Chapter 1. Hiring a Lawyer to Help Protect the EnterpriseA. IntroductionB. Choosing an Attorney1. Gathering Recommendations2. Interviewing the Attorneys3. Hiring the Attorney4. Large Law Firms or Smaller FirmsC. Using a Lawyer EffectivelyD. Using Legal SpecialistsE. How Much Will the Attorney Cost?F. Billing Practices of Law FirmsG. Attorney-Client PrivilegeH. Final ThoughtsApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 2. Avoiding LitigationA. IntroductionB. Litigation1. The Pre-Trial Stage2. The Trial3. The Post-Trial StageC. Alternative Dispute Resolution (ADR)1. Negotiation2. Mediation3. Arbitration4. Online Dispute ResolutionD. Avoiding Litigation1. Things to Consider2. Things to AvoidApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 3. Selecting the Proper Business FormA. IntroductionB. Steps to Forming Most Business Entities1. Step 12. Step 23. Step 34. Step 45. Step 56. Step 67. Step 78. Step 89. Step 910. Step 1011. Step 1112. Step 12C. Being Alone in a Sole ProprietorshipD. Forming a Partnership with OthersE. Limited PartnershipsF. Limited Liability Partnerships (LLP)G. CorporationsH. S CorporationsI. Limited Liability Companies (LLC)J. Personal Liability of the EntrepreneurK. Piercing the Corporate VeilL. Declaring Illegal DividendsM. Federal Income TaxationN. State Income TaxationO. Choosing a Legal HomeApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 4. Establishing and Serving on Boards of DirectorsA. IntroductionB. Fiduciary DutiesC. Duties and Responsibilities of the Board of Directors1. Establishing the Board of Directors2. Selecting Members to Serve on the Board of Directors3. Rights of the Directors4. Responsibilities of the DirectorsD. The Sarbanes-Oxley Act (SOX)E. Who Should Serve on the Board of Directors for the Venture?F. Advantages and Disadvantages of Outside DirectorsG. Attracting People to the Board of DirectorsH. Board MeetingsI. Committees1. Audit Committee2. Compensation Committee3. Executive Committee4. Investment Committee5. Litigation Committee6. Nominating CommitteeJ. Should the Entrepreneur Serve on the Boards of Other Companies?Application QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 5. Operating Through Agents and OfficersA. IntroductionB. Using Agents to Act on Behalf of the Venture1. Liability of the Agenta. Agent’s Commitment to the Third Partyb. Agent’s Warranties of Authority2. PromotersC. Fiduciary Duties1. Who Is Owed Fiduciary Duties?2. Duty of Care3. Business Judgment Rule (BJR)4. Additional Protections for the Directors and Officers5. Duty of Loyalty6. Self-Dealing7. Business Opportunities8. Criminal LiabilityD. OfficersE. The Sarbanes-Oxley Act (SOX)1. Disclosure Committee2. ProxiesApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 6. Raising Funds for the VentureA. IntroductionB. BootstrappingC. Family and FriendsD. Commercial Banks and LendersE. Small Business AdministrationF. “Angels” as InvestorsG. Venture CapitalistsH. Equity FundingI. Securities Laws and the EntrepreneurJ. JOBS Act and CrowdfundingApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 7. Avoiding Torts and Minimizing RisksA. IntroductionB. Torts DefinedC. Negligence1. Negligent Hiring2. Negligent Retention3. Negligent Promotion4. Negligent SupervisionD. Intentional Torts1. Assault and Battery2. False Imprisonment3. Interference with Contractual Relations4. Interference with Prospective Advantage5. Invasion of Privacy6. Privacy IssuesE. Strict LiabilityF. Respondeat SuperiorG. How to Reduce the Risks1. Provide Training and Instructions to Employees2. Prepare Operations Manuals3. Safety Committee4. Monitor EmployeesH. Beware of Bored EmployeesI. Set a Good ExampleJ. Managing the RisksApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 8. Supervising Workers to Reduce the RisksA. IntroductionB. Hiring and Supervising Employees1. Should Employees Be Hired at Will, or Should There Be a Contract for a Period of Time?2. How to Reduce Risks Associated with Hiring and Supervising Employeesa. Performance Reviewsb. Inventionsc. Trade Secrets and Non-Disclosure Agreements3. How to Reduce the Risks Associated with Firing EmployeesC. Using Independent Contractors to Reduce Costs and Risks1. What Is the Difference Between an Independent Contractor and an Employee?2. Why Does It Matter if the Worker Is an Independent Contractor or an Employee?3. Advantages and Disadvantages of Independent Contractors4. Statutory Employees and Statutory Nonemployees5. Misclassified Workers6. Liability for the Physical Acts of Independent ContractorsD. Gratuitous Employees and AgentsE. Employee HandbooksF. Employment Policies1. Non-Solicitation and Antipiracy Agreements2. Nepotism Policy3. No-Moonlighting ClauseApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 9. Complying with Employment LawsA. IntroductionB. Discrimination1. Legal and Illegal Discrimination2. Disparate Treatment and Disparate Impact3. Bona Fide Occupational Qualifications (BFOQs)4. Discrimination Based on Religion5. Sexual Harassment6. Once a Discrimination Complaint Is FiledC. Workplace RomancesD. Americans with Disabilities Act (ADA)1. Public Accommodations Provisions of the ADA2. Employment Provisions of the ADAE. Providing a Safe Place to Work and Workers’ Compensation1. Rights of the Injured Worker2. Workers’ Compensation3. Workplace ViolenceF. Drug TestingG. Wages1. Minimum Wage2. OvertimeH. Required BreaksI. Whistle-Blower ProtectionJ. UnionsApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 10. Protecting the Venture’s Name and ReputationA. IntroductionB. DefamationC. DisparagementD. Palming OffE. Product Liability1. Warranties2. Negligence3. Strict LiabilityF. Final ThoughtsApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 11. Protecting What Makes the Venture UniqueA. IntroductionB. Intellectual Property1. Patents2. Trademarks and Service Marks3. Trade Dress4. Trade Secrets5. CopyrightC. The Internet1. Domain Names2. Internet Practices and PoliciesApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 12. Minimizing and Shifting Risks Through ContractsA. IntroductionB. Contract FormationC. Terminating an OfferD. Affirmative Defenses to Contracts1. Reality of Consent2. Capacity to Contract3. Legality4. Proper FormE. Special Terms and Clauses1. Non-Disclosure Agreements2. Covenant Not to Compete3. Saving Clause4. Arbitration Clause5. Force Majeure ClauseF. Battle of the FormsApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 13. Obtaining Insurance to Protect the Enterprise from RisksA. Managing Risk with InsuranceB. Insurance VocabularyC. Insurable Risks and EventsD. Purchasing Insurance Policies1. Selecting an Insurance Company2. Paying of Commissions to Agents and EmployeesE. Homeowner’s Insurance Versus Business InsuranceF. Techniques to Reduce Insurance PremiumsG. Property Insurance1. Types of Property Covered2. Types of Events Covered3. Premiums for Property Insurance4. Replacement Cost, Actual Cash Value, or Policy Limits InsuranceH. Liability Insurance1. Product Liability Insurance2. Workers’ Compensation InsuranceI. Automobile InsuranceJ. Intellectual Property InsuranceK. Business Interruption InsuranceL. Special Types of CoverageM. Make a Claim TimelyN. Insurance as an Employee BenefitO. Life Insurance on Founders and Key PersonnelP. Techniques for Saving Money on InsuranceApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsSuggested ActivitiesChapter 14. Identifying Legal Risks Before They Become Legal ProblemsA. The Importance of Preventive LawB. Resolving Legal ProblemsC. Preventing Legal Problems1. Workers, a Potential Source of Liability2. Contracts, the First Line of Prevention3. Identifying Legal Problems4. Knowledge Is PowerApplication QuestionsSummaryKey TermsEnd-of-Chapter QuestionsAppendix. Resources for the FutureINDEX