Trade Secrets: Voicemail Sinks Case

Law.com reports that a California trade secrets case may have been lost by one party's lawyers leaving a message on the other parties' voicemail.

In Jasmine Networks Inc. v. Marvell Semiconductor Inc., S124914, Marvell attorneys had argued Jasmine wasn't entitled to use a voice mail that Matthew Gloss -- Marvell's former general counsel -- and two colleagues had inadvertently left on the telephone of Jasmine's top lawyer. Jasmine wanted to introduce the voice mail as evidence that Marvell was planning to steal Jasmine's trade secrets.

The California Court of Appeals ruled against Marvell and the California Supreme Court ordered the case back to the Court of Appeals.

Be very careful not only about what you say but where you say it - digital recording can be evidence.

So What is Wrong About Using Online Forms?

I had thought to do a dissection of some of these forms until I read The Perils of Using Form Agreements from Deal Attorney. I think this article is a good place to start for anyone contemplating using an online form.

I think the article offers a more subtle reward for you non-lawyers - even those who are not in business. Read the post and you will see what having an attorney brings to document preparation. It is not merely having a law degree that is important here but the methodology brought to bear on analyzing the worth of a document. The experience gained by practicing law to know the good, the bad, and the ugly points of forms. Like many tools, legal forms can bring good and they can bring harm. You can see how a lawyer handles a form by reading this post.

Trademarks: Champagne

I suggest reading Produced in Champagne, but What Do You Call It? from The New York Times is not the typical trademarks article. First, it is European although the broader enforcement issues of a trademark remain the same. Second, it involves a treaty rather than a statute, but remember under our federal constitution that treaties are a source of law. Mostly, it does show the power of trademarks.

Employment Law and Social Networking Sights

Suggested reading for employers and employees alike from The Washington Post: When Young Teachers Go Wild on the Web.

Part of me wants to say that college educated, licensed people like teachers ought to know better. So having written that, let me go on to observe that some do not know better.

Let us be clear that teachers being employed by government agencies have different obligations to their employer than do private employees. Indiana allows for the firing of most employees for any reason whatsoever as Indiana is an employment-at-will state. Teachers fit into a different category. Which means those without employment contracts could be fired for the activities described in the WAPO article.

Employers need to consider whether they want to monitor Facebook and MySpace for pages of their employees. Employers could do something described in the article:

Local school officials said they don't necessarily scrutinize Facebook when they conduct background checks on teachers. But in some parts of the country, they do.

"I know for a fact that when a superintendent in Missouri was interviewing potential teachers last year, he would ask, 'Do you have a Facebook or MySpace page?' " said Todd Fuller, a spokesman for the Missouri State Teachers Association, which is warning members to clean up their pages. "If the candidate said yes, then the superintendent would say, 'I've got my computer up right now. Let's take a look.' "

Public employees need to consider this:

If teachers claim free speech protection under the First Amendment, Simpson said, the U.S. Supreme Court recently ruled that governments can fire employees if their speech harmed the workplace's mission and function.

Prudence and discretion are not necessarily bad things. When I was much younger, I remember hearing something along the lines of this: do not do anything you would mind seeing on the front page of the newspaper. The Internet allows all of us to create our own modern version of the newspaper front page.

In the following is some good advice for all potential employees:

In an interview, Melton said: "Is my Facebook profile open? I definitely thought I closed [the page] to people. . . . " Access to her page was later restricted, effectively withdrawing it from public view.

Employers, you have a lot more to think about concerning work policies. About all I can offer is that you make a decision on whether or not to that you care about what your employees do on Facebook and its competitors. If you decide other than to ignore employee pages on social networking sites, then put it into writing and stick to it.

Following Up on "Trade Secrets Litigation: Allstate Posts Documents Online"

Womble Trade Secrets Blog posted about Allstate's putting alleged trade secrets up on the Net. Its Good Hands Trade Secrets: Allstate Releases Data on How it Sets Rates from April 8 has two points not included in my Trade Secrets Litigation: Allstate Posts Documents Online:

Allstate said Monday that it didn't post the documents in response to Friday's court ruling, noting that it could not have created a site with 150,000 pages that quickly.

"We think the documents do merit protection and what we did to protect them was justified, but at some point you have to look to the threat of the brand," spokesman Rich Halberg said. "Critics were using bits and snippets of documents to create an inaccurate picture of claims."

More Premier Properties Information

Indiana Commercial Foreclosure Law has a timeline (with links) for the Premier Properties case I wrote about in Why We See Few Receiverships.

Thanks to Indiana Commercial Foreclosure Law for showing me the way to Bridgewater Falls put in receivership from The Cincinnati Enquirer. For some reason Ohio creditors had their receivership in place last month,

Rocky Brands - A Follw up on Trade Secrets News Roundup of 2/18/08

According to Columbus Business First, Rocky Brands settled its trade secrets case:

The Nelsonville-based footwear maker on Monday said it reached a settlement with former Rocky employee Glen Bratcher, his company and a Chinese manufacturer it alleged were using trade secrets to make boots nearly identical to some Rocky lines. Also named in the suit were Bratcher's Franklin, Tenn.-based company, Westwood Footwear and Accessories LLC and Nantong Hong Yi Wang Shoes Company Ltd., which makes products for Westwood as well as Rocky Brands.

Rocky said terms of the settlement are confidential, but CEO Mike Brooks said the company is "extremely pleased" with the resolution of the case, which included 13 claims against Bratcher and the two companies.

Online Resoources: Searchable e-Discovery Case Log

A bit more for any lawyers is K&L Gates' Searchable e-Discovery Case Log:

"K&L Gates maintains and continually updates a database containing over 900 electronic discovery cases collected from state and federal jurisdictions around the United States. This database is searchable by keyword, as well as by any combination of 28 different case attributes, e.g., on-site inspection, allegations of spoliation, motion for a preservation order, etc. Each search will produce a list of relevant cases, including a brief description of the nature and disposition of each case, the electronic evidence involved and a link to a more detailed case summary if available."

I find this interesting both for its content and for its idea of presenting information for free on the Net. Probably does not seem like much for non-lawyers but I bet it took some convincing to get this done.

Franchise Financing News

My Biz Broker's More On Franchises interests me for this bit of information:

Indeed, with banks becoming more tight-fisted, the SBA is becoming the place more would-be franchisees are turning to. It’s what the SBA was created for, to provide access to capital for small businesses who can’t get it through conventional means.

Circumstances such as paying clients have lead me a bit away from current news on franchising but I think would have seen this information. Not that it seems strange considering our current economic conditions but I would like to see some confirmation for certainty. Meanwhile, it does seem good advice for new franchisees and franchisors.

Trade Secrets Video

The Trade Secrets Vault posted a link to a law school lecture on trade secrets. The lecture tries to answer the question Why Do We Have Trade Secrets?. I am not sure how many non-lawyers will sit through a 45 minute lecture. I find this interesting regardless of the sound quality - but then I am a lawyer interested in this area of law, aren't I?

Who do I think should listen to this video?

1. Those in the DIY crowd who think they can handle trade secret matters on their own. They need to know the complications of the area.
2. Those who want to know why trade secrets are important.

Certification Requirements for Imported Natural Wine

New regulations proposed and can be seen here.

SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau is adopting as a final rule, without changes, the temporary regulations implementing the certification requirements regarding production practices and procedures for imported natural wine. These requirements were adopted in section 2002 of the Miscellaneous Trade and Technical Corrections Act of 2004 as an amendment to section 5382 of the Internal Revenue Code of 1986.

Piercing Liability Protections of a Limited Liability Company - Some Ideas by Way of North Carolina

Wilmington North Carolina Business Law and Litigation Attorney Blog has a multi-part article on getting past the personal liability protections of a LLC. This article bears paying attention to for Indiana limited liability companies.

I have yet to see a case from Indiana on the subject but it is one that interests me both from the perspective of creating limited liability companies for clients and also because I may be suing a limited liability company. North Carolina might have some ideas for Indiana. In Piercing the LLC Veil in North Carolina - Part II, the North Carolina statute is quoted:

The North Carolina Limited Liability Company Act protects LLC members from liability for the actions of the LLC. N.C.Gen.Stat. § 57C-3-30(a) provides:

A person who is a member or manager, or both, of a limited liability company is not liable for the obligations of a limited liability company solely by reason of being a member or manager or both, and does not become so by participating, in whatever capacity, in the management or control of the business.

Indiana's has a similar statute:

IC 23-18-3-3 Personal liability of members, managers, agents, or employees
(a) A member, a manager, an agent, or an employee of a limited liability company is not personally liable for the debts, obligations, or liabilities of the limited liability company, whether arising in contract, tort, or otherwise, or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company. A member, a manager, an agent, or an employee of a limited liability company may be personally liable for the person's own acts or omissions.

If anything, Indiana offers wider protection to limited liability companies. Neither North Carolina nor Indiana defines the acts or conduct or omissions that might lead to personal liability.

Apparently, North Carolina lawyers have attempted to use the traditional, veil-piercing factors from corporations law as a guide to piercing the liability protections of the LLC. I must agree with this paragraph:

Of course, such an approach misses the obvious: an LLC is not a corporation. They are different types of business entity altogether. Just because the courts can look past a corporation's liability protection under certain circumstances, it does not automatically follow that those exact same circumstances should cause an LLC member to lose liability protection.

Not knowing the facts of the North Carolina cases, I am left with some guesswork about the reason for using corporations law. Either it is a sign of how conservatively our lawyer's brains work or it is a sign of laziness or both. I would think the better analogy would be to limited partnerships. Whether such an argument gets one any further in piercing a LLC's liability protection is a question for another time but I doubt this argument would be any more successful.

I also suggest reading Piercing the LLC Veil in North Carolina - Part 3. In this part, the argument appears to be that creating a LLC for the purpose of defrauding creditors might lead to a piercing of the veil. I find this appealing as an equity style argument but I keep thinking the evidence had better be pretty and prepare for an appeal if successful.

Follow Up on "Restaurants and intellectual property"

Trade Secrets Vault Blog reports in April 19 post Chef’s Lawsuit Against a Former Assistant Is Settled Out of Court settlement of the Pearl Oyster Bar case mentioned in my posts Restaurants and intellectual property and Thinking more about restaurants and intellectual property #1.

The settlement included a confidentiality clause, so no one but the parties and lawyers know the settlement's details.

What can an Indiana employer do about hiring an Employee who might have trade secrets?

Other than not hiring a person from a competitor because you know they have trade secrets, I find the following general rules from Trade Secret Misappropriation By Employee: Is The Employer Liable? are a very good start:

...., employers hiring employees from competitors should, at a minimum, first ascertain that there is no non-compete agreement with the prior employer. Second, the new employer should have the new employee sign a statement for the personnel file that the new employee either does not have knowledge of any trade secrets of the prior employer or shall not use any such trade secrets of the prior employer while employed by the new employer. While such a statement may not necessarily assure protection against liability, it will at least show a good faith attempt to avoid misappropriation of trade secrets.

Employers should ask if there is a non-compete agreement of every employee. Without knowing any particular positions or employee's talents, the employer should consider placing the employee in a position differing from their former job.

Ah, The Vagaries of Litigation

Read Trade Secret Jury Verdict : Redwood Health Services v. Clifford Der, dba Benefit Brokerage Services from The Trade Secrets Vault Blog to understand what I mean by vagary.

Verdict-Defendant : The jury found in favor of the plaintiff on the counts of breach of fiduciary duty and interference of contract, and awarded it $59,780. The jury found for Der on the counts of breach of contract and common counts, and awarded him $135,291.

I see here a good example of why cases settle rather than going to a jury and leaves me with questions of evidence.

New Real Estate Case from the Indiana Court of Appeals

The Indiana Court of Appeals handed down Hays v. Hays (PDF format) yesterday. At issue was interpreting a deed's first-right-of-refusal clause and Indiana's partition statute. The parties involved were the son of the grantors and the wife of a deceased son.

Two things come to mind as I read the case. First, that good drafting follows having a good enough imagination to foresee the reasonable contingencies that might follow out of the relationship of people to the subject of the deal. Lacking any means for deducing the grantors' intentions, they may have considered that one son would die leaving a wife and then, too, maybe not.

The second thing coming to my mind is the operation of the partition process. The property will now be sold. Not part of it, but all of it. From my reading, I think saying that is not the result desired by the son is a gross understatement. Whether selling the property is best for the property is a question that cannot be answered by the opinion.

Small Business Estate Planning

Some good ideas from TLD's General Counsel Blog:

A buy-sell agreement is one option (which won't be discussed here in this post) and setting up an estate plan is another option often considered. If you set up an estate plan to include a revocable living trust, you can assign or transfer your business interest into your trust and specify what happens to that share of the business interest.

One common approach for married couples is to transfer the business interest to the trust and allow the surviving spouse to manage the interest and upon the death of both spouses, the interest is then transferred to the surviving children either in equal shares or to the child who is most interested in the business interest (for whatever reason). Additional language can be included depending on the type of business interest involved and what your wishes are in case something happens.

Remember that trusts are a tool. I do want anyone to think they are the only tool. Another tool may be the answer in another situation. In other words, one size does not fit all. The important things for business owners to do is to plan for the succession in their business and then take steps for carrying out the plan.

If you have an Indiana business and need legal counsel for estate planning, I am taking on new clients at this time.

Notice, Preliminary Injunctions, Employment Contracts, and The Indiana Court of Appeals

Ordinarily, preliminary injunctions come before trial on the substantial issues of the case. Not in Roberts v. Community Hospitals of Indiana, Inc. (PDF format).

If the court consolidates the preliminary injunction with trial, there has to be proper notice given to all the parties. Notice gives the parties time to properly prepare for the hearing. The Indiana Court of Appeals held that there was not enough notice given in this case and sent it back to the trial court.

The case gives us an insight in the preliminary injunction process. I find the case worth reading for that reason alone.

If you are looking for Indiana counsel for business litigation, please remember that I am taking on cases at this time.

Why We See Few Receiverships

The Indianapolis Business Journal sums up the reason in the first line of Premier Properties retreats into bankruptcy:

"Premier Properties USA Inc. filed for bankruptcy protection yesterday, narrowly avoiding the appointment of a receiver to take control of the troubled Indianapolis company."

Federal bankruptcy court serves as a refuge from state receivership statutes. Any state insolvency proceeding has federal bankruptcy law looming over it.

That does not mean that state alternatives to federal bankruptcy law needs discarded but only that federal law must be considered when evaluating options for the insolvent business.

4/26/08 update: See The Ongoing Saga Of Indianapolis Real Estate Development Company Premier Properties USA, And Owner Christopher P. White for a complete chronology of this case (well, complete to today's date) and Bridgewater Falls put in receivership from The Cincinnati Enquirer.


4/25/08 follow up on Premier: Emergency hearing scheduled for Premier

Virtual Worlds - Virtual Law?

Going a bit afield for this post, but I decided while reading Virtually Blind's Blawg Review #156 that the future is here. I read William Gibson's cyber-punk novels a long time ago and some of the ideas and news discussed in the blog post seem very familiar. Ten years or so after the dot com bust, I am just as leery as anyone the transforming powers of the Internet. Okay, maybe I am not as leery as some because I do see the potential for business and for trouble in the virtual world. If I did not see this potential for business, I would not highly recommend reading the post from Virtually Blind and adding the blog to your RSS reader.

You may also want to take a look at Second Life DMCA Statement Raises Question: Does Provider Expeditiously Remove Infringing Material?.

New Court of Appeals Case on Crime Victim's Statute, Mortgage Foreclosure and Fidicuiary Duty

And discovery sanctions and attorney fees and garnishment orders. At sixty-seven pages, I still have not fully digested Prime Mortgage USA, Inc. v. Nichols (PDF format) beyond recognizing that this looks like a bombshell of a case. The Court of Appeals describes the issues as follows:

Issues

1. Whether Nichols's claim under Indiana Code section 34-24-3-1 (the "Crime Victims Statute") is barred by the statute of limitations;

2. Whether the Defendants were entitled to a jury trial on the amount of damages under the Crime Victims Statute:

3. Whether the trial court abused its discretion in ordering default judgments as a sanction for discovery violations:

4. Whether the trial court's award of damages was proper and supported by the evidence;

5. Whether sufficient evidence existed to hold the Defendants liable under the Crime Victims Statute;

6. Whether the trial court's award of attorney's fees was improper:

7. Whether the trial court improperly determined that Nichols's unpaid compensation constituted "wages" under Indiana Code sections 22-2-5-1 and -2:

8. Whether Nichols's claims are barred by the doctrine of unclean hands: and

9. Whether the trial court's garnishment order was improper under either Indiana Code section 27-1-12-14(e) or Indiana Code section 27-I-I 2-17.1(1).

That list excludes one important issue and why I fully expect a petition to transfer to the Indiana Supreme Court is being contemplated by the appellant: "The trial court held a hearing on damages. and awarded roughly eight million dollars to Nichols."

I plan on breaking the case down by topic in separate posts rather than one big post. Stay tuned.

Speaking of General Counsel: TLD's General Counsel Blog

I make a few comments below about general counsel for a business. Out of California comes TLD's General Counsel Blog giving us an example of the range for a general counsel and some good blogging, too. Tremaine, Lumsdaine & Doyle (the TLD of the title) subtitled their blog as "A Compendium of Matters of Interest to Businesses in California". Even with its California perspective, I think it has items of interest to businesses and lawyers outside of California.

Making the Most of Your Lawyer

Thanks to Wilmington North Carolina Business Law and Litigation Attorney Blog for the lead to Getting the Most From Your Attorney from The New York Enterprise Report.

The Wilmington North Carolina Business Law and Litigation Attorney Blog noted the following and I want to add an amen to this statement:

...In the third item on Dan's list is one I always emphasize:

Use lawyers to prevent problems, not just fix them. Many small businesses do not have attorneys until they think they need them. You need to make sure you are proactive in identifying legal issues before they become problems, and problems before they become lawsuits.

I would personally prefer to have my days be filled with short, simple, inexpensive legal work that solves problems and ends them, instead of having them filled with long, complicated, intractable and expensive problems. The latter might ultimately be slightly more lucrative for the attorney, but my view is that both myself and my clients are best served when the problems are handled while they are still small, manageable, easy to handle, and cost little to solve.

I would add something to points 2, 4, and 9 about selecting attorneys. There is a growing trend for outside general counsel. What is this? In-house counsel who are not employees but provide all the services of in-house counsel. I am aware of two companies providing this kind of service: In House Legal and Outside GC. I have been offering this sort of service for several years now. The point is not to select one counsel for a particular matter or networking with lawyers but having a lawyer acting as outside general counsel who has the network in place and knows the business objectives of the client.

Franchising: Evaluating a Franchisor

Rush Nigut has another good franchising post, Evaluate the Strength of a Franchisor, which comments on Evaluate the Strength of Your Franchisor Before Signing On from First Prize Franchise.

I, too, commend the original article to any potential franchisee. However, I think Mr. Nigut does a great job condensing everything written about the dangers and risks of franchising for franchisees:

One critical aspect to consider in my view is the brand itself. Is the brand recognizable? If not, the franchise better have a fantastic system, unique concept or protected intellectual property. Otherwise, I think you need to question whether the franchise is right for you.

If you would not spend your money at the franchise, why should anyone else?

And, yes, I know I said was cutting out the franchise articles but this was too good not to pass along.

Blog Review: Wilmington North Carolina Business Law and Litigation Attorney Blog

I would call Wilmington North Carolina Business Law and Litigation Attorney Blog a lawyer's blog. By that I mean the general public may not find it very useful or interesting but that attorneys should find it very interesting. At least, I did.

Non-lawyer writing on Trade Secrets

If you have read my trade secret articles and I have left you somewhat dazed and confused, then please read Intellectual Property - Trade Secrets, Copyrights and Trademarks from the Independent Inventors Blog. For a non-lawyer, he does a very good job of explaining the importance of trade secrets.

Trade Secrets Litigation News

Tesla Motors looks like the big news of the week. At least, that is my impression from today's Google Alerts.

Edmunds Inside Line's Tesla Motors Sues Fisker Over Trade Secret reports:

SAN FRANCISCO — Tesla Motors filed suit on Monday in San Mateo Superior Court. The action contends that Denmark-born designer Henrik Fisker's company fraudulently agreed to take on Tesla's $875,000 design contract for the White Star sedan to gain access to confidential design information and trade secrets, according to media reports. Afterward, Fisker announced the Karma, a competing vehicle.

"It caused a slight delay in White Star because we could not use the Fisker styling," Tesla Chairman Elon Musk told The New York Times. "The styling was substandard compared to what he unveiled for his product. He gave us an inferior work product, and it's obvious why."

Autoweek's Tesla sues Fisker, alleges theft of trade secrets adds what I find to be a very interesting paragraph:

The contract had a non-exclusivity clause, which allowed Fisker to perform styling and design services for other companies. Henrik Fisker is a former Aston Martin designer who started his own company in 2005 to specialty BMW and Mercedes cars.

I have to wonder what this clause says. Right now, I am hearing Claude Rains decrying gambling at Rick's while pocketing his winnings. As for the trade secrets claim, I would think that a non-exclusivity clause acts as a warning sign to protect trade secrets.

With high stakes for Tesla and a lot of money on the line, this could be the trade secrets case of the year.

Franchising Epiphany

Before explaining what caused the epiphany, let me explain what is an epiphany. After all, I have heard some strange uses of the word. Here is the relevant part of the definition:

3. a. A sudden manifestation of the essence or meaning of something.
b. A comprehension or perception of reality by means of a sudden intuitive realization

This epiphany occurred while reading Rush on Business Blog's Franchise Due Diligence: Ask what they don't do well:

He says this evoked the best responses from franchisees when he conducted his due diligence. If you are considering a franchise be sure to talk to as many franchisees as possible. Speaking to only a handful is not enough

Frankly, I am quite annoyed at myself for not thinking about this when I was in-house counsel for a franchisor. Great advice for a potential franchisee.

Yes, Yes, Yes... A Great Trade Secrets Post

Excuse the Meg Ryan/When Harry Met Sally imitation, but I read the following in Shhh….it’s my trade secret. from Wisconsin Business Law and Litigation and could not resist:

When new businesses begin hiring, they are driven clarify to extreme degrees that no employee should bring in either ideas, documents, etc from former employers to use at the new job. They may also inquire into any non-compete or non-disclosure agreements the employee signed with a prior employers and, contrarily, may have employees sign new non-compete and non-disclosure agreements to protect the company’s own trade secrets.

There is no doubt that trade secrets are valuable, but they require constant tending, like a plant.

I have been trying to get certain ideas across about trade secrets for the past year and there they are in two neat paragraphs. Beautiful.

The post also makes a good point for what I call trade secret audits:

The primary problem businesses run into with trade secret law is the second prong - reasonable efforts to maintain secrecy of the trade secret. Courts judge reasonableness based on the nature of the secret so a business generally has no way to predict what protection measures will be sufficient in the court’s eyes.

Having counsel review your methods for protecting your trade secrets may not be a magic bullet but I do think it will help prove sufficiency to a court.

The New Jersey Lawyers Blog

I mentioned this blog in a post yesterday. I wanted to give it a shout out as being a bit different from what I usually see in lawyer blogs. The blog refers to itself as "The New Jersey Lawyers Directory Blog" and does not seem attached to any particular law firm or lawyer. This might be a good idea for lawyers in a particular geographical or practice area to digest their posts.

Employees and the Internet

Yes, another article on the problems caused by employee access to the Internet. Years ago it was employees and e-mail, then it was employees and blogging . Perhaps with every new Internet development we will see a new article reminding employers of the dangers to their business. The latest is Web 2.0 Can Be a Pandora's Box of Liability from Law.com.

In recent years, millions of employees have joined the world of Web 2.0, which includes social networking sites such as Facebook and LinkedIn, blogs, wikis, podcasts, video sharing sites and RSS feeds. Today, technology allows virtually anyone to easily post a message, picture, audio and/or video to his or her networking page, blog or other Web site. In this constantly changing new world, where individuals have the ability to disseminate information about their employers to a potentially worldwide Internet audience, employers need to evaluate their existing technology policies and, where necessary, implement new policies and strategies.

For those employers lacking any idea of what is Web 2.0, read the whole article.

Employers can break the dangers to the business as employees surfing the web more than working, embarrassing the business (rightly or wrongly), or exposing trade secrets. For employees, they need reminding that they have no privacy rights when using the employer's computers.

I see no reason why any employer with an employee handbook does not spell out its computer/Internet policies in the handbook, or why an employer providing Internet access does not have an employee handbook.

IRS Products for Nothing, but No Free Chicks

Thanks to David Goldman and The Florida Estate Planning Blog for pointing me to five free business products from the Internal Revenue Service. Mr. Goldman lists the products with a brief discussion, so take a look at his blog.

Why Every Business Needs a Certified Public Accountant

Warning: a bit of snarkiness or just plain being a smart Aleck follows but I am deadly serious about the underlying point.

So why does a business need a CPA? Take a look at Please explain why the profits from my LLC is taxed at over 40%? and you will see Exhibit A for why a business needs an accountant (as well as a lawyer).

Article on Financing for New Business

Is there anything more troublesome to a new business than financing? I think not.

I have seen some good businesses go under because they lack finance. I have seen people with good ideas unable to get them off the ground from the lack of finances.

Since my interest lies in my business clients being able to get their business started and/or keep their business running, I pay attention when I see articles like New Business - Trading Equity for Cash.

If you are starting a business, guard your equity at all costs. Selling equity should be a last resort. Try to get loans or trade profit sharing in lieu of selling equity. If you must sell equity, do so only in small percentages. You do not want to the small business person in the example above.

The article contains practical advice on financing problems and is worth the time to read.

Limited Liability Companies: A Very Good FAQ from New Jersey

Yes, New Jersey. The New Jersey Lawyers Blog published Limited Liability Company – Questions and Answers. I see little disagreement with Indiana law and some common-sense answers to the questions.

I thoroughly agree with this (see my post "More about do it yourself LLC Operating Agreements"):

Question 5: I know that I can form an LLC online by myself. Why do I need a professional advisor such as an attorney?

Answer: True, you can form the company online, but the mere existence of the LLC offers little protection. A professional can draft the Operating Agreement to include the provisions you want and need and can monitor activities that may cancel statutory protection. You need good documents and procedures to benefit from the statutory protection. Further, you may get significantly more protection from an LLC formed in a different state or country. An advisor familiar with the options can help you make the right decision.

I will admit that the post raises a point for favoring LLC's over corporations that I had never considered:

Question 6: What is the difference between an LLC and a corporation?

Answer: The sole remedy of a creditor of a debtor/LLC member is the charging order against distributions. The creditor of a debtor/corporation shareholder may attach and gain ownership of the shares, thus giving the creditor significant management rights. For asset-protection purposes, the LLC is a better structure.

Yet, I do not see this as a major concern in Indiana. Corporate stock falls within the category of intangible personal property. Indiana's exemption law keeps stock with a fair market value of less than $200.00 in the hands of the owner/debtor. A closely held corporation's stock has no fair market value because of the lack of a market. I think this is an interesting idea but ultimately a wash.

If you are thinking of starting an Indiana LLC, remember that I am taking on new clients.

Small Business Administration Resources for Small Business

For start ups or existing small businesses, the SBA has a portal page here. Too much to easily summarize, I suggest bookmarking for future study.

A Third Party Interference Case In Anderson, Indiana

The Anderson Herald Bulletin's reports on a slightly different sort of third party interference with contract. However, after reading Pepelea wants $75K from city, I am have some major questions.

On the face of it this is a good case of third-party interference with a contract except for one thing. Was ther