This would really depend on the industry therein. For example, in the telemarketing industry, there are several different laws that telemarketers need to comply with including federal laws as well as state laws. A person who was doing any type of telemarketing, such as outbound telemarketing would need to have a telemarketing license in the state of Utah.
If they did not have a telemarketing license, then the fines could be $5,000 per telephone call that was made, and it could get even worse than that and at some point, the person might even be looking at jail time. It would be important, especially in that industry and several others, for the business to be legally compliant, meaning they were able to get a license, whether that was from the Department of Professional Licensing, the city, the county or the state.
Certain types of businesses are good in one state, whereas they would not be allowed to operate in another state. For example, in some states, a person would not be allowed to do a business of credit repair unless they were a licensed attorney. In some states, it would actually be illegal to have payday loan companies or short-term cash advance loan companies, so the person might end up going to jail for operating in certain states and they could end up being criminal charged.
Whenever we represent a business, we go through and make sure they are legally compliant, meaning we make sure they have every appropriate license, bond and insurance policy. We make sure they are protected so they do not go to jail regardless of what industry that business came under.
What Are Some Other Ways You Help Avoid Non-Compete Agreement Situations?
We usually make sure there are employee or independent contractor agreements, so any time a company started getting rather large, meaning over 20 to 30 employees, they would need to start setting up systems where whenever they hired someone, the person would have to fill out an employment application, not just a resume and a cover sheet.
A background check would be run and a credit check may be run, depending on the business, and then the person would also have to sign non-compete agreements. There would be confidentiality provisions in those agreements along with dress codes, policies, procedures and it would basically be an employee’s handbook that each employee would be required to read and they would need to sign a document stating they had read it. In this way, it would really protect the business from having trade secrets stolen or from any misinterpretations.
The worst thing that could happen would be if the employee said they did not have any idea there was a certain policy or they did not know they could not do certain things or they did not know something was confidential. Having those employee handbooks, policies and procedures in place would ensure the employees would know about company policies because not only would they have to read them, but they would have to sign a document saying they had read them so they would not be able to make any excuses later.
Do People Think About The Criminal Aspects Of Business Law?
Most people tend to take it a little lightly, and they think they would just be there to make money and nothing else would really matter because they were in business. I would think that people do care and that they want to make good choices, but if they were uninformed and did not know they needed to have a license or they did not know they should have a bond or something of that nature, then they would be opening up themselves to problems in the future.
What Do Small Business Owners Do To Fail And Be Wiped Out Completely?
One of the most important things for a small business owner would be to have an adequate supply of cash. I have seen most smaller business failing because they did not have an adequate cash reserve, like liquid assets they could use if an emergency showed up or if month to month the business did not generate sufficient income to cover their expenses, then the business had a cash reserve that could make up for it.
I usually recommend business owners to get an insurance policy in case a lawsuit happened, especially if they were smaller or there were assets to protect. Since I am not an insurance agent, I do not make any money by telling them to do this.
They really ought to get a CGL policy, which stands for Commercial General Liability policy. It is also known as an umbrella policy, because it would protect things from any liability from slip and falls or any liability the company may cause somebody else in their acts of business. These insurance policies should probably be worth at least a million dollars if not more because of the world we currently live in.
What Is MLM Law And Do You Handle It?
Yes, we do handle case involving this unique area of law. MLM standards for “Multi Level Marketing companies.” There are a lot of multi-level marketing companies, at least here in Utah. An example would be a company that created a juice or a product that they sold to their down lines and created distributors. This is a unique area because there are some pitfalls and there are some things that could cause MLM companies to fail or to fall under scrutiny of the SCC.
Years ago, the big multi-level marketing company was Amway and Amway. They were sued as being a pyramid scheme at one point, along with other companies. It was ultimately proven that it would not count as a pyramid scheme if the compensation plan was structured properly and the company was set up correctly, meaning it was not based on more people and there was an actual business involved. It would not be considered a pyramid scheme and the company would be able to exist if it followed this structure.
It would be really important when setting up a compensation plan in an MLM company, to do it correctly to avoid either falling into the pitfall of becoming a pyramid scheme or to actually appear as or become one because that would make it fall under SCC’s scrutiny. Utah has registration laws for MLM companies, like the Business Opportunity Act which requires a specific registration with the state SCC. These types of things are very unique and important to do if someone wanted to set up any type of MLM company.
For more information on Business and MLM Law, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (801) 676-5506 today.