Tag: licenses

Choice of Business Entity (Part 1)

Congratulations, you have decided to start a new business.  You are going to become an “entrepreneur”, a business owner.  You have put together your business plan, located potential business premises, talked with your advisors, and are ready to get started.

You have talked with an attorney and an accountant and they have advised you to form a “business entity”.  Now you have to decide which one is right for you.  So, what are your choices?  Following are just a few options:

Sole Proprietorship.  You could own and operate the business and not form a separate entity.  This is generally the “simplest” legal way of owning and operating a business.  Other than obtaining the required business licenses, all you need to do is to put an “open for business” sign up and you are ready to go.  The business is owned by only one individual and “dies” when the owner either stops doing business or dies.  The individual owner has unlimited liability for all obligations of the business.

Partnership.  If you have decided to go into business with other owners, you could form a partnership.  There are two kinds of partnerships:  general partnerships and limited partnerships.

In a general partnership, you and your partners will have unlimited liability for acts and obligations of the business, including those incurred by any of the partners in the business.  If you have no agreement, the partnership will be governed solely by the laws regarding partnerships in your state.  Without an agreement, if one partner dies or withdraws, the partnership terminates.

In a limited partnership, there must be at least one general partner who manages the affairs of the partnership and who will be liable for all the acts and obligations of the partnership.  The “limited partners” may not participate in the management of the partnership and are treated as investors.  They will not generally be liable for the acts and obligations of the partnership.  The partnership must file a Certificate of Limited Partnership in the state in which it wishes to organize.

In proprietorships and general partnerships, there can be serious legal consequences to the individual(s) who operate the business.  As pointed out, a sole proprietor, while “King” of the business, has unlimited liability for the obligations of the business.  General partners are entitled to their share of the business income, but also have unlimited liability.  Limited partners may not participate in management, but have limited liability.

So, what can a business owner do to limit his or her liability?

[To be continued, in Part 2, where we will discuss Corporations and LLCs, two of the more preferred ways of operating a business in order to minimize personal liability].

If you are starting a business and have any questions, please contact:

Morris R. Saunders at:

312-368-0100 or msaunders@lgattorneys.com.

Essential Legal Matters: What Foodservice Operators Must Know

As any foodservice operator knows, the food business is changing daily.  Margins are thin, competition is fierce and fickle consumer demand and constantly changing dietary fads create increased daily pressure on operators. There numerous legal issues you should consider to give you a leg up. 

Type of Business Entity 

While many food service companies may operate as sole proprietorships, it is always better to operate under the umbrella of a legal entity that will protect you as the owner from personal liability.  This is particularly so in the food service industry where you are feeding people (or distributing to those who do) and interacting with a multitude of guests and employees.  Typically, a corporation or limited liability company (LLC) is the way to go.  And if you open in more than one location or operate separate food service businesses, you would be well advised to set up a separate corporation of LLC for each operation; this way only one entity’s assets will be at risk in the event of a lawsuit.

Intellectual Property Rights

Nearly every food service business creates intellectual property, and these assets can be very valuable in the highly competitive foodservice industry, particularly when your business becomes successful.

One of the most commonly used methods of protecting your food service business intellectual property rights is obtaining trademark protection for any distinctive marks, emblems or symbols or form of words.  The protected mark must be something that distinguishes your business from others and be distinctive, i.e., not something generic like “great food.”  In order to obtain the right to use a trademark, an application must be filed with the United States Patent & Trademark Office.  Most businesses retain an attorney to file the application.

Another form of intellectual property common in the foodservice sector are copyrights.  The purpose of a copyright is to protect creative work and to grant authors the exclusive privilege to produce, create or display the work.  It may be possible to copyright a book containing recipes and sometimes even certain recipes themselves or the method or technique of preparation of food products.

Local Regulations

In addition to organizing a business entity and protecting intellectual property, food service operators need to obtain all appropriate permits and licenses.  The permitting and licensing process varies widely from state to state and even city to city and county to county.  Often local government offices can be a great resource for determining what type of licensing and permitting you will need for your business.  In addition, you will likely need additional licensing if you serve or distribute alcohol.  Your business may also be subject to food and safety health inspections.

Conclusion

With the foregoing in mind and, facing the legal side of the foodservice industry does not have to be a daunting task.

If you have any questions in this area, please contact:

Jonathan M. Weis at:

jweis@lgattorneys.com or 312-368-0100.

Alert to Property Owners: What the Firearm Concealed Carry Act Means to You.

The Firearm Concealed Carry Act became effective on July 9, 2013, and applications for concealed carry licenses became available to Illinois residents in early 2014.

What does this mean for property owners? Generally, an owner of private property may prohibit the carrying of concealed firearms on the property under his or her control, but must do so in compliance with the Firearm Concealed Carry Act.

However, the Firearm Concealed Carry Act allows holders of concealed carry licenses to keep a firearm, subject to certain requirements, in their vehicle, even if their vehicle is located in a parking area of a prohibited location.

To determine whether you are in compliance with the Firearm Concealed Carry Act’s procedures and requirements, or to review your employee handbooks and policies generally, please contact:

Mitchell S. Chaban at:

(312) 368-0100 / mchaban@lgattorneys.com

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