Examining the Advantages and Disadvantages of a Sole Proprietorship

Illinois small business attorneysIn a sole proprietorship, an individual proprietor (the owner), manages and runs their business. They receive all income for the company, but they are also responsible for its debts, liabilities, and tax obligations. Learn more about this widely used business structure, including its advantages and disadvantages, and how an attorney can assist with the setup.

Advantages of a Sole Proprietorship

Of all the business structures that one can choose, sole proprietorships tend to be the most affordable and easiest to start. Paperwork and other legal items are generally less extensive, and the sole proprietor is only required to comply with state and federal tax laws, zoning laws, and other local regulations, such as licensing laws.

There are also few formal business requirements (except those specific to the industry they operate in), and because the owner has full control over the decision-making power within their business, they may sell or transfer it to another owner or entity at any time they deem necessary. The owner may also change the structure of the business at any time, but it is important to recognize that obligations before the switch may still fall on the owner of the company.

Disadvantages of a Sole Proprietorship

Unlike other business structures, sole proprietorships are not protected from liabilities and bad debts incurred by their company. Instead, they may be held personally liable. In extreme situations, this can cause the business and the owner to simultaneously go bankrupt. Furthermore, the sole proprietor is required to pay all federal taxes on any income earned, and they may be penalized if they do not meet their obligation.

Another major disadvantage is that few investors are willing to put money or energy into a sole proprietorship; quite simply, there just is not enough protection for the investor. As such, sole proprietor business owners typically rely on personal loans and assets to finance the company. If the business fails, this can result in a serious financial loss for the owner of a sole proprietorship.

Contact Our DuPage County Business Law Attorneys

Although sole proprietorships are relatively simple and straightforward in terms of setup, there are some obstacles that business owners should be aware of before moving forward. Stock, Carlson, Oldfield & McGrath, LLC can help ensure that these matters are understood by business owners and that they receive personalized attention to fit their needs. Learn more about how we can assist with your business set-up by scheduling a personalized consultation with our DuPage County business law attorneys. Call our offices at 630-665-2500 today.

Source:

http://www.nytimes.com/allbusiness/AB4113314_primary.html

Investigating the Social Media Conduct of an Employee

Illinois business law attorneyAs most business owners know, the actions and inactions of an employee can greatly impact your company’s image. When the action is a positive experience, it reflects well on the company. The exact opposite happens when an employee acts in a way that is considered unacceptable. Unfortunately, if that poor conduct occurs online, the employer may be limited in the actions they can take. Learn more about the investigation of an employee’s social media account, including how to avoid violations under the Stored Communications Act.

Unsavory Social Media Behavior

If your company has an image to protect – be it honesty, integrity, compassion, or top-notch customer service – then you may already have a social media policy in place. Unfortunately, some employees may still break the rules, even with the rules in place. If that happens, you may need evidence from an investigation before you can bring action against the offending employee (i.e. termination, lawsuit, etc.). Without it, you may be at risk for litigation. Yet conducting it can also place your company at risk, especially if you violate the SCA.

The Stored Communications Act

Enacted in 1986, the Stored Communications Act protects the private electronic communications of every American. It states that no one can intentionally access the electronic communications of another person without their consent. Not even law enforcement can access certain information without a search warrant. Employers may be at an even further disadvantage and could even be at risk of criminal charges if they violate the Act.

What Can You Access, and How?

One of the easiest ways to monitor an employee’s social media account is to request that they add you or your company as a contact. Not only does this give you a first-hand account of what they are posting, but it also gives you a way to take screenshots of offending posts. Another strategy is to require that employees provide you with copies of offending posts. You cannot request access to their account, however, and it is advised that you avoid requesting information that may be unrelated to the offending comment.

Obtain Assistance with Your Company’s Needs

Stock, Carlson, Oldfield & McGrath, LLC understands just how important it is to protect your company. Whether you need assistance with the development of a social media policy, an investigation of an employee, or protection in the face of litigation, we are here for you. Schedule your personalized consultation with our DuPage County business law attorneys to learn more. Call 630-665-2500 today.

Sources:

http://www.insidecounsel.com/2017/06/22/investigating-employees-social-media-activity-3-pe

https://www.justice.gov/usam/criminal-resource-manual-1061-unlawful-access-stored-communications-18-usc-2701

 

Electronic Business Contracts – Are They Valid?

Illinois business law attorneysLong gone are the days of doing everything on paper. Pictures and important documents are stored in the cloud. People often connect more with the people on their social media account than their neighbors. Even business contracts are sent and signed digitally. Are digital contracts an effective or legal option for businesses though? Can they stand up in the face of business litigation, or are digital contracts a lawsuit waiting to happen?

Uniform Electronic Transaction Act

In 1999, a total of 47 states adopted the Uniform Electronic Act, which indicates electronic signatures may be considered just as valid and legally binding as a manual one. The state of Illinois did not accept this law, but many digital signatures are considered valid. However, it is important to note that electronic signatures on negotiable instruments are not considered valid in the state of Illinois. Further, there may be additional restrictions placed on the validity of a specific contract or signature.

Advantages and Disadvantages of Electronic Contracts

One of the biggest benefits of electronic contracts is that they offer an easy way to send, receive, and store important business and employment contracts. Electronic signatures can also facilitate faster processing of certain documents. However, electronic contracts also have potential disadvantages – some of which are significant.

By far, the most concerning problem of electronic contracts in Illinois is the way they leave room for litigation. This risk is present for many reasons, but the lack of universal standards within the state is one of the most influential. Thankfully, a judge cannot simply deem a signature invalid because it was obtained electronically. Instead, they may consider some of the following aspects:

  • If all elements of a contract were present (offer, consent, acceptance);
  • If both parties entered the contract willfully;
  • The method or manner through which the signature was obtained; and,
  • Any other relevant factors to the case.

Contact Our DuPage County Business Law Attorneys

If you are a business owner who wishes to use electronic contracts in any aspect of your business, it is important that you discuss this desire with an experienced business law attorney. Not only can this prevent a costly mistake, but it can also help ensure your company is compliant in other areas of Illinois business law.

Stock, Carlson, Oldfield & McGrath, LLC is dedicated to the future of your company. Dedicated and experienced, we can carefully review your current legal processes to determine if there are any issues that may place your company at risk. Schedule your consultation with our DuPage County business law attorneys to learn more. Call 630-665-2500 today.

Sources:

http://www.uniformlaws.org/Act.aspx?title=Electronic%20Transactions%20Act

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=89&ChapterID=2