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05/07/2010
IconWhen You Realize You Really Goofed Cliff Ennico www.creators.com "I am so confused and sick in the stomach about selling on eBay and the IRS. I have so many things around my home that I have been saving and collecting for many years now. My daughter is 22 and I have saved so much of her stuff from her childhood also. Not to mention I have always over the years loved shopping at yard sales and thrift stores which in return has caused my home to be very cluttered with closets running over. I have made myself stop buying from these places because I end up buying things I do not need. I also became addicted to eBay a few years back, and for about three years got caught up in buying way too many things. Mostly dolls, teddy bears, and old toys - mementoes of my childhood. I have them all over the house. Some of them I have donated to thrift stores and some I have been selling on eBay. Much of the stuff I list on eBay does not even sell and when I pay eBay's fees I suffer a loss, but some things I have gained on. I do not count on this for my income and never considered it a business. The thought of having to go back over the past few years and amend our tax returns because I may have made a profit selling something on eBay or in my local 'pennysaver' makes me feel ill with stress. I am afraid it is going to cause me to get sick with worry and enable me from functioning properly. I take medication for problems of excessive worrying, depression and anxiety and this is the kind of situation that can trigger me to get sick again and it scares me real bad. Thanks so much for any help." A lot of longtime eBay sellers are waking up and finding out they should have been paying taxes on their selling profits. Unfortunately, I can't give this reader the "get out of jail free" card he so badly wants. Since he obviously didn't keep good records of what he sold and what he paid for it (most eBay sellers don't), this reader has no idea whether he made or lost money at the end of each year. While the amount of any profit or loss was probably small, given that these were household items and not precious antiques, still . . . the law is the law is the law. If you have a hobby and you make as much as One Dollar in profit, the IRS wants you to report the profit as "hobby income" on Form 1040 and pay the taxes on it. If you fail to do so, and the IRS picks up on it during an audit, you're toast. For peace of mind, if nothing else, this reader should go back and attempt to figure out if he made a profit in any of the years he sold on eBay. If he can document that overall he lost money each year, then he's probably okay - the IRS does not require you to report "hobby losses" on your tax return (they actually prefer that you don't). If the records show that this reader made a profit in one or more prior years, he has a difficult choice, neither of which will be stress-free. If he amends his tax returns for the prior years in which he made a profit, he will have to pay interest and penalties on the overdue taxes, and he may be "waking a sleeping Rottweiler" in the form of an IRS audit to see if he's failed to report any OTHER income. If he decides not to amend those returns, he will have many sleepless nights hoping he won't get audited until the statute of limitations on each return expires (currently three years from the filing date, unless the IRS suspects fraud, in which case there is no statute of limitations). Is there anything this reader can do? Yes. He can't change the past, but he sure can change the future. He should get into compliance this year, by keeping good records for any eBay listings and sales he makes during the current tax year which began on January 1. If he shows a profit at the end of the year, he should pay the taxes due plus a little extra, say 5%. Why the extra 5%? In a word, "penance" for his past sins, and a little insurance in the event the IRS audits his past tax returns and discovers his goof. The IRS (and any other government agency, for that matter) is always going to go easier on someone who they see is working hard to get into compliance than they will someone who sticks his head in the sand and hopes the Bogeyman will go away. As an IRS agent once told me, "even a dog knows the difference between being kicked and being stumbled over." Happy April 15, everybody, and remember: this is one of the many reasons we have liquor. Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconWhen You Can't Trademark Your Name Cliff Ennico www.creators.com "I have a business name that I am thinking of trademarking. My concern is, if I do not trademark the name and use it in business, what is stopping someone else from trademarking that name (after I begin using it) and taking it away from me? Is this possible?" In the United States, the only way to protect an unusual or distinctive business name is to register it as a trademark with the PTO - the U.S. Patent and Trademark Office ( www.uspto.gov ). Not everything can be trademarked, however, and even if the PTO grants you a registered trademark, someone else can challenge it on a number of grounds (such as fraud, or infringement of another trademark such that the public will be confused between the two). I've said it before in this column: if you have a name that a trademark lawyer says you can trademark, do everything short of violating the law to register the mark with the PTO. That is the only effective way to prevent other people from using the same or a similar name in the same or a similar business. Beg and borrow from your relatives to pay your trademark attorney's fees. Hit up your credit cards or lines of credit to do so. Getting that federal registration - which entitles you to put the "R in a circle" (reg;) next to your name - will deter a lot of bad guys out there who may be tempted to rip off your name once you start becoming successful. But what if your name cannot be trademarked, or you just can't scrape together the money to register it? The law allows you to claim your name as a "common law" trademark by putting the letters "TM" next to the same wherever it appears. So, for example, "Succeeding in Your BusinessTM". Technically, you're supposed to use the letters "SM" when claiming a common law mark for a service as opposed to a product, but the latest version of Microsoft Word doesn't have "SM" in the "Symbols" directory, only "TM", so you're stuck using that (memo to Bill Gates - while you're working the kinks out of Office 2007, could you fix this glitch, please? Thank you.) As Mark Twain once said about investing, "if you have to put all your eggs into one basket, watch that basket!" The same applies to "common law" trademarks. If you are using one, be sure to document exactly when you first used the mark in interstate commerce. Keep files with examples of stationery, correspondence, product labels, marketing brochures and other literature that clearly shows the "TM" next to your name and the date(s) you were using that name in commerce. If someone who registers your name as a trademark later on claims they were "first to the courthouse" and tries to sue YOU for infringement, the burden will be on you to prove that you were using the name before the other guy did. You will need every scrap of evidence you can muster. But I would go beyond that if I were you. Check the PTO's records on a monthly or weekly basis, and the minute you see someone has filed an application to register your name as a trademark, don't wait for the PTO to take action. Instead, file a challenge or protest of the other company's application, and let the PTO know you've been using the mark in interstate commerce before the application was filed. Your trademark attorney will know how to do this. At the same time, your trademark attorney should send a scathing letter to the company that applied to register the same name as yours, telling them to withdraw their application and demanding that they "cease and desist" using your name. The letter (called a "cease and desist letter", appropriately enough), should be sent by registered or certified mail, along with copies of documentation showing exactly how long you have been using the common law trademark in commerce. Common law trademarks can be effective, but only if you are diligent and stay on top of what your competition is doing. If a competitor registers your name with the PTO and continues using the name for five years without a challenge, the registration will become "uncontestable" and you won't be able to challenge it. While you may be allowed to continue using your name if you can prove you were using it in commerce before the other guy registered his "uncontestable" mark, if the other guy is a Fortune 500 corporation with millions of dollars and an army of lawyers to make your life miserable in court . . . Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconWorker's Comp For Beginners Cliff Ennico www.creators.com "I started out in business several years ago as a solo contractor. About three years ago, I hired my first employee, and today I have about five full-time and part-time people working for me. I have a terrific accountant, and have always paid my income and payroll taxes on time. About six months ago I had to lay off a guy because new construction was slowing down in our area. He filed for unemployment benefits, and now I'm getting nasty letters from my state Labor Department saying they need to audit my books. What's going on here, and why didn't anyone tell me about this?" Sad to say, your predicament is a fairly common one for small business owners - especially those who, like you, started out as "solos" and then started hiring employees. Life becomes much more complicated when you hire your first employee. Most people know that they have to pay employment or payroll taxes on their employees' wages, and hire a payroll service to do all of the necessary paperwork. But there's another set of laws in just about every state you have to be aware of when you hire employees. Unfortunately, accountants, lawyers and payroll services sometimes forget to tell you about them. These laws go under the general heading of "workers' compensation" or "workers' comp", and they can really trip you up if you're not careful. There are three types of workers' comp program: Workers' Compensation Insurance . Traditional "workers' comp" is a form of insurance that provides compensation for employees who are injured in the course of employment. The idea is that by providing coverage for workers from state funds, the workers will be less likely to sue their employers for damages resulting from on-the-job injuries (yeah, right). Every state law is different, but virtually all workers' comp programs require you, as an employer, to purchase insurance in minimum amounts for each one of your employees, and keep the insurance policies up to date. Most employers maintain only the minimum amount of coverage required by law, as they figure they "will be sued anyway" if an employee is injured on the job and that there is no real benefit to paying more than the minimum premium each year. In any event, workers' comp is no substitute for a general liability policy covering you against lawsuits resulting from injuries and accidents to ANYONE that happen on your premises. Just about all states have a workers' comp program of some sort. To find out your state's requirements, go to www.workerscompensation.com and click on your state when the map of the United States pops up. Unemployment Insurance . In addition to workers' comp, many states require employers to pay into an "unemployment compensation" system that provides benefits to workers who are "between jobs". Once you hire your first employee, you are required to make periodic payments into the system. If you fail to make these payments, and a laid-off worker files for benefits, your state Department of Labor will view you as a "scofflaw" and will take legal and administrative action to bring your business into compliance. To find out about your state's unemployment comp program, search on the Web for "[your state] unemployment compensation", or visit your state Department of Labor's Website. Temporary Disability Insurance (TDI) . Lastly, in Puerto Rico and five states (California, Hawaii, New Jersey, New York, and Rhode Island), employers and employees (through payroll deductions) are required to contribute to a "disability fund" to provide temporary benefits to persons who are unable to work due to employment-related injuries, or who become disabled while they are "between jobs". Some of these states allow employers to provide their own disability coverage for employees in lieu of contributing to the state program, but other don't. A useful summary of state TDI laws can be found on the Web at workforcesecurity.doleta.gov/unemploy/pdf/temporary.pdf . Generally, if you are self-employed and have no employees, you are not required to provide worker's comp coverage for yourself, or pay into state Unemployment Insurance or TDI programs. You are also not required to provide coverage for "independent contractors" who work for you. However, if the IRS or some other government agency reclassifies your "independent contract" workers as employees, you will be getting a nasty letter from your state Labor Department demanding you make contributions retroactive to the date you first began working with them. Some payroll services will help you comply with your obligations under state workers' comp, Unemployment Compensation and TDI laws. Sadly, however, most don't - they deal only with employment taxes. The only sure way to make sure you don't make any mistakes here is to retain the services of a good "labor and employment" attorney in your area BEFORE you hire your first employee or "independent contractor". Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconDoes Small Business Have A Future? Cliff Ennico www.creators.com "A local Mom and Pop supermarket recently lost their lease to a nationwide pharmacy chain. Driving around town I#146;m seeing small businesses fold up shop left and right and big national chains moving in. I#146;m also reading that big company Websites are using their search engine advertising dollars to push smaller competitors off the critical #145;first page#146; of search results. I wanted to start a business, but I admit I#146;m a little depressed. Does small business have a future in this country?" The answer depends to a large extent on how you define a "small business". If you#146;re thinking of the traditional model - a "brick and mortar" retail or service business run by a family - you probably will see less and less of that as time goes by. The causes are many: skyrocketing real estate costs and property taxes in many parts of the country that are driving storefront and office rents dramatically upward, increasing costs of living and a shortage of trained, qualified employees that are driving salaries and payroll taxes through the roof; a legal system in which "anyone can sue anybody for anything", and often does; the advent of the Internet, where with a few clicks of a computer mouse you can find out exactly where you can find the best deals and lowest prices for just about anything; and perhaps most damaging, a consuming public that wants low prices and convenience above everything else, and doesn#146;t value the better service small businesses have traditionally provided to justify their (often) higher prices. But the death knell of small business should not be sounded quite yet. In many ways, this is one of the best times in history to be running your own business. If you think my vision is too rosy, take at look at the "Future of Small Business" survey Intuit Corp. just released (they#146;re the folks who produce the "Quicken" and "QuickBooks" accounting software products). It#146;s available on the Web at www.intuit.com/futureofsmallbusiness .I won#146;t summarize the Intuit report here, because it really deserves to be read in depth. But since you asked (you did, didn#146;t you?), here is my own "crystal ball gaze" at where the small business world is going to be in 10 years#146; time, and a look at some macro-trends that probably will drive most Americans alive today into some sort of entrepreneurial career at some point during their lifetimes. The Demise of the Behemoth Corporation . Back in the 1970s, if you ran a billion dollar (in sales) corporation, you needed thousands of managers running the systems that made those businesses happen. Today, with the right information technology and strategic alliances, you can run a billion dollar corporation with fewer than 100 full-time employees. Look for tomorrow#146;s businesses to be much smaller, leaner and more entrepreneurial. The Growth of Franchises and Chain Stores . Most people, when asked, say they support small businesses. But their actions show they are not willing to pay higher prices to support them. Consumers today are time-starved, and they want convenience, low prices, and one-stop shopping over just about anything else. That favors chain stores and franchises over their standalone, Mom and Pop competition. There#146;s a franchise today for just about every retail and service business you can imagine. Why are Mom and Pop operators being "assimilated by the Borg", buying franchises and managing chain store outlets? Because franchises and chain stores can pool their resources to advertise nationally, build brand recognition, negotiate rock-bottom prices for equipment and supplies, carry huge inventories (so customers can have immediate gratification of their desires and buy more stuff), and compete head to head with the big guys. Look for "brick and mortar" retail, especially, to be dominated by national brands in 10 years#146; time. The Internet Retail Explosion . Mom and Pop retail will survive, but it will be going online and working out of the house, because there#146;s little or no overhead. There are millions of small Web retailers offering just about every product and service you can imagine. Yes, big company Websites are using their search engine dollars to muscle out the little guys (hence the current debate in Congress about ensuring a "level playing field" on the Web), but "retail aggregators" such as eBay, Yahoo! and Amazon offer marketing programs that give members of their communities the wherewithal to compete online. Have you ever searched for something online and found an eBay listing or a Yahoo! Store on the first page of your search results? Enough said. "Marketainment": The Key to Small Business Success . Three books that should be read by every wannabe entrepreneur have nothing to do with business per se: they are "Amusing Ourselves to Death" by Neil and Andrew Postman (Penguin, $14.00), "Rejuvenile" by Christopher Noxon (Crown, $23.95), and "Life: The Movie" by Neal Gabler (Vintage Books, $14.95). Their point is a simple one: consumers who have been saturated with media since early childhood expect elements of entertainment, drama and "fun" in everything they do. Forget about providing your customers with great service - they won#146;t reward you. Give them a terrific show, and they#146;ll come back again and again. nbsp;nbsp;nbsp;nbsp;nbsp;Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconYou're Never Too Small For An E-Mail Policy Cliff Ennico www.creators.com "I know you're not a big fan of e-mail, but we're a small Internet auction company and we really couldn't live without it. We have three employees who all work from laptop stations in our office. What are some of the things we need to tell our employees to make sure they don't abuse e-mail and get us into trouble? Do we need to have a formal, written e-mail policy?" Like it or not, e-mail is fast becoming the life blood of communications in America. It's convenient, it's fast, and it's a lot easier to get right down to business without a lot of socializing "small talk". It's also a lot easier to get into hot water, though, precisely because it's so fast and direct. Any business with at least two employees should have an e-mail policy. Whether or not you pay a lawyer to draft one up (the cost should be in the $500 to $1,000 range, depending on where your business is located) is up to you, but I think it's a good idea. You would give a copy of the policy to each of your employees, and get them to sign a receipt acknowledging that they have read it and understand it. Most employers would also call a meeting of the employees at which you or your lawyer would "walk them through" the policy and answer any questions they may have. Even if you don't want to create a "formal" e-mail policy, it's still a good idea to sit down with your employees at least once a year and explain what they can and can't do when using your company's laptops, personal computers and other equipment to send e-mail or text messages. Here are some of the things your policy should include, whether written or not: Employees are required to disclose all passwords and security codes to you, and are forbidden to change them without your knowledge. Employees are also prohibited from disclosing passwords to people outside the organization without your permission. Employees are required to use e-mail for business communications only - no chatting with buyers on eBay or socializing on MySpace (unless of course that's an essential part of your business). E-mail communications should be strictly prohibited if they are intended: to gain knowledge of the affairs of others, with no business purpose for obtaining the information; to send messages or prepare information that contains racial, ethnic, or sexual comments, or if they contain remarks which may be considered derogatory or libelous regarding co-workers, customers, competitors, or others; to use the systems for any purpose detrimental to your business (for example, sending confidential information to a competitor); to send messages containing information that is restricted by government security laws or regulations; to copy or send documents or software in violation of copyright laws; to forward messages without a legitimate business purpose under circumstances likely to lead to embarrassment of the sender or to violate the expressed desire of the sender to restrict additional dissemination; to review or retain messages received which appear to be misaddressed; to send chain letters, cartoons or other communications not directly related to your business; to provide access to former employees; to conduct job searches; and to access or distribute any illegal material. If you plan to monitor your employees' e-mail correspondence, be sure to tell them in advance you plan to do that. If you plan to "back up" e-mail files on a regular basis (and you absolutely should, in case you are ever sued and the plaintiff's attorneys demand copies of all electronic files relating to the dispute), tell your employees and warn them that even "deleted" e-mail messages can be retrieved using software that is easily available on the market. Finally, you should consider limiting your employees' e-mail communications to 25 words or less, with a requirement that any longer messages be reviewed by an immediate supervisor before transmission. The longer the message, the more likely the sender will say something stupid, insensitive, emotional, ill-considered or inaccurate that will land you and your company in legal hot water. I know I'm in the minority here, but I still believe that the more important a message is, the more you should consider sending it in a manner other than e-mail. As a famous diplomat once said, "one should never put something in writing if one can say it, and one should never say something if one can nod one's head." Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconOne Person's Parody Is Another Person's Lawsuit Cliff Ennico www.creators.com "I'm looking for creative ways to advertise my business on YouTube, MySpace and other 'social networking' Websites. One idea I had was to do video parodies of my competitors' advertising - my brother's a successful stand-up comedian and has come up with some hilarious ideas that I know would attract viewers on these sites. I really don't want to be sued, though. Do you have any suggestions?" There are two basic things you need to know about parodies and satires, from a legal point of view: parody is a form of protected expression under the First Amendment to the U.S. Constitution (which, among other things, guarantees "freedom of speech"); if the person or company you're making fun of doesn't like your parody, they will sue your pants off anyway, forcing you to spend tons of money in legal fees so you can assert and defend your First Amendment rights. Don't get me wrong - an advertising parody, when done the right way, can be an extremely compelling and entertaining way to get your marketing message across, especially in these days of "viral" marketing where everyone (it seems) is e-mailing video clips to everyone else saying "hey, you gotta look at this!" If done the wrong way, though, your parody may cost you your business, your house, and your sanity. There are a number of ways you can get into legal trouble with parodies and satires. Here are some of the more common ones: Copyright Infringement. If you're going to parody someone else's work, you have to be sure the parody is all your original work and content. DO NOT "cut and paste" your competitor's advertising without their consent (which, of course, they won't give). For example: you make a copy of your competitor's television ad and change the audio track so that the actors/characters in the ad are saying silly things - the competitor probably will sue you for "copyright infringement"; you shoot your own television ad from scratch, following the overall "story line" of your competitor's ad (not the actual word-for-word dialogue) but using children or dogs instead of grown-up actors for humorous effect - as you did not use any of your competitor's copyrighted content, their lawsuit for copyright infringement probably won't be successful. Defamation, a/k/a "Libel" . If your parody contains false or misleading statements about the competitor that are intended to injure their reputation (and pray tell, when does someone do a parody for reasons OTHER THAN injuring someone's reputation?), you are likely to be sued for libel. If the person you're sending up is a politician, movie star or other "public figure", you will have a strong defense on First Amendment grounds, as these people have to prove you acted with "actual malice" in creating the parody - a very difficult burden of proof. If, however, the person you're parodying is a local competitor, a court will probably view him or her as a "private figure", and they will have to prove only that you were negligent in creating a parody that harmed their business. "Misuse of Trade Dress" . Make sure your video is clearly and obviously recognized as a parody. If you do TOO good a job at copying your competitor's content, people may mistake your "parody" for the real thing (i.e. they will think that it actually is your competitor's ad) and the competitor will sue you for "misuse of trade dress" (also sometimes called "trade dress infringement"). Invasion of Privacy . If your parody calls people's attention to a fact about your competitor that he or she wouldn't want to be made public, you could be opening yourself up to an "invasion of privacy" lawsuit. For example, if your parody shows a monkey removing an extremely ugly toupee from an actor who is impersonating your competitor, and your competitor (unbeknownst to you) actually wears a hairpiece, you may be sued for advertising to the world that your competitor is bald. One more thing: in the words of Irish author Brendan Behan, "there is no such thing as bad publicity, except your own obituary". If your parody is really good, it may actually backfire on you by reinforcing your competitor's advertising in the public mind. The good news is your competitor won't sue you; the bad news is your competitor will make tons more money off of your parody than you will. For an excellent Website offering legal information and guidance to parodists, go to www.chillingeffects.org . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconThe Cost Of Keeping A Corporation On "Life Support" Cliff Ennico www.creators.com "My hairdresser is a psychologist in private practice and she is not incorporated. I keep telling her she has to be to protect herself in case she gets sued. She said someone told her it would cost her over $2,000 a year to do this. Do you know? What do you think?" Frankly, I think all hairdressers are psychologists. It's just that this one has a license . . . I'm a little surprised at the $2,000 quote for legal fees. It may well cost $1,000 to $2,000 to set up a corporation in most states, but once the corporation is set up the annual "carrying charges" aren't that much. Many states impose a "minimum tax" on corporations each year, but it's usually only in the $250 (Connecticut) to $800 (California) range. There's also a filing fee for an "annual report" you have to file with your state Secretary of State's office each year, but that's usually in the $50 to $100 range. What may be going on here is that an attorney quoted her an "annual retainer" of $2,000 to keep the corporation alive each year. Some attorneys do this, and it's not at all unethical. In fact, it may actually save your life if you're not disciplined enough to do the corporate paperwork yourself. When you form a corporation, there is certain paperwork that must be prepared on a regular basis each year. Fail to do the paperwork, and there's a risk that a judge may disregard your corporation - a procedure known as "piercing the corporate veil" - and allow a plaintiff to get at your personal assets if someone sues you. Paying an attorney an "annual retainer" guarantees that the necessary paperwork will be done correctly, and on time, so it will be there if you ever need your corporation to shield you against personal liability. The idea is that you pay an attorney $2,000 a year as a "flat fee", and he handles all of the corporate paperwork (other than tax returns, which your accountant does) you need to prepare each year. The services that are normally included in an "annual retainer" arrangement are: preparing resolutions of directors' and shareholders' meetings when your corporation needs to do something "outside of the ordinary course of business"; conducting the annual meetings of your directors and shareholders (generally required by law for corporations with more than one director or shareholder); overseeing elections of your corporation's directors and officers; preparing and filing the annual report to the Secretary of State; and acting as your corporation's "registered agent" (basically the designated recipient of litigation papers and other important documents that are legally "served" upon the corporation). The $2,000 would cover the attorney's time (i.e. you wouldn't pay by the hour for these services), but you still probably would be on the hook for the attorney's out-of-pocket expenses (known as "disbursements"), such as filing fees, postage, and overnight courier fees. The "annual retainer" also would not include fees for services other than routine corporate maintenance. So, for example, if you ask your attorney to negotiate a lease of office space for your corporation, or prepare an employment agreement with a senior executive, those services likely would not be included in the "annual retainer". A valuable service indeed, but still $2,000 sounds a bit high to me. If the hairdresser asks around, she should be able to find an attorney willing to perform these services for an annual fee of $1,000 or less, plus expenses. Unless, of course, the hairdresser/psychologist's office is located in a high-rent district, such as midtown Manhattan, in which case $2,000 is probably a bargain. One more thing: in most states, professionals (such as psychologists or lawyers) cannot limit liability for THEIR OWN professional malpractice by forming a corporation or limited liability company (LLC). If they have partners, they can limit their personal liability for THEIR PARTNERS' malpractice by forming a legal entity, but the corporation or LLC will not protect them against THEIR OWN malpractice. That's frankly why many "solo" professionals don't bother forming corporations or LLCs - they would rather spend the money on a drop-dead policy of professional liability (malpractice) insurance, in the hopes that a potential plaintiff will chase after the insurance policy and not try to seize the professional's personal assets. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconThe Little "Gremlins" That Are Killing E-Commerce (Part Two) Cliff Ennico www.creators.com You can forgive a small Mom and Pop business for not having its act together when it comes to e-commerce. But what if the company is a large one with a multimillion dollar budget, in fact a leader in the field of electronic publishing? That's when the little glitches in a company's Website really burn your breakfast. Being a lawyer, I always like to order new lawbooks in December, so I can deduct the purchase price on my tax return. Most lawyers do this, and the major lawbook publishers (there are only about three left standing after a wave of industry consolidation) offer special discounts and sales at year-end to encourage lawyers to buy that $2,000 treatise on federal trade regulation they've been dreaming about (I know, I know, it doesn't take much to get lawyers excited . . . ) And so last week I attempted to access my account on the Website of a leading lawbook publisher (I won't mention names, but they know who they are). I typed in my username and password, and . . . nothing happened. I tried it three times, and each time received a message saying "error - page cannot be displayed." I figured that maybe I had forgotten my password, so clicked on the "Forgot Password?" prompt. Within minutes I received an e-mail message with my password -- the same one I had typed in initially. Time to pick up the phone, and brave the company's automated customer service hotline ("automated customer service" is an oxymoron, like "jumbo shrimp" or "strong weakness"). After six levels of "make your selection" and a few minutes of horrible holiday music, a very nice Indian gentleman named "Al" picked up the phone. I explained my problem to him, and we spent the next several minutes reconfiguring my username and password. When nothing worked, Al put me on hold, saying he was going to discuss the problem with the company's "technical support" team. In other words, the company's customer service hotline in India had to call the company's technical support hotline (probably also based there) and had go through the same rigamarolle I did to get to a human being. After several minutes, Al got back on the line, apologized for the delay (I can't really knock Al - he was very nice, clearly doing his best, and seemed about as frustrated as I was that he couldn't solve the problem) and repeated to me what the company's technical support team told him -- that the automated "account access" system was down and wouldn't be back up again for the next two weeks. Two weeks! At the company's busiest time! I asked Al if he could take my order, but he apologized and said I would have to call the company's sales department. I thanked Al (sincerely) for his time, wished him a happy holiday (assuming there is a holiday in India that is observed this time of year), and hung up. And dialed up the Website of the company's leading competitor. And registered an account there (which I didn't have before). And bought a book that competes with the book I wanted to buy originally. Yes, I could have called the first company's sales hotline as Al recommended, but by this point I was pressed for time and frankly didn't have the patience to scroll through another "telephone tree" before reaching another human being. For those of you wishing to join the e-commerce parade, here are a few tips: Your customer is ordering online because it is fast and convenient - any aspect of your online ordering system that slows the customer down or throws roadblocks in her path will be viewed by the customer as a moral failing on your part; Make sure there is no system "down time" during peak periods of customer demand - if you must perform scheduled maintenance and upgrading of your system, do it at a slow time of year and beef up your "offline" customer support; If your system is down, be sure to explain that to the customer in simple English (i.e. no cryptic "error" messages) so the customer doesn't think (as I did) that he or she was doing something wrong; and If you provide "live" support for your Website, make sure your customer service reps know what's going on so they can perform "damage control" and prevent you from losing orders and customers. It all boils down to simple respect, folks. If you treat your customers with respect, and show that you value their time as much as you do your own, you will find they will put up with the occasional gremlin. If, however, you waste their time and give them the choice of blaming either themselves or you - tell me, which way do you think they're going to go? Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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05/07/2010
IconFinding Balance and Meaning in a Nine-to-Five World By Mike Cook www.thrivebook.com I have actually heard people say that the way they are at work is "not really the way they are." I cannot think of a sadder declaration about the conditions of one's life than that. Work should not be a life sentence for suffering. The idea of work-life balance is an illusion we create. The reality is that we have only one life, about one third of which we spend earning a living. So, how do you want to live your life, in and out of work? That's the question everyone seeking happiness and a sense of balance should be asking. What are your conditions of satisfaction? What are your material aspirations? How much do you need to earn to meet them? How much are your time and skills worth? What kinds of people do you prefer to work with? What kind of work really turns you on, makes you sing? I encourage people who are grappling with these questions to see the workplace as an ideal setting for personal growth and transformation. This quest is what I call "walking around spirituality." It means treating your job as your life's work-behaving and interacting with clients, coworkers, and customers in such a way that you enrich yourself and all those who come in contact with you. Those among us who are the most fun and inspiring to work with are leading satisfying lives. They are not necessarily the highest paid or highest placed folks in the organization-that may not even be their prime motivation. We admire these people because they are true to themselves. They have found a balance, not between life and work, but between being and doing. They are being who they want to be, and doing what they want to do. Here are some simple guidelines that might very well help you find more meaning and balance in your work and life. Follow your calling. Some tasks are not worth doing. Unless you have a calling to the work, there is a high probability that it will not be done well. The people who feel happy and satisfied at work at those who are working well at something they consider important. Some of the time it will be interesting, some of the time it will be entertaining, and some of the time it will be boring and difficult. But even when it is boring or difficult, it should still feel important to you. Work in a state of awareness. Day-to-day life in the workplace can be dangerous because the opportunities to go to sleep, or operate on automatic, abound. Try to be fully aware of your behavior and decisions and what your life's mission and purpose are. Stay awake to each opportunity for self-growth and knowledge. Embrace interdependency and interconnection. One of the great paradoxes of life is that we are put here in separate compartments, and yet we are always part of something much greater than ourselves, something that we affect and something that affects us. Whatever we do or don't do has an impact on the lives of others-that is just the way it is. Therefore, we have a certain responsibility to each other, which is also true in the place we work. Take responsibility. Many people in today's world are not getting everything they need, either in life or in the workplace, and they are beginning to suspect that maybe this has something to do with them , not their circumstances. Take responsibility for your peace of mind, personal transformation, or attitude overhaul. The workplace is a perfect laboratory as you search for your own truth, for the obvious reason that you spend so much of your life there. Stay young. Staying young boils down to waking each morning with a sense that you still have places to go and things to do, and you are grateful for the opportunity to have a future. Make your life into a learning experience from beginning to end, and from nine to five. Meet life on its own terms and adopt a student's mind in doing so. Express gratitude. In many people's experience, the single most missing element in their day-today work lives is appreciation. Remind yourself, through the practice of saying thank you-that other people at work don't have to support you; their support is a gift. That they get paid is immaterial to the notion of your being grateful. Accept circumstances without judgment. See business realities for what they are and accept them without judgment, thus creating the condition for acting freely. You cannot control your circumstances, but you can choose your path. Have integrity. Be completely true to what you know is right and what you feel you must do, regardless of the immediate cost or sacrifice. Be honorable and behave decently in and out of work. If you sense the "something is just not right" in your work life, consider that what you may actually be sensing is a gap between your "being" and your "doing" that is causing you discomfort. How do you want to "be" in your job and in your life? In the workplace setting, the most satisfied and successful players are those who have found a way to integrate spiritual common sense (being) with exceptional workplace behavior and business performance (doing). Mike Cook is founding partner of Vitalwork, Inc. www.vitalwork.com , a leadership development firm that helps companies and employees compete in the outsourced economy. His new book is "Thrive: Standing on Your Own Two Feet in a Borderless World" (St. Lynn's Press). Permission granted for use on DrLaura.com More >>

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05/07/2010
IconThe Little "Gremlins" That Are Killing E-Commerce (Part One) Cliff Ennico www.creators.com During this holiday shopping season, there is going to be a lot of ballyhoo in the press about how more people than ever are doing their holiday shopping online, and how the Internet is going to kill traditional "brick and mortar" retail. This is not going to be one of those articles. This was the year I decided to do all of my holiday shopping online. After all, when you're convinced that the Internet is the future of retail, shouldn't you put your money where your mouth is? Well, based on three experiences this past week, I must regretfully conclude that it's going to be a while before everyone does all of their shopping online. There are a lot of "gremlins" - some technical glitches, some the result of really bad customer service -- that will need to be worked out before online shopping becomes the instant, seamless, "real time" process that it's being touted to be. Case # 1: my Mom loves brass monkeys. Not the animal, the cocktail. For the unenlightened (or the merely sober), a "brass monkey" is a concoction of vodka, orange juice, and dark rum, with a little umbrella added for effect. Years ago Heublein included the brass monkey in their line of premixed, prebottled cocktails, but Mom has had trouble finding them lately as her local liquor stores are focusing more on wine and beer. So I went online looking for a case of brass monkeys to give Mom this Christmas (let it never be said that I'm not a dutiful son). After some searching (you would be amazed what pops up in the search results when you type in "brass monkey"), I came across an online liquor store in southern California that specializes in hard-to-find items, and lo! They had a listing for "Heublein Brass Monkey Cocktails". Now, since Club took over the Heublein brand a number of years back and now markets all of the former Heublein products under the Club name, the reference to Heublein should have given me a clue that this Website might not be 100% up to date. But no matter - the Website looked otherwise to be very professional, with a very efficient checkout and "shopping cart", and I was able to place my order for a case of brass monkeys in about 30 seconds. I did think it was a little odd that the site didn't ask me my age at any point, but I figured that anyone ordering a case of Polynesian cocktails from the 1950s probably didn't need to prove they were underage. Two days after placing my order, I received an e-mail confirmation of my purchase . . . with an AOL return address. Uh oh. Serious e-commerce operations do not use AOL as their Web server. Home based Mom and Pop businesses do. Then I read the confirmation, which was accurate but contained the following cryptic (and ungrammatical) statement at the end: "All submitted orders does NOT guarantee shipment [sic] and will go through our verification process first. Your payment information will only be charged after your information has been verified." What do they mean by "verification"? Does it mean checking me out to make sure I'm of legal drinking age? Great, but how do they do that with only my credit card information? How long will the verification take? And how long after that before the brass monkeys ship (I do need them by Christmas after all)? I sent this company an e-mail message asking for answers, and have done so each day since then, but haven't yet received a response. I tried calling the customer service telephone number that appears on their home page (not a toll free number), but the phone merely "rings off the hook" - there's no automated customer service, not even an answering machine. Not exactly the way to conduct your e-commerce business, folks. Marsha Collier ( www.coolebaytools.com ), a leading eBay expert and author of "Santa Shops on eBay" (John Wiley, $16.99) says that for an e-commerce Website to be taken seriously, "the customer should get an e-mail confirmation immediately upon placing the order, and shipment within 48 hours." Amen. Since this is clearly a Mom and Pop operation, I am willing to cut them a little slack and give them a little time to get their act together. What happens, though, when the culprit is an established company - in fact a leader in electronic publishing? More next week . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is 'Small Business Survival Guide' (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com. More >>

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