Posts Tagged ‘corporation’

Red Flag Rules Retailers Must Obey

August 22nd, 2010

Starting on November First of 2009, financial institutions and other creditors were mandated to comply with the Red Flag provisions of the Fair and Accurate Credit Transactions Act of 2003. The purpose of the Red Flag rules is to alleviate and prevent identity theft. Identity theft could be defined as any fraud involving people getting particular benefits by pretending to be someone else.

Broad in scope, the Red Flag rules define financial institutions as any organization engaged in insurance, banking, or similar activities, and a number of the definitions come with leeway to expand compliance demands. Any consumer account involving multiple payments or transactions that is offered to organizations can be subject to the rules.

In a nutshell, the rules state that any financial institution or creditor that may be subject to a reasonable and predictable risk of identity theft must create or develop an identity theft prevention program in order to remain in compliance. These programs should include identification of any activity that might be considered identity theft. They should pursue red flags that have already been identified, and should take action to prevent and mitigate theft. Finally, period review and updating of red flags are necessary to comply with the Red Flag provisions.

Additionally, the Red Flag provisions say that an institution’s identity theft prevention program should be managed and written by senior company management. Training and overseeing this service are required.

Identity theft is an expensive and disparaging issue; business and consumer losses came to about $56.6 billion in 2005 alone. But when one considers how harmful identity theft can be to a business, not complying with these regulations can be even more expensive and harmful. Potential losses, costly investigations, regulatory fines and potential lawsuits are all negative consequences of non-compliance. It seems as though their best bet is to follow the rules.

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New York Woman Sues Starbucks Over Tea That Was ‘Too Hot’

May 10th, 2010

Controversial Starbucks have run into another PR disaster and are now facing a lawsuit from an American woman over claims she suffered second degree burns after being served tea that was too hot. Her lawyer claims she had been served the product which was “unreasonably hot, in containers which were not safe” in a Manhattan branch of the chain.

New Yorker Zeynap Inanli intends to sue the corporation for unspecified damages after it is claimed she experienced “great physical and mental anguish” which included the burns. Her lawyer stated that she was unable to read the warning signs as she cannot read English.

The US coffee giant is no stranger to this kind of allegation and refused to comment although a legal expert has noted that the cups in question have two warning signs on the sides and a third on the lid along with design measures to guarantee any hot liquid cannot spill out accidentally.

The case echo’s a case in 1994 when a jury ordered McDonald’s to pay nearly $3m to an Albuquerque woman who claimed she had scalded herself with the restaurant’s coffee. The parties settled out of court but it paved a way for those looking to seek compensation against large corporations for hot drinks accidents.

This is the third major lawsuit facing Starbucks in the last twelve months and could do further harm to their reputation. Last year singer-songwriter Carly Simon signed to Starbucks own record label but her album failed to sell; she attempted to sue Starbucks for ‘loss of earnings’ claiming her album was not even promoted, the case was thrown out of court.

In February of this year, Starbucks battled a case to ban gun carriers in Denver to openly carry firearms in their coffee shops. Although Colorado law states that civilians can openly carry firearms with a licence, many city centre business forbid the carrying of weapons indoors. Starbucks made the decision to allow their customers to observe the 2nd amendment but risked losing the faith of at least on side of the argument. Starbucks claimed they were trying to cater for customers while observing local law but it has dragged them into the centre of a dispute between gun control activists and gun advocates.

Starbucks have consulted health and safety experts in order to prevent liability over their printed paper cups and paper cup lids and their warnings are written in several languages and shown in a visual form, legal experts suspect the case will be thrown out of court.


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Steps for Helping Entrepreneurs Become Bullet Proof

February 28th, 2010

Words can’t describe how important it is that business owners separate themselves from their business. If you don’t understand why you should never co-mingle your personal and business activities, please continue to read, do some deep research or get sued by a business creditor and see how far his attorney will go to take everything you own personally. It’s not a fun route to travel on. Let’s do it right the first time and start to learn ways of separating yourself from your growing enterprise.

Here are a few things you can do. Get some business cards with a logo. Start a website and direct your customers there. Get a phone number for your business so you don’t have customers calling your cell phone at all hours of the night.

If you would like to just do business without actually filing any paperwork you can, technically. You would become a sole proprietorship. If there are more than one of you doing business together, you can be a partnership. If you actually want your business to become a legal separate entity then you would need to do a little leg work. If you just want to start selling something and leave yourself open for lawsuits then a sole prop is probably okay.

If you want to truly separate yourself from your business by forming an LLC or a Corporation, you have to actually do some work to gain that status of complete separation. Your state will require documents to be completed and filed with them to establish an LLC or Corporation. You will also need to deal with the IRS and get an EIN issued to your business.

If you elect to run your business as a partnership or sole prop then you are fully responsible for all business obligations including commitments made to employees, customers and banks. That’s right, you will be responsible for the business’ debt if creditors show up at your door.

The most important reason for choosing to form a limited liability company or a corporation is to give you, as the business owner, some liability protection for dumb (and often uncontrollable) things that happen within or as a result of your business. Because there are so many different strategies and types of LLCs and Corps, I would highly recommend consulting with a professional before pulling the trigger on the formation. In my opinion, complete separation is Business 101 and shouldn’t be overlooked or taken too lightly.

Jared writes articles about offshore company incorporation and teaches people what to know about set up llc


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Know Your Options Before Your Form An LLC

February 21st, 2010

When forming an entity, it’s always a good idea to think the process through before you begin. Entity formation can be as complicated as you make it or as easy as 1,2,3. In this article, I want to highlight a few of the most popular entity structures that are being used by most business owners. Enjoy your reading!

When you talk with you accountant, legal adviser or entity former make sure you understand what you are asking them to do. If you say that you want a corporation setup then that’s probably what they will do. If you say that you want an entity setup, then it’s a broader question and they will dig deeper to find out which type of entity structure you need.

Corporations give business owners protection again legal actions that might come against their business. It protects them personally from business lawsuits. (as long as the corp. is setup properly). In addition to liability protection to the owners, it also has a host of tax advantages that are often missed by entrepreneurs who choose to operate as a sole proprietor.

Limited Liability Companies are often referred to as LLC’s. They offer similar advantages as the corporation such as limited liability (hence the name) and tax advantages for properly structured LLC’s.

If you do nothing but get a business license, you are essentially a sole proprietor. Sole proprietorship don’t have to apply for a nation employer identification number and most of the time can just use their personal social security number as their recognizable ID. When it comes to taxes, the return for a sole prop business is schedule C of the 1040. This is found on your personal tax returns. It’s easy to start a business and it you don’t have the money to file another type of entity, just do this.

Both Corps and LLCs offer similar advantages when trying to raise money from outside capital sources. It’s hard for an investor to take a piece of equity in a sole prop. It’s impossible because it’s just you. Having a separate entity allows for investors to come in and invest in exchange for equity.

Jeremy tries to teach people that if they want to Form LLC Free information can be found here. You can also learn how to how to incorporate yourself once you have that business started.

categories: entity,corporation,LLC,legal,strategy,finance


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