Business Plan Development Course - Business Law 101 Lecture Notes

Introduction

• Welcome to Business Plan Development Course
• Guest speaker: Alex Bruno
• Objective: Wrap up curriculum by discussing business law as it relates to taking a business to market.

Speaker Background

• Alex Bruno: Graduate of UC Berkeley, Doctor of Juris from UCLA Law School
• 5 years experience in business law and estate planning
• Focus on entrepreneurship and legal aspects of business

Structure of the Law Firm

• Office locations: Glendale and Sherman Oaks
• Billing methods:
  • Flat fee (project-based)
  • Hourly billing
  • Ongoing subscription for legal counsel

Key Topics Covered in Business Law

1. Business Entities

   • Types of business entities:
     • Sole Proprietorship
     • Partnership
     • C Corporation
     • S Corporation
     • Limited Liability Company (LLC)
     • Professional Corporation
     • Benefit Corporation (B Corp)

2. Legal Requirements

   • Operating a business in California
   • Taxation obligations:
     • City (Los Angeles)
     • State
     • Federal
   • Other registrations:
     • Doing Business As (DBA)
     • Workers’ Compensation Insurance
     • Sales Tax Registration (if selling retail)

3. Liability Issues

   • Types of liability risks:
     • Premises liability (customer injuries)
     • Employee-related liabilities (workers' compensation, harassment)
     • Contract disputes
   • Examples of liability scenarios:
     • Slip and fall accidents
     • Harassment claims
     • Delivery issues with suppliers

4. Fundraising Strategies

   • Options for raising funds:
     • Family and friends loans
     • Small business loans
     • Selling company equity
   • Types of investors:
     • Accredited vs. unaccredited investors
   • Importance of private placement memorandums and investor questionnaires

Business Entities Explained

• Sole Proprietorship:

  • Advantages: Minimal paperwork
  • Disadvantages: Personal liability for business debts

• Partnerships:

  • General vs Limited Partnerships
  • General partnership exposes all partners to liability
  • Limited partnership protects limited partners’ personal assets

• Corporations:

  • Separate legal entities protecting personal assets
  • C Corporations face double taxation
  • S Corporations allow for pass-through taxation but have restrictions on shareholders

• Limited Liability Company (LLC):

  • Offers flexibility and protects personal assets
  • Fewer formalities than corporations

• Benefit Corporation:

  • Allows profit-sharing with social purposes

Legal and Insurance Requirements

• Legal Framework:

  • Register with the city of Los Angeles to operate
  • Obtain necessary licenses and permits

• Insurance:

  • Types of required insurance:
    • General liability
    • Workers' compensation
    • Employment practices liability

Liability Protection Strategies

• Establish a separate legal entity (LLC or Corporation)
• Obtain proper insurance coverage
• Draft clear company policies and procedures
• Keep personal and business finances separate (avoid comingling funds)

Importance of Professional Relationships

• Key professionals for business success:
  • CPA for tax matters
  • Doctor for health issues related to stress
  • Attorney for legal issues

Conclusion

• Building relationships with legal professionals early is crucial for business owners
• Importance of having a solid business plan and proper legal structure to protect against liabilities
• Q&A with Alex Bruno for further clarification and questions.