• You get the benefit of personal liability protection, as you would with a corporation.
• You keep things simple with a business that’s easier to run, similar to a partnership or sole proprietorship (for example, you aren’t required to file corporate taxes).

Who can form an LLC?

The good news is that just about anyone can start an LLC. You don’t need a huge company, lots of employees, or anyone but yourself (except in Massachusetts, where you need to have two owners).

The owners of an LLC are called “members” and there are no special qualifications required, but in most states, you can’t form one if you are in certain licensed professions, such as an attorney or a medical doctor. In that case, you can form a professional corporation, or PC.

You can have as many members (owners) as you want in your LLC, but most LLCs keep the ownership small (no more than five members), since you do need to work closely with each other and have a shared vision. Be sure the members are people you trust and can work with. A good LLC is like a marriage in that way.

How to form an LLC

• Create a business plan. Once you’ve decided that an LLC is a good fit for your business, you should start by creating a business plan (although it is not required), so that you have a roadmap for what you’re going to do and how you’re going to do it.
• Name your business. Next, you need to do a search within your state to make sure no one else is using the same business name you have chosen (it’s confusing for everyone if there are two Bob’s Plumbing companies). Your secretary of state’s office will do the search and give you clearance if the name is available.
• Choose a registered agent. This is a person who will accept legal service and notifications on behalf of your LLC. It doesn’t have to be you or any other member; it just has to be someone within the state willing to accept those documents (there are registered agent companies you can contract with). Choosing someone else frees you up from having to be available for service.
• File your articles of organization. To make your LLC official, you’ll need to fill out an articles of organization form from your state that includes the LLC name, registered agent, names of members, and other basic information. You’ll file this with the secretary of state, often in the corporation division. There will be a filing fee that is usually under $100.
• Write an operating agreement. Use your business plan to create an operating agreement for your LLC. This does not have to be filed with the state, but it is an essential document you will rely on. An operating agreement includes identifying information about the company, a statement of the company’s intent, the business purpose of the LLC, the term of the LLC, how it chooses to be taxed, and how new members will be admitted, as well as other general operating provisions.
• Comply with local requirements. Be sure to complete any local licensing or registration requirements for businesses in your county or city. In certain locations, you may be required to file a DBA (or “doing business as”) document that identifies the individuals behind the LLC.

Managing your LLC

Now that you’ve set up your LLC, you can get down to the business of actually running it—and that means working with the other members successfully. There are two different ways you can choose to manage your LLC:

• Member management. In this method, the members are the ones actually doing the hands-on management. All the members vote on decisions and work in the business. This means you’ll need to have a clear business structure and defined roles. Your operating agreement should set out what each member’s responsibilities are and how the business will actually run.
• Manager management. In this method, the members select one or more members or bring in an outside person (such as a CEO or COO) who will take on the responsibility for day-to-day management of the LLC. The members who are not in managing roles don’t actually control how the business runs. Instead, they function more like investors who have put up their money and are waiting to see their profits. Only those people who are named as managers are able to vote on management decisions and do business on behalf of the LLC.

Liability protection

The main reason most people decide to form their small business as an LLC is to protect themselves from liability. An LLC shields you from liability for the company’s business debts and claims. So, if your business gets behind on a business line of credit, the bank can sue only your company and reach only your company’s assets. It can’t sue you personally or try to take your house or your car or anything you own in your own name.

You are on the hook, though, for any money you’ve invested in the LLC—because those funds belong to the LLC, but your liability is limited after that point.

The exceptions to the rule

LLC personal liability protection can be a great shield, but it doesn’t protect you from everything. Personal liability exceptions to LLC liability protection are the same as those faced by corporations.

You can still be personally liable as an LLC member if you:

• Personally injure another person directly
• Give a personal guarantee for a loan or debt for your LLC and the LLC then defaults on it
• Do not pay the taxes your LLC withholds from your employees’ pay
• Cause harm to the LLC or another person by intentionally doing something fraudulent or illegal

The biggest pitfall that will expose you to liability is failing to keep the LLC and your personal affairs separate. You have to take your own LLC seriously if you want other people to.

If you’re just using your LLC bank account as your own personal checking account or you don’t pay your business bills from that account, then it’s going to be clear that the LLC truly is not a separate entity. In your own mind, you need to think of it as separate and act accordingly.

How to separate your LLC from your life

In your mind, work is just part of your life, so it can be hard to keep your LLC separate and keep a clear line between your personal life and your company. It’s essential you do so, though, if you want to enjoy the limited liability protections.

To protect your LLC status:

• Have an operating agreement. Set out your business details in writing, so you and the other members are clear on your mission and your procedures and practices.
• Bank separately. Use a business bank account for your LLC, deposit all business checks there, and pay all business expenses out of it.
• Fund your business. You and the other members should invest enough money so that your LLC can run itself, pay its expenses, and be financially independent.
• Be legit. Get a federal employer identification number (EIN) for the LLC and keep a clear account of your business’s finances, so there can be no question that it is a separate entity.
• Be honest. Don’t misrepresent the state of your company’s finances to creditors or vendors. 

Business insurance

Business insurance can be an added layer of liability protection for you from your LLC. An insurance policy will cover liability that might affect you personally.

For example, if you own a hair salon and accidentally graze a client’s face with your scissors, you could be personally liable, since it is a personal act that caused harm to another person. But a good business insurance policy will cover this mistake and help protect your personal assets.

Business insurance also protects the LLC itself from lawsuits and claims. For example, if you own a landscaping business and one of your mowers accidentally hits a client’s marble stone lion and damages it, your business insurance will pay the claim. However, business insurance only covers liability for negligence—it doesn’t cover unpaid business debts.

LLC taxes

While an LLC offers some tax advantages, you’ll still be paying taxes, and it’s important to do so on time and accurately. The LLC itself must file IRS Form 1065 yearly. This is the same form used by partnerships and it reports each member’s share of the profits and losses from the LLC.

Learn more about how to file your LLC taxes in this article.

Although it must file a form each year, your LLC enjoys pass-through tax liability. This means the LLC itself does not pay taxes. Instead, the LLC members are responsible for paying taxes, and each member pays their own share. So, if you have two members who are equal owners, each will be responsible for reporting half of the profits or losses for the LLC on their own personal tax returns. You’ll have to make quarterly tax payments so long as you own the LLC, so be sure to stay on top of that.

Closing your LLC

Should you reach the point where you’re ready to close the doors to your business, there are some steps you’ll need to take to officially end your LLC. In most states, unless your operating agreement says otherwise, when one member wants to leave the LLC, it must be dissolved. If more than one member wants to leave, you have the same result. And if you’re the sole member, it’s up to you.

If you want to avoid the problem of having to close down because one member wants out, you can include buy-sell guidelines in your operating agreement that set out what will happen if one member wants out, decides to retire, dies, or becomes disabled.

To close down the LLC, you need to pay off remaining business debt, fulfill any remaining obligations (such as shipping orders), and decide if you will sell business assets (such as real estate or equipment) or divide them among the members. You must pay all tax responsibilities and notify all of your creditors that you will be closing.

You must file to dissolve the LLC with your state as well. Then the members must divide any remaining assets or profits among themselves, in proportion to their ownership amounts. One or more members can decide to open a new LLC if they choose, and this may be the thing that makes the most sense if you’ve been forced to close down due to one member leaving.

Is forming an LLC right for me?

Only you can answer that question, after taking into consideration your business goals and financial needs—including what types of liability issues could arise specific to the services you provide.

Whether you’re a solopreneur or building a fast-growing startup, forming an LLC can be an effective way to combine business liability protection with a flexible form of organization that’s easier to manage.

When you’re ready to form an LLC, you’ll also want to decide whether to handle the filing and paperwork on your own, or to ask a provider like LegalZoom to help.

An investor approached retirement planner Josh Markowitz with an opportunity. The investor was not wearing business attire and had requested the late-morning meeting be held in a cigar bar. Markowitz felt obliged to ask for more details on the investment strategy.

The investor told Markowitz that if he invested $250,000 for two years, he’d get a return of 15 percent each year.

The investor explained that he lends money to distressed companies at 20 percent interest. Under their agreement, if the debtor company couldn’t pay the money back within six months, the lender could buy stock in the company at a 40 percent discount. The investor’s strategy was to then dump the shares on the market as quickly as possible.

As predatory as the scheme sounded, it wasn’t illegal—yet. When Markowitz asked him about the risks in the business model, the investor replied, “our biggest concern is regulatory.”

Nearly 98 percent of U.S. businesses are small—very small—with fewer than 20 employees. And between paying overhead, complying with laws, ironing out tax issues, and actually running the business, entrepreneurs have their hands full. Tough decisions come every day.

Are you handling things ethically within your business?

When faced with an ethical decision, Aileron, a nonprofit for small business owners, said entrepreneurs should ask themselves two questions:

• When cash is short, do you abuse vendors or do you hold off paying some of your employees?
• Do you save a few bucks and cheat on environmental or workplace compliance?

If you answered “yes” to either question, you may be heading down an ethical slippery slope.

So, why should busy small business owners worry about ethics?

Because whether you are a software startup or have a taco truck, ethics failures can hurt the bottom line, writes Shanté Roddy, CEO of Intuitive Risk Management International.

“Ethically treating employees, good relationships with the public, and correct information shared with stakeholders are all responsibilities of the top leadership and have a direct impact on the overall growth of the company,” Roddy writes.

Business owners have to sweat the small decisions, because, as Aileron puts it, “business ethics issues always start small.”

Juliette Gust is the founder of Ethics Suite, a platform for employees in the restaurant and hospitality industries to report employer misconduct without getting into trouble. She gives an example: A restaurateur receives a request from a local business owner who would like to hold an event at her restaurant. The business owner’s policies don’t allow alcohol at company events, so asks the restaurateur to hide the evening’s liquor sales by counting them as food items.

“If…I say ‘sure, no problem,’ then my team knows I am willing to make an unethical decision to benefit my income,” Gust says.

Having seen that unethical behavior, employees might be more likely to act unethically themselves, she says, and that could threaten the reputation and profitability of the business as a whole.

Gust referred to the “broken window syndrome,” the theory that crime is more likely to occur on a street where there are broken windows, because they’re a sign that discipline and the rule of law are more tenuous. Former New York Mayor Rudy Giuliani’s implementation of the theory in the 1990s was controversial, but the common-sense analogy for business is clear.

The “trickle down” of ethical decisions

Tracy Miller, a lecturer at MBA@Dayton, the online MBA program from Dayton University, underlines that tone trickles down.

A company’s ethical strategy “is driven from the top,” Miller says. “And so it has to be believed by your leaders. Your top management has to believe that this is important enough in the workplace to invest resources in it. Those companies that are successful have found the right formula for making sure their words and behaviors are aligned.”

The right decision won’t always be the one that earns you the most money, but it may provide other benefits. For example, if a sole proprietor of a content business hires subcontractors, he may pay them the day rate that they ask for, even if it costs him a bit more. He’s making less than the maximum he could make for a particular project, but he recognizes that there are less tangible—but equally valuable—benefits to being seen as a fair employer.

First, he knows he’s not driving down market rates in his own, very competitive industry. Second, his product is only as good as the people producing it. So it’s important for him to know that the next time it calls the subcontractor, they’ll pick up the phone.

When profit is the only motivator, says Miller, a company is priming itself for a fall.

“You can talk about companies that had all the words right and then their behaviors were different,” she said. “And so they turned a blind eye. They didn’t hold employees accountable for these business practices because the employees were creating profits and the profits were more important to the company than the ethics.”

Miller likes to cite Enron as an example, which sought protection from its many creditors in 2001, under allegations of corporate fraud.

Small businesses don’t operate on Enron’s scale, but their ethical guidelines are no different. “An ethical business not only abides by laws and right relevant rules,” writes Reddy, “it also operates honestly, competes fairly, provides a reasonable environment for its employees, and creates partnerships with customers, vendors, and investors.”

Looking at a small business as a network of stakeholders makes it easier to grasp how, with one unethical decision, a small business can alienate clients, burn bridges with subcontractors, destroy lives, ruin its reputation, and even wind up in legal trouble.

Going back the real-world example of the retirement planner Markowitz, he knew he could have made money for his clients by investing in a predatory lending scheme, while technically doing nothing wrong. However, the long-term risk did not merit the short-term reward, so he said “no” to the opportunity.

According to MBA@Dayton’s Miller, businesses should make ethics part of their culture and value system. This means investing resources in training to protect the long-term reputation of a company. That way, when faced with a decision that may bend the rules, employees know not to make it or to seek additional guidance. In the end, ethics trump the bottom line.

Delivery policies and the legal obligations associated with delivery of goods may sound like something that you just want to shelve for later and hopefully never think about.

But, understanding the risks involved in delivering goods to your customers will ensure that you are legally protected, and help to make sure that your hard-earned profits don’t end up down the drain if a legal issue arises.

In Part 1 of this article, I covered how contracts of sale are formed, both offline and online, as well as store policies and how to get your customers to agree to them. Make sure you check back to Part 1 for reference, as you need to make sure that your customers are bound by your delivery policy.

Legal issues around delivery of goods:

First, let’s consider some of the differences between physical stores and online stores in terms of the delivery of goods. In a physical store, “delivery” usually occurs at the counter when your customer has paid for the item. They take delivery immediately and walk out the door. If you sell large products such as furniture, you may offer door-to-door delivery for your customers. If so, there are a few legal issues that you may need to consider.

Online and door-to-door delivery:

As I discussed in Part I of this article, make sure that your delivery policy is displayed in-store prominently and is provided to the customer when they elect to have their goods delivered. Some of the same issues apply to online delivery as delivery from your physical shop. Let’s take a look.

In the U.K., under the Distance Selling Regulations, when you display your goods online you must state if the price is inclusive of delivery costs, and you must state your arrangements for payment and delivery. Most online stores cover these details in a delivery policy. Here’s an example of what it might look like, from Apple’s delivery policy:

Apple’s Delivery Policy

Whether you are running an online store or offer delivery from your physical store, if you are in the U.S., you need to comply with the Mail or Telephone Order Merchandise Rule. This rule applies to orders made over the internet, by phone, by mail, or by fax, and sets out rules and guidelines for making promises about shipment estimates and times, unexpected delays, and refunds.

The rule requires that you must have a reasonable basis for stating that your product can ship within a certain time period. So this means you can’t say that your goods will be delivered within one week if you don’t reasonably expect this to be possible.

If there are delays with regard to your shipment, you must notify your customers, provide them with an updated shipping estimate, and allow them a chance to cancel and receive a refund.

Who owns the goods in transit?

In the U.K., ownership passes to the buyer when an unconditional contract for sale and delivery of specific goods in a deliverable state is made. It does not matter if delivery or payment are postponed.

This means that the goods must be a specific (identifiable) item, and must be ready for delivery. For the goods to be identifiable they need to have some kind of “individual” nature about them, such as the buyer pointing to a specific item on a shelf in-store, or choosing an item number if they are purchasing online.

If this is the case, the buyer owns the goods while they are in transit, unless there is a remaining condition that the seller is required to fulfill. If the seller needs to fulfill a condition, ownership transfers to the buyer when the condition is fulfilled and the buyer is notified. Online, this would be something like sending a confirmation email that the goods are packaged and ready to ship.

If the item is not identifiable, ownership of the item cannot pass to the buyer until the item has been identified (e.g. by the seller choosing a specific item in his warehouse). Unidentifiable goods are usually those that are to be manufactured, chosen, or acquired after the contract has been formed.

Here is an example showing the difference between identifiable and unidentifiable goods:

A seller has two stacks of books in their warehouse; one stack has just one copy of a book which is signed by its author and another stack has 100 copies of that book but without signatures. If someone orders a copy with a signature, that book is immediately identifiable because it is the only one in the warehouse with a signature. If someone orders a copy without a signature, it is not identifiable because “their” copy could be any of the 100 unsigned books.

The person who orders the book with the signature becomes the owner immediately, but the person who orders the book without the signature only becomes the owner once their copy is pulled out of the stack and set aside for delivery.

The law is the same in the U.S. and in the U.K.: Ownership passes to the buyer either when the goods are delivered, or when the goods are identified and intended to be owned by the buyer.

The alternative in all of these scenarios is that the buyer and seller can also agree that ownership of the goods will transfer when they intend it to (i.e., they can agree between themselves if they wish to do so).

What if the person transporting my goods breaks them?

The person or company transporting your goods is usually known as a common carrier or a public carrier. For business purposes, freight companies are usually classified as common carriers. This is in contrast to contract carriers, which are a private business only and usually transport only their own goods (such as a trucking company).

Common carriers are usually liable for the goods they carry, with some exceptions, and their liability may vary state by state in the U.S.

One law in the U.S. that applies country-wide is called the Carmack Amendment. It covers common carriers, and limits the liabilities of carriers to loss or damage of the property itself. Carrier liability under the Carmack Amendment is established by proving that the goods were delivered to the carrier in good condition, that they arrived at the place of delivery in damaged condition, and that the amount of damages is measurable.

Common carriers are never liable in the event of:

• An act of nature;
• An act of public enemies;
• Fault or fraud by the shipper; or
• An inherent defect in the goods.

Regardless of which country you are based in, usually common carriers have insurance in place to protect them in the event that damage occurs to your goods. However, there may also be exclusions from their policies, so always obtain your own insurance, particularly for big-ticket items.

Some carriers may include insurance in their fee, so carefully consider what you are paying for and look for deals on shipping and carrying that include insurance. Make sure you read all insurance policy details and exclusions before signing up.

If you are shipping your goods by ship, there are also various maritime laws that may apply to lost goods.

The best ways to avoid running into these issues are:

1. Always pack your products well and ensure that there are no defects before you send;
2. Obtain insurance to cover all of the shipping and delivery methods that you use. Even if a common carrier is at fault,  you can make a claim to your insurer for the loss and your insurer will go after the common carrier for the cost;
3. Cost-wise, pack your products as small and light as possible to reduce shipping and packaging costs;
4. Ship smart, and consider all costs, fees, and duties so that you don’t end up with shipping and packaging costs eating away at your profit margins.

Conclusion:

At TermsFeed, we’ve set up free PDF templates that you can use to get started with a Refund Policy and a Terms and Conditions Agreement to cover your legal obligations.

As we discussed in Part I, also remember to make sure that your online store has a good Privacy Policy and store policies (whether online or offline) and ensure that both your physical store and online store provide clear product expectations for customers.

Have you had a particularly good (or bad) experience shipping goods for your business? What did you learn?

This is Part 1 of our article, “Selling Your Goods In-Store Versus Online: Legally, What’s the Difference?”

Look for Part 2 coming soon!

Legal agreements and store policies

When you set up shop, legal considerations may be the last thing on your mind. Not only are there legal considerations involved in setting up your storefront—when you set up the online arm of your business, there are additional considerations that you need to keep in mind as well.

First, I will cover how contracts of sale are formed, both offline and online. Then, I will examine store policies, and how to get your customers to agree to them.

Finally, in Part Two of this article, I will look at the delivery of goods and the delivery risks that arise when goods are purchased online or are delivered to a customer not in-store.

How a contract of sale is formed in a physical store:

It may not seem like it, but when a customer purchases an item in your shop, they are forming a contract with you.

The primary elements of contract formation are:

• Mutual agreement (offer and acceptance);
• Consideration;
• Intention to be legally bound; and
• Legally competent parties.

Let’s look at a common scenario. You display a mirror in your store for $10. Alice brings it up to the till, and pays you $10 for the mirror.

Offer, acceptance, and invitation to treat

While it may look like you are “offering” the mirror for sale for $10, you are doing what is called an “invitation to treat.” An “invitation to treat” is a precursor to a legally binding offer, and in our shop scenario it means that you don’t have to sell her the mirror at the price displayed. It is in fact Alice who is making an offer to buy the item when she brings it up to the counter at that price. You then accept Alice’s offer and she exchanges her $10 for the mirror.

This means that if you accidentally display an item in your shop at the wrong price, when a customer comes up to the till you can correct the error when they “offer” to buy your item at the incorrect price.

Consideration

The $10 and the mirror are both something of value. Consideration is just another term for something of value. The consideration does not have to be “adequate,” but it must be what is called “sufficient” consideration.  In other words, the things being exchanged must have some value, but the general rule is that courts do not care how much value. So even if the mirror is worth $2, and you sell it for $10, the consideration is still valid. The only exceptions are when the value given is grossly inadequate (such as if the mirror was worth $2 and you sold it for $4000), or if the value given on both sides is of the same type, such as selling a $1 note for $100.

Legal competence and intention to be bound

Being legally competent means that your customer has to meet a set of legal conditions that allow them to make a contract. For example, in the U.K. and the U.S., minors cannot be legally bound by contracts. However, they enter contracts of sale all the time to purchase candy from corner stores. So how does this work?

It works because the rules aren’t quite as strict as “no minors can enter contracts”—they are more nuanced than that. In the U.K., courts have found that the person entering into the contract must be “capable of understanding the general nature of what he is doing by his participation” (Gibbons v. Wright (1954)).

It means for most contracts in the U.K., the minor is not able to be legally bound, but if it’s something for the minor’s benefit or for “essential items for living,” they can be. While candy is not really an essential item, one could easily argue that it is a food (which is essential for living) and the contract is also beneficial for the minor (as buying the candy makes them happy).

In the U.S., the person must have the ability to understand “the rights, duties, and responsibilities created by, or affected by the decision… the probable consequences for the decisionmaker and, where appropriate, the persons affected by the decision… [and] the significant risks, benefits, and reasonable alternatives involved in the decision.”

This means that it’s likely a child is capable of understanding the risks and consequences when he is purchasing a chocolate bar for $1.50, but would be unlikely to understand a complex employment contract.

Finally, intention to be bound means that for the contract to be enforceable, both parties need to be intending to enter into a legal contract. Intention to be bound is usually presumed when the contract is a commercial one (such as buying an item in a shop), so this isn’t particularly at issue for most business situations.

You may think that an online store is different—after all, you just have a Terms and Conditions document to cover all this stuff! But, things are more complicated than that.

So, what’s the difference with an online store?

Online, things get a bit trickier in a number of ways.

First let’s look at offer and acceptance for a contract of sale. Most website use a Terms and Conditions document that sets out the conditions of sale, payment information, refunds, ownership of the item, and use of intellectual property, among other things.

Many stores also send out confirmation emails once a person has purchased an item from their store. Here’s an example of the type of email I mean, from Microsoft:

But what happens if you displayed the item at the wrong price? If you sent a confirmation email, have you now agreed to be bound by the contract?

This exact situation happened to Kodak, in 2001. Kodak displayed a digital camera package on their website for an incorrect price of £100. Thousands of customers ordered online and provided their credit card details for the payments to be made. The customers received automated online confirmation emails that told them to keep the email as proof of purchase.

Kodak claimed that the orders had not been accepted and that no contract had been formed. However, the Court held that the website pages with the products listed were invitations to treat, and the customers had made offers to buy the packages for £100. The problem for Kodak was the automated confirmation emails, which suggested that the orders had been accepted. The emails not only acknowledged the order, but also used the words “this contract.”

To avoid problems like this, ensure that your website is structured in the way you want to conduct business, by:

• Stating clearly in your website Terms and Conditions when acceptance occurs;
• Clarifying any conditions that may affect the acceptance of the offer (such as items being out of stock or listed at the incorrect price); and
• Ensuring that regular checks are performed to make sure items are listed at the correct price.

What about agreement to store policies?

Your customers need to not only be bound by the contracts you make with them, they also need to be bound by your Store Policy (in your retail store), your Returns and Refunds Policy, your Terms of Use (for using the website), and your Privacy Policy.

Your Terms of Use sets out how your customers can use your website, how to make an account, circumstances in which customer accounts may be deleted, and behaviors or actions that are not permitted. This is basically the same as what a Store Policy is for your physical retail store.

Your Returns and Refunds policy covers the circumstances in which you will accept returns or give refunds, and may include time limits or set out directions for posting or returning an item by mail.

Your Privacy Policy sets out how you collect, use, manage, and disclose customer data. It should also explain to the customer how their privacy and personal information will be protected.

The contents of your Terms of Use, Returns and Refund Policy, and Privacy Policy will depend on what country you are in, what countries your customers are in, what information you are collecting, and the business decisions you have made. Sites like TermsFeed can help you to generate a Privacy Policy, Terms of Use, and a Return and Refund Policy in minutes for your online store.

Before you start selling items from either your online store or your physical store, make sure you have these policies in place and tailored to your situation. As each policy and set of terms is so particular to your individual situation, I won’t go into detail on these here.

Now that you’ve got these documents in place, how do you make sure your customers agree to them?

Policies online

Online, there are two different ways of displaying your Terms of Use and Privacy Policy, called browsewrap and clickwrap.

Browsewrap is where the user has to browse to find your terms on the website. This is the method that many websites use, where the Terms of Use and Privacy Policy are small links down at the bottom of the page. Sometimes the user has to scroll down quite far before they can find them. Here’s a visual example of what browsewrap is from Hortonworks:

Image via Hortonworks

This image is taken from right down the bottom of their page.

Clickwrap is a much stronger method (from a legal perspective), where the customer has to actually click “I Agree” to the Terms of Use and Privacy Policy. Usually this is implemented with a pop up that appears when the customer reaches the website, or a tick box at the end of a web form. Here’s an example of what a clickwrap method is from Budget Travel:

Image via Budget Travel

Without offer and acceptance of those terms, they haven’t been agreed to. This is why a clickwrap method is much stronger, as the user clearly clicks “I Agree” and they become bound by the terms.

Another problem is that online, you can’t tell how old your customer is. It could be a six year old purchasing a Gucci bag without the knowledge of his parents. It is incredibly common that children make in-app purchases when they are playing with a parent’s phone.

Luckily for the parents, these contracts are not enforceable as the minor does not understand the nature of the contract. However, the difficulty arises when the parent needs to prove that it was the child who made the purchase (rather than it having actually been the adult).

Now let’s look at getting agreement to your in-store policies.

Policies in-store

Online, it’s particularly important that your customers agree to your Privacy Policy, as a large amount of data is collected simply by the customer visiting the website. If you use Google Analytics, or if the user can make an account, your website collects even more personal information. In a physical store, it is rarer that customer data is collected. This means that privacy and information security issues arise for an online store that a physical store usually does not need to deal with.

However, as physical stores collect increasing amounts of personal information about their customers, privacy issues are beginning to appear for them too. Many large retailers now track customer movements throughout the store and create “heat maps” to figure out which areas customers visit most.

There’s also the case in the U.S. where Target knew a customer was pregnant before her father did. As the customers at Target can create a Guest ID, with their name, email address, and credit card linked to the ID, Target can collect information about each purchase that customer makes, and analyse the data to form an overall impression of what kind of things that customer is buying.

Target was quick to say that they complied with all privacy laws when conducting this exercise, so it’s likely that when a customer signs up for a Guest ID they agree to a privacy policy of some kind. This commonly occurs when customers sign up for a customer loyalty program, where a slip of paper is filled out with their details. The Privacy Policy or Terms are often printed on the back of the paper.

A physical store usually has a document like a Terms and Conditions, but it’s normally called a “Store Policy” instead. Refund and return policies are required by many states in the U.S. to be posted conspicuously for the customer to be bound, and the same will likely apply to your Privacy Policy if your store is collecting customer data. Likewise in the U.K., if a store has a returns policy, they must display it prominently and frequently.

Here’s an example from the Dekalb County World Farmer’s Market in Atlanta:

You can see that the refund policy is prominently displayed, in bold, and also highlighted in red to bring it to their customers’ attention.

This is effectively a strong browsewrap method, where the customer needs to look around the store, at their receipts, or search online for your in-store policies.

As long as you display these prominently and frequently, your customers are likely to be bound. While methods that require your customers to actually sign an agreement would be stronger from a legal perspective, carrying this out in-store for every policy is impractical and likely to turn customers away.

Conclusion

Always remember that there are unique circumstances when running an online store when compared to a physical store, and you need to keep on top of your legal obligations by following the above tips.

Stay tuned for Part 2 of this article, coming soon!

To make your research a little easier, we’ve scoured a number of government websites and compiled a list of laws and regulations that affect every business.

Licensing

1. Business licenses

To legally start a business, you’ll likely need a business license. Start by calling your local city government. See if you need a license, and if you need to know about any zoning rules. For federal and state licensing, check out the Small Business Administration website, and follow the links that are applicable to your business.

Employment laws

2. Fair Labor Standards Act

This act regulates federal minimum wage, overtime rules, child labor bans, and record keeping requirements. You’ll want to read through it to make sure you comply with the current regulations.

3. Federal Equal Employment Opportunity laws

This set of laws prohibits discrimination based on race, color, religion, sex, or national origin. It also includes equal pay for men and women, and protects people with disabilities.

4. Family and Medical Leave Act

If an employee is dealing with a medical condition, or a family member with a medical condition, there are rules an employer must follow. From time off to compensation, you’ll want to read this guide to understand how this act affects your business.

5. Occupational Safety and Health Act

This law guarantees employees a safe work environment, free from recognized health hazards.

6. Workers’ compensation

Most states require employers to buy an insurance policy that compensates employees if they get hurt or become ill from workplace exposure. To learn more about your responsibility as an owner and what an employee is entitled to, check out the Department of Labor website.

7. At-Will work doctrine

In all states except Montana, there is an at-will work law in place. This means employers can fire an employee at any time for any reason, unless it’s an illegal one. Likewise, an employee can leave the job at anytime.

Tax laws

8. Obtain an employer identification number

To file your business taxes, you’ll need an employer identification number. Visit the IRS website to get your number, and you’ll get the number immediately after filling out the necessary forms online.

9. Know the taxes you have to pay

Whether your business has a staff of one or 100, Uncle Sam says you have to pay certain taxes. Take some time to review the federal tax, social security, Medicare, and federal unemployment tax requirements. The IRS has a breakdown of your tax responsibilities as an owner. You’ll also want to talk with an accountant about these obligations and figure out a budget.

In addition to federal taxes, you’ll likely have to pay state taxes as well. Use this website to research your state tax requirements.

10. Hiring employees

When you plan to bring on an employee, it impacts your taxes. The amount of time an employee works for you will make a difference when it comes to taxes, so research the difference between a W-2 employee and a 1099 employee before making any hiring decisions.

Advertising and marketing laws

11. Truth in Advertising and Marketing

Just as it sounds, this law requires all advertising or marketing efforts to be truthful. In addition, if you make any claims during an advertisement, you must have proof to back it up. You can’t ever be misleading or unfair. This rule becomes even more specific when you market to children or use endorsements.

12. CAN-SPAM Act

Did you know there is an email law? It’s true. The CAN-SPAM Act regulates commercial emails. The law requires honesty and bans deceptive subject lines. In addition, you must tell recipients where you’re located and give them an easy way to opt-out of your email messages.

13. Telemarking Sales Law

If you plan to sell products by mail, phone, or online, you’ll need to brush up on the FTC’s telemarketing rule. Under this rule, businesses must ship products within 30 days, provide delivery notices if a product is delayed, and give refunds if an order can’t be filled. You’ll also want to check out the rules surrounding the Do Not Call Registry.

Online business laws

14. Sales Tax Collection

Owners of a brick and mortar storefront charge a sales tax that’s required in that specific area, but what if you have an online business? According to the FTC, if your business has a physical presence in a state, such as a store, office, or warehouse, you must collect applicable state and local sales tax. Of course, some states don’t have any sales tax. You’ll want to read the FTC guidelines and check with your state’s revenue agency to make sure you comply with the law.

15. International sales laws

With a website, any business can sell their products internationally. It instantly opens your business to a new audience, but that exposure comes with regulations. It poses questions about shipping, various taxes, and customs. The FTC has a guide to help you navigate the international waters.

Privacy law

16. Data security

If your business collects sensitive personal information from its customers, you must have a sound security plan in place. Aside from keeping the data under lock and key, you should only collect the information that you need, nothing more. The FTC has a guide to help businesses put a plan in place.

Healthcare laws

17. Affordable Care Act

In the last few years, healthcare laws have drastically changed. The new Affordable Care Act impacts every business. Prepare your startup by reading about the new healthcare policies.

18. Healthcare privacy

If your small business offers healthcare policies that can be accessed online, you’ll need to come up with a security plan for this data as well. If the information is ever breached, there are rules in place to notify those affected.

Intellectual property

19. Protect your intellectual property

If you develop a new product, you’ll want to protect it with a patent. You can also protect your business name, symbols, and logos by applying for a trademark. You can learn more about the process through the United States Patent and Trademark Office.

To protect books, movies, digital work, and musical pieces, you’ll want to copyright your work. The United States Copyright Office can help you file the correct paperwork.

Finance law

20. Bankruptcy

Though we hope you never have to go here, in some cases, new businesses hit financial roadblocks. If your business has cash flow problems and is exploring the possibility of bankruptcy, there are several laws you’ll want to familiarize yourself with before filing the paperwork. The Small Business Association has the resources you’ll need to review.

Researching business laws can be a tedious task, but it’s always best to be informed. While the list above covers a lot of legal ground, additional laws may pertain to your business. To protect yourself, find an experienced attorney and talk about laws that are specific to your business.

What can and can’t employers ask job applicants?

For many employers, knowing which questions can be asked of job applicants is akin to navigating a minefield, in large part because of the complexity of the laws associated with employment.

However, a good understanding of federal employment law can help avoid potentially explosive situations. Read more to find out what questions are likely permitted by U.S. employment laws and which ones aren’t.

Questions that can’t be asked

Nearly all questions that can’t be asked on a job application or during an interview relate to specific traits, attributes, sources of information, or characteristics identified by the U.S. Federal Government. These characteristics are often the basis of discrimination and therefore cannot be a basis for, among other things, not hiring a particular job applicant.

These characteristics include:

• Disability
• Race/color
• Religion
• National origin
• Age
• Gender
• Pregnancy
• Genetic information
• Citizenship
• Veteran status
• Familial status

In addition, some states have also passed laws that treat the following as protected characteristics:

• Sexual orientation
• Marital status

Given the protected characteristics listed above, it would seem reasonable to assume that employers just can’t specifically inquire as to whether a job applicant possessed any such characteristics; however, simply not inquiring about those characteristics—though generally a good practice—is only a starting point.

In fact, employers can get into hot water even if they don’t directly ask whether a particular applicant possesses a protected characteristic. By simply discussing or indirectly eliciting information about a protected characteristic, the employer could potentially be in violation of employment law.

For example, asking questions relating to or associated with protected characteristics can violate employment laws. If an employer were to ask an applicant if she planned on starting a family, even if it was coupled with a question about the applicant’s future plans or goals, the employer could be in violation of this law.

Additionally, asking an applicant if he/she celebrated a religious holiday would in effect be indirectly inquiring about an applicant or job candidate’s religion.

To be safe, employers should steer clear of these topics altogether to avoid directly or indirectly asking about these protected characteristics.

Questions that can be asked

While the protected characteristics set forth by the federal and state governments limit the types of questions employers can ask, there are still questions that can help determine if an applicant or job candidate is a good fit for the company.

Generally, employers can ask questions regarding whether the applicant will likely be able to fulfill specific duties/obligations of the job, e.g. ability to lift a certain amount of weight, and whether the applicant can satisfy specific requirements of the job, e.g. provide documentation of legal right to remain in the U.S.

This is not to say that employers can’t ask questions that would disqualify an applicant from the job because the applicant doesn’t possess those skills, qualities, or characteristics required by the job; in fact, the truth is quite the contrary.

For example, if a job requires that a person perform heavy lifting and it appears that the applicant has a disability that would likely make it very difficult to perform such heavy lifting, it is likely permissible to ask the applicant whether he/she can lift the amounts required by the job—the key is to make no mention of any disability when inquiring about the applicant’s capabilities.

Although it is permissible to ask whether an applicant can fulfill the duties, obligations, or requirements associated with the job, the duties, obligations, or requirements of the job cannot in and of themselves be illegal.

Additionally, interviewers can also ask questions pertaining to company culture, work ethic, and of course, job skills, as outlined above.

Applicant questions and interviewer responses

In the context of a job interview, the questions asked by an employer are only one part of the equation, and many interviewees have questions of their own for their interviewers, which could potentially be problematic for the employer.

In situations where an interviewer is either inexperienced with or not comfortable answering questions associated with protected characteristics, an interviewer can defer the question to the human resources department or other counsel.

To recap: Here are some rules to follow

Interviewers can avoid violating employment law by adhering to the following rules:

• Never ask direct questions or questions that tend to elicit information about a protected characteristic.
• Never ask job applicants if they can perform illegal duties or responsibilities.
• Defer questions asked by applicants about protected characteristics to the human resources department or other counsel.
• Know it is generally safe to ask if applicants can fulfill specific duties/obligations of the job.

While these rules apply to many circumstances, the laws associated with employment discrimination are fairly nuanced, and it may be wise to seek advice from a human resources professional or other counsel. It’s also important to keep in mind that there are indeed situations in which expert counsel may be required so as not to run afoul of employment laws.

Despite the fact that this post expressly addresses job interviews, many of these principles also apply to firing, compensation, assignment or classification of employees, transfer, promotion, layoff or recall, job advertisements, recruitment, testing, use of company facilities, training and apprenticeship programs, fringe benefits, pay, retirement plans, disability leave, and other terms and conditions of employment.

Do you have any further questions for us about what you can legally ask your applicants? Maybe you sought legal counsel before hiring, and can share your experience with other entrepreneurs? Ask us a question or share your experience in the comments below. 

Many employers assume that because they are “good” to their employees, they aren’t breaking any employment laws. Although this is sometimes the case, employers are often surprised to learn about the causes of action based upon which employees can bring suit.

In order to be less susceptible to workplace lawsuits, employers should stay up-to-date regarding the various state and federal laws that affect them. Doing this is however much easier said than done.

I’ve broken down five common types of workplace lawsuits that employers frequently face—all of which can often be avoided:

1. Personal injury
2. Overtime
3. Discrimination
4. Harassment
5. Wrongful termination

Although these might seem obvious, the laws are quite nuanced and employers may not realize the smaller details that could help them avoid these lawsuits. Read on to get the lowdown on these common workplace lawsuits.

1. Personal injury

An employer’s nightmare is a personal injury lawsuit brought against them. The truth is, more often than not, they are quite preventable. Employers may be held liable for injuries that an employee suffers while at work, which are the result, at least in part, of an employer’s negligence, when acting reasonably within the scope of his or her employment. This might seem like a no-brainer and something easy to prevent, but consider that in 2012 alone, there were 2,976,400 recordable instances of workplace injury. Workplace injuries can and do happen.

Often, claims of on-the-job personal injury are covered by worker’s compensation insurance. This insurance prevents an employee from seeking damages in excess of the payments received pursuant to worker’s compensation insurance.

In order to avoid such lawsuits, employers need, at a minimum, to carry worker’s compensation insurance and to respond promptly to safety issues communicated to the employer. Furthermore, employers should diligently monitor potential safety hazards, follow published safety guidelines, and adequately train employees on workplace safety.

2. Overtime

Overtime can be tricky if not tracked and properly understood. The Fair Labor Standards Act, or FLSA, is a federal law that sets forth, among other things, overtime pay requirements for non-salaried, hourly employees.

To help prevent overtime lawsuits, employers should implement systems or processes that both accurately and correctly track the amount of time that an employee has worked. By making sure that these systems and processes are in place and working properly, employers can rest assured knowing they are taking proactive steps to monitor the hours worked by their employees.

3. Discrimination

Unfortunately, discrimination is another common type of workplace lawsuit. An employee who is member one of the following protected classes can file suit against an employer if he or she has been treated unfairly.

Federally protected classes:

• Gender
• Race
• Color
• National origin
• Age
• Disability
• Religion
• Veteran status
• Pregnancy
• Citizenship
• Familial status
• Genetic information

State-law protected classes (varies from state to state):

• Sexual orientation
• Marital status

In the absence of direct evidence, like a written statement by an employer that a particular employee was fired because of his or her gender, the following four things must be proven as to the case:

1. The employee is a member of a protected class;
2. The employee is qualified and performing his/her job in a satisfactory manner;
3. The employee has suffered an “adverse action” (such as termination or lack of promotion); and
4. The “adverse action” was the result of the Employee’s membership in a protected class.

If a court is satisfied as to the preceding requirements, the employer must then prove, by records and other documentation, that the adverse action was the result of legitimate business reasons.

Avoiding discrimination lawsuits can be easy if you are aware of the law and prepared. Make sure that all business protocols, policies, and procedures are well documented and available to employees. Always document and retain records of employee reviews, poor performance, and tardiness.

4. Harassment

Although harassment doesn’t necessarily require that an employee be a member of any of the aforementioned protected classes, as bullying or flat-out hatred can apply to anyone, harassment is commonly associated with membership in a protected class. Incidents of harassment can range from seemingly benign statements or actions to outright hostile statements or actions.

Perhaps the best way to prevent harassment and discrimination is by developing and distributing an employee handbook and requiring regular review of its contents by all employees, especially those whose jobs include employee supervision or management. An employee handbook should not only set forth harassment rules and guidelines, but should also provide a discipline to those who violate such rules and guidelines.

5. Wrongful termination

Unlike discrimination and harassment, wrongful termination is not an actual cause of action upon which a lawsuit can be filed; it’s a blanket term used to describe various causes of action, both direct and indirect, that result in the wrongful termination of an employee.

For most employees, employment with a particular employer is “at-will” and not guaranteed pursuant to a contract. Unless there is a contract, either written or implied that guarantees continued employment, an employee must prove that the basis for the firing was illegal—this could include violation of public policy, breach of fair dealing or good faith, whistleblowing, or fraud, among other reasons.

Accurate and detailed records regarding employee performance, employee discipline, employee-employer communications, and so on, can help an employer prove the termination was legal and defend against claims of wrongful termination.

To recap, some steps employers can take to treat their employees fairly and mitigate the risk of these lawsuits include:

• Implementing systems to accurately track hourly employees’ time
• Developing, distributing, and reviewing an employee handbook
• Keeping detailed records of employee performance, discipline, and communications

Although these suggestions don’t guarantee that employees won’t be treated illegally or unfairly or that an employer won’t be sued, they can go a long way to prevent such problems.

Remember: An ounce of prevention is worth a pound of cure.

Can we add to this list in any way? How has your business ensured that all employees are treated legally and fairly? Tell us in the comments below. 

Prior to the JOBS Act, companies were exempt from registering their transactions, as long as there was no public offering involved. One of the conditions was that the company was not allowed to use “general solicitation to market the securities.” Essentially, companies weren’t allowed to advertise or use crowdfunding to attract investors.

So what does Rule 506(c) do? It gets rid of the prohibition of general solicitation, as long as investors resulting from that solicitation follow a few rules.

How is that different from crowdfunding, you might ask? Investopedia’s definition of crowdfunding highlights the restrictions on crowdfunding, namely, how much can be invested. This restriction is meant to protect individuals from losing the money they invest, especially since 25 percent of new businesses fail in their first year (the rate of those still in business after four years ranges between 37 to 58 percent, depending on the industry).

Let’s examine the basic framework for 506(c) and crowdfunding:

You can think of 506(c) offerings and crowdfunding as cousins. Both aim to make it easier for companies to tap into a diverse network of investors, and both harness the potential of new technologies to raise capital quickly and cheaply.

But, there are some crucial differences between the two. A basic guideline is that, in most cases, a 506(c) offering has fewer restrictions than crowdfunding, except when it comes to who can invest, where the rules are stricter for a 506(c).

1. Who can invest?

This is the one area where crowdfunding offers a more flexible opportunity to cast a wide net. 506(c) offerings must be made only by accredited investors, whereas crowdfunding ventures are free to accept backing from nonaccredited investors as well.

On top of that, Rule 506(c) investors must be verified as accredited investors. Companies can use a third party service, such as Verify Investor, or take the risk of performing the accreditation in house. The trouble is that investors are often reluctant to provide sensitive financial information about themselves to a company they’re agreeing to back, so going with a third party service is often the quickest and easiest way to get past the verification hurdle.

2. How much capital can you raise?

This is where crowdfunding’s most significant limitation comes in. While 506(c) offerings have no limit on their potential capital raise, crowdfunders are restricted to a yearly cap of $1 million. While this often works for musicians, authors, and some businesses, it may not be useful for a business that needs a lot of capital up front in order to get going.

3. Is advertising allowed?

Here’s something that might surprise you: while 506(c) offerings are marketed and advertised freely now, the rules overseeing crowdfunding solicitation are much more restrictive. General advertising is severely limited, and primary disclosure has to occur on an established “funding portal,” meaning one of the crowdfunding websites we’ve all seen on our social media feeds.

4. What is legal now?

506(c) is legal now; crowdfunding is kind of legal. The SEC has yet to put forth final recommendations, and only 11 states so far have legalized equity crowdfunding for businesses. Even so, those states do not allow the use of social media to attract investors, since the internet is obviously not restricted to state lines. Although there is a suggested framework in place, equity crowdfunding (unless it’s through Rule 506(c) to accredited investors) is largely not yet legal.

What is right for your company?

A range of factors come into play when deciding whether to go with 506(c) offerings or crowdfunding.

Considerations include:

• The size and scope of your company: Is $1M enough for you, or do you need more than that to get started? If you need more money up front, you should go with the 506(c) offerings. If your financial needs are less at the beginning, consider crowdfunding.
• You product or service and its audience: Remember, your audience also includes your potential investors. Are they likely to have the financial security to be accredited? If so, go with 506(c). If you’re looking for a wider variety of investors, crowdfunding may be more appealing.
• Your timeline: Do you need capital now, which would require you to use Rule 506(c), or can you wait as money trickles in?
• Legality: Remember that crowdfunding still involves some legal pitfalls regarding how much can be invested. Accredited investors have a sense of the risk they are taking when they invest, whereas small amount investors on a crowdfunding site may not. Consider the potential for backlash in your plan going forward, and remember to play it safe and consult your securities attorney.

Still unsure which option works best for your business? Ask us your questions in the comments below.

Hiring professionals for a small business is an important process. The best attorney for your business will depend on what the legal needs are for your company. In fact, there is a good chance there is no one attorney who can handle everything, so the best attorney may actually turn out to be a law firm with several attorneys having different specialties.

Small businesses often need help setting up the right legal form of business—negotiating contracts with customers or suppliers, assisting with real estate needs (such as a lease or a building purchase), taxes, zoning and licenses, protecting intellectual property, or settling litigation.

For example, contracts need to protect all parties involved in the transaction, when often lease agreements are written to protect only the landlord. These contracts are negotiable, and your attorney should have a standard “tenant’s addendum” containing provisions that benefit you that can be added to the printed lease document. Getting legal advice before you sign any contract could save you conflicts or dollars in the future.

So, how should a small business owner find the right legal help for their business? One option is to ask friends and business associates for a referral. Accountants, bankers, and insurance professionals will have attorneys they have worked with in the past and who they feel comfortable with. Resources also exist on the web, such as the American Bar Association, which has a state by state lawyer referral directory.

Interview more than one attorney to find someone who knows not only small business law, but also your industry. Ask questions about experience with the specific legal issues you are facing. Ask for references so you can check how satisfied other small business owners are with the services they received. Make sure you feel comfortable understanding what the attorney is saying to you. Remember, you are the customer in this situation and you need to feel this is the person or firm who can serve your needs now and in the future. Confirm fees in advance for this initial conversation and clarify fees that will be charged for future legal work.

An attorney is one of the key business professionals you want to have on your small business team. The right attorney can save your business money and time in dealing with complex legal matters.

Have you hired legal help for your small business? Share your experience in the comments below.

You can reach Arlene at asoto@socc.edu with further small business questions.

[ Down to Business is a weekly small business advice column featured in The World Newspaper, originally published online by the Oregon Small Business Development Center Network, and republished here with permission. ]

There are some tax mistakes commonly made by small business owners as well as some common deductions that aren’t taken, many of which you want to avoid next spring when doing your company taxes for 2013.

Common Tax Mistakes for Small Businesses

While there are many mistakes that small business owners make on a timely basis, here are a few of the top common tax problems for new businesses:

• Receipts Being Thrown Away – Many small businesses will only keep receipts that are higher than $75. Why should they keep everything? Because while the IRS does not require receipts on business meal or entertainment write-offs less than $75, in an audit you may need them. The receipt will also have needed information such as where you went and when you went there.
• Not Gifting Correctly – The IRS will allow up to $25 per individual gift, whether to clients or to others. Putting down a deduction of thousands of dollars for gifts will get you noticed. Only deduct $25 per gift, no matter how much higher the gift actually was.
• Getting Supplies Mixed in With Equipment – Equipment will depreciate, not supplies. By listing computers as a supply and not equipment, you may be facing the IRS disallowing the deduction at all. Always classify your equipment and supplies correctly, or there may not be any deduction given.

Commonly Missed Small Business Deductions

There are common deductions that can be put on your tax return as a small business, if you know. Many of these deductions are often missed:

• Retirement – If you have a SEP-IRA or a Keogh retirement fund and are self-employed, it is a write-off.
• Social Security – Since self-employed people must pay both halves of social security, they can deduct half their contribution on their taxes.
• Charges for Telephone – Business calls can be deducted, but keep in mind the telephone charges themselves cannot unless you have a second line that is used solely for business purposes.
• Furniture – If you have office furniture that was newly purchased that year you can choose to deduct the entire cost, or a portion over the next seven years. Office furniture is an often overlooked deduction.
• Business Office Supplies – All business supplies—every pen, paper, index card, etc.—can be written off. Ink, toner, etc is also deductible. If you use it in your business, keep every receipt.

Knowing these mistakes and common deductions, hopefully your next tax return will provide your company with a higher refund.

For the best results, always see a tax consultant months before filing so they can see problems and help you rectify them prior to the tax season.