Another issue that will need to be addressed is related to the idea of having delivery for customers. This delivery idea will revolve around the ability to supply a business vehicle for GXB’s employees to utilize. The vehicles must be designated for company business and the drivers must have liability insurance.
While the owners of GXB Printing have done a great job establishing their business identity and distinction they will want to insure that no other business are allowed to steal their ideas or pass themselves off as their business. Limited protection for this business can be obtained by registering it as a business style with the Registrar of Companies. This will allow the business to insure a business style and idea that remains its own.
Two areas that may require outside assistance is the online order option that will be made available for his customers and dealings with suppliers. The internet is opening up a whole new world for business, but the legal principle underlying contractual relationships remain unchanged. A few questions that may arise are; who are the parties to the transaction? How credit worthy are they? Has a transaction taken place? Are the terms of the transaction certain to be enforced? Is there evidence that an agreement has been reached. All of these questions must be answered along with basic elements of confidentiality, encryption, security for payment and other issues which may arise. A company with the credibility as Internet Business Consulting (ICBI) should be contacted to take care of all web design and E-Commerce functions.
When dealing with suppliers many standard forms and documents will exist with lots of fine print. Some may want the owner to enter into a master agreement, with invoices for services or materials being made subject to this master agreement. Typically this agreements will set out payment terms, rates of interest on late payments, confirm that there are no representations or warranties and state that ownership of the goods sold does not pass until full payment is received. This agreements need to be reviewed carefully, especially any provisions which state that any goods or services supplied come without representation or warranty; in this case it may require a third party agreement for these warranties. These contracts should be reviewed by an outside source or agency to insure that the contracts on equipment and supplies are within the best interest of the business. In the state of Alabama, many state agencies provide assistance in the area of contract proofing and assistance for business owners. This may be an avenue worth investigation.
GXB Printing will need the assistance of a legal advisor, not only for the above mentioned reasons, but in order to support the idea of expanding business outside the state of Alabama. With each new state comes a set of new laws governing business. Assistance in this area is readily available from state business consulting agencies.
In the course of establishing his business and expanding to new lengths, choosing the proper legal structure is crucial. Some factors to consider are;
- Number of participants (one or more entrepreneurs)
- Scope of the enterprise
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Type of
- Type and extent of the liabilities, etc...
In this case, The LLC provides its owners with a very flexible and adaptable form of business organization that provides liability protection comparable to the protection provided by incorporation of a business unit. Unless personal guarantees have been given, a member's liability is limited to the amount invested in the LLC. In an LLC, the managers or members have full liability for unpaid taxes.
A LLC can be established at moderate cost in a relatively short time. Management by all members, by one or more members, or by a non-member individual or business entity is allowed. (The management arrangements are specified in the articles of organization.) Ownership interests can be transferred using procedures described in the articles of organization or operating agreement, or by consent of a majority in interest. Thus, the members have a high level of flexibility in setting up or modifying business arrangements.
GXB Printing has a lot to consider in order to witness the owner’s vision becoming reality, and these items listed just scratch the surface of the legal issues that will arise. With this in mind, it would be beneficial for the owners to seek sound legal advice on all matters of their business; an ounce of prevention is worth several pounds of cure
References
BusinessLaw.gov ()
Cross & Miller (2001) “West’s Legal Environment of Business.” Thomas Learning, Cincinnati, OH.