plan, articles of incorporation, copies of contracts with other businesses, and leases, SBA lenders may require a verifiable personal background statement. Keeping organized personal and business tax records when applying for a small business loan is always beneficial. It is also essential to keep balance sheets and detailed accountings of profit and loss.

Seeking an SBA Loan during the holiday season can be an excellent opportunity to revitalize your small business for the next fiscal year.

If you need legal assistance and want to know whether your small business is eligible for an SBA loan, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

The End of SBA 8(a)?

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 14 Sep 2023 22:06:23 GMT

The Small Business Administration (SBA) 8(a) Business Development Program is halted due to a recent court ruling. The program was designed to award at least 5% of annual federal contract funding to small, disadvantaged businesses for up to 9 years.

On July 19, 2023, the United States District Court for the Eastern District of Tennessee issued a ruling that could affect the eligibility process for minority-owned businesses applying for the SBA’s 8(a) program. In Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.), the court held that utilizing certain racial preferences when awarding governmental contracts violates constitutional equal protection guarantees. This case appears to extend the reach of the ruling handed down by the United States Supreme Court in Students for Fair Admissions (SFFA) v. University of North Carolina and Students for Fair Admissions (SFFA) v. Harvard to the governmental contracting sphere.

Though the injunction has temporarily suspended applications pending review and created possible revisions to the application process, SBA Administrator Isabella Casillas Guzman stressed that the agency “remains committed to supporting this crucial program and the small business owners who have helped drive America’s strong economic growth.” The SBA’s Business Development Program eligibility was not limited to minority individuals. Individuals not expressly falling into a minority group were simply required to show that a social disadvantage negatively impacted their entry into or advancement in the business world. Nonetheless, it was the presumption that individuals of certain minority ethnic groups, including Asian Americans, Native Americans, Black Americans, and Pacific Islanders, are automatically subject to social disadvantage that failed to pass muster in the Tennessee District Court.

Equal Protection requires all government actions using classifications on the basis of race to undergo strict scrutiny, a form of judicial review that requires a rebuttable presumption and a compelling government interest. The court determined the SBA’s rebuttable presumption that members of minority ethnic groups are socially disadvantaged violates the Equal Protection Clause under the 14 ^th Amendment.

So, what does this mean for my small business?

The fact remains that minority-led business have historically experienced discrimination and failures at the hands of various industries. However, these experiences were not proven in court to be connected to being excluded from participation in the 8(a) program.

As the United States enters 60 years since the Civil Rights Act of 1964, 160 years since the Emancipation Proclamation, and approaches 250 years since its inception, much remains to be done to formally ameliorate the social and economic barriers encountered by women, members of minority ethnic and other minority groups, and veterans.

Surely one day lawmakers will enact enduring laws that ameliorate business barriers for individuals who are socially and economically disadvantaged. Further, perhaps policy changes to programs like The Business Development Program will be made to ensure that members of minority groups are not systemically immobilized by social and economic barriers.

In the meantime, minority-led business considering 8(a) contracts should brace for lengthier applications and increased eligibility requirements. This ongoing legal precedent is likely to change forever how minority-led businesses seek governmental funding.

Additional Links:

SBA Suspends 8(a) Applications Following Federal District Court Injunction

SBA Releases Interim Guidance to 8(a) Program Participants in Light of Lower Court Ruling

The post The End of SBA 8(a)? appeared first on The SJS Law Firm, PLLC.

You Need To Take A Vacation. Here’s How Business Owners Can Schedule Time to Rest!

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 15 Aug 2023 00:44:38 GMT

Entrepreneurial rest is an important part of business ownership, yet it is often overlooked. According to this study , in the U.S., lack of sleep leads to around 1.23 million lost working days annually due to illness or attempting to work even while sick. Another 2019 study from the Harvard Business Review found that exhaustion negatively affected an entrepreneur's ability to evaluate ideas and created obstructions for various business tasks. The study further found that business owners who operated on less sleep struggled to evaluate complex structural alignments, often key determinants of a business’s commercial success. Stepping away creates the distance necessary to gain clarity, brainstorm new ideas, and avoid burnout. Here are five steps to help you prepare to rest this summer.

Look for a slow period. Take time to review your schedule and find a block of time that has the least number of deliverables, reschedulable meetings, and other priorities, and set that time aside for your getaway.
Inform your team. Reach out to your team, delegate tasks to ensure projects are being completed, and equip them with solutions to any foreseeable issues.
Tell your clients. Reach out to your clients, let them know you will be out of the office, and provide them with whom to contact in your absence.
Set vacation boundaries. If needed, schedule brief moments where you allow yourself limited time to check in on your business so you can remain fully present during your vacation.
Have fun. Take this time to really relax and enjoy this well-deserved vacation. This rest will recharge you, and the positive effects will carry over to your team in the ways you can show up when you return. Remembering why vacation and reset is important will help you relax and enjoy your vacation.

Optimize your business's profitability and growth by maximizing your efficiency, increasing your productivity, and heightening your decision-making by taking time to rest!

If you need legal assistance , contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

New Law Seeks To Improve Work Life for Pregnant and Nursing Employees

sjsmith@thesjslawfirm.com (Shavon Smith) — Fri, 21 Jul 2023 18:22:05 GMT

President Biden recently expanded federal protections for pregnant and nursing employees through the Pregnant Workers Fairness Act ( PWFA ) and the Providing Urgent Maternal Protections for Nursing Mothers Act ( PUMP ). The law went into effect on June 27, 2023, and extends the requirements of the American Disability Act (ADA) by requiring employers with fifteen or more employees to provide reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an “undue hardship.” PWFA does not specify the types of reasonable accommodations that may be required nor stipulates the types of conditions that will be considered a “known limitation.”

The Act directs the Equal Employment Opportunity Commission (EEOC) to issue regulations to “carry out” its provisions within one year of the law’s enactment, but some of the examples include the ability to sit or drink water; receive closer parking; have flexible hours; receive appropriately sized uniforms and safety apparel; receive additional break time to use the bathroom, eat, and rest; take leave or time off to recover from childbirth; and be excused from strenuous activities and/or activities that involve exposure to compounds not safe for pregnancy.

Under the PWFA, covered employers are prohibited from:

Requiring a qualified employee to accept an accommodation without a discussion about the accommodation between the employee and the employer;
Denying a job or other employment opportunities to a qualified employee or applicant based on the individual’s need for a reasonable accommodation;
Requiring a qualified employee to take leave if a reasonable accommodation can be provided that would allow the employee to continue working;
Retaliating against a qualified employee for requesting or using a reasonable accommodation for a known limitation related to the employee’s pregnancy, childbirth, or related medical condition;
Retaliating against an individual for opposing or reporting unlawful discrimination under the PWFA or otherwise participating in a PWFA proceeding (including investigations into violations); or
Interfering with any individual’s rights under the PWFA.

The PUMP Act expands existing employer obligations under the Fair Labor Standards Act (FLSA) to provide an employee with a private place and reasonable break time to express breast milk for the employee’s nursing child for one year after the child’s birth. The EEOC will begin accepting discrimination charges for incidents occurring on or after June 27, 2023. Employers should look for forthcoming EEOC regulations within one year of the passage of the PWFA and the Pump Act. Employers should also review their existing accommodation procedures to ensure they comply with the new law.

If you need assistance reviewing or drafting an addendum to your employee policy, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

CFPB Issues Final Ruling Aimed At Increasing Transparency and Access to Loans for Small Businesses

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 26 Jun 2023 20:30:49 GMT

The Consumer Financial Protection Bureau (CFPB) recently issued a final rule implementing Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to help combat discrimination and promote investment. Consistent with Section 1071 and to foster accountability, this ruling imposes data collection and reporting requirements on small business creditors, including banks, credit unions, online lenders, and a wide range of lending products that originate at least 100 loans of any amount annually.

CFPB Director Rohit Chopra said many small businesses, defined as an entity with gross revenue under $5 million in this last fiscal year, failed during the COVID-19 pandemic because they struggled to access credit under the Paycheck Protection Program. This small business loan census will be the key to collecting data broken down by race, ethnicity, gender, and sexual orientation of business owners, ensuring banks and non-banks are serving small businesses fairly. The credit application information will be compiled in a comprehensive, publicly available database to help policymakers, borrowers, and lenders better address economic development needs and adapt to future challenges.

The final rule is effective 90 days after publication in the Federal Register, and lenders will follow a tiered compliance date structure starting:

October 1, 2024, for lenders originating at least 2,500 small business loans annually
April 1, 2025, for lenders originating at least 500 small business loans annually
January 1, 2026, for lenders originating at least 100 small business loans annually

According to National Community Reinvestment Coalition (NCRC), the langue of Section 1071 requires the collected data to

include the following:

The number of the application and the date on which the application was received.
The type and purpose of the loan or other credit being applied for
The amount of the credit or credit limit applied for, and the amount of the credit transaction or the credit limit approved for such applicant
The type of action taken with respect to such application, and the date of such action
The census tract in which is located at the principal place of business of the women-owned, minority-owned, or small-business loan applicant
The gross annual revenue of the business in the last fiscal year of the women-owned, minority-owned, or small business loan applicant preceding the date of the application
The race, sex, and ethnicity of the principal owners of the business
Any additional data that the CFPB determines would aid in fulfilling the purposes of this section

This ruling will provide business owners with insights into the cost of business loans which will aid in more informed decisions about financing options, and also ensure that small businesses are not unfairly discriminated against when applying for loans and provide greater regulatory oversight of the lending market. Read the final ruling here . The CFPB has also created several resources to assist with implementation (e.g., executive summary, fact sheet, etc.), which are located here .

If you need assistance navigating your requirements under this policy, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

Is Your Business Using Generative AI? Then Consider These Legal Issues

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 25 May 2023 15:45:50 GMT

Last November, OpenAI released ChatGPT, a generative artificial intelligence (AI) chatbot specifically trained to respond to human input in real-time. The chatbot works by piecing together responses based on a large amount of data which results in a human-like reply. Unlike other types of AI, ChatGPT is generative which means it has the ability to create or “generate” new content. Up until now, search engines like Google have allowed us to search and receive answers. But, generative AI like ChatGPT can write up the answers. This introduces new legal issues about privacy, plagiarism, intellectual property ownership, copyright, threats of cybercrime, fraud, a host of ethical concerns and more.

This June, the Supreme Court will decide in Gonzalez v. Google, whether section 230 of the Communication Decency Act, a U.S. law that protects technology platforms from legal responsibility for content posted by their users, also applies when companies use algorithms to target users with recommendations. With ongoing debates about who actually owns the content, codes and images created and distributed by generative AI, the case also questions whether AI chatbots, like ChatGPT, could qualify for immunity, alongside search engines, from civil claims under Section 230. What SCOTUS decides could influence emerging laws and regulations of generative technologies. If you are interested in using ChatGPT in your business, here are a few tips to keep in mind.

To mitigate privacy issues, when using online resources in general, be sure to remove personal identifying information before passing the data through the tool.
Remain aware of the evolving regulations and legal opinions on the IP ownership and copyright protection of AI created content, codes or images.
Be familiar with whether your geographical location requires you to explain to clients how AI made a decision that affects them.

Technology as well as the laws and regulations that govern it are rapidly changing. Staying up to date on these ongoing issues, debates, and legal opinions is vital in your ongoing business strategy and communication with your clients. Also consider reaching out to an attorney to discuss drafting company policies and employee guidelines regarding the use of generative AI. Acceptable use policies should require company notice and authorization as well as encourage employees to adhere to local, state and federal laws governing data privacy, fair and nondiscriminatory practices, and avoiding IP infringement.

If you are interested in creating an AI policy for your business, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.

Banking Tips for Small Businesses Owners

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 18 Apr 2023 20:32:04 GMT

Last month, Silicon Valley Bank (SVB), a California-based lender that typically catered to the tech industry, collapsed after not having enough cash to pay depositors during a bank run. This was the biggest U.S. lender to fail since the 2008 global financial crisis – and the second-biggest in history. In 2021, during the pandemic, SVB received more deposits than they could lend and subsequently invested in U.S. Treasury securities. Then in 2022 and 2023, interest rates increased and caused the value of those securities to plummet. SVB sold those securities at a $1.8 billion deficit which prompted venture capital firms to recommend their companies pull out of the bank. The withdrawals were so large, regulators had to shut the bank down to protect depositors.

By the end of 2022, SVB only held about 0.91% of all banking assets, so it's unlikely this will have an effect on other banks. Still, the collapse highlights the importance of tracking bank investment portfolios and the reevaluation of business banking and lending practices. Small business owners should consider taking time to think through ways to mitigate risk such as:

Diversifying funds into U.S. securities or bonds
Spreading business finances across FDIC-insured banks (FDIC automatically insures up to $250,000 in deposits “per depositor, per insured bank, for each account ownership category”)
Working with organizations like IntraFi Network , a Certificate of Deposit Account Registry Service (CDARs) that ensure finances above FDIC coverage by placing deposits in checking accounts, money market deposit accounts and CDs in FDIC banks in its network
Depositing excess funds in credit unions, which also insure individual deposit accounts up to $250,000 through the National Credit Union Administration (NCUA)
Regularly evaluating the relationship with your banker and banking services by reviewing quarterly and annual changes to the bank’s total deposits, available capital, or cash flow on the FDIC website. Also consider searching the Federal Reserve website to see if your bank has been required to take corrective action to avoid financial collapse

It is important to remain up to date on your bank’s financial health. Reach out to your accountant and financial advisors to create a strategy that equips your business to thrive amid any banking surprises.

Additional links:

For a complimentary consultation, please contact us at (202) 505-5309.

Could Your Executive Employees Be Entitled to Overtime?

sjsmith@thesjslawfirm.com (Shavon Smith) — Thu, 30 Mar 2023 20:53:06 GMT

A recent Supreme Court 6-3 ruling provided that a “bona fide executive” who earned more than $200,000 annually was entitled to overtime pay for working more than forty hours per week.

Under the Fair Labor Standards Act (FLSA), “bona fide executive, administrative, or professional” (EAP) employees are exempt from receiving overtime. An employee is considered a bona fide executive and thereby excluded from the Act’s protections if the employee meets all of these tests:

the “salary basis” test, which requires that an employee receive a predetermined and fixed salary that does not vary with the amount of time worked;
the “salary level” test, which requires that preset salary exceed a specified amount (for highly compensated employees, this is $107,432 per year in total compensation, including payment of at least $684 / week);
the job “duties” test.

SCOTUS noted the pivotal issue of whether the employee, an offshore oil rig worker, was paid on a salary basis. The Helix Energy Solutions Group argued that the worker was not entitled to overtime under the FLSA, despite regularly working eighty-four hours per week. A federal district court judge agreed and found that the employee was paid a salary and was not entitled to overtime pay. However, the 5th Circuit reversed the decision finding the worker did not satisfy a special rule of the FLSA that allowed so-called daily-rate workers to be paid on a salary basis.

The Court affirmed the 5th Circuit and noted in the majority opinion that the worker’s “biweekly paycheck amounted to his daily rate multiplied by the number of days he worked in the pay period.” With his paycheck being based solely on a daily rate, the Court found that the worker was not an executive exempt from the FLSA’s overtime pay guarantee and that daily workers, regardless of income, qualify for salary if the conditions are set. The opinion noted that the worker’s “compensation did not meet the conditions of that special rule, ‘which focuses on workers whose compensation is ‘computed on an hourly, a daily or a shift basis.’” That was not the case in this insistence, and thereby the worker was entitled to overtime pay.

This case highlights that the FLSA, which requires employers to pay “time and a half” to employees when they work more than 40 hours a week, places liability not on how much a worker is paid but on how the worker is paid. The day-rate pay model has been a standard in the energy industry due to the unpredictable and irregular hours required from oil rig workers. This decision means that workers paid on a day-rate basis will be entitled to overtime after 40 hours of work, and the energy industry will likely see a widespread shift to an hourly pay plus overtime model. Overall, the Helix decision shows how SCOTUS will likely construe FLSA, so this is a good time for employers to audit and review their payment structures and employee classifications.

For a complimentary consultation, please contact us at (202) 505-5309.

D.C. Amends Campaign Finance Laws for Businesses Working on District Contracts

sjsmith@thesjslawfirm.com (Shavon Smith) — Tue, 21 Feb 2023 02:42:05 GMT

Politics and business go hand in hand, and being involved in politics can be instrumental to a business's success. As such, it's important to remain abreast of regulations around campaign contributions from businesses. The District of Columbia recently updated the Campaign Finance Reform Amendment Act of 2018 (CFRAA), a campaign finance law that aims to address corruption. According to a notice released in December of 2022, the law will now prohibit businesses working on District contracts or seeking to work on contracts with the District with a cumulative value of over $250,000.00 from making certain monetary contributions to political candidates.

The District's Campaign Finance Board, an independent agency, will regulate and apply the law to any campaign and political contributions for the 2024 election cycle and forward. The District is also developing a self-certification platform to help District contractors manage the law requirements. The regulation will be promulgated and available for public review and comment in the beginning of this year. We will keep an eye out for the information sessions the Office of Contracting and Procurement will be hosting this month and report back once we have additional information. Though the law is still developing and we are following it closely, view the latest language and its requirements here .

For a complimentary consultation, please contact us at (202) 505-5309.

Noteworthy Legal Changes That May Affect Your Business in 2023

sjsmith@thesjslawfirm.com (Shavon Smith) — Mon, 23 Jan 2023 23:29:29 GMT

Happy New Year! As we enter a new season, I want to ensure you are up to speed on some of the legal happenings that occurred in 2022. Here are two of the most recent noteworthy legal happenings that may impact your business in 2023.

1. There are new reporting requirements under the Corporate Transparency Act.

The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) passed the Corporate Transparency Act (CTA), which aims to strengthen anti-money laundering regimes by requiring businesses to report information on their beneficial owners.

The reporting rule is one of three rulemakings planned to implement the CTA. FinCEN also plans to issue two final rules: (1) establish rules for who may access beneficial ownership information, and (2) revise FinCEN’s customer due diligence rule.

FinCEN will be releasing additional information over the next year. In the meantime, prepare

for this upcoming regulation by creating a secure business document listing all the required

information about your company’s beneficial owners.

2. The Small Business Administration will create a centralized website for business owners.

On October 10, 2022, President Biden signed the bipartisan One Stop Shop for Small Businesses Compliance Act into law. Previously, federal law required federal agencies to publish small business compliance guides only for certain regulations. In addition, these regulations and compliance guidelines were housed on different websites, which made it difficult for business owners to find and keep track of new requirements.

This Act requires the Small Business Administration to create a centralized website that helps small business owners navigate all federal regulations and compliance guidelines in one place. Small business owners can expect the website to launch within the next three months. Take time to make or review the list of compliance guides that pertain to your business so you can more easily cross reference once the new SBA site is published.

We will keep an eye on both of these roll outs. In the meantime, book a consultation to discuss any legal concerns you may have as you continue planning and executing your 2023 business goals.

For a complimentary consultation, please contact us at (202) 505-5309.

Four Ways to Prepare Your Small Business for the New Year

Mon, 19 Dec 2022 18:17:23 GMT

The end-of-the-year holiday season is a great time to review, reflect and renew your business plans and goals. Below are four things you can do to set your business up for success in the New Year and beyond.

1. Review new regulatory laws that may affect your business

Every year, various regulatory agencies make decisions about updating or implementing new laws. It is important to take time to ensure you remain in compliance or risk facing civil and criminal penalties. In 2023, SBA will be rolling out a comprehensive website for business owners to review all pertinent laws and regulations, but in the meantime, check out our end-of-year wrap-up, where we update you on upcoming legal changes that may affect your company.

2. Reflect on business achievements and losses

Now is a good time to analyze your business and assess whether you met revenue targets, improved employee relations, and other objectives. It is also a good time to review your practices and ensure the business is operating at its optimal level.

3. Consider new possibilities for business growth

After reviewing your compliance with external regulations and updating internal management, it’s important to set new business objectives for the new year. Strategizing ways to meet sales goals, increase client satisfaction, employee retention, and other opportunities will give you and your employees specific targets to move towards throughout the year.

4. Schedule a meeting with your attorney, insurance agent, and tax professional

Checking in with the professionals supporting your business ¬– and having them meet with one another – helps ensure your financial planning is up to date. It is important to review tax documents in preparation for the upcoming tax season, certify that business assets are adequately insured and protected, and confirm that all risks are accounted for. Completing these tasks before the end of the year will place you and your business in a great position for the New Year.

The SJS Law Firm can help today. For a complimentary consultation, please contact us at (202) 505-5309.

Handling Holiday Time Off

Tue, 22 Nov 2022 18:15:03 GMT

No matter your industry, the holidays mean facing a few scenarios with your employees unique to this time of year. For instance, employees may need additional time off to travel, or you may need to bring on seasonal or temporary workers to handle the busy holiday season. Below is a quick run-down of some areas to consider for your business’ holiday schedule.

Do I have to give my employees time off for any holiday?

Generally, private employers are not required to provide time off, even for federal holidays such as Christmas and New Year’s Day. So, while not a requirement, most employers are not Mr. Grinch and voluntarily provide their employees with time off.

Federal law does require employers to “reasonably accommodate” the religious practices of their employees. Therefore, if you provide time off for religious holidays, such as Christmas, you should also provide similar leave opportunities for workers of other faiths to observe religious holidays like Diwali, Yom Kippur, and Eid to avoid religious discrimination claims

Any special rules on pay for the holiday?

If you require employees to work on holidays, you are not obligated to pay a higher wage than on other days. However, the normal rules on overtime still apply. Again, small business employers are not taking a page out of Scrooge’s handbook and will sometimes voluntarily provide a higher wage to incentivize employees to work on a holiday or the day after a holiday. And as a bonus, this could go a long way towards boosting the morale and loyalty of your employees.

What are the minimum wages in my state?

For employers in the DC Maryland region, wages will vary based on the state of employment. Where is the principal place of business? The laws of that state will determine wage rates. However, remember some remote employees are considered employees of the state from which they work remotely. Be sure to verify the state of employment for all employees.

The minimum wage in the District of Columbia is currently $16.10. The minimum wage in the State of Virginia is $11.00 for employers with four or more employees and will be $12.00 beginning January 1, 2023. The minimum wage in the State of Maryland is currently $12.50, while employees under the age of 18 may be paid 85% of the State minimum hourly wage rate, as low as $10.63/hour, for fewer than 20 hours per week of work. The minimum wage in Prince George’s County, Maryland is currently $11.75 for all employees. The Montgomery County, Maryland minimum wage ranges from $14.00 to $15.00, depending on the number of employees.

What if I need to hire seasonal workers?

Temporary or seasonal workers are a great way to deal with high volume without hiring new employees. Temporary or seasonal workers are entitled to the same minimum wage as your employees but not to health insurance or other benefits provided to your permanent employees. Temporary workers are entitled to overtime pay. However, there are five federal law Fair Labor Standards Act categories that are exempt from receiving overtime - Administrative employees, Computer employees, Executives, Outside sales personnel (not subject to weekly minimum pay), and Professional employees all earning at least $684.00 gross per week or $27.63 hourly. In addition, certain categories of temporary employees for businesses like amusement parks, swimming pools, and seasonal attractions may not be entitled to overtime.

The laws regulating minimum wage and overtime pay vary by state and job description, so be sure to know the exempt status and minimum wage requirement for each small business employee.

Keep these points in mind as you’re navigating your holiday schedule. And however you choose to handle seasonal time off, make your environment welcoming and festive for the employees clocking in!

The post Handling Holiday Time Off appeared first on The SJS Law Firm, PLLC.

The SJS Law Firm can help you resolve this issue. For a complimentary consultation, please contact us at (202) 505-5309.

The District of Columbia’s Ban on Non-Competition Provisions, Revisions to the Law, and How They Might Affect Your Business

Thu, 29 Sep 2022 17:40:38 GMT

The District of Columbia Council passed the Ban on Non-Compete Agreements Amendment Act at the end of 2020. After a series of recent amendments, the law is set to take effect on October 1, 2022. Broadly speaking, the ban prevents employers from requiring an employee that performs work in the District to sign an agreement that includes a non-compete provision, which prohibits an employee from "being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating the employee's own business." Bill 24-256, as it’s called, was revised this summer to maintain that conflicts of interest requirements, and provisions preventing employee use of sensitive information, are not impacted by the District’s non-compete restrictions.

Non-compete clauses are common in employment agreements and contracts and generally refer to concurrent employment and anticipate a possible time after the employee and the employer part ways. They force the employee to agree not to pursue a business that taps the same market as the employers.

The scope of the formerly sweeping District Ban has been narrowed to cover only those employees earning less than $150,000; or less than $250,000 if the employee is a medical specialist. In addition, the ban now explicitly excludes babysitters, certain medical professionals, and broadcast employees of a radio, television, or satellite station.

The reconstructed ban was signed by Mayor Muriel Bowser on July 27, 2022, effective October 1, 2022. Non-Complete provisions executed before the date the ban went into effect are impacted. Employers have 30 days from October 1, 2022, to comply with the ban and provide employees with written copies of policies that are exceptions to the prohibition (such as confidentiality policies or policies excluding buyer-seller competition). After the law takes effect, employers are to provide employees written notice of policies that are exceptions to the ban within 30 days of employment and any time the non-compete law changes.

The ban excludes "Medical specialists," which are defined as any individual who performs work in the District "on behalf of an employer engaged primarily in the delivery of medical services," and who (1) holds a license to practice medicine, (2) is a physician, (3) has completed a medical residency, and (4) earns at least $250,000 in compensation per year. Additionally, medical specialists must be given at least fourteen days to consider any non-compete their employer asks them to sign.

The ban’s exclusion of “Broadcast employee” includes “on- or off-air creator (such as an anchor,

disc jockey, editor, producer, program host, reporter, or writer) of a legal entity that owns or

operates one or more of the following: (A) A television station or network; (B) A radio station or network; (C) A cable station or network; (D) Satellite-based services similar to a broadcast station or network; or (E) Any other entity that provides broadcasting services such as news, weather, traffic, sports, or entertainment programming.”

Additionally, the ban refers to provisions of a “written agreement or a workplace policy that prohibits an employee from performing work for another for pay or from operating the employee’s own business."

The ban does not prohibit employment agreements that restrict an employee from revealing confidential and other proprietary information, such as trade secrets, customer lists, and the like. The ban also does not apply to agreements between a business seller and its buyers in which the seller agrees not to compete with the buyer's business.

Under the new law, employers cannot restrict qualifying/covered employees from operating their own businesses — both after their separation and even during their employment.

The ban requires employers to provide employees with specific notice, in writing:

"No employer may require or request that a covered employee sign an agreement or comply with a workplace policy that includes a non-compete provision."

If requiring a non-compete provision, employers must now provide notice to the highly compensated employees at least fourteen calendar days before employment or if already employed, at least fourteen calendar days before the employee must execute the agreement.

The second part of the ban restricts retaliation from employer to the employee. Retaliation refers to an employer taking negative action against a former employee who refuses to agree to a non-compete provision, or more accurately under the ban, if the employee asks about the validity of a non-compete provision in an employment agreement. This part of the law extends to an employee's inquiry regarding a non-compete provision to not just the employer, but also to coworkers, the employee's lawyer or agent, or a government entity.

Employers should consider ensuring their agreements regarding confidentiality and propriety information are reviewed and as strong as possible. Small business owners will also want to modify any employment provisions that can be misconstrued as non-compete clauses.

The SJS Law Firm can help you resolve this issue. For a complimentary consultation, please contact us at (202) 505-5309.

Should You Apply for Employee Retention Credits for Your Business?

Tue, 23 Aug 2022 00:05:05 GMT

Small businesses were hit significantly hard during COVID-19. State governments required non-essential businesses to shut down depending on the services or products offered. Essential businesses included those providing communication services and other necessities or tackling health-related issues affected by COVID-19. Other businesses were forced to shut down for an extensive period and lost consistent revenue.

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), trade or businesses negatively impacted by the pandemic could receive Employee Retention Credits (ERC), which encouraged employers to keep their employees on payroll. Though this program officially ended last year, the tax credits can still be retroactively applied under certain conditions. Eligible businesses that COVID-19 financially impacted can receive a refundable tax credit equal to at least 50% of qualified wages paid to employees between March 12, 2020, and October 1, 2021, for most businesses and up to January 1, 2022, for designated Recovery Startup Businesses. This includes tax-exempt organizations classified under a 501(c) status. However, if you are self-employed, you are not eligible to claim a credit with respect to your own earnings. Below are some important and helpful tips if you are an employer considering retroactively applying for these credits.

Helpful Tips

Which businesses can claim ERC?

Eligibility for retroactive ERC is very attenuated but generally requires a business to have experienced periods when operations were suspended by the government due to COVID-19, or show a significant decline in gross receipts compared to 2019, regardless of whether employees were providing services during the period of substantial decline. The credits apply to proven time periods of a significant decline in gross receipts or any quarter in which a business was suspended by the government.

Keeping up with records

The IRS recommends keeping all employment tax records for at least 4 years. But as it pertains to health insurance costs, sick/family leave records, and employee retention credit records, the IRS recommends keeping these documents for at least 6 years . Copies must always be submitted to the IRS if requested.

Example of a small business suspended by the government

Employer D operates a physical therapy facility in a city where the mayor has ordered that only essential businesses may operate. Employer D's business is not considered essential under the mayor's order, which requires Employer D to close its workplace. Prior to the governmental order, none of Employer D's employees provided services through telework, and all appointments, administration, and other duties were carried out at Employer D's workplace. Following the governmental order, Employer D moves to an online format and can serve some clients remotely, but employees cannot access specific equipment or tools that they typically use in therapy, and not all clients can be served remotely. Employer D's business operations are partially suspended by the governmental order because Employer D's workplace, including access to physical therapy equipment, is central to its operations, and the business operations cannot continue in a comparable manner.

How can you file?

Generally, over and underreported taxes on a previously filed Form 941 can be corrected if you as an employer file Form 941-X, the Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund form within 3 years of the date the Form 941 was filed . The IRS calls these time frames a “period of limitations.”

For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year even if filed before that date. Example. You filed your 2019 fourth quarter Form 941 on January 28, 2020, and payments were timely made. The IRS treats the return as if it were filed on April 15, 2020. On January 18, 2023, you discover that you overreported social security and Medicare wages on that form by $350. To correct the error, you must file Form 941-X by April 18, 2023, which is the end of the period of limitations for Form 941, and use the claim process.

**The assessment of eligibility for the ERC tax credit is a case by case determination. Always consult either a certified accountant, financial advisor, or lawyer for your business tax needs**

Sources:

Visit irs.gov for more information on the Employee Retention Credit and how to apply.

Effective Contract Negotiation for Small Businesses

Wed, 22 Jun 2022 01:39:07 GMT

Negotiations are happening every day throughout our lives, whether it is business or personal. It is imperative for small businesses to be able to effectively negotiate when entering into a contractual agreement. You will negotiate everything from terms, pricing, and deadlines, meaning that you will have to communicate precisely your end goals for that specific issue with a vendor, distributor, or another business. The initial perception of having to negotiate can sound harsh, aggressive, and sometimes breed intimidation. However, one key in this process is never going into it with the attitude of wanting to "beat the other '' person. It exudes that you are negotiating with your emotions, which is not the purpose. As a small business owner, you will have to make critical decisions. Every move being made will affect the overall business.

Below are some tips that will be helpful not only when you are in the negotiating, but also help you be prepared for the day:

Preparations Leading up to Negotiations

Do Your Research: Researching is a very important step that should be done in the early stages of the process until the time of negotiations. Researching the other party’s metrics, numbers, products, and the market you are in is critical in understanding how you will be able to leverage what you are asking for and how you can compete.

Past Performance: In addition to researching the company in general, it is imperative that you understand the company’s history, which can explain their ultimate interests and will better assist you in communication.

Self-Assess Your Business: Going into a negotiation, you should always ensure you know all your resources before going into negotiations to leverage what you are looking to accomplish.

Goal Setting: As a business, it is important to review your goals (short-term and long-term) for your business, which will better help to facilitate what you are trying to accomplish during the negotiation. Make sure to also rank your goals in order of importance.

Prepare to Give Up Something: Whether paying a higher price for an item or not being able to negotiate an objective within a contract, make sure to think through what you are willing to give up, whether financially or substantively.

Know When to Walk Away: While the goal is not to run the conversation to where it's one-sided, you should always set boundaries for what you will not settle for. Walking away from a deal to protect your business moving forward is better than sacrificing that could impact your business severely.

Common Ground: Trying to foresee a common ground amongst both sides where you both walk away with something from the table could equate to a positive and smooth negotiation experience.

During Negotiations

Be Professional: While this may sound trivial, sometimes people in negotiations automatically assume that you must be brash to get what you want. It's the complete opposite. Remember, you are building relationships with other businesses through this. Your reputation matters and is important if you are looking to do continuous deals with the other party.

Timing is Key: Long negotiations can be tedious and non-effective for both parties. More than likely, nothing will get resolved nor decided. That doesn’t mean you should rush through it either. Keep track of timing and how long it takes to give an answer or consult about a decision.

First Offer Does Not Mean Best Offer: Just because the first offer sounds good does not mean it is the best. Make sure to counter-offer. Having back and forth conversation is healthy to where both parties may be able to get what they are looking for or something better.

Ask Questions: Is this the best deal that you can offer? Can you add anything additional to the deal? What benefit are you looking to get out of this negotiation? Some of these questions can help you understand what the other party is asking for and how you can move forward with what you really need.

Don’t Stay on an Issue: If an issue arises, don’t dwell on it for too long. Remember, timing is essential in a negotiation. Put the issue aside and keep moving through the other needs. Over time, the original issue may not be an issue anymore.

Seek Counsel or Advice if Needed: You don’t have to go into a negotiation alone. If available, seek out the advice of a lawyer in your specialty field to get the maximum understanding of how you should move forward.

The S.J.S. Law Firm can help your small business comply with the upcoming reporting requirements of the Corporate Transparency Act. For a complimentary consultation, please contact us at (202) 505-5309.

Sources:

Richard Harroch. A Guide to Succeeding in Business Negotiations. Forbes. 2020.

Goldman Sachs: 10,000 Small Businesses Articles for Small Business Owners - 7 Negotiation Techniques Every Business Owner Should Know.

New Reporting Requirements for Small Businesses Under the Corporate Transparency Act

Wed, 18 May 2022 23:31:47 GMT

A new law affecting almost every small business, The Corporate Transparency Act (CTA), was passed in January 2021. New provisions will take effect later this year and require information disclosures for non-public corporations, including tax-exempt corporations.

The CTA seeks to curb corporate funding of terrorism, trafficking, money laundering, and other illegal activity. Specifically, the new law is intended to unveil anonymous shell corporations, businesses without significant assets often misused for tax evasion purposes and other illegitimate business activity. It is uncertain whether unmasking the owners of such malignant corporations will decrease illegal activity. One common criminal activity engaged in by shell corporations is the artificial price inflation of real estate. Critics argue the removal of anonymity does not directly disincentivize criminal behavior. Regardless of the law’s purpose, the CTA is set to increase the reporting burden of small businesses across the United States. Businesses of all sizes can remain optimistic that increased information disclosure generally reduces crime.

Who is exempt from reporting requirements?

The new law does not apply to companies with more than $5 million in revenue and over 20 full-time employees. [1]

Who is required to report?

Under the new law, “beneficial owners” must be identified and disclosed. Beneficial owners include any owner of at least 25% of the company and any individual who maintains “substantial control” of the company. [2] Substantial control varies and depends on the number of owners and the nature of membership duties. While it is still being defined, substantial control includes those members with responsibilities that include “directing, determining, or substantially influencing important matters of a reporting company.” [3]

Annual Filings

Small Businesses and Corporations will be required to report the following information annually to the U.S. Treasury Department through the Financial Crimes Enforcement Network (FinCEN): the full name of the reporting company; trade names and ‘doing business as’ names of the reporting company; business street address; State or Tribal nation of formation; and Taxpayer Identification Number. [4] Additionally, each required beneficial owner will need to report the following: name, birthdate, address, and ID number (such as Passport or Driver’s License) with an Official ID image. [5]

Strict Reporting Deadlines and Penalties

Entities formed after the effective date will have only 14 days to report the required information initially. [1] There is a 30-day deadline for changes in the required information, changes in exempt status, and death of a deceased beneficial owner. [2] Existing entities will have one year from the effective date, which is estimated to be in September 2022, to report the required information initially. [3]

Under penalty of perjury, willfully failing to report the required information or willfully reporting incorrect/incomplete information comes with a hefty penalty of $500 a day and a criminal fine of $10,000 and up to 2 years in prison. [4]

Privacy Concerns

The increased reporting burden would help prevent crime by alleviating a previous lack of disclosure. However, the sensitive nature of the required information raises serious privacy concerns. Fortunately, small businesses can take steps to protect this sensitive information. Even though all beneficial owners must be reported to FinCEN, a nominee officer or director can represent a business in the public record. Additionally, ‘beneficial owners’ does not include minor children, creditors, employees without membership interest, inheritors, or nominees. [5]

Some businesses may be concerned about hacking personally identifying information belonging to their members. The hacking of CTA information comes with the steep cost of a $250,000 fine with criminal charges of up to 5 years in prison. [6] Additionally, the reported disclosures are not released to the general public but only to the US government. Who exactly can access the data is still being addressed legally, but so far, federal intelligence agencies and regulators (including the IRS) will have access to the data without a court order. [7]

How Best to Prepare?

Some unknowns remain about the CTA, but small businesses should pre-emptively identify owners and members who maintain substantial control of the entity and prepare to disclose this soon-to-be-required information.

[1] Proposed 31 CFR 1010.380(c)(xxi).

[2] 31 U.S.C. 5336(a)(3)(A).

[3] Proposed 31 CFR 1010.380(d)(1).

[4] Proposed 31 CFR 1010.380(b)(1)(i)

[5] 31 U.S.C. 5336(b)(2).

[6] Proposed 31 CFR 1010.380(a)(1)(i).

[7] Proposed 31 CFR 1010.380(a)(1)(iv).

[8] 31 U.S.C. 5336(b)(1)(D).

[9] 31 U.S.C. 5336(h).

[10] Proposed 31 CFR 1010.380(d).

[11] 31 U.S.C. 5336(h).

[12] Beneficial Ownership Information Reporting Requirements, 86 Fed. Reg. 69920 (Dec. 8, 2021)(NPRM), https://www.federalregister.gov/documents/2021/12/08/2021-26548/beneficial-ownership-information-reporting-requirement

Pros & Cons of Mandatory Vaccine in the Workplace for Small Business Owners

Tue, 22 Jun 2021 00:38:21 GMT

As the vaccine roll-out continues, people across the country take a small sigh of relief. However, small business employers face the dilemma of whether to mandate their employees to get the vaccination or not.

The Equal Employment Opportunity Commission ("E.E.O.C.") has provided that companies can mandate a vaccine as a requirement to return in-person work. Federal equal employment opportunity ("EEO") laws do not prevent an employer from requiring all employees who physically enter the workplace to get the COVID-19 vaccination, subject to reasonable accommodations of Title VII, the Americans with Disabilities Act of 1990 ("A.D.A."), and other EEO considerations. Some examples of reasonable accommodations include unvaccinated employees wearing a face mask, keeping social distance, completing a periodic COVID-19 test, or working telework. Although the E.E.O.C. only extends to federal EEO laws, states may enact regulations related to vaccination programs. However, it's important to heed the caution of the E.E.O.C. to ensure that employers do not run afoul of EEO laws that discriminate against employees based on protected categories .

The E.E.O.C. also states that employers may offer non-coercive inducements or bonuses to encourage employees to get the vaccine as long as the incentives are voluntary. The incentive policies comply with A.D.A. and Genetic Information Nondiscrimination Act ("GINA") if the vaccination records remain confidential and classified separately from the employee's personnel file. If the employer is an agency that offers vaccines, the employer may offer incentive rewards or penalties; however, they must not be "so substantial as to be coercive." The E.E.O.C. has not defined "coercive" besides suggesting that it can be coercive to offer a considerable incentive causing an employee to feel pressure to disclose protected medical information. Family members may be vaccinated through an employer-administered program, but employers may not provide incentives for them.

Things to Consider When Deciding to Mandate the COVID-19 Vaccine

Some things that small businesses should consider before deciding whether or not to mandate the COVID-19 vaccine in their business are the nature of their business and how the implementation of the COVID-19 vaccine might affect productivity. There are legal and business repercussions for mandating or not mandating the COVID-19 vaccine.

Benefits

One of the benefits of mandating the COVID-19 vaccine is the American Rescue Plan allows business owners who provide full pay for employees that need to take time off for the COVID-19 process and recovery to claim it as a tax credit. Businesses that want to claim the tax credit must meet the eligibility requirements. The American Rescue Plan ensures that any employer who allows its employees to miss work to get vaccinated will not lose profit. In addition, providing paid time off for vaccinations promotes safety, productivity, and health in the workplace and community.

The COVID-19 vaccine mandate is a preventative measure that averts employees from getting sick or others sick. If an employee leaves work because of COVID-19, it negatively affects the productivity of the small business. If the community finds out that an employee at a small business has COVID-19, patrons are unlikely to feel comfortable using its services or buying its goods. Another benefit of mandating the COVID-19 vaccine is it may attract more business and new employees. A vaccine mandate portrays that your organization values employees' and the community's health and well-being. If all employees are vaccinated, the employer could use this as a marketing strategy to attract customers.

Disadvantages

A disadvantage of an employer mandating a COVID-19 vaccine is cooperating with an employee who is unwilling to be vaccinated. The employer would have to explore accommodations for employees who decline the COVID-19 vaccine for personal reasons and mandating a COVID-19 vaccine may cause certain employees to leave. Employees may reject the COVID-19 vaccine due to medical reasons and/or religious beliefs. Employers have to be careful not to dismiss employees who refuse to get the COVID-19 vaccine due to medical or religious reasons because it is discriminatory employment practice that violates federal law.

In the end, small businesses must weigh the benefits and disadvantages of the implementation of the COVID-19 vaccination to see what works for their business.

The S.J.S. Law Firm can help you resolve this issue and weigh your options. For a complimentary consultation, please contact us at (202) 505-5309.

No More Non-Competes

Wed, 17 Feb 2021 16:29:32 GMT

The District of Columbia is now poised to put into law a ban on non-competition provisions, and it perhaps the nation's most sweeping in the restrictions it places on employers.

The District of Columbia Council recently passed the Ban on Non-Compete Agreements Amendment Act at the end of 2020 . Broadly speaking, the Ban prevents employers from requiring an employee that performs work in the District to sign an agreement that includes a non-compete provision, which prohibits an employee from "being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating the employee's own business."

Non-compete clauses are common in employment agreements and contracts and generally refer to concurrent employment and anticipate a possible time after the employee and the employer part ways. They force the employee to agree not to pursue business that taps the same market as the employers.

The scope of the new District Ban is very broad. It covers "any employee working in the District" (although it does exclude babysitters, some volunteers, some medical professionals) and "lay member[s] elected or appointed to office within the discipline of any religious organization and engaged in religious functions"). The Ban was signed by Mayor Muriel Bowser on January 11, 2021 and become effective after a 30-day review period. Non-Complete provisions executed after the date the Ban went into effect are impacted.

The Ban excludes "Medical specialists," which are defined as any individual who performs work in the District "on behalf of an employer engaged primarily in the delivery of medical services," and who (1) holds a license to practice medicine, (2) is a physician, (3) has completed a medical residency, and (4) earns at least $250,000 in compensation per year. Additionally, medical specialists must be given at least fourteen days to consider any non-compete their employer asks them to sign.

Additionally, the Ban refers to provisions of a "written agreement between an employer and an employee that prohibits the employee from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating the employee's own business."

The Ban does not prohibit employment agreements that restrict an employee from revealing confidential and other proprietary information, such as trade secrets, customer lists, and the like. The Ban also does not apply to agreements between a business seller and its buyers in which the seller agrees not to compete with the buyer's business.

Under the new law, employers cannot restrict employees from operating their own businesses — both after their separation and even during their employment.

The Ban requires employers to provide employees with specific notice, in writing:

"No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020."

Employers much provide notice to employees ninety calendar days after the Act becomes effective, seven calendar days after an individual becomes an employee, and fourteen calendar days after the employer receives a written request for a notice from the employee.

The second part of the Ban restricts retaliation from employer to the employee. Retaliation refers to an employer taking negative action against a former employee who refuses to agree to a non-compete provision, or more accurately under the Ban, if the employee asks about the validity of a non-compete provision in an employment agreement. This part of the law extends to an employee's inquiry regarding a non-compete provision to not just the employer, but also to coworkers, the employee's lawyer or agent, or to a government entity.

Employers should consider ensuring their agreements regarding confidentiality and propriety information are reviewed and as strong as possible.

The SJS Law Firm can help you resolve this issue. For a complimentary consultation, please contact us at (202) 505-5309.

December Newsletter – Chapter 7 v. Chapter 11: Liquidation or Reorganization?

Tue, 15 Dec 2020 23:00:00 GMT

It’s a choice no business owner wants to make. If you are a small business owner and you would like to file for bankruptcy, you have two options under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code. On top of business stress, your personal stress may be a large factor in choosing to file for bankruptcy under Chapter 7 or Chapter 11. You might have exhausted personal assets, maxed out credit cards, pending lawsuits, defaulted mortgages, bouncing checks, and overdue taxes, to name a few. If you are a business owner and identify with these issues, consider your options under the provisions of Chapter 7 and Chapter 11 of the Bankruptcy Code. In general, these sections of the Bankruptcy Code provide individuals and small businesses with the option to file for bankruptcy protection.

Before considering which Chapter will best benefit your business, prepare yourself with all the financial disclosures to the court. Being unprepared with the proper documentation can be the sole reason for a court to deny your business’s request to file. When you are ready to file, make sure you can provide the following: tax returns, balance sheets, a statement of profits and losses, a check register, documentation of transfers to business “insiders” and of personal guarantors, documentation of secured creditors and value of assets, and a list of unsecured creditors (names, addresses, amounts owed, etc.). When you are prepared, begin to look at your options.

Chapter 7 of the Bankruptcy Code is a provision that allows for the total liquidation of individual or business assets to pay unsecured loans. Do not confuse this provision with Chapter 13, which provides this option solely for individuals. Chapter 7 allows for individuals, partnerships, and corporations to file under its provision. Be prepared to file a detailed schedule of liabilities, income, assets, continuing financial dealings, and unexpired leases.

If your business is qualified to file under Chapter 7, the court will grant an automatic stay, a temporary injunction that will halt obligations to creditors. Before filing under this provision, understand what business assets will not be protected under a bankruptcy exemption. In general, the court will grant a bankruptcy exemption for some business property, in which the owner has equity, to protect it from creditors. The court will appoint a trustee to sell non-exempt business assets to settle debts that can be paid appropriately under the provision.

Chapter 11 calls for the reorganization of a business entity with a specific subsection for small businesses. Under Chapter 11, business owners provide a proposal for business reorganization along with a scheduled plan to pay back creditors over time. The business plans will then seek the approval of the court. Chapter 11 provides options for business owners and individuals; however, it has specific provisions for small businesses under subchapter V (5): “Small Business Debtor Reorganization” (SBRA).

Recently the SBRA section of Chapter 11 was paired with the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”), making Chapter 11 an extremely enticing option for small business owners. The SBRA section of Chapter 11 was established in 2019 and recognized that small businesses needed different requirements for maximum debt and obligations to creditors to restructure as a small business adequately. Therefore, small businesses that fall under Chapter 11 are subject to exceptions to the general provisional requirements. In addition, the CARES Act allows for more small businesses to qualify for Chapter 11 relief by expanding the initial maximum debt requirement from $2.5 million to $7.5 million for one year. If your small business qualifies, consider restructuring your entity under Chapter 11.

Bankruptcy is not one fluid process. Incorporated in the proceedings are temporary and permanent options for individuals and businesses alike. Chapter 7 and Chapter 11 of the Bankruptcy Code have proven to be the most useful and successful provisions for small businesses and should be greatly considered as you prepare to approach the Bankruptcy court. The current economic posture is harsh; however, it is cause for new beneficial legislation that could positively affect your business. Stay informed and seek your best options.

The SJS Law Firm can help you resolve this issue. For a complimentary consultation, please contact us at (202) 505-5309.

The post December Newsletter – Chapter 7 v. Chapter 11: Liquidation or Reorganization? appeared first on The SJS Law Firm, PLLC .

A NEW CHAPTER: WHAT SMALL BUSINESS OWNERS SHOULD EXPECT FROM A BIDEN PRESIDENCY

Mon, 16 Nov 2020 18:15:00 GMT

On January 21, 2021, the nation will welcome a new president to address this country’s economic, political, and social concerns. Although a presidential shift presents various uncertainties for small businesses, it offers an opportunity to identify where change is proposed to occur and how it can affect your business. So, what does a Biden presidency mean for small business owners?

President-elect Joe Biden and his team have acknowledged that their first priority is addressing COVID-19 as a concerted federal effort instead of individual and diverse state plans. This unprecedented pandemic has forced many small business owners to close their doors. However, with a strong emphasis on extinguishing the national pandemic, recovering the economic blow, and providing social stability, Biden proposes new regulations to recover and support small businesses.

FUNDING AND LICENSING

Biden seeks to implement many financial relief efforts for small businesses as part of an economic recovery plan. This relief effort would include a “restart package” that provides small business owners with support for retaining and rehiring workers in addition to covering certain recovery costs associated with COVID-19. Biden also promises to introduce a temporary interest-free loan program for small and medium-sized businesses as well as federal funds to support state-level small business relief efforts.

Most significantly, Biden has promised to restructure the mismanagement of the Paycheck Protection Program (PPP). The President-elect seeks to emphasize a stricter oversight of the PPP and other small business relief efforts to ensure that they support small businesses rather than large corporations. Biden seeks to reserve half of all future PPP funds for companies with 50 employees or fewer and provide more specialized assistance to minority-owned businesses. Also, Biden seeks to redirect unused corporation bailout funds and unused PPP funds toward supporting small businesses. The President-elect also proposes a $400 billion federal procurement program to provide federal contracting opportunities to certified small businesses. The program is projected, in large part, to target disadvantaged businesses.

Along with the numerous proposed funding options, Biden and his team promise to work to remove excessive licensing regulations in specific industries, which could significantly diminish burdensome annual expenses incurred by specialized businesses. The scope of a projected license removal initiative is unclear, however, if your business is inconvenienced by heavy licensing, be vigilant about developing this potential proposal.

TAX

What about tax implications? Although the public narrative is that tax rates are projected to rise under a Biden’s presidency, a narrower look provides a more realistic view of what Biden’s tax plan really means for small business owners. The first point of change is corporate tax rates, which are projected to rise, however, if your entity is not set as a C-Corporation, this change does not affect you. What you should be cautious of is a potential increased tax rate from 37% and 39.6% for individuals who earn more than $400,000 in income per year. In addition, strategic tax planning and attentiveness to opportunities for tax benefits targeted to small business owners will serve you well. For example, Biden has proposed to give small businesses a tax break for starting a retirement plan for workers. This seems to be one of the many potential pro-small business tax policies from the new Administration.

Although we can only identify general proposals of change, a Biden Presidency looks like an opportunity for small business owners to be proactive by strategizing how to circumvent disadvantages and utilize a new Administration’s advantages.

The SJS Law Firm can help counsel you on the implication of the new Administration on your business. For a complimentary consultation, please contact us at (202) 505-5309.

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November 2020 Newsletter: Exploring Bankruptcy: Understanding the options for a distressed commercial entity in a post-COVID-19 economy

Mon, 16 Nov 2020 18:12:00 GMT

Part 2: Filing for Bankruptcy
You have considered your options and determined that filing for bankruptcy will allow you the greatest relief for lingering business debts. There are various options when it comes to filing for bankruptcy, and you should consider them carefully. What options does your business qualify for, and what options will provide the best financial relief? Before leaping to file for bankruptcy, mitigate the debt you can re-pay. Consider creating an initial scheduled repayment plan and liquidating non-essential assets. Once you have exhausted your resources, it may be time to begin the filing process.

If you are initiating the bankruptcy, understand all of your options. Look to your state insolvency laws, federal options, and informal out-of-court workouts. In general, an out-of-court workout is a plan for creditors that can be more attractive than filing for bankruptcy. However, beware that this may not be an option for your secured creditors. You may consider this option to satisfy at least some of your business obligations before turning to the court.

What state insolvency laws apply to your business? In other words, if your business is unable to pay its debts, what actions can creditor’s legally take under state law? Creditors may initiate bankruptcy, so you should be vigilant and punctually respond. Creditors generally start an “involuntary bankruptcy” if a business has the resources to pay creditor debts yet has not done so. Be proactive about feasible repayments to avoid this conflict.

Under Federal law, your business might have some options. Does your business qualify for relief under Chapter 7 or Chapter 11 of the federal bankruptcy code? If you meet the requirements of Chapter 7, liquidate assets and unsecured financial obligations will be forgiven. Even if your business does not fit the specific low-income requirements to file for Chapter 7, Chapter 11 might prove to be a better option.

Chapter 11 calls for the reorganization of a corporation or partnership to keep a business running and provide a feasibly structured repayment plan for creditors. Filing under Chapter 11 of the federal bankruptcy code might be more straightforward and less expensive for business owners who would like a chance to continue their business venture.

If your business entity is a Limited Liability Corporation (LLC), you might have special concerns to consider before filing for bankruptcy. Do you have a partner? Is there an operating agreement and are there any limitations relating to filing for bankruptcy? In some cases, filing may cause the business to dissolve. You much determine which partner is liable for which partnership debts, if any, and identify what exposed assets to creditors. Address crucial aspects of your business that will be integrated into the filing process.

Be prepared to understand all obligations that are not dischargeable when you file if you are in a permanent financial situation and are ready to declare bankruptcy formally. Some debts will not be liquidated through the bankruptcy process, such as taxes on the federal, state, and local. The court may also deny discharging debts where proper documentation is not provided, or the court finds that a bankruptcy law was violated.

When your business is ready to file for bankruptcy, you will file a petition with a Federal Bankruptcy Court in your state and district where your business is located. For a Chapter 7 case, the filing fee is $335. Chapter 11 cases start at $1,717, however, this may increase since the process is a bit more complex. Every business that goes through the bankruptcy process is analyzed under a microscope. The court will need a complete and accurate disclosure of your business operations and financial history. Be prepared to have at least two years of financial statements at the court’s request. An essential consideration for this process is whether to seek counsel.

Although you have the option to file for bankruptcy without an attorney, it is strongly encouraged since the process will lead to a long-term financial result. If you would like to learn more about whether to file under Chapter 7 or Chapter 11, look for our next article in the series as we compare the two options.

The SJS Law Firm can help you resolve this issue. For a complimentary consultation, please contact us at (202) 505-5309.

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October 2020 Newsletter: Exploring Bankruptcy: Understanding the options for a distressed commercial entity in a post COVID-19 economy

Thu, 15 Oct 2020 16:34:00 GMT

Part 1: Closing your Business v. Filing for Bankruptcy

Under high uncertainty, local economies are in various stages of reopening, yet many small businesses are considering permanently closing their doors, finding it difficult to overcome the financial and even emotional stress of maintaining a business for months in a closed economy. Before pulling the plug on your business, make sure to consider all your available options. Get familiar with your best course of action by learning the difference between filing for bankruptcy and closing your business. If you chose to file for bankruptcy, understand the process and know your best options through Chapter 7 and Chapter 11 of the Bankruptcy Code. If you choose to close business, know how to maximize your business value until the very end.

When a business closes, it enters a temporary dissolution period in order to fulfill all final obligations. Dissolution involves three steps: (1) A dissolution event, (2) The winding up of partnership affairs, and (3) The termination of a partnership. A dissolution event can occur by actions of the partners/partnership or by a partner filing for dissolution, which may then be granted by court decree. During dissolution, a business is still subject to certain duties and liabilities. It is important to identify what this means for your business. When your business is winding up, obligations and debts are still owed to the principle entity and those interested in its dissolution, such as investors, lenders, property lessors, and the IRS. When strategizing a plan to tackle your business debt, consider what outstanding receivables you may have, or other money owed to the business. Consider all obligations that are overdue or have no prospects of being paid and take action. What losses will your business have to absorb? Would assigning your accounts receivable to a financial institution yield sufficient capital to withstand your business obligations in dissolution? Your business should have sufficient capital to satisfy all financial obligations and have the resources to keep your business running for the remaining length of operation.

Bankruptcy is sometimes the better option when meeting financial obligations to creditors seems unrealistic. Suffering from lingering debt does not always equate to closing your business. If filing for bankruptcy is an attractive option for your business, learn the various filing options. While some options simply forgive certain debt, some provide a financial restructuring. If you choose to file for bankruptcy, consider what obligations would be discharged and what would you still have to owe. Various bankruptcy options can be available for your business if you qualify. Understand important requirements, such as having debt that does not exceed the maximum limit for a certain filing option.

Deciding to dissolve your business or formally file for bankruptcy is a difficult decision and will be best determined by evaluating your business obligations and debts. If you are able to satisfy your debts, uphold obligations, and support your business for a short period of time, you may be able to dissolve your business. However, if you are unable to come up with the capital to pay back your financial obligations, the bankruptcy process is your greatest tool. If bankruptcy seems like a good option for your business, look for our next article in the series as we explore the steps for filing for bankruptcy.

The SJS Law Firm can help you resolve this issue. For a complementary consultation, please contact us at (202) 505-5309.

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Playing the Long Game: How to survive the negative impacts of COVID-19 on Government Contracting?

Tue, 16 Jun 2020 20:58:00 GMT

The COVID-19 pandemic has had some government contractors at a standstill and uncertain of what their next move should be. The current unprecedented market has imposed new challenges for which the federal government has struggled to provide defined solutions and guidelines. Prior national crises and federal government shutdowns have provided government contractors with tools and knowledge to survive turmoil, but COVID-19 has still left contractors with little direction.

How can you, as a government contractor, survive the financial and legal ramifications of COVID-19? Take action and stay the course. Remember that the government is still open, and you can and should keep doing business. You can start by evaluating your contracts for specific terms that are now at issue., Do any of your contracts have a provision that allows for an excusable performance delay? Generally, an excusable delay clause calls for a pause in contracted work due to “acts of god,” for which past flu epidemics similar to COVID-19 have been considered. If your contracts can be excusably delayed, identify what situations and for which contracts you must give notice of delay. If a situation is beyond your control and impacts your ability to perform a contract, this clause may properly relieve you of your prior contractual obligations.

In addition to staying in contact with suppliers and prime contractors if you are a sub-contractor, the key to resolving your contract questions is to stay in contact with your contracting officer. Consider in what situations can ask for a stop-work order. A stop-work order halts all work and costs against a contract and is generally a clause within a government contract that can be invoked by a contracting officer. Notify your contracting officer of your delays, expenses, and offer potential solutions to discuss. Discuss how you can mitigate costs and delays. If there are delayed payments and canceled contracts, consider the costs you incur. What fixed cost do you absorb, and can you dispose of any portion of that amount? Pay attention to your cash conversion cycle to ensure that your payments to suppliers line up with how quickly you are getting paid by your government contacts.

In order for government contractors to survive the impacts of a global pandemic, they must stay on a steady course towards the goals they have set for themselves. Staying invested through a period of volatility instead of reacting to the market shocks provides the best mindset for business success and survival. Before looking to how you might establish new contract relationships in the future, focus on your existing contracts. Your existing contracts may provide you with new contract opportunities. Communicate with your government officials about issues that you deal with as a government contractor in your specific business and look out for a contingency plan for contracts established by the federal government.

The SJS Law Firm can help you as you work through these issues. For a complementary consultation, please contact us at (202) 505-5309 or info@thesjslawfirm.com .

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A Fork in the Road: Considering legal options to close your business

Mon, 01 Jun 2020 18:51:00 GMT

After evaluating options, many businesses will make the tough decision to close down due to the negative effects of COVID-19. Before making this decision, business owners should consider if they should file for bankruptcy, or simply dissolve the business. They may also consider maximizing the value of their business by selling it. If these are not viable options for your business, understand what it means to legally dissolve a business entity.

The first step in a dissolution process is to communicate your decision to all partners, employees, investors, and other stakeholders. Depending on your entity structure, a dissolution process may look different. In general, when your business is winding up, obligations and debts are still owed to the principle entity and those interested in its dissolution. After giving employees enough notice, make sure that all final payments and obligations are fulfilled. During this process, business will still be run for a short period of time, which means that you should consider keeping the minimum number of workers needed until the final close of business. If employees do not want to continue working, your burden and workload will significantly increase. Retained employees may need a more attractive temporary pay and benefits plan.

Before dealing with the obligations and debts that your business owes, consider what is owed to your business. During the dissolution process, business owners may encounter customers that are unable to fulfill their obligation to the business. Consider your options. If you have an accounts receivable, you may want to assign it to a financial institution that would be able to pay or provide a high percentage of the amount. Your last resort? A lawsuit. The value of the obligations and debts to your business will drive what options are proper to fulfill them.

Paying your business debts means thinking about IRS obligations, debts to investors, and property leases. Consult your accountant to ensure that you have and will properly fulfilled all obligations to the IRS. Investors, likewise, will expect a full repayment for their capital contributions. After these obligations are paid off, consider your property debt. Are you leasing your property, or do you own it? If you own your property, consider your options to sell. If you are leasing the property, will your landlord allow you to sublease, sell, or assign your lease? If your landlord does not give you these options, offer a termination fee. Consulting a real estate attorney is a best practice when reviewing these options.

Dissolving your business is not always a smooth process, however as you take crucial legal steps to terminate your business entity, always keep in mind that you have options on how to proceed. If you are uneasy about meeting financial obligations, consider different strategies, such as selling your business assets on a piecemeal basis in order to gain excess capital. Once all obligations are fulfilled, you should be able to confidently walk away from your business.

The SJS Law Firm can help you resolve this issue. For a complementary consultation, please contact us at (202) 505-5309 .

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Tools for the Unknown: Reopening Your Business in a COVID-19 Economy

Mon, 01 Jun 2020 18:49:00 GMT

As businesses prepare to reopen their doors, they must consider the implications brought by a fickle, and uncertain economy. Before making the decision to reopen your physical locations, consider the approach of other businesses in your industry. What has changed in the local, state, or federal laws due to the novel coronavirus (COVID-19)? How has the community responded to reopening businesses? Is there a greater chance of enduring overbearing lawsuits due to COVID-19? Examining these issues and implementing new workplace protections will aid businesses in transitioning back to a “business-as-usual” environment.

An important concern in a post-COVID-19 economy is new work conditions and restructuring the workforce to comply with safety and health guidelines. If all or a portion of workers can continue to work from home, you may want to consider reopening your business at a later time. If it is not essential that employees have contact with other employees or customers, then consider creating a defined temporary work-from-home (WFH) policy.

A WFH policy would include guidelines for who can work from home, expected hours, productivity standards, security provisions, and access to business documents and records. If you choose to have a temporary work from home policy, it is important to clarify expectations in your policy guidelines and implement a proper monitoring system to ensure that productivity at home matches productivity at the business workplace.

Identify regulations that might differ for WFH employees, such as disability accommodations. In your industry, should an employee’s accommodations at work apply when they work from home? If employees with existing health conditions are negatively impacted by COVID-19, special accommodations may apply. Make sure that your business’s WFH policy complies with ADA and EEOC telework guidelines.

If a portion or all of your workforce must go back to a physical place of business to ensure business success, it is important to be prepared for a new work environment. Can you meet the community standard for social distancing in a business environment? How can you remove the possibility of nonessential contact in your workplace? Removing the threat of increased health concerns may mean that businesses must implement heightened health and safety procedures. Consider how regulations pertaining to your specific workforce affect new health and safety guidelines? If you have a unionized workforce, what NLRA regulations apply or have changed due to COVID-19?

If it is too expensive for your business to operate with the heightened precautions and regulations necessary to adhere to the state of the new economy, then it may be best to seek other options, such as maintaining an online presence. In addition to safety precautions, employees may face continued challenges at home. How can your business accommodate to an employee’s childcare needs when schools are closed, and care services are unavailable? Evaluating the success of “business-as usual” before reopening your business doors can aid your long-term success.

The SJS Law Firm can help you resolve this issue. For a complementary consultation, please contact us at (202) 505-5309 .

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March 2017 Newsletter: Doing Business With Uncle Sam Part II: Negotiations

Mon, 03 Apr 2017 17:42:00 GMT

Last month we discussed some basics of government contracts, including contract types. This month we will explore the topic further looking specifically at negotiating contracts with the government (federal and state). Like large commercial entities, the government definitely appears to have the upper hand. For many small businesses that translates into a reluctance to fully negotiate. But keep in mind, the fact that you have a good or service that the government needs to buy gives you a seat at the table and some leverage.

When Can You Negotiate Your Contract with the Government?

Contracts awarded using sealed bidding do not permit negotiation. A standard provision may state that the, “government intends to evaluate proposals and award without discussions.” When that provision is used, actual negotiations are not permitted unless the contracting officer determines they are necessary.

Contracts awarded via a request for proposal or request for quotation are negotiation contracts and your proposal represents an initial offer. Language in the proposal may provide that the, “government intends to evaluate proposals and award a contract after conducting discussions with offerors whose proposals have been determined to be within the competitive range.”

Here negotiations are required with any offeror(s) in the competitive range. Negotiations, in either a competitive or sole source environment, are exchanges with the government that are undertaken with the intent of allowing the offeror to revise the proposal. Negotiations may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract.

How Do You Approach Your Negotiations with the Government?

Five tips to keep in mind when negotiating with the government:

Be sure to catch next month’s article where we will be discussing what to do if you have a dispute with the government after the contract has been awarded.

The post March 2017 Newsletter: Doing Business With Uncle Sam Part II: Negotiations appeared first on The SJS Law Firm, PLLC .

February 2017 Newsletter: Doing Business With Uncle Sam

Fri, 24 Mar 2017 18:17:00 GMT

The Esquire’s Letter

So you have a useful good or important service that the government – local, state, or federal – is buying and you want the government as a customer. And why wouldn’t you, the federal government spends over $400 billion a year with federal contractors; states like Maryland spend nearly $8 billion a year with government contractors. But doing business with the government, though lucrative, is complicated. Government agencies are notoriously slow to pay and the rules are oh so plentiful and complicated.

Still interested? Here’s what should you know before you sign your first or your next government contract:

1. What Type Of Contract Do You Have

The type of contract you have will determine the rules that apply and how you get paid. The goods or services offered and the duration of the arrangement will often dictate the type of contract. The following list includes some of the most common contract vehicles:

Fixed-Price Contracts
Fixed-price contracts provide for a set price, or, in appropriate cases, an adjustable price. Fixed-price contracts providing for an adjustable price may include a ceiling price, a target price (including target cost), or both. A firm-fixed-priced contract provides for a price that is not subject to any adjustment on the basis of the contractor’s costs in performing the contract.

Cost-Reimbursement Contracts
Cost-reimbursement contracts provide for payment of allowable incurred costs. The contract establishes an estimate of total costs for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed without the approval of the contracting officer.

Indefinite-Delivery Contracts
There are three types of indefinite-delivery contracts: definite-quantity contracts, requirements contracts, and indefinite-quantity contracts. The appropriate type of indefinite-delivery contract may be used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. These are also called delivery order contracts or task order contracts.

Time-And-Materials Contracts
Time-and-material contracts are used when it is not possible at the time of placing the contract to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence.

Labor-Hour Contracts
A labor-hour contract is a variation of the time-and-materials contract, differing only in that the contractor does not supply materials.

2. Know the Rules

While guided by some of the same principals, government contracts are different than typical commercial contracts. The rules dictate the game. For instance the applicable rules will cover when and how you will be paid; dispute resolution procedures; ownership of intellectual property and what you must include in your subcontracts. Federal contracts are, for the most part, governed by The Federal Acquisition Regulation (FAR). FAR is a substantial and complex set of rules governing the federal government’s purchasing process. Its purpose is to ensure purchasing procedures are standard and consistent, and conducted in a fair and impartial manner. A link to the FAR can be found here . As you can see, it is both long and not necessarily easy to understand the interrelated parts.

Every state and local government has its own set of procurement and contracting laws, which like the FAR, aim to promote uniformity and fairness into the contracting process. Further, like the federal government each individual state agency may have additional rules specific to contracting with that agency.

Stay tuned next month for Part II of this article where I will discuss what, if any thing, you can negotiate in your government contract and what to do if you have a dispute. In the meantime check out this prior newsletter article regarding women-owned businesses and government contracting .

If you are looking for ways to partner with other companies to offer your goods or services to the government you should register for my course on Teaming Agreements with the Prince George’s Community College Center for Entrepreneurial Development.

The post February 2017 Newsletter: Doing Business With Uncle Sam appeared first on The SJS Law Firm, PLLC .

What Does A Trump Presidency Mean For Your Small Business?

Thu, 02 Feb 2017 01:38:00 GMT

On January 20 ^th we will have a new President. I will personally mourn the absence of the Obama family at 1600 Pennsylvania Ave, but at noon on 1/20/17 the guard changes. How will this guard change effect your small business? Many are unsure of what to expect because Trump did not offer up a plethora of concrete plans during his campaign and subsequent transition.

Uncertainty aside, any good small business owner knows that the key to success is a mix of planning and pivoting when necessary. In creating your strategic plans for the next 4 years you should consider Trump’s stance on regulations, taxes, and international trade.

Regulations

Trump has proposed a moratorium on all new regulations and had pledged to roll back “every wasteful regulation which kills jobs.” Of particular interest to small businesses will be Trump’s actions related to employment, especially as it pertains to actions Obama took via Executive Order. These include rules that increased the minimum wage and granted paid sick days to workers hired by federal contractors. Small business owners should also expect changes to regulations that altered the salary threshold below which workers automatically become eligible for time-and-a-half overtime pay.

With respect to healthcare, republican lawmakers have already taken steps to dismantle the Affordable Care Act, which in its current version requires small business owners with at least 50 employees to provide health insurance or be fined $2,000.00 per employee.

Taxes

Donald Trump has said he will slash taxes and has advocated lowering the income tax on all companies to 15 %. S-Corps and other pass-through entities like LLCs, would also have a top tax rate of 15%. Small business owners often cite taxes as an impediment to growth. Many commentators, however, believe that any tax cuts or reform will benefit large corporations far more than small business owners.

International Trade

For many small business owners expanding into international markets is part of their plan for strategic growth, and many local and state governments encourage small business owners to go on trade missions. Further, some organizations that represent small business owners have cited the North American Free Trade Agreement as a plus for small business trade and that it has resulted in more opportunities for small business owners to enter international markets. Trump has consistently taken a protectionist stance towards trade and wants to rollback old agreements like NAFTA, and modify other trade deals.

Small business owners who are thriving have always learned to adapt to new laws, regulations and economic realities. Whatever Trump’s plans may bring planning and pivoting will be crucial.

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16 Resources You Should Apply for to Grow Your Business or Non-Profit in 2017

Thu, 05 Jan 2017 18:51:00 GMT

Funding, credit, cash flow, and access to capital. Most business owners, no matter what stage of business they may be in, have and will spend countless hours pondering the money question. For good reason, many business owners, especially those helmed by women, count a lack of access to capital as their number one hurdle to growth and continued success. And while money does not grow on trees, grants and business competitions, whether national or local, are great sources of capital, mentoring, and exposure for businesses.

Business owners often turn to grants because they are not required to pay them back, but grants often come with stipulations on who is qualified and how the money can be used. Business competitions often take a lot of work on behalf of the entrants, but in addition to cash prizes, grants may offer invaluable networking, mentoring and exposure for business owners.

As you make your 2017 business plans, consider applying for one of these 16 grants and business competitions to help fund and grow your business:

PROSPECTUS Online Business Accelerator

The Walker’s Legacy PROSPECTUS Online Business Accelerator focuses on providing both the training and resources needed to build and scale businesses founded by women of color. The 9-week program utilizes an original curriculum, cohort model, and a structured learning environment to aid start-up and established business owners in advancing their business operations! Learn more and register today by the January 13, 2017, deadline here .

InnovateHer Challenge

The InnovateHer Challenge is a business competition hosted every year by the Small Business Administration. Participants must have a product or service that impacts and empowers the lives of women. The challenge starts with local pitch competitions hosted by universities, accelerators, SBA Resource Partners, Microsoft stores and other organizations. Local winners compete in a live pitch competition for up to $70,000.00 in prize money.

Amber Grant

The Amber Grant Foundation awards one $500.00 grant to a different women-owned business each month, with one of the 12 grant winners being awarded an additional $2,000.00 grant at the end of the year. The grant honors the memory of a young woman named Amber who died at the age of 19, unable to fulfill her entrepreneurial dreams. There is a fairly easy application, with a $7.00 application fee, where you are asked to discuss your business and explain how you plan to use the grant. Applicants are encouraged to speak from the heart.

Eileen Fisher Women-Owned Business Grant

This is for innovative companies that are at least 51% women owned and founded on creating environmental and social change. To qualify, businesses must have been operating 3 years or longer and have under $1 million in revenue. Awards of $100,000 are given to approximately 10 women business owners each year.

FedEx Small Business Grant

FedEx awards up to $25,000.00 apiece to 10 small businesses annually. The application requires an explanation of your business, how you would use the money, and photos of your business. This grants seeks entrepreneurs with a deep passion for their business.

Mission Main Street Grants

Chase Bank awards $150,000.00 to 20 small businesses every year through its Mission Main Street Grants Program. Recipients are selected based on their growth potential, management team, community impact, and how they plan to use the grant funds. Companies must have been in business at least 2 years and have fewer than 100 employees.

Tory Burch Fellows

Tory Burch Fellows, selected through the Tory Burch Foundation, receive 3 days of workshops and networking with innovative founders and business experts; 1-year fellowship with support from the Tory Burch Foundation; $10,000.00 grant to advance their business education; and an opportunity to pitch to a panel of industry leaders as they determine one winner of the $100,000.00 grant investment. Eligible businesses must be early stage (1 to 5 years of operations) and generating minimum revenues of $25,000.00 and maximum revenues of $500,000.00.

Cartier Women’s Initiative Award

The Cartier Women’s Initiative Awards is an international business plan competition created to identify, support, and encourage early stage projects led by women entrepreneurs. Six women entrepreneurs, one laureate per region (Sub-Saharan Africa, Asia-Pacific, Europe, Middle East & North Africa, Latin America, and North America), are awarded every year. The award includes $100,000.00 in funding, business mentoring, and media exposure.

StartRight! Business Plan Competition

StartRight! is a regional business plan competition to encourage women entrepreneurs to write their business plans. The competition is aimed to provide support for women as they develop their plans through counseling, coaching, and specialized workshops. StartRight! awards a grand prize of $5,000.00 to winning business plans. To qualify, the business must be at least 51% women owned, less than 3 years old, and located in Maryland.

The Halstead Grant

Emerging jewelry designers should check out this grant. Female designers with businesses under 3 years old are eligible for this grant. The most recent winner was awarded a cash grant of $7,5000.00 plus $1,000.00 toward jewelry supplies and marketing via Halstead’s website and social media.

Open Meadows Foundation Grants

Are your entrepreneurial endeavors aimed at social justice? Open Meadows funds women-led projects that promote gender, racial, or economic justice. The projects funded must be designed and implemented by women and girls;  reflect the diversity of the community served by the project in both its leadership and organization;  promote building community power; and  have limited financial access Awards are under $2,000.00 and applications are accepted in the spring and fall of each year.

Verb U/Dell Social Innovation Challenge

Verb U – the next chapter of the Dell Social Innovation Challenge – seeks university students and recent graduates to enter a variety entrepreneurship competitions run by Verb in partnership with global companies, foundations, and governments. The grants and awards vary by competition.

The Patrina Foundation

The Patrina Foundation supports social and educational nonprofit programming designed to meet the unique needs of girls and women in the greater New York Metropolitan area. Since inception, the Foundation has made grants in excess of $7 million to roughly 350 organizations.

The Miller Lite Tap The Future Business Plan Competition

The Miller Lite Tap the Future Business Plan Competition is an annual competition for minority business owners sponsored by Miller Lite and designed to economically empower minority businesses. The competition, which takes place in three rounds, is open to businesses that have less than $5 million in revenue and $15 million in assets.

The USDA Rural Business Enterprise Grant Program

Rural Business Enterprise Grant Program is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and emerging private businesses in rural areas that have fewer than 50 employees and less than $1 million in gross revenues. Grants range from $10,000.00 to $500,000.00

National Association for the Self-Employed

This non-profit provides educational resources and grants. To apply for a grant of up to $4,000.00 you have to be an active member of the association, provide a detailed explanation of how you plan to use the funds, and demonstrate how the grant will support your business growth. Grants can be used for marketing, advertising, hiring employees, expanding facilities, and other specific business needs.

The post 16 Resources You Should Apply for to Grow Your Business or Non-Profit in 2017 appeared first on The SJS Law Firm, PLLC .

Celebrating Tax Day?

Fri, 29 Apr 2016 16:43:00 GMT

April is home to two important dates, my birthday, and tax day which traditionally falls on my birthday (4/15). While my birthday is a day of celebration, as a small business owner dealing with taxes is one of the most undesirable parts of business. Many of us come from a 9-to-5 where taxes are straightforward – to a maze of self-employment taxes, payroll taxes, and state taxes.

The entity you choose for your small business has a huge effect on how you’re taxed. Limited Liability Company (LLC) is a popular entity choice for many small businesses (note: if you are setting up an entity you should seek a professional opinion to ensure you are making the best choice for your business) because it is easy to set up and provides flexibility that traditional corporations do not – but if you’ve chosen an LLC do you know all of the tax advantages or disadvantages? Here are a few to consider:

LLCs Do Not Have a Specific Tax Category

Because LLCs are fairly new entities, the IRS does not have a specific tax category for this business type. LLC members have a choice when it comes to taxes – they can be taxed as partnerships or corporations. Changing your filing status after the initial election requires a request to the Internal Revenue Service. If LLC’s pay taxes as a partnership, meaning the members pay taxes individually, the LLC still has obligations to the IRS. Each year, LLCs must file a Form 1065, which states their earnings, profits, and losses.

Taxes Assessed on Entire Distributive Share

However members’ distributive shares are divvied up, (50/50, 70/30 etc.) the IRS treats each LLC member as though the member receives his or her entire distributive share each year, even if the LLC does not distribute the money to the members. So if an LLC elected to leave all profits in the business, each LLC member is liable for income tax on his or her rightful share of that revenue.

Self-Employment Taxes

LLC members are required to pay self-employment taxes directly to the IRS i.e. contributions to social security and Medicare. However, owners who are not active in business, meaning they are not providing services or making management decisions,– that is, those who have merely invested money — may be exempt from paying self-employment taxes on their share of profits.

How Are Property Contributions Taxed

In general, the contribution of property, for instance delivery vehicles or computers, to a LLC in exchange for a membership interest, is a tax-neutral event if the LLC is taxed as a partnership – neither the contributing member nor the LLC is taxed.

“You don’t pay taxes–they take taxes.”–Chris Rock

At the DC Chapter of the National Society of Black Engineers Entrepreneurship Conference where I presented on Performing a Legal Check Up For Your Small Business.

I had the pleasure of presenting at the SheRocks brunch during Women’s History Month. SheROCKS is one of the fastest growing events for emerging women artists and entrepreneurs. The event was created to showcase women in the arts while creating ways to accelerate support amongst women entrepreneurs.

www.sherocksevent.com

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“It’s Greek to Me!” 3 Steps to Reviewing Contracts

Tue, 28 Jul 2015 20:59:00 GMT

We’ve all heard the expression “It’s Greek to me!”- the old saying that people use when they don’t have a full (and sometimes even partial) understanding of a certain concept or thing. I often hear this sentiment when it comes to understanding the meanings of certain contract terms and phrases. Like this one:

“Upon such default, and at any time thereafter, Secured Party may declare the entire balance of the indebtedness secured hereby, plus any other sums owed hereunder, immediately due and payable without demand or notice, less any refund due.”

I mean really, what does this even mean!? If you are a small business owner, you will often be presented with contracts that you are expected to understand and comply with. Here are three tips to keep in mind before you ink your name to a contract.

iii) Changes: Can changes be made via email and acknowledged by both parties; or do you have to draft a new agreement signed by both parties?

Finally, be certain to actually read the agreement! And ask questions if something is unclear to you. An ounce of preparation is worth a pound (and months) of legal fees and proceedings. Below is a comment I received recently from my client, Tikoshia Davis who did her ‘ounce of preparation.’

Tikoshia is the Business Coach for Soulpreneurs and has some exciting business coaching programs in the works! Check out her website at TikoshiaDavis.com and reach out to her! tikoshia@TikoshiaDavis.com

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Is Crowdfunding Right For Your Business

Tue, 28 Jul 2015 15:57:00 GMT

The Esquire’s Letter

Securing enough financing to start a business is often the main concern of many small business owners. Banks are often unwilling to take the risk and lend to a new or relatively new small business. For many small businesses and startups crowdfunding has filled the financing void. Crowdfunding involves the solicitation of funds from a large pool of potential investors or donors generally via the internet. In 2014 alone, U.S. crowdfunders raised $9.46 billion, (in equity and donation based crowdfunding) a 145% increase from the year before.

Crowdfunding Regulations

Enacted in April 2012, the Jumpstart Our Business Startups Act (The JOBS Act) was passed with bipartisan support and intended to make it easier for small businesses and startups to raise capital. The JOBS Act gives the ability for the general public to receive company equity in exchage for funding. Part of the JOBS Act, which permits accredited investors to invest via crowdfunding, was implemented immediately. An accredited investor is a term used by the SEC to refer to investors who are financially sophisticated, generally determined by his or her net worth.

As it relates to nonaccrediated investors, the Act instructed the Securities & Exchange Commission (the SEC) to propose rules for equity crowdfunding. To date those rules have not been adopted. Instead of waiting on the federal government, a growing number of states have passed legislation to permit crowdfunding inside a state’s borders – i.e. local businesses can raise money from residents of the state. Twenty-two states and the District of Columbia have enacted crowdfunding laws and regulations.

Is Crowdfunding Right For Your Small Business?

Should crowdfunding be part of the financing plan for your business? Here are a few issues to consider: 1) How much money will you need to raise? Many states limit the amount a company can raise to $1 million or $2 million. If you need more than the state’s limit you will have to devise other financing strategies in addition to crowdfunding. 2) How many investors do you want to answer to? Many investors, with the exception of accredited investors, are generally capped at investing $10,000.00 or less, therefore you may need a number of investors to reach your goal. You may be faced with a large number of investors who seek to provide a lot of input in the affairs of the business and who may not fully appreciate the inherent risk in investing in small businesses and startups.

Even if crowdfunding does not fit perfectly with your business, or if your crowdfunding campaign is ultimately unsuccessful, it may present a great (relatively inexpensive) way to create buzz for your small business.

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Back to School and Back to Business: Employee Training

Sun, 17 May 2015 21:50:00 GMT

September means more than just back to school for kids. For a small biz, this is the perfect time to get staff together to ramp up education and training for employees to ensure they have the tools necessary for a strong end-of-year finish.

Of course, there are training courses particular to your industry, e.g., in a medical office making sure your staff is up to date on the latest HIPPA regulations. If there’s no training particular to your industry, you might want to use this time to implement team building activities and training to strengthen morale and make sure workers are firing on all cylinders. But an oft-overlooked area by small businesses is harassment and anti-discrimination training. While this may not be the type of training that will immediately increase profits, in the long run, it’s the type of training you’ll be happy you’ve invested in (especially if you are ever hit with a harassment suit, which could devastate your small biz) and it will help ensure that you are creating a cohesive and respectful work environment.

Generally, laws that prohibit harassment protect workers from verbal or physical conduct in the realms of race, color, gender, national origin, age, disability, marital status, or sexual orientation. The most prevalent form of harassment, sexual harassment, has laws that protect individuals from unwanted sexual advances, requests for sexual favors, and verbal or physical conduct of a sexual nature.

Harassment training is not required under federal law, but some states have enacted legislation requiring training. Also, some court decisions and Equal Employment Opportunity Commission (EEOC) Guidelines (EEOC is the government agency responsible for enforcing workplace discrimination laws) make it clear that harassment training is essential. Also, in order to raise a defense or avoid punitive damages in a lawsuit, employers need to show that they have provided harassment training to all employees.

So what should that training include? Employers should be informed of exactly what your policies are and of which behaviors are prohibited. Presenting examples and scenarios are a great way to engage the trainees, especially when they’re relevant and tailored to your work environment.

One of the most important aspects of training is ensuring your employees understand reporting procedures, i.e. what employees have to do if they are the victims of any type of on-the-job harassment. If you have a large staff with an HR department, implementing a reporting and investigating procedure is a lot less challenging than if you have a small staff and you, as the owner, doubles as Human Resources (HR). If you have a very small staff, consider retaining an outside company that can handle harassment complaints and conduct investigations to ensure compliance. Looking to start-ups Namely or Jump Start HR is a good place to began research.

This is also a good to time to reinforce and train your employees on key policies from the employee handbook (or high time to draft an employee handbook if you don’t already have one!).

To get started, here are a few policies to consider reviewing: Ethics, Confidentiality, Computer usage, and Social Media.

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It’s Party Time!

Sun, 17 May 2015 21:50:00 GMT

Summer is in full swing and if you’re anything like me you’ve attended your fair share of summer events–weddings, reunions, showers, fairs, and pool parties.

As a small business owner, events are a great way to connect with clients, as well as forge new relationships because they show appreciation to current customers while attracting new ones. Also, getting face to face with your customers and potentials is a great marketing tool because for many of us in small biz, you are the brand.

Events can be deceptively simple, but you won’t get results with a last minute deal where you throw pre-made burgers on the grill ( Click to tweet me! ) and pass the red Solo cups. Instead think about creating a memorable experience for your customer via a rooftop overlooking the city on a summer evening, or a sleek hotel that captures the vibe of your brand. Now close your eyes and picture it—it’s so close you can almost see the hashtags and word of mouth buzz your event will create, right? Great, but before you get too far into fantasy and planning, remember these two things: Insurance and Contracts. This pair will help ensure the success of your event because they’ll protect your business should things not go exactly as planned. Here’s a little more about both:

Insurance

There’s nothing fun about insurance, but it’s so necessary. While things could go smoothly from beginning to end, there are a myriad of things that could go wrong that you’d want to protect your business against—think things that can get you sued and result in you losing money.

So what could go wrong you ask? A guest could get injured, one of your guests could have a few too many drinks, decide to get behind the wheel, and cause an accident; your event could cause property damage to the venue (so, give that pyrotechnics idea a second thought!); or maybe at the last minute you have to cancel or postpone the event.

The good is that there’s insurance to protect your small biz in each of these unfortunate scenarios. Carefully look at your business general liability policy, endorsements, exclusions, and fine print to see what’s covered. You may want to consider event insurance specifically for your event, which could provide broader coverage.

Contracts

Again, it’s not an exciting topic when talking about party planning, but it’s essential. In planning your event, you’ll enter into contracts with various vendors: DJs, bartenders, the venue, a caterer etc. Very often these vendors will have a standard contract for you to sign—but don’t sign on the dotted line blindly. You have more negotiating power than you think, so don’t be afraid to push back on clauses you don’t feel comfortable with, for instance, you may feel more comfortable giving a final count five days before the event instead of seven, so see what you can negotiate.

Of course, be sure that the contract includes provisions that address payment, cancellation, Force Majure (i.e. Acts of God), insurance, and indemnification. More importantly, make sure you understand all the parts of what you’re agreeing to and what effect, if any, it will have on your event.

And think about agreements you’ll need with your attendees if you’re doing something major like an international retreat with your clients. You’ll want to have them sign releases to limit your liability should anything happen while attending your retreat.

It’s these boring details of event planning that will help protect your business so you can focus on giving your guest a great time—and having one yourself!

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Social Entrepreneurs: Non-Profit v. Benefit Corporation

Sun, 17 May 2015 21:50:00 GMT

As we close out Black History Month, take time to reflect on what you can do to leave the world a little bit better than you found it. It’s a new day where entrepreneurs are matching their desires to do good with their business ideas and becoming “social entrepreneurs.” Social entrepreneurs develop business models that blend traditional capitalism with innovative and transformative solutions across education, health, environment, and enterprise development.

Social entrepreneurs aim to build strong and sustainable organizations, which are either set up as not-for-profits or traditional companies. Many states have enacted new laws that permit the set up of a new corporate form: benefit corporations (often referred to as B-Corps). B-Corps are corporate entities legally required to create benefit for society as well as its shareholders. For instance, Seventh Generation, which specializes in green household and personal care products, is a B-Corp. The question for many entrepreneurs who aim to do good with their enterprise is whether to set up as a non-profit as opposed to other business models, such as a B-Corp.

The biggest difference between a B-Corp and a nonprofit organization is that the benefit corporation is a for-profit corporation and the nonprofit is a not-for-profit corporation. Sounds simple enough, but how do you choose? In a non-profit, the board of directors is charged with upholding the mission statement of the nonprofit and no individual within a nonprofit is legally allowed to profit from dividends or additional money left over after all expenses have been covered. The directors in a B-Corp are also charged with upholding the mission statement of the organization, but the directors are also obligated to maximize profits for shareholders. Doing good and maximizing profits are tenets that can often be conflicting, resulting in disputes among shareholders and board members.

The two legal benefits of becoming a B-Corp address the seemingly at odds goal of doing social good and maximizing profits. Mainly, the B-Corp protects the company from shareholder suits complaining that the company’s management is focusing on considerations other than maximizing profits and weaves the company’s social mission into the corporation’s formative documents, so that the mission cannot be eviscerated by a hostile takeover by shareholders. There are also tax implications to consider. Many non-profits decide to obtain 501c3 tax-exempt status, while B-Corps are taxed like a normal corporation.

So again, which to choose? It simply depends on your end goals. If you think your idea has the opportunity to change the world and do lots of good, but you also think it can generate a lot of money, you may want to consider a B- Corp. On the other hand, if you intend to obtain funding via donations or grants a non-profit with 501c3 status may be the way to go.

Want to discuss this further? Contact me today at sjsmith@thesjslawfirm or 202-505-5309 to schedule a complimentary consultation.

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Handling Holiday Time Off

Sun, 17 May 2015 21:50:00 GMT

No matter your industry, the holidays mean facing a few scenarios with your employees unique to this time of year. Many workers want to take time off, and for those in retail it may mean bringing on temporary or seasonal workers to deal with the holiday rush. Here’s quick run down of some questions to keep in mind:

Do I have to give my employees time off for any holiday?

Generally, private employers are not required to provide time off for holidays such as Christmas and New Years’ Day. So while not a requirement, most employers are not Mr. Grinch and voluntarily provide their employee’s time off.

Federal law does require employers to “reasonability accommodate” the religious practices of their employees. Therefore, if you provide time off for religious holidays, such as Christmas, in order to avoid religious discrimination claims you should also provide similar opportunities for workers of other faiths.

Any special rules on pay for the holiday?

If you do require employees to work on holidays, you are not obligated to pay a higher wage than other days. However, the normal rules on overtime still apply. Again, most small biz employers are not taking a page out of Scrooge’s handbook, and if able will voluntary provide a higher wage for working on a holiday or the day after a holiday. And as a bonus, this could go a long way towards the morale and loyalty of your employees.

What if I need to hire seasonal workers?

Keep these points in mind as you’re navigating your holiday schedule. And how ever you choose to handle seasonal time off, make your environment welcoming and festive for the employees clocking in.

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When Darkness Falls: Handling the Horrors of Small Business Ownership

Sun, 17 May 2015 21:50:00 GMT

There are some days—months even—when owing a small business can feel like taking a tour through the world’s scariest haunted house—dark and scary with the unknown lurking around every corner. In a haunted house those unknown horrors can send you screaming and running for cover ( that’s if you’re anything like me in a haunted house ). In business those unknowns can send you, well, screaming and running for cover, too! There are a lot of scary unknowns that a small business can face, but none more horrific then getting slapped with a lawsuit. It’s understandable that a lawsuit can induce fear. A lawsuit, even a meritless small one, can mean attorney’s fees, disruption to your business, a possible money judgment against your business, and a tarnished reputation. But handled correctly, a lawsuit doesn’t have to send you screaming and running for cover.

Act Quickly
Ignoring the lawsuit and not responding is the absolute worst thing you can do. The person bringing the suit, the plaintiff, can ultimately obtain a default judgment against you —i.e. the matter will be decided even in your absence.

Not acting quickly is almost as bad as not responding at all. Generally you will have 30 days to response to the complaint. You’ll need the full 30 days to investigate the facts of the case, determine your strategy, and if necessary locate counsel to represent you.

Seek Help
In many instances, a small business owner may go the do-it-yourself route for their legal needs. This isn’t one of those times to do it yourself, and in fact you probably cannot. Most state laws generally prohibit any business entity other than a sole proprietorship from appearing in court except through an attorney authorized to practice law in that state. If your business is set up as a corporate entity, such as an LLC (as opposed to a sole proprietorship), you will need to retain an attorney to represent the entity.

When it comes to legal counsel, getting hit with a lawsuit is not the optimal time to interview counsel for your small biz ( click to tweet ). Think about forming a relationship prior to catastrophic events. Check out a prior blog post I wrote about selecting an attorney here .

Also, don’t just hire an attorney to handle the lawsuit and wash your hands of the matter. Stay on top of your attorney and make sure you understand the process, the status of the case, and the attorney’s strategy.

In a few jurisdictions, business owners are permitted to represent their entities in small claims court. If your business is sued in small clams court, where generally a maximum of $5,000.00 is on line, you may want to handle it yourself if permitted and avoid paying attorney fees if the matter is simple. In that instance you may still want to pay an attorney just to consult on the matter and provide you guidance.

Do Better
Being able to learn from mistakes and quickly adapt is integral to the longevity of any small biz. Think about the gaps you may have that actually led to the lawsuit and fix them. For instance, if it’s dispute with a customer over the quality of your work, make sure your agreements and relevant documentation are clear regarding what clients can expect in terms of the finished product.

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Your New Year Checklist: How to Ensure the Legal Affairs of Your Business are in Order

Sun, 17 May 2015 21:49:00 GMT

The start of a new year presents an incredible opportunity for us to get things right – or at least attempt to. There is no better time than the start of 2015 to ensure that the legal affairs for your small business are in order. Why? First, to ensure your business is protected. As you are busy running the day-to-day operations of your small enterprise, many things fall by the wayside and you may have glaring areas of liability that you’ve just failed to stop and think about. Second, once the year gets started (and budgets start to dwindle) you may not have the time or resources necessary for a comprehensive review of your businesses legal affairs. Finally, I’m certain one of the goals for your business is to grow and be bigger, badder, and better than you were last year – you don’t want preventable legal issues standing in the way of your awesome goals. Like the old saying goes, an ounce of prevention is worth a pound of cure! So what exactly should you be looking into? Every business needs a unique plan but here are the top 5 areas that you should ensure are in order for your business for the New Year.

1. Succession Plan

No one likes to think about breaking up a partnership, becoming incapacitated or especially death, but to some extent you need to begin with the end in mind. Your plan should include a successor who you think has the strengths and abilities to keep your business running. If you have partner, think about whether they will run the business on his or her own or if you can appoint someone who works as well as you do with he or she. If you are anything other than a sole proprietor, your plan should also include a buy-sell agreement that will govern every aspect of how to handle the sale of the departing members stake in the business. Every member or partner in the business should have life insurance that would be used to fund the buy-sell agreement. Finally, make a list of key documents, accounts and passwords, and make sure they are safe and quickly accessible to the successor.

2. Insurance Policies

In addition to evaluating life insurance as mentioned above, this is a great time to make sure you currently have the right coverage for your business. Maybe you’ve grown and you need more coverage than you previously had. Or perhaps another carrier can provide better terms of your business – explore what’s in the marketplace.

3. Employment Issues

Make sure that your employee handbook is up to date with latest law and reflects the current composition of employees. Oh wait – you don’t have an employee handbook – draft one! Make sure you have policies that cover discrimination and harassment as well as a system for employees to make formal complaints. While you’re at it, schedule discrimination and harassment training for your employees. Also, ensure that your standard employment application is compliant with applicable laws. For instance, several states have recently enacted “ban the box” legislation that prevents employers from asking about criminal records on job applications.

4. Compliance

Speaking of compliance, are there any updates to laws relevant to your industry? For instance, District of Columbia just laid out a new set of regulations for food trucks. http://dcra.dc.gov/service/mobile-food-truck-licensing-information

5. Your Website

So you’ve updated your site for the New Year but what about your sites terms and conditions, disclaimers and privacy policies? Exactly what you’ll need will be dictated by what you’re doing online. For instance, if you’re selling a product via the internet, make sure the terms and conditions cover how payment is collected and how refunds are handled. If you give advice over your website, your disclaimer should put limitations on the promises, advice, and guarantees made on your site. Don’t forget to inform users that the site is your intellectual property.

This is just a short list of areas where you should perform a “checkup” for your business. At SJS Law Firm I provide legal “checkups” to small business owners to ensure that your business is legally protected in each of the areas described above and more.

Contact me today at sjsmith@thesjslawfirm.com or 202-505-5309 to schedule a complimentary consultation.

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Two Simple Legal Tasks to Take on This Summer

Sun, 17 May 2015 21:49:00 GMT

Starting a business can be a very daunting task, so daunting that many folks sit on the sidelines and let their brilliant, million dollar ideas go with them to the grave. But everything is easier when you break it down into easy to follow steps. Here are two simple legal steps you can take, even during the fun-filled, uber busy summer months, to get your business or brilliant idea off the ground.

Hey, Can You Use That Name?
You’ve come up with an awesome name that completely captures your brand and business, but is another business already using that name? Will you be infringing on a trademark if you use it? Start with a Google search for this task. Next, go broader and use a database that will allow you to perform a comprehensive search into state and local files to find out if an existing entity has already snagged your name. You can search each individual state’s registry free of charge and there are a few databases where you can perform a comprehensive search across all states. Finally, see if it’s been trademarked. You can conduct a free trademark search via the United States Patent & Trademark Office’s website .

Study Up
There’s a whole lot of law that goes into setting up your entity and ensuring that it runs smoothly. While you shouldn’t rush to enroll in law school, you should have some basic understanding about the laws applicable to your business, as it will help you understand, manage, and forecast your legal needs and facilitate more meaningful conversation with your legal counsel. The two books I recommended are The Entrepreneur’s Guide to Business Law and American Bar Association Legal Guide for Small Business, Second Edition: Everything You Need to Know About Small Business, from Start-Up to Employment Laws to Financing and Selling . Think of these as your new beach reads, or just toss them in your tote on the go. If you want more, Coursea also offers an excellent free online course, Law and the Entrepreneur, I’ve taken it and I highly recommend it. And in September, SJS Law Firm will be publishing an easy to read legal guide for entrepreneurs!

So, as you rush from weddings to family cookouts, take some time to get started on your business—especially since you can do these steps poolside with a tablet or a few books!

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Women in Business

Sun, 17 May 2015 21:49:00 GMT

March is a good month for women. According to the National Women’s Business Council, there are over 7 million women-owned businesses in the US. Washington, D.C. and Maryland are the states with the largest percentage of women-owned businesses, and Detroit is the city with the largest percentage of women-owned businesses (shout out to my hometown!). Women-owned businesses have $1.2 trillion in total receipts. African American women-owned firms generate $36.8 billion of that figure.

Now, as we end Women’s History Month, let’s highlight the Women Owned Small Business (WOSB) program that provides opportunities for women-owned small businesses to do business with the federal government. In 2012, WOSB accounted for four percent of all small business federal contracts, amounting to $16.2 billion total—now wouldn’t you want a piece of that pie?

Do not assume that your business, product or service is not a right fit to do business with the government. Federal and state governments purchase a wide-range of services and products each year, and provide an excellent platform for women-owned businesses—perhaps even yours.

Who Qualifies : The WOSB must be small… as defined by the SBA. (Definition found here ) The entity must be 51% owned and controlled by one or more women who are U.S. citizens. That means in an LLC, a woman must have 51% ownership of each class of membership. Control refers to not only the daily operations of the entity, but the long-term planning as well.

Certification : In order to bid on contracts, the entity must be certified as a WOSB either by self- certifying or through third party certification by state government, local government, or an SBA approved certifying entity.

Industries : A range of industries is eligible for WOSB contracts. There are several industries identified by the SBA where women-owned business are underrepresented or substantially underrepresented, such as residential construction, transportation, and design. A full list of NAIC codes can be found here .

Resources : There are a ton of resources to educate women business owners on the process of bidding on federal government contracts and entities that will help woman-owned businesses through the process.

Women’s Business Enterprise National Council
National Association of Women Business Owners Corp.
Small Business Association’s Office of Government Contracting
National Women Business Owners Corporation Database
WomenBiz.gov

If you are a small business with government contracts or seeking them and you need legal assistance we would love to an opportunity to meet with you. Contact us at 202-505-5309 or info@thesjslawfirm.com .

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Advertising & Environmental Sustainability

Sun, 17 May 2015 21:48:00 GMT

For many, Earth Day is every day as they strive to live daily life being consciousness of the environment. That’s especially true for the many small businesses that make it their mission to create natural, environmentally sustainable products, such as cleaning, food, hair, and beauty products. It’s important, however, not to use false and misleading advertising when marketing your environmentally friendly products. You do not want to overstate features of your product, such as organic, made from 100% recycled material, or 100% biodegradable if it is not in-fact those things. There are federal and state laws that regulate false and misleading advertising, and violations could result in hefty fines. For instance, violation of the D.C. Deceptive Trade Practices Act can cost you up to $1000.00 per violation.

There are ways to tout your products attributes without misleading consumers. One way to make those environmentally products stand out, and certify your products environmentally friendly attributes is with “eco labeling.” An eco label is a symbol that manufacturers can put on products they sell to demonstrate that they are better for the environment than similar products without the label. The number of eco-label programs has grown from a mere dozen worldwide in the 1990s to more than 400 today.

The federal government has eco-labeling and certification programs that small businesses can utilize, such as USDA Organic certification which verifies that your farm or handling facility complies with the USDA organic regulations and allows you to sell, label, and represent your products as organic or Design for the Environment, a label which means that Environmental Protection Agency scientists have evaluated every ingredient in the product to ensure it meets stringent criteria. There are also a variety of non-governmental programs you can use to certify your products such as FairTrade Certified for agriculture or food products or GreenSeal, a label used for a variety of products. Eco-labeling sends a clear signal to your customers about your product and the benefits they provide for the environment. For more information, check out the SBA’s Green Business Guide: https://www.sba.gov/green-business-guide.

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Government Contracts for Women-Owned Businesses

Sun, 30 Mar 2014 19:15:00 GMT

As we end Women’s History Month, I’d like to take a moment to highlight the Women Owned Small Business (WOSB) program that provides an opportunity for women-owned small businesses to do business with the federal government. The federal government purchases a myriad of services and products each year and the program provides an excellent platform for women-owned businesses.

Who Qualifies : The WOSB must be small as defined by the SBA. That definition can be found here . The entity must be 51% owned and controlled by one or more women who are U.S. citizens. That means in an LLC, a woman must have 51% ownership of each class of membership. Control refers to not only the daily operations of the entity but the long-term planning as well.

Industries: A range of industries are eligible for WOSB contracts. There are several industries identified by the SBA where women-owned business are underrepresented or substantially underrepresented, such as residential construction, transportation, and design. A full list of NAIC codes can be found here .

Resources: There are a ton of resources to educate women business owners on the process of bidding on federal government contracts and entities that will help a woman-owned business through the process.

Women’s Business Enterprise National Council

National Association of Women Business Owners Corp.

Small Business Association’s Office of Government Contracting

National Women Business Owners Corporation Database

WomenBiz.gov

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Breaking Up is Hard to Do – But Not If You Do These Two Things

Fri, 14 Feb 2014 16:42:00 GMT

Be honest, brutally honest. This is what’s going to maintain relationships – Lauryn Hill

It’s Valentine’s Day and love is in the air! This time of the year it’s easy to jump into a new romance so you have that special someone to celebrate V-Day with. Only to soon find out that he or she wasn’t so special after all. While it may be somewhat easy to break off a new romance, breaking up your business partnership probably won’t be as simple. Take these two steps to ensure that you don’t have a breakup or that any breakup is as smooth as possible.

Have A Partnership Agreement!

It is completely surprising to me how many business partners, family members, and friends jump into business together without a clear partnership agreement. Only to later discover they may be been great friends but terrible business partners. A good agreement must, at a minimum, address: Each partners role (things may change over time, but start with a clear understand of who is responsible for what); How decisions will be made (does every single decision, including the type of toner, require a vote by the partnership, maybe – but make that clear); How disagreements will be handled (oh – and you will have disagreements, but they shouldn’t be the death of your awesome business); How profits are divided (evenly may seem like a no brainer to you, but not to the partner who logs a few more hours a week than you in the business); Percentage of ownership for each partner (again, don’t make assumptions, Mike may have put up more money, but Sharon may do more work and expect an equal share); and How to proceed in case one partner dies unexpectedly or just wants to jump ship and back pack across Europe for a year (how will you afford to buy them or their estate out?).

Communication Is King!

The key to any good relationship – business or otherwise – is communication. Even beyond your partnership agreement, have an honest ongoing conversation about your goals, working styles, and expectations and if necessary why things just aren’t working. Try to meet regularly just to go over how the working relationship is between the partners. These conversations may be hard at times, but will make the partnership stronger and any necessary breakup smoother.

I really hope your partnership lasts forever and your business is wildly successful, but beginning being aware of possible roadblocks will make any breakup easier or ensure you and your partner never ever have to call it quits.

If you are starting a business, or currently have one, and need a partnership agreement the SJS Law Firm would love to help! Also, if you and your partners need a third-party to discuss strategy with or to assist in resolving a business dispute please contact us. sjsmith@thesjslawfirm.com; 202-505-5309.

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How To Ensure The Legal Affairs of Your Business Are In Order

Wed, 22 Jan 2014 16:48:00 GMT

“ Cheers to a new year and another chance for us to get it right ” – Oprah Winfrey

The start of a new year presents an incredible opportunity for us to get things right – or at least attempt to. There is no better time than the start of 2014 to ensure that legal affairs for your small business are in order. Why? First, to ensure your business is protected. As you are busy running the day-to-day operations of your small enterprise, many things fall by the wayside and you may have glaring areas of liability that you’ve just failed to stop and think about. Second, once the year gets started (and budgets start to dwindle) you may not have the time or resources necessary for a comprehensive review of your businesses legal affairs. Finally, I’m certain one of the goals for your business is to grow and be bigger, badder, and better than you were last year – you don’t want preventable legal issues standing in the way of your awesome goals. Like the old saying goes, an ounce of prevention is worth a pound of cure! So what exactly should you be looking into? Every business needs a unique plan but here are the top 5 areas that you should ensure are in order for your business for the New Year.

1. Succession Plan

No one likes to think about breaking up a partnership, becoming incapacitated or especially death but to some extent you need to begin with the end in mind. Your plan should include a successor who you think has the strengths and abilities to keep your business running. If you have partner think about whether they will run the business on his or her own or if you can appoint someone who works as well with he or she as you do. If you are anything other than a sole proprietor, your plan should also include a buy-sell agreement that will govern every aspect of how to handle the sale of the departing members stake in the business. Every member or partner in the business should have life insurance that would be used to fund the buy-sell agreement. Finally, make a list of key documents, accounts and passwords, and make sure they are safe and quickly accessible to the successor.

2. Insurance Policies

3. Employment Issues

Make sure that your employee handbook is up to date with latest law and reflect the current composition of employees. Oh wait – you don’t have an employee handbook – draft one! Make sure you have policies that cover discrimination and harassment as well as a system for employees to make formal complaints. While you’re at it, schedule discrimination and harassment training for your employees. Also, ensure that your standard employment application is compliant with applicable laws.

4. Compliance

5. Your Website

So you’ve updated your site for the New Year but what about your sites terms & conditions, disclaimers and privacy policies? Exactly what you’ll need will be dictated by what you’re doing online. For instance, if you’re selling a product via the internet make sure the terms and conditions cover how payment is collected and how refunds are handled. If you give advice over your website, your disclaimer should put limitations the promises, advice, and guarantees made on your site. Don’t forget to inform users that the site is your intellectual property.

This is just a short list of areas where you should perform a “checkup” for your business. Contact an attorney for further guidance for you particular business.

At SJS Law Firm I provide legal “checkups” to small business owners to ensure that your business is legally protected in each of the areas described above. Contact me at sjsmith@thesjslawfirm or 202-505-5309 for addition information.

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How To Find The Best Attorney to Represent Your Small Business

Thu, 31 Oct 2013 01:33:00 GMT

So, you’re thinking of starting a business and on your massive to do list is finding an attorney to advise you on the legal aspects of your newly planned venture. Or perhaps you’re like many small business owners and you’ve attempted to handle many of the legal aspects of the business on your own, but you’re now at the point where your lack of formal legal education is well – showing to say the least. Now comes the task of locating counsel, someone who will protect your business and truly add value. One could easily go the phone book (providing you could actually locate one) and select the lawyer who sprung for the biggest ad but I highly recommend against this. Here are the steps you should take to find your perfect partnership.

Are they Located Where You Operate : Though it’s not a complete necessity that your attorney is located where your business is located there could be many benefits. For one, you may be the type that’s more comfortable with face-to-face meetings, or you want an attorney who can actually spend time in your business and truly understand how you operate. Also, you and your attorney can tap into each other’s networks more easily by attending events together if you are located in the same place.

Who Do They Normally Represent : Your next-door neighbor’s cousin may be the most awesome criminal defense attorney ever, that doesn’t mean she can counsel you on trademark issues. It will probably be best for you to select someone whose focus is counseling small business owners and start-ups. They will generally be well versed in issues related to small business that you may not be thinking about. Also if, for example, you have a very specific issue related to industry regulations you may be best served seeking counsel from an attorney who has specialization in that regulation. That attorney will be abreast of the latest with respect to that regulation and to extent it may involve a government agency or another entity, he or she may have developed useful relationships.

What Do Others Have To Say About Them : Much like finding a hairdresser or a good restaurant, you have to ask around. Talk to your banker, accountant, other small business owners, and friends. If they tell you they like someone, get specifics, why did they like working with that particular attorney. In addition to asking for recommendations ask whom to steer clear of.

Spend Some Time With The Attorney : Some attorneys offer free consultations while others do not. Even if the attorney does not offer free consultants, you should not be reluctant to pay the fee. Often, if you retain the attorney the consultation fee is credited towards work the attorney will perform on your behalf. Use the initial meeting as an opportunity to discuss your business and ask about their background. You’ll want to spend the time to get to know the attorney in a way that you can’t in a 10 min conversation. What else should talk about during your initial consultation? Well, don’t be shy about asking for referrals and barring any privilege concerns ask to see their product, like a document they may have filed in court. Read articles or blog posts from the attorney’s website. Try to get a sense of how busy the attorney is and if they really have time to devote to counseling your business. Who else at the firm will be working on your matter? Will the partner reel you in and then give your matter to a junior associate or law clerk? Also – what’s his or her communication style- is it all legalese or do they take the time to make sure you fully understand and are comfortable. Make sure all of your concerns are addressed.

What Technology Is The Attorney Using : What type of technology are they using to bring you the best and most efficient legal services possible. There are a ton of resources out there that make attorneys more efficient and in return could mean a lower bill for you.

How Will You Be Billed ? Ask about the attorney’s billing practices. Many attorneys generally bill by the hour and rates vary greatly. However, law firms of all sizes are increasingly using alternative billing practices. Find out what the attorney is open to and talk about whether they are willing to tailor his or her billing methods to meet your preferences.

Chemistry : Much like dating, someone can look good on paper but the fit is just wrong. You’ll be working closely with your attorney and probably over a long period of time. Make sure you like them and that they are a good fit for the long-term vision for your business. Don’t’ be afraid to trust your instincts.

Good luck on your search for the perfect partnership!

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Blog – The SJS Law Firm, PLLC

Tax Season 2026: Key Tax Considerations for Operating & Partnership Agreements

Spring Cleaning Your Business: Clearing Out Risk and Creating Opportunity

What a Good Attorney-Client Relationship Looks Like and How It Benefits Your Small Business

Planning Ahead: Key Legal Updates for Businesses in 2026

Five Ways to Prepare Your Business for 2026

Reflection is a critical—and often overlooked—business tool. Taking stock of your business’s performance helps you enter 2026 with clarity instead of clutter. Conduct a “Year-in-Review” Audit and assess the following:

Negotiating with Giants: Strategies to Negotiate Contracts Against Bigger, Better-Resourced Companies

UNDERSTANDING YOUR LEVERAGE

KNOWING WHICH TERMS MATTER MOST

USING PLAIN LANGUAGE AND ASKING QUESTIONS

SEEKING PROFESSIONAL HELP STRATEGICALLY

CONCLUSION

Termination Clauses That Save You From Legal Trouble

TERMINATION CLAUSE CHECKLIST FOR SMALL BUSINESS OWNERS

Government Contracting 101: What Small Businesses Should Know Before They Bid

Register With the Proper Authorities & Get Your Identifiers in Place

Know What Types of Contracts You’ll Encounter

Comply with Federal Acquisition Rules & Relevant Regulations

Build a Strong Bid or Proposal

Data Privacy & Security: Legal Checklist for Small Businesses

Determine Which Laws Apply to Your Business

Audit What Personal Data You Collect, Store, and Share

Vendor & Third-Party Risk Management

Prepare for Consumer Rights & Data Subject Requests

Maintain Ongoing Compliance & Review

Are Arbitration Clauses Effective for Small Businesses?

Black Business Month: A Data-Driven Snapshot

MAKE YOUR CONTRACTS WORK FOR YOU, NOT AGAINST YOU

How Intellectual Property Protection Can Propel Your Small Business Growth

UNDERSTANDING YOUR INTELLECTUAL PROPERTY PORTFOLIO

WHY IP PROTECTION MATTERS FOR SMALL BUSINESSES

COMMON IP PITFALLS FOR SMALL BUSINESSES

CREATING AN IP STRATEGY FOR LONG-TERM SUCCESS

CONCLUSION

Maryland’s Paid Family and Medical Leave Program

Who are the Mandated Employers; Are There Exceptions?

Who are the Eligible Employees?

How Much Must Employees and Employers Contribute to the State Program?

What is the Effective Date of the PFML?

Notification of Employees

What are the Penalties for Non-compliance?

Business To-Dos

BUSINESS INCOME AND THIRD PARTY PAYMENT PLATFORMS: NEW IRS THRESHOLD FOR FORM 1099-K REPORTING

IMPLEMENTING AN EFFECTIVE TELEWORK POLICY FOR YOUR BUSINESS

Include the Following Provisions in Your Telework Policy:

Conclusion

What A Trump Or Harris Presidency Means For Your Small Business?

A Trump Presidency for Small Businesses

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A Harris Presidency for Small Businesses

Conclusion

What A Recent Supreme Court Decision Ending Chevron Deference Means for Your Small Business?

How does the End of Chevron Affect Small Businesses?

Conclusion

DON’T IGNORE THE INDEMNIFICATION PROVISIONS IN YOUR CONTRACTS!

What is an Indemnification Provision?

Why do Indemnification Provisions Matter?

What does a Typical Indemnification Provision Include?

Conclusion

Celebrating National Small Business Month

Earth Day 2024 – Adding Everyday Sustainability Practices to Your Business

Reducing Energy Usage

Reusing and Recycling

Certify your Small Business

Empowering Women Entrepreneurs: Navigating Government Contracts

Ready Your Small Business for the New Year Ahead

(Business) Relationship Bootcamp

First Date – Business Formation

Honeymoon Stage – Engaging with Your Business Ecosystem

Keeping Things Interesting – Gaining and Retaining Clients

E-Commerce Check-In

Terms and Conditions

Privacy Policy

Exploring SBA Loans

The End of SBA 8(a)?

So, what does this mean for my small business?

You Need To Take A Vacation. Here’s How Business Owners Can Schedule Time to Rest!

New Law Seeks To Improve Work Life for Pregnant and Nursing Employees

CFPB Issues Final Ruling Aimed At Increasing Transparency and Access to Loans for Small Businesses