Employers: Taking the Next Big Step

Businesses often begin with one owner wearing many hats, but at some point, with success, comes the need to hire employees. If you are nearing that point, below is a list of things for you to be thinking about.  It is not meant to be overwhelming, and is honestly not as difficult as it seems. But like most things, preparation is key.

1. Set Up Income Tax Withholding.

Start by applying for an Employer Identification Number (EIN). An EIN is a number required by the IRS to report withholding taxes and other information. You can apply for an EIN here. After you have an EIN you can set up your Income Tax Withholding accounts. To learn more speak with an accountant or a tax attorney. 

2. Establish Recruiting and Hiring Practices that Minimize the Risk of a Lawsuit.

Fortunately, the laws of our country and the state of Michigan prohibit discriminating against certain classes of people in employment. Unfortunately, as a business owner the hiring decisions you make could put your business at risk whether you mean to or not.

You may have noticed a theme among my blog articles is planning ahead to reduce risk and liability. If you are being sued for discrimination in your hiring practices, it is to late.  Working with an attorney today is a low cost an efficient way of saving a major headache down the road.

Perhaps you are looking to pay someone minimum wage to do office work for you in the afternoons, the perfect part time job for a student, right? You advertise that you are looking for "A responsible high school student, proficient with Microsoft Office and quickbooks, and able to work part time after school three days a week." The problem with this ad is that you have potentially just exposed yourself to an age discrimination lawsuit.  Under both Federal Law and Michigan's Elliot Larson Civil Rights Act, it is illegal to discriminate based on age.  Even though your intentions were good using the language "high school student" is effectively discriminating based on age.

Similarly, there are questions that should ALWAYS be left off a job application.  Questions asking for a photograph or asking about religion, marital status, or numerous other topics can only serve to open the door for a lawsuit.  Do yourself a favor and do your research regarding discrimination, or save yourself the time and talk to an expert.

3.     Prepare an Employment Handbook.

It does not matter if you have one employee or two hundred, creating a rock solid employment handbook is the most important thing you can do to protect your business from employment related issues.

The employment handbook can be used to clarify every piece of the employment relationship.

One of the most important sections of an employment handbook deals with is the nature of employment.  Is the position at will, meaning you may fire your employee at any time and for any reason, or do you have to have good cause to fire them?  Most employers want employees to be at will, but this should always be confirmed in the employment handbook, and language such as "one year contract" should be avoided.

Another topic that may be be of interest to you as an employer is how you should handle employees that have a Medical Marijuana Registry Cards.  Your employment handbook should expressly lay out a drug policy, that includes information about medical marijuana.  

There are too many sections that should appear in an employee handbook for me to touch on in one blog article.  But topics that should be in your employment handbook include:

a. Salary and Benefits

b. Non-Disclosure Agreements

c. Non-Compete Agreements

d. Non Discrimination and Workplace Harassment Policies

e. Consensual Relationship Policy

f. Internet Usage Policy

g. Social Media Policy 

h. Attendance Policy

i. leaves of absence

and many more...

Once again, do your research ahead of time or contact an attorney to help prepare your employment handbook.

4. Workplace Posters

As an employer both the Federal government and the State of Michigan require you to post specific employment posters around the work place. You may be required to post:

  1. Federal Minimum Wage Poster
  2. Equal Opportunity Employment Poster
  3. Employee Polygraph Protection Notice
  4. Michigan UIA Poster 
  5. Michigan Discrimination Prohibited Poster
  6. Michigan MIOSHA posters


As always, this is general information. I am a lawyer, but I am not your lawyer, at least not yet.  THis list is not exhaustive, but I would love to have an individualized conversation about what your business needs and how I can help.  A blog post should not be construed as specific legal advice and this blog does not in any way create an attorney-client relationship. 



Nonprofits Need Help Too


I became an attorney with the goal of helping others. Nowhere is that more rewarding than when working with someone passionate about a nonprofit organization.

Organizations designed for purposes other than profit face many of the same risks as their for-profit counterparts.  Just like a business may be liable for the acts of their employees, you may be legally responsible for the actions of your organization's volunteers. You can still incur personal liability that may be minimized by creating a separate legal entity. While these risks exist, they should not stop you from helping in the ways you would like to.  Proper planning and entity formation can ensure that you are protected. To learn more, check out this article about liability and volunteers, and my recent blog post about why your business should become an LLC to minimize risk.

Beyond limiting liability, the IRS gives nonprofit organizations an additional incentive to do things the right way.  26 U.S. Code § 501 provides federal tax-exempt status for certain nonprofit and charitable organizations. Filing for 501(c) status allows an organizer to be legitimized in the eyes of the law without incurring federal income taxes. Not only does 501(c) status reduce an organizations taxes, but it may allow donors to reduce their own taxable income by deducting donations that they make.

If you or someone you know are involved with a nonprofit organization, protect it, and protect yourself, by contacting Ventures Law Firm today.

Model Releases and Your Photography Business

As a photographer, one of the best ways to bring attention to your blossoming business is to share your fantastic work with others. Today, social media makes this easier than ever before. As a photographer you own the copyright to the photos that you take. But, did you know sharing your photographs might be putting you at risk? Privacy laws prohibit you from using photographs of your clients in a commercial manner without their permission. Doing so could expose you to a lawsuit. 

Fortunately, there is a simple fix. A model release is a contract that allows you to use the images of those you photograph.  You may also receive the right to license the photographs, that is, charge others to use the images.

There are additional considerations when children become involved.  A release involving a minor may not be enforceable, regardless of whether it is signed by the minor or the parents.

To have a model release prepared specifically to meet your needs, or to speak with an attorney about your photography business, contact Ventures Law Firm today.

As always, this is general information. I am a lawyer, but I am not your lawyer, at least not yet. A blog post should not be construed as specific legal advice and this blog does not in any way create an attorney-client relationship. 

Why your new business needs to be an LLC

It is all about the risk...

When I was 18, I started a tent rental business with my best friend Jay. The idea came to us after renting tents, tables, and chairs for our own graduation parties. We saw how expensive it was to rent tents and decided we wanted a piece of that action. Two months later we owned 12 plastic eight foot tables from Costco, 112 folding chairs, and two large all white party tents (because the striped tents belong in a circus, not an elegant affair like a high school graduation party.)

There were two of us. We did not form an LLC (Limited Liability Company) or any formal business entity because we didn’t want to spend the money on something we didn’t “need.” There was no formal partnership agreement, as we were two best friends who agreed to “split the work and split the profit.” We went to the Monroe County Clerk, registered the name ‘JZ’s Tent Rental’, opened up a bank account in that name, and it worked. We split all income, and a few years later when our lives were moving on we sold the tents, tables, and chairs to a friend with a similar business.

We made major mistakes, and we got lucky

The first mistake we made was not forming an LLC.  We took on this personal risk which could have cost us both our business and our friendship.

If you, as an individual, begin operating as a business without creating a formal entity, the State of Michigan labels you a sole proprietor. If you have partners, you are labeled a partnership. The problem with these business types is that there is no separation from you, the individual, and the business that you run. You are seen as one entity and are personally liable for all debts the business has. If you are facing a lawsuit, and are not an LLC, then your home, your car, and everything else you own is suddenly at risk. You could lose it all.

The risk here can come even in the most innocent of situations. Perhaps someone was injured because they decided to party a little too hard and dance on a JZs Tent Rental table while at a wedding reception.  Or, perhaps we had hired a friend to pick up our tent the day after a graduation party, and our friend was in a car accident on the way home. In both situations we could have been personally liable for any injuries or damages caused, even if we weren't directly involved.

Operating as an LLC takes away that liability. The LLC becomes its own entity, its own person, separate from you. You are no longer personally liable if your business is sued. This becomes even more important for a small sized business where the extra income the business brings in may not even be worth the risk of operating as an sole proprietor. 

The second mistake we made was not creating an operating agreement. As best friends we did not anticipate any problems, as many also do, and things worked out. 

Unfortunately, as an attorney, I see far too often the damage that disagreements among business partners can cause. Even among friends or family.  When people do not see eye to eye, and there is no system in place to make a decision, a business can become crippled and unable to act.  Or, maybe even worse, it can ruin a friendship or strain a relationship with family members.

Creating an operating agreement does not entirely solve this problem, but it does lay a foundation for success.  An operating agreement assigns out the roles and duties of the members (owners of an LLC). Having this legal document in place outlines how the business will be run, financial management and profit disbursement, and standard operating procedure to handle disagreements when they inevitably arise. A simple agreement can end many problems before they begin.

So the title of this article is "Why your Business needs to be an LLC." I used the example of my first business, to demonstrate how lucky I was.  I simply did not know the risk I was taking. I stayed in business three years, with mild success, and could have lost everything. The risk I took was enormous.  Becoming an LLC can cost as little as $250. Think about that. Two-hundred fifty dollars could save your house, your car, and any other valuable property from being seized in a lawsuit. 

There are obviously other ways to protect yourself.  Forming a corporation is one such possibility. However, an LLC allows for less formality and start up cost, which may ultimately be a better fit for new business owners. To learn more about LLCs and other business entities contact me today. I love to talk to new entrepreneurs about how I can help protect their investment and help them grow.

As always, this is general information. I am a lawyer, but I am not your lawyer, at least not yet. A blog post should not be construed as specific legal advice and this blog does not in any way create an attorney-client relationship.