I hear clients often discuss raising money from friends and family to finance their business. There is a common misunderstanding that you can take on investment from friends and family without having to comply with securities laws. This type of misunderstanding regarding securities laws can lead to serious consequences for the owners of the business. And I wanted to set the record straight so you can avoid unnecessary liabilities when raising money for your business.

What is a security?

To begin, it is important to understand what a security is to understand why this all matters at all. There’s a lengthy definition for what a security is, and boiled down to its essence a security is any contract, transaction or scheme…

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If you’ve done any searching online, you’ve probably read that limited liability company (LLC) entity offers flexibility when organizing the management and economic structure of the company. And because of this flexibility, the LLC quickly became the most popular entity to form in order to shield personal assets from business liabilities. One of the areas where LLCs offer flexibility is how to structure payments to owners of the business. Today’s post discusses the fact that owners of an LLC can only be considered “employees” if the LLC elects to be taxed as a corporation.

Can LLC Members be Paid as Employees?

Members (owners) of an LLC cannot be considered “employees” of the business unless the LLC elects to be taxed as a…

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The Washington Secretary of State recently announced that changes are coming for annual report notices from the business licensing service. Beginning in June, corporations and LLCs will receive annual report notices and most business license renewal forms will be replaced with a letter that instructs the business to file its annual renewal online. In some cases a paper form will still be needed, in which case there will be instructions in the renewal letter on how to obtain the necessary paper form through an automated phone system.

The goal is to increase annual filings online and to streamline the renewal process. It’s a positive step towards automating the renewal process and making filing requirements less onerous for businesses in Washington. You can check out…

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A few recent high profile trademark disputes making the news have brought to light again the importance of protecting your business’ trademarks and other IP. Specifically, these stories highlight the need to register your trademarks and draft carefully negotiated terms in any licensing agreements your business enters into.

Tully’s May Lose Right to Use of “Tully’s”

The Seattle Times reported that Keurig Green Mountain has sued Global Baristas, the Seattle investor group that bought Tully’s and saved it from bankruptcy, to prevent Tully’s from using the trademark “Tully’s” in its name. Keurig is arguing that Global Baristas has violated its licensing agreements by selling coffee from another local firm (Dillanos) without Keurig’s permission. Keurig claims that Tully’s owes Keurig $469,000.

In a statement last month,…

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