Emerging Companies Guide: A Resources for Professionals and Entrepreneurs

by Gutterman, Alan S.

• ISBN13: 9781590314661
• ISBN10: 1590314662
• Edition: CD
• Format: Paperback
• Copyright: 2005-07-30
• Publisher: Natl Book Network

Summary

This guide-book includes forms and checklists for such topics as new product development, marketing, and growth and exit strategies. A companion CD-ROM is also included.

Table of Contents

Preface	xvii
Starting a New Business	1	(34)
Preliminary Considerations	5	(3)
Joint Ventures	6	(1)
Sole Proprietor	7	(1)
Employment	7	(1)
Hiring Professionals	8	(6)
Attorney	8	(5)
Accountant	13	(1)
Initial Client Interview	14	(2)
Planning for Control and Management	16	(5)
Control Structure	16	(4)
Management	20	(1)
Arrangements Prior to Forming Entity	21	(2)
Formation Expenses	21	(1)
Pre-Formation Subscription Agreements	21	(1)
Pre-Formation Transactions by Promoters	22	(1)
Intellectual Property and Business Names	23	(5)
Business or Trade Name	23	(1)
Fictitious Business Name	24	(1)
Identifying and Protecting Names and Marks	24	(1)
Identifying, Protecting and Owning Intellectual Property	25	(3)
Choosing the Business Entity's Jurisdiction	28	(7)
General Considerations in Choosing the Business Entity's State of Formation	28	(2)
Advantages and Disadvantages of Some Popular Jurisdictions	30	(5)
Preparing a Business Plan	35	(24)
Preliminary Considerations	37	(1)
Purposes of Business Plan	38	(5)
Introduction	38	(1)
Management Tool	39	(1)
Capital Request	40	(1)
Strategic Plan	40	(1)
Private Placement Memorandum	41	(2)
Elements of Business Plan	43	(12)
Executive Summary	45	(1)
Table of Contents	45	(1)
Business Description	46	(2)
Identification of Opportunity/Target Market	48	(1)
Offering	49	(1)
Customers	50	(1)
Assessment of Competition	50	(1)
Management	51	(2)
Risk	53	(1)
Strategy	53	(1)
Operations	54	(1)
Financial	54	(1)
Appendix	55	(1)
Presentation of Business Plan	55	(4)
Non-Tax Aspects of Forming and Organizing a New Business	59	(44)
Preliminary Considerations	63	(1)
Selecting the Form of Business Entity	63	(18)
Choices in Forms of Entity for Emerging Companies	64	(5)
Principal Non-Tax Considerations in Selecting the Form of Business Entity	69	(12)
Formation and Organization	81	(4)
Preliminary Considerations	82	(1)
State of Incorporation	82	(1)
Articles of Incorporation and Organization	82	(1)
Bylaws	83	(1)
Filing of Articles of Incorporation	84	(1)
First Meeting of Directors	84	(1)
Miscellaneous	85	(1)
Owners' Agreement	85	(6)
Background	86	(1)
Future Issuances of Securities	87	(1)
Directors and Officers	87	(2)
Shareholders	89	(1)
Terms of Employment and Buy-Sell Procedures	90	(1)
Responsibilities of a Corporate Director	91	(4)
Oversight Responsibilities	92	(1)
Fiduciary Duties	92	(1)
Board Composition and Compensation	93	(1)
Effect of Sarbanes-Oxley Act	94	(1)
Facilities	95	(3)
Preliminary Considerations	95	(1)
Real Estate Lease Agreements	96	(2)
Personal Property	98	(2)
OSHA	100	(2)
Scope	100	(1)
Forms	100	(1)
Work-Related	101	(1)
Recording Criteria	101	(1)
Day Counts	101	(1)
Employee Involvement	101	(1)
Protecting Privacy	102	(1)
Reports	102	(1)
Record Retention Policy	102	(1)
Tax Aspects of Forming and Organizing a New Business	103	(30)
Preliminary Considerations	105	(2)
Tax Planning Goals in Business Formation	105	(1)
Federal Income Tax Treatment of Businesses	106	(1)
Scope of Discussion	107	(1)
Tax Rates	107	(1)
Key Concepts	108	(2)
Electing Tax Treatment	110	(3)
Contributions to Capital	113	(6)
C Corporations	114	(3)
S Corporations	117	(1)
Partnership Contributions	117	(2)
Operations	119	(6)
Gains, Losses and Their Allocation	119	(3)
Research and Development	122	(1)
Tax Accounting for Start-Ups	123	(2)
Distributions and Liquidations	125	(6)
Corporations	125	(4)
S Corporations	129	(1)
Partnerships	130	(1)
Conclusion	131	(2)
Tax Reporting and Compliance	133	(18)
Preliminary Considerations	135	(5)
Tax Planning	136	(1)
Tax Entity	137	(1)
Tax Time Period	138	(1)
Tax Accounting Method	139	(1)
Withholding and Estimated Tax Payments	140	(4)
Withholding	140	(2)
Estimated Tax Payments	142	(2)
Federal, State and Local Tax Returns	144	(7)
State and Local Taxes	144	(1)
State and Local Property Taxes	145	(1)
State and Local Sales Taxes	145	(1)
State and Local Income Taxes	145	(1)
Federal Income Taxes	146	(1)
Corporations	147	(1)
Individuals	148	(3)
Accounting and Financial Reporting Issues	151	(34)
Preliminary Considerations	155	(2)
Accountant's Role in Assisting Emerging Companies	157	(4)
Accounting Elections	161	(2)
Financial Reporting	163	(10)
Balance Sheet	164	(3)
Income Statement	167	(2)
Cash Flow Statement	169	(2)
Quality of Financial Reporting	171	(2)
Financial Statement Analysis	173	(12)
Horizontal Analysis	173	(1)
Vertical Analysis	174	(1)
Ratio Analysis	175	(1)
Liquidity Ratios	175	(1)
Cycle Ratios	175	(1)
Solvency Ratios	176	(1)
Profitability Ratios	177	(1)
Equity Ratios	178	(7)
Financing a Business	185	(52)
Preliminary Considerations	189	(1)
Financing Sources	190	(10)
Venture Capital	190	(5)
Alternative Financing Sources	195	(5)
Financing Strategy	200	(11)
Financial Needs	200	(5)
Valuation	205	(2)
Debt vs. Equity	207	(4)
Typical Venture Capital Financing Terms	211	(8)
Initial Round	212	(6)
Follow-On Rounds	218	(1)
Finding Investors: Securities Law Considerations	219	(13)
Preliminary Considerations	219	(1)
Federal Securities Laws	220	(6)
State ``Blue Sky'' Securities Laws	226	(1)
Private Placement Memoranda	227	(5)
Debt	232	(5)
Warrants as Loan Condition	233	(1)
Secured vs. Unsecured Debt	233	(1)
Security Interest	234	(1)
Subordination	234	(3)
Technology and Intellectual Property Rights	237	(86)
Preliminary Considerations	243	(2)
Patents	245	(15)
Preliminary Considerations	245	(1)
Governing Law	245	(1)
Types of Patents	245	(1)
Practice of Patent Law	246	(1)
Patent Rights	247	(1)
Requirements for Patentability	248	(3)
Who Can Obtain a Patent?	251	(1)
Patent Application	252	(1)
How a Patent Is Obtained	252	(2)
Types of Patent Applications	254	(1)
Foreign Patents	255	(1)
Miscellaneous Proceedings	256	(1)
Patent Infringement	257	(3)
Copyright	260	(25)
Preliminary Considerations	260	(1)
Copyright Protection	260	(3)
Owners' Rights	263	(3)
Ownership of Copyright and Transfer	266	(3)
Transfer of Ownership and Recording Transfer	269	(1)
Duration of Copyright	270	(1)
Copyright Notice	270	(1)
Copyright Registration	271	(1)
Copyright Infringement and Remedies	272	(13)
Client Interview Checklist	285	(1)
Trademarks	285	(18)
Preliminary Considerations	285	(1)
Identifying and Choosing Strong Trademarks	285	(3)
Trademarks, Service Marks, Certification Marks, Collective Marks and Trade Dress	288	(3)
Protecting Trademarks	291	(3)
Protecting against Infringement and Dilution	294	(5)
Trademark Law and Domain Names	299	(4)
Trade Secrets	303	(20)
Uniform Trade Secrets Act	303	(3)
Comparing Trade Secrets with Other Forms of Intellectual Property	306	(2)
Reasonable Efforts to Keep Secret	308	(1)
Practical Examples of Trade Secrets	309	(4)
Trade Secret Conflicts Involving Employers and Employees	313	(1)
Inevitable Disclosure	314	(4)
Remedies for Misappropriation	318	(5)
Product Development and Distribution	323	(46)
Preliminary Considerations	327	(1)
Development Agreements	327	(3)
Founder	327	(1)
Internal	327	(1)
Research and Development	328	(1)
R&D Partnership	329	(1)
R&D Subsidiary	329	(1)
Manufacturing, Supply and License Agreements	330	(7)
Internal	330	(1)
Manufacturing	330	(1)
License	330	(4)
Original Equipment Manufacturer (OEM)	334	(3)
Sales Contracts	337	(5)
Commercial Laws Governing Sale of Goods	338	(1)
Standard Contract Terms	339	(3)
Distribution Agreements	342	(27)
Employee and Salesperson	342	(1)
Sales Representative	343	(1)
Agent and Broker	343	(1)
Consignment	343	(1)
Distributor	343	(19)
Antitrust Laws	362	(7)
Human Resources	369	(54)
Preliminary Considerations	373	(1)
Hiring	373	(7)
Recruiting	374	(1)
Employment Applications	375	(1)
Interviewing	376	(1)
Testing	376	(1)
Reference Checks	376	(1)
Offers of Employment	377	(1)
Alternative Arrangements	378	(2)
Employment Contracts	380	(6)
Description of Duties	380	(1)
Compensation and Expenses	381	(1)
Term	382	(2)
Termination	384	(1)
Additional Terms	385	(1)
Changes	386	(1)
Personnel Policies and Strategies	386	(9)
Employee Handbooks	386	(1)
Standard Policies	387	(2)
Intellectual Property	389	(1)
Non-Competition	389	(1)
Employee Use of Voice Mail, E-Mail and the Internet	390	(3)
Arbitration	393	(2)
Stock Option Plans	395	(4)
Incentive Stock Options	396	(2)
Non-Qualified Stock Options	398	(1)
See-Saw Options	399	(1)
Firing	399	(7)
Preliminary Considerations	399	(1)
Training	399	(1)
Progressive Discipline	400	(1)
Peer Review System	400	(4)
Release and Severance Agreements	404	(1)
Post-Termination	405	(1)
Facility Closure	406	(1)
Employment Laws	406	(17)
Age Discrimination in Employment Act of 1967	407	(2)
Americans with Disabilities Act	409	(1)
Civil Rights Act of 1964, Title VII	410	(2)
Employee Polygraph Protection Act of 1988	412	(1)
Employee Retirement Income Security Act of 1974	412	(1)
Equal Pay Act of 1963	413	(1)
Fair Labor Standards Act of 1938	414	(1)
Family and Medical Leave Act of 1993	414	(2)
National Labor Relations Act	416	(1)
Occupational Safety and Health Act of 1970	417	(1)
Uniformed Services Employment and Re-Employment Rights Act	417	(2)
State Common Law	419	(4)
Internet and Online Business Activities	423	(24)
Preliminary Considerations	425	(1)
Online Business	425	(19)
Establishing an Online Presence	425	(12)
Conducting Business Online	437	(7)
Taxation	444	(1)
Income Taxes	444	(1)
Sales and Use Taxes	444	(1)
Internet Access and E-Commerce Taxes	445	(1)
Raising Money Online	445	(1)
Conclusion	446	(1)
Marketing and Public Relations	447	(16)
Preliminary Considerations	449	(2)
Marketing	449	(1)
Public Relations	450	(1)
Research	450	(1)
Marketing Strategy and Program	451	(2)
Defining the Niche	453	(1)
Market Intelligence and Research Sources	454	(1)
Managing Marketing Dollars	454	(1)
Web-Based Marketing and PR	455	(3)
Establishing Credibility and Expert Status	458	(1)
Evaluation Process and Smart Steps	459	(1)
Crisis Management	459	(3)
Preliminary Considerations	459	(1)
Approach	460	(1)
Lessons from Enron	461	(1)
Conclusion	462	(1)
Growing a Business	463	(34)
Joint Ventures and Other Strategic Alliances	467	(5)
What Are Joint Ventures?	467	(1)
Types of Joint Ventures	468	(1)
Key Components of Joint Ventures	468	(1)
Taxation of Joint Ventures	469	(1)
Potential Liabilities of Joint Ventures and Participants	470	(1)
Strategic Alliances	470	(1)
Advantages and Disadvantages of Joint Ventures and Strategic Alliances	470	(2)
Corporate Partnering	472	(4)
Finding Corporate Partnering Opportunities	472	(1)
Types of Investment Instruments	473	(1)
Documenting the Relationship	474	(1)
Corporate Partnering Advantages	475	(1)
University Relationships	476	(3)
Organization of University Technology Development Activities	476	(1)
Government-Sponsored Research Activities and Funding	477	(1)
Licensing University Technology to Third Parties	477	(1)
Research Agreements with Third Parties	478	(1)
Individual Consulting Agreements with Research Sponsors	478	(1)
Going Global	479	(5)
Globalization: Need for an International Outlook	479	(2)
Exporting Successful Businesses	481	(3)
Operational and Corporate Complexity in an International Context	484	(1)
Bridging Cultures	484	(1)
Preparing for IPO	484	(3)
Reasons for Conducting IPO	485	(1)
Due Diligence	485	(1)
Level of Commitment	486	(1)
Selection of Underwriters	486	(1)
Alternatives to IPO	487	(1)
Distressed and Troubled Companies	487	(10)
Pace of Growth	487	(1)
Thinking Long Term	488	(1)
Finding and Making Connections	488	(1)
Financial Distress	489	(4)
Duties of Board of Directors	493	(1)
Financial Strategies for Troubled Companies	494	(3)
Purchasing and Selling a Business	497	(32)
Preliminary Considerations	501	(1)
Confidentiality Agreement	502	(1)
Letter of Intent or Term Sheet	503	(4)
Contents	504	(1)
Binding Nature	505	(1)
Lock-Up	505	(1)
Remedies	506	(1)
Disclosure Effect	507	(1)
Due Diligence	507	(5)
Purpose	507	(1)
Timing	508	(1)
Checklist	509	(3)
Main Agreement	512	(8)
Deal Provisions	513	(2)
Representations and Warranties	515	(2)
Covenants	517	(1)
Conditions	518	(1)
Indemnification	518	(1)
Miscellaneous	519	(1)
Exhibits and Schedules	520	(1)
Approvals	520	(4)
Boards of Directors	520	(1)
Stockholders	521	(1)
Government	522	(1)
Third Parties	523	(1)
Broker Fees	524	(1)
Closing	524	(5)
Timing	524	(1)
Deliveries at Closing	525	(4)
Estate Planning	529	(20)
Preliminary Considerations	531	(1)
Use of Entities	532	(4)
Partnership	533	(2)
Corporation	535	(1)
Limited Liability Companies, S Corporations and Limited Liability Companies	536	(1)
Buy-Sell Agreements	536	(2)
Valuation	538	(2)
Fixed Price	539	(1)
Formula Price	539	(1)
Appraisal	539	(1)
Life Insurance	540	(3)
Transfer of Life Insurance Policies	540	(1)
Types of Life Insurance	541	(2)
Estate Freeze Transactions	543	(4)
Grantor Retained Annuity Trusts	544	(1)
Installment Sales	545	(2)
Conclusion	547	(2)
About the Editors	549