When purchasing a small business, many buyers overlook one important aspect of the deal: transferring intellectual property rights. Typically, IP rights include copyrights, trademarks, patents, and other non-disclosure rights. I’ve highlighted three basic questions you should always ask before you purchase a small business.

Can you and do you want to transfer the business’ trademarks?

In some situations even if the trademarks are transferable, you may not want to transfer them. For example, the business’ logo may infringe on rights of another business. You obviously wouldn’t want to transfer ownership and risk being held liable for trademark infringement once you own the logo.

In other instances, the trademarks may not be transferable if the seller does not have the right to transfer…

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Suppose you came up with a distinct combination of ingredients that when put together in a dish create a unique flavor. Your customers have come to know your food based simply on this flavor. You’ve decided that you want to protect the use of this flavor so your competitors don’t confuse your customers with “knock-off” dishes. But can you actually trademark a flavor to protect it?

A recent case highlighted this interesting trademark question:

New York Pizzeria Inc v. Syal involved a pizzeria that brought a lawsuit against its former employee for allegedly breaching his employment agreement and wrongfully acquiring internal documents and recipes. New York Pizzeria alleged that the employee, Mr. Hembree, used these internal documents and recipes to create a…

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As of earlier this month, you can officially use crowdfunding to raise money in Washington for your small business. This new way of raising money allows you to publicly advertise to all investors that you are selling stock in your company. Traditional securities offerings restrict advertising and limit offerings to those investors who satisfy the income and net worth standards to qualify as an “accredited investor.” This new opportunity is different from platforms like Kickstarter because with Kickstarter campaigns you cannot offer stock in exchange for the donations. Instead, you give individuals “swag” (e.g. promotional merchandise) in exchange for their donations.

Crowdfunding is not yet available nationwide despite a section in the JOBS Act directing the SEC to enact crowdfunding rules…

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Numerous small businesses today are organized as a limited liability company (LLC). An LLC offers flexibility when organizing the management and economic structure of an entity. Due in large part to this flexibility, the LLC has become the most popular choice of entity to form when seeking limited liability protection for new small businesses. Below we’ve put together some information to help you decide whether to elect to be an LLC taxed as an S corporation.

Key Distinctions between S Corporations and LLCs

When deciding how your small business should be taxed it is important to understand the distinctions between S corporations and LLCs. An S corporation refers to the tax treatment of an entity. An S corporation is not a type…

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