Legal Reality for Business

The Law Blog for Business Owners

W-2 or 1099? - Are Your Personnel Employees or Contractors?

By Paul J. Franzetti
August 22, 2017
Category: Setting up a Business

More than once a business owner calls me 2 weeks after he or she has hired the first "employee" for the business.  Here's why:

The problem: 

The person hired cannot or will not do the job and the owner has terminated the relationship.  The owner, however, entrusted company equipment to the new worker - typically a phone or a computer - and the now-terminated worker will not return it, claiming that he or she is owed some specified sum of money.  "Ah," but the business owner protests, "I hired him... Continue reading

Suspicious Minds – make everyone poorer

By Paul J. Franzetti
August 17, 2017
Category: General Business Risks


An Elvis tune came to mind on the 4oth anniversary of his passing.  People have recently said to me that I am way too optimistic and that I trust people far too much.  They are saying that to a lawyer, of all people, someone whose training in protecting clients’ interests teaches that one should be suspicious of everyone’s motives.

Apparently, the... Continue reading

Independence Day, Pursuit of Happiness, and the Rule of Law

By Paul J. Franzetti
July 03, 2017
Category: Setting up a Business

Our Independence Day foreshadowed a new era, not only in personal freedom, but in recognizing rights in property and business – or the pursuit of happiness – as the Founders put it. 

The rule of law, recognized that day, heralded an explosive growth in business opportunities and the ability of ordinary people to pursue them.  Of the 56 signers of the Declaration, 25 were lawyers.&... Continue reading

Tags: Independence Day Rule of Law July 4 Pursuit of Happiness Freedom for Business

Social Media -- Best Practice To Train Employees on Proper Communications

By Paul J. Franzetti
June 30, 2017
Category: General Business Risks

Why a post from a business lawyer on social media day?

Whatever you as a business owner think about social media – be it good, bad, or indifferent – you know that your employees are using it.  And not just for personal chit-chat, but about your business.

These posts can damage the business in a number of ways.  The post... Continue reading

Tags: social media training employees dangers to business business risks

Hiring a Lawyer can Propel Your Business Toward Your Vision

By Paul J. Franzetti
April 02, 2016
Category: Setting up a Business

Have you ever asked yourself any of the following: “Why would I hire a lawyer?” “Isn’t LegalZoom good enough for setting up and running my company?” “Can’t I find everything I need on the Web?” “Nobody files lawsuits anymore, I’ll just take the risk.” “Lawyers just want to charge high fees and you can’t really trust them anyway.”


Here are some insights from one who has managed a commercial business, as well as practiced law both as a business trial lawyer and a business lawyer, totaling over 30 years.


The answers to t... Continue reading

Tags: Small Business

Overtime Issues and Salaried Employees — Do You Have a Problem?

By Paul J. Franzetti
January 21, 2015
Category: Setting up a Business

The number of overtime lawsuits has sharply increased in Texas in the last decade. That employees are seeking greater compensation should come as no surprise, given the overall stagnation in take-home pay since the 1980s.

But why should you as an employer care? After all, you are paying market rates for wages, and you may believe that relations with your employees are so good that no one would think of suing.

What may come as a surprise, however, regards:

the complexity of the Fair Labor Standards Act and regulations (... Continue reading
Tags: Small Business Overtime

“YOU’VE BEEN SERVED” Some Pointers on Lowering Litigation Risk in Your Business

By Paul J. Franzetti
October 15, 2014
Category: General Business Risks

Those three words strike fear into the heart of any rational person. Being sued is not only a hassle, but it puts your hard-earned assets or business at risk. We live in a litigious society, however, and every business owner should think about the risk.

What are some of the best ways to handle the risk?

First, form a company that limits your personal liability to what you have invested in the business. The overwhelming entity of choice these days is a limited liability company — that is, LLC, but corporations still have their... Continue reading

Texas Supreme Court Underscores the Necessity of Written Buy-Sell Agreements 
and Other Contractual Protections When Forming Companies

By Paul J. Franzetti
September 17, 2014
Category: General Business Risks

Texas’ highest court recently ruled that minority shareholders do not have a claim for oppression when majority shareholders do things that hurt them financially. The case, Ritchie v. Rupe, involved a long running dispute in a closely-held company in which the founding shareholders had passed on, and the relationship among their descendants had deteriorated into acrimony.

Although it ruled out an oppression claim, the Texas Supreme Court recognized the existence of a severe problem:

Our review of the case law and other au... Continue reading

Tags: Texas Law

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