This fall in Business Law matters, we take a deeper dive into:

1. 1. What businesses need to know about state consumer privacy legislation. A growing number of states are enacting consumer data privacy laws to give consumers more choice over how companies access and manage their personal data.
   2. Companies’ responsibly to understand the U.S. Environmental Protection Agency’s (EPA) decision to ban 9 additional PFAS in products and the reporting requirements. To avoid negligence, companies must work to eliminate legal claims due to environmental contamination or personal injury. An attorney can help you understand your rights and obligations with the government or other parties.
   3. Why and how the legalization of recreational and medical marijuana use’s limited bipartisan support creates a public safety issue. Consumers need to be educated and aware of how the SAFE Banking Act is doing its part.
   4. A costly blunder on the part of the Consumer Financial Protection Bureau (CFPB). Find out how an IT test triggered $2.3 billion in unauthorized payments.
   5. The specifics regarding former Uber executive Joseph Sullivan’s data breach, liability, and sentencing.

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The internet and social media platforms are rich with independent users that have built sizeable audiences ranging from hundreds of thousands to millions of followers.  In many cases these grass-roots campaigns have resulted in viewers that rival or top conventional media outlets.  As a result, many companies have learned that they can get their product or service in front of like-minded individuals at a lower cost than television or radio commercials.  In many cases, these social media endorsements are more powerful and engaging because people have a connection with the influencer they follow.  As with any marketing endeavors, it is important to protect your company and follow the Federal Trade Commission (FTC) rules and regulations.

How Companies Should Protect Themselves

In a recent article by Legal Matters we have read more about his subject, and how some companies have been flagged for non-disclosure violations.  These brands include Lord & Taylor and Warner Bros. Home Entertainment.  Both of which had to make settlements with the FTC for violations.  Specifically, they had failed to release the relationship they had with big-follow social media creators.  In these specific cases, the followers were compensated roughly $4,000 for an endorsement of their product.  Instagram has become feverishly popular over the last couple of years and companies need to ensure they are marketing their products or services within certain guidelines to avoid violation.

What Can Be Done to Avoid Penalties?

The most important take-away is to understand that according to FTC guidelines, consumers have a right to know whether a certain brand is being endorsed by the influencer’s own violation, or if they have a partnership with a company in exchange for free products or future payments.  In this case, the influencer and the companies failed to disclose their relationship, which violates FTC’s disclosure recommendations.  Remember that if your company is investing in advertising it is well worth your time to speak with an attorney to help ensure you are following FTC and online regulations.  The money you pay an online influencer can pale in comparison to the amount certain violations may bring.  In some cases, these disclosures can be adhered to with an online statement, or #hashtag such as #ad #paidadvertisement or #sponsoredpost at the beginning of the post.  Please feel free to contact our office to learn more about how law firms such as BLPG can help protect companies in their online and social media marketing strategies.

Business-related contract are becoming more and more complex.  For example, everyday consumers are used to seeing a gargantuan contract to update their mobile phone software or setup internet and cable at their homes.  It is not uncommon for contracts in various industries, such as construction, to have contracts reaching 500 pages or more.  Essentially both sides are trying to protect themselves by using legal maneuvers in an attempt to control risk.  Many business owners, inventors, and entrepreneurs understand that the best way to draft and review these contracts is to work with a trusted business contract attorney in Utah or the state in which their business is headquartered.

What can be done when a dispute arises?

Complex contracts are here to stay and have become commonplace to conduct business.  Along with an increase in length, comes more opportunities to address potential disputes.  A common resolution comes in the form of establishing an ADR or alternative dispute resolution.  This is a contractual and mutually agreed upon the method in which disputes can be resolved without relying on a classic courtroom setting.  As with any solution, there are potential pros and cons depending on a variety of factors.  Below is a quick list of why setting up an ADR can be beneficial, as well as some potential drawbacks.

Benefits of arbitration

Agreements can be made on equal ground:  A traditional legal trail comes with potential unknown and unpredictable outcomes.  At the end of the day, neither side knows with absolute certainty how a judge or a jury will eventually decide.  In the contract, both parties can choose and agree who will be an arbitrator, especially one that has experience in their specific industry or area of legal dispute.

A quicker turnaround time:  Arbitration is typically less formal and more flexible in terms of scheduling.  The discovery process is trimmed down and avoids large portions of gathering and submitting documentation.  Most cases also do not necessitate or include expert witnesses or require as much legal preparation.

Potential drawbacks of arbitration

There are no appeals:  The arbitration decision is final.  This is something that is agreed upon and established during the construction of the contract.  Even if one side feels they received an unfair outcome there is no formal appeals process available.

The limitations on evidence can be worrisome:  Judges in a traditional court setting have specific regulations to follow in regards to accepting or denying the evidence.  Arbitrators do not have as many rules guiding their decisions and can utilize almost any information that is brought to them.  There is also a lack of cross-examination because arbitration generally relies on documents as opposed to witnesses taking away the ability to ask questions or clarify misunderstandings.

Have the right legal team on your side

The largest take-away from this article should be that business contractual legal matters are best left to the professionals.  There are potentially miles of red tape, legal hurdles, and future implications of agreements to take into considerations.  Although this article discusses arbitration, there are other means of resolving disputes that may be more ideal for your business or situation.  If you need contracts updated, drafter or reviewed consider working with Bowen Law Professional Group.  Our team proudly serves businesses of almost any size in Utah, California, New York, Florida, and Tennessee.  Contact us today to speak with a legal professional at (801) 364-0123

Setting up a limited liability company (LLC) is a popular choice when establishing a business structure for startup and growing businesses.  There are several options that can be selected based on the type of entity that you will be forming.  As with most business decisions, there are perspective advantages and potential disadvantages.  This article is aimed towards addressing key items to consider when deciding if an LLC formation is the right choice for you, your business and your investments.

Items to Consider When Forming an LLC

One of the key items to address when forming an LLC is to ensure that it is formed in accordance with the rules and regulations of a particular state.  In a majority of instances, this will be the state where the business is operated and headquartered.  If your business will be operating in several states you may be required to register in all of these states.

Filing the LLC Articles of Organization

An LLC cannot be officially formed until an “Articles of Organization” is prepared and filed (keep in mind this document can be referred to something else in certain states.)  This document addresses key items such as whom the registered agent for the LLC will be.  This is the person who will receive legal documents related to the business.  Examples include items such as service of process, complaints, subpoenas and so forth.  You will also need to include a statement of the purpose of the LLC.

Keep Current with Required Filings

Most states require some form of annual report filing.  If a business misses this deadline for such filings they may be faced with potential late fees and in some cases a suspension or dissolution of the LLC.  Procedures and filings will differ based on state jurisdictions.  This is why it is important to understand and comply with the standards established in the state in which your limited liability company is established.

Advantages of an LLC

Tax flexibility: This is referred to as flow-through taxation.  The IRS does not tax the LLC directly.  Rather, profits are distributed to the members who are then taxed on profits at their personal tax level.  This avoids double taxation.

Limited Liability:  As the name implies, an LLC provides its members with protection from liability.  This important shield protects members in ways that a sole proprietorship or traditional partnership does not.  Members are not personally liable for debts and often court judgments and creditors.

Most businesses these days have embraced technology either by necessity or because of convenience.  It has become commonplace for companies to use computers and the cloud to store information, stay organized and process information.  These digital assets are vital and can sometimes be worth far more to a business than any physical goods or products.  It is therefore important to account for, evaluate and protect, our digital assets both personally and especially for your business.  One way to do this is by adding these assets to your Asset Protection System™.  Which includes a business succession plan should business owners either pass away or transition the business to new managers/owners when they retire.

Understanding your digital assets

We store almost never-ending amounts of information among servers, computers, mobile devices, and cloud storage services.  Because of the vast nature of these digital assets, it can seem like an insurmountable task to categorize and protect your digital properties.  With that in mind, it is usually best to start considering these types of materials first and moving on from there.

1. Software or programs that are unique to your business. Perhaps you own and operate a company that creates and distributes digital goods such as software or apps.  These programs are unique to your business and should be protected.
2. Business photographs, marketing materials, logos and other branding are often overlooked valued business asset.
3. Intellectual property includes trademarked or copywritten materials that your business owns. This can include online content, download of prospects, materials, blogs, articles, your business website and domain registration(s).
4. Contact information for prospective and current customers, including email list, have value and should be protected because they could be sold in the future.

Protecting your digital properties

It is important to establish the ownership and value of your digital assets.  By indexing and explaining various items you are putting yourself in a position where you can help create an estate plan, business succession plan, and Asset Protection System™.  Gathering these materials is important beyond these concerns because they directly reflect the overall value or worth that a business has.  Comping this information helps you support your ability to claim expenses on these digital assets as well as sell them or have your business evaluated by potential investors.  If you own or operate a business and have not considered the value of your digital properties, we recommend speaking with us as soon as possible.