Ready to hire? Keep these ten points in mind before you begin the Florida background check process: 1. Brushes with the Law An employer who obtains a satisfactory criminal history check on a job applicant is presumed to not have liability if the person later commits an intentional tort (a civil wrong that causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortious act). Criminal history record checks may be obtained from each county in Florida and from the Florida Department of Law Enforcement. Separately, employers can also check a job applicant’s name against the outstanding warrants and sexual offender databases. 2. Spanning the Twitterverse Facebook, LinkedIn, Twitter and other social media sites may provide a trove of information about job applicants. There’s no law against searching social media sites. However, these sites are likely to contain information—race, religion, sex, marital status, etc.—which cannot be grounds for non-hiring for many employers. 3. Sue Happy An employee who is involved in numerous civil lawsuits may not be ideally suited for the job. Employers may check the civil court records of each county in Florida to determine whether a job applicant has sued or been sued in civil court. 4. Credit Checks in the Red Federal law requires employers to obtain written consent before obtaining a job applicant’s credit report. If the employer decides not to hire the person based in part on the credit report, he or she must be provided with a copy of the report. 5. Making the Grade Federal and Florida laws make student education records confidential. However, employers can require job applicants to provide school transcripts or verification of enrollment. Degree or enrollment verification is available through most schools or third-party providers like National Student Clearinghouse. Do you need help conducting an employee background check? Get in touch with our employment lawyers by filling out the form below. 6. It Stays in the Exam Room Medical records are generally confidential under both federal and Florida law.Employers can ask applicants questions about their ability to perform specific job duties, but employers cannot ask for medical records. 7. Right to be Bankrupt Bankruptcy records are a matter of public records, so it is possible for employers to determine whether a job applicant has declared bankruptcy. However, federal law prohibits most employers from discriminating against an applicant because he or she filed for bankruptcy. 8. Got Hurt and Can’t Work Employers should be concerned about abusive workers’ compensation claims, which can increase employers’ insurance premiums. Workers’ compensation claims are public records in Florida. Employers that obtain the necessary release form can search for job applicants on the Division of Workers’ Compensation Claims Database. 9. License to Drive When job duties involve driving, Florida employers should require job applicants to provide written consent allowing the employer to obtain the applicant’s driving record. Without consent from the applicant, an employer may only obtain a driving record to verify information provided by the applicant. 10. Cannot Tell a Lie In most cases, federal law prohibits asking job applicants to submit to a lie detector (polygraph) test. There are a few exceptions when hiring for specific positions, such as armored car drivers and pharmaceutical distributors. Have A Question About Florida Background Checks for Employment? Contact BrewerLong today and our employment attorneys can advise you how to carry out a background check.

A personal guaranty is a legal promise that, if a business is unable to repay debt, an individual will assume responsibility. Credit issuers use personal guaranties to ensure repayment of the loans they issue to businesses. Some creditors will not even consider giving out a business loan without a personal guaranty. For many small businesses, the creditor is the gatekeeper, and the personal guaranty is the key to the gate. Before signing for a business loan, it is essential to know how creditors enforce personal guaranties. Before you sign, know these 10 facts about personal guaranties: This Time, It’s Personal.  A personal guaranty is a promise to be personally responsible for the obligation of another person or company.  The person or company to whom the obligation is owed—usually a lender—can enforce the obligation against the guarantor just like the original obligor. Would You Loan Money to a Teenager?  No, neither would a bank.  Unfortunately, banks look at your new business and see a teenager.  Lenders want an “adult” to co-sign for their loan—often the owners of the company.  Keys to the Gate.  If the limited liability aspect of your corporation, LLC, or LLP is a wall between your business activities and your personal wealth, a personal guaranty is the key to the gate.  Personal guaranties make sure that you are “all in.”  Good for the lender, bad for entrepreneurs looking for a fresh start. It’s Your Problem.  Banks often require a number of people to personally guaranty the same obligation.  These guaranties are usually “joint and several,” meaning that the bank can enforce payment of the whole amount against one of the guarantors.  It’s up to that poor guarantor to go after reimbursement from the other guarantors. Ties that Bind.  You can dissolve your marriage or your business partnership, but that has no impact on the personal guaranties made by the parties.  As a result, you may still be responsible for your ex-spouse’s or your ex-partner’s debt.  You can ask the lender to release the personal guaranty, but it’s not likely to happen. Changes.  Often, a change in the circumstances of a guarantor triggers a default under the obligation.  So if the uncle who guarantied your loan dies, becomes disabled, or files for bankruptcy, you could get a demand for full payment from the lender. Beyond the Grave.  Personal guaranties survive the death of the guarantor.  This means that, after the death of the guarantor, the guarantor’s estate might still be liable under the guaranty.  Remember to give the lender notice in a probate administration. Bankruptcy Protection.  Liability under personal guaranties can be discharged through the personal bankruptcy of the guarantor.  That’s a good “out,” but the consequences of a personal bankruptcy are far-reaching. Pawn Kings.  To avoid having to make a personal guaranty, you have to convince the lender that your business is good for the money.  The most common way of doing this is through the pledge of other valuable collateral—just like a pawn shop.  It helps to have a good credit history, too. No Guaranty.  Personal guaranties are great for lenders, but they’re no slam dunk.  A lender seeking to enforce a personal guaranty has to track down the guarantor, sue him or her personally, prove that the guarantor is liable for the debt, and then enforce the judgment against the guarantor’s unprotected assets, whatever they are.  It’s a long, costly process, and the guarantor is likely to fight it every step of the way. While personal guaranties offer protection for lenders, they are a financial risk for individuals with small businesses. With a personal guaranty, you pledge your assets, including your home, bank account, and wages, as collateral. Personal guaranties are not for everyone, but it may seem like the only way to get your business started. BrewerLong can help. We have years of experience representing small businesses and business owners in the state of Florida. Set up a consultation by calling us at 407-660-2964 or contact us online. We are happy to advise you on business contracts and liability to ensure protection of your assets.

Even small, simple operations have plenty of moving parts. Use these ten key points to keep your company running smoothly, protect your assets, and avoid litigation. The Must-Have.  Don’t go into business with others unless you have an Owners’ Agreement.  You can’t see the future, and you can’t be certain that you and your business partners (or their spouses or heirs) will always agree on everything.  Why So Formal?  Company formalities are important to limiting your personal liability for the company’s obligations.  Have separate company bank accounts, separate company financial records, separate company e-mail addresses, and whatever else needed to clearly separate the company’s life from your personal life.  If you don’t respect this separation, the courts might not either. This Time, It’s Personal.  Lenders and financing companies almost always require the owners of a closely held business to sign personal guarantees.  This means they can sue the company, the owners, or both.  Do what you can to limit personal guarantees.  If you leave the company, understand what happens to your personal guarantees (and try to terminate them). Get Secure.  Unless you get paid in full at the time goods or services are delivered, get security for future payments.  Security might take the form of an escrow deposit, a personal guarantee, a bank letter of credit, or a pledge of the purchased goods or some other collateral.  Whatever the security, have a written agreement that clearly states your rights in case of nonpayment. Business Straight-Jackets.  In many cases, restrictive agreements are enforceable (provided they are reasonable in duration and geography).  Know what restrictive agreements apply to you and the people you hire.  Use restrictive agreements yourself to ensure that the person you hire today isn’t competing against you tomorrow. Protect the Good Stuff.  You don’t have to be the latest dot-something tech company to have valuable intellectual property.  IP may include your name, slogans, website, plans, and just about anything else you (or someone else) has thought of.  If someone else develops your IP (that web designer, for instance), make sure the creator assigns all the rights to you. What’s in a Name?  Not much, when it comes to “independent contractors” or “employees.”  Whether a person is an employee (which requires tax withholding and other administrative burdens) or an independent contractor (which doesn’t) depends on what he does and how he does it.  If you can tell a person how, when, and where to do her job, she’s probably an employee. The Tax Man Cometh.  Collecting taxes and delivering them to the taxing authority is a big deal.  Employment taxes you withheld and sales taxes you collected are not yours, they belong to the government.  The government will get them, with penalties and interest (or worse!) if they’re late. Fresh Stock for Sale!  Selling equity (stock, units) in your company may seem like a great way to raise capital.  It’s also a great way to have financial investors and security regulators looking over your shoulder.  Don’t sell equity if there’s a better way, and there’s probably a better way. Here’s the Catch.  Even if you have the right written agreements, it costs money to enforce them.  Your agreements might provide that legal fees and costs go to the prevailing party (most of them should), but you won’t get that until the end (and only if you go to court).  Litigation is always an expensive last resort.

Whether you’re just starting or you have an existing company, you may be considering forming an LLC. Here’s what you need to consider before you do: 1. Corporate Gymnastics LLCs are a flexible form of business entity with fewer mandatory rules than apply to LLCs than to corporations or partnerships. However, this flexibility means that all of the details governing each LLC must be spelled out in long, complicated Operating Agreements. 2. Limited Liability Like corporations and (some) partnerships, LLCs offer their members limited liability. Each member of an LLC may lose his or her investment in the company, but the member’s other property should not be subject to the LLC’s liabilities. Of course, creditors know this too, so members are often required to personally guarantee loans and other obligations of the LLC. 3. The Rule Book An LLC and its members are governed by the Operating Agreement. The Operating Agreement should cover such topics as management of the LLC, capital contributions from the members, distributions of net profits, and ultimate liquidation of the company.  4. Upper Management An LLC can either be managed by its members or managed by one or more managers who might or might not be members. Even where an LLC is manager-managed, there are usually some decisions that must be made by the members (such as a sale of the LLC). LLCs do not usually have traditional corporate officers (like president, treasurer), but they can. 5. Ante Up The investments members make in the LLC are called capital contributions. Capital contributions can be cash or anything of value. A key term of the Operating Agreement is whether existing members can be required to make additional capital contributions. 6. Pride of Ownership Unlike corporations, in which ownership is evidenced by stock, ownership in LLCs may be denominated and evidenced in many different ways. A member might simply own a percentage interest recorded only on the LLC’s books, or a member might own membership units or shares that are represented by certificates.  7. Returns on Investment Net profits of the LLC are generally paid to some or all of the members in the form of distributions. When and how distributions are made should be addressed in the Operating Agreement. Members can divvy up the profits in almost any way imaginable. 8. Pick Your Poison By default, LLCs (those with more than one member) are treated like partnerships for income tax purposes, but they can instead elect to be treated like corporations (even S corporations). LLCs with only one owner are completely ignored for income tax purposes, meaning that they are lumped together with their owners. 9. Taxing Calculations The taxation of partnerships, and therefore most LLCs, is very complicated. The LLCs do not pay taxes themselves (in most cases), but they do have to file tax returns. Net income passes through to the LLC’s members in the form of allocations to member capital accounts, which must comply with very detailed tax rules. Bottom line: have a good CPA. 9. Charge!  When a corporate shareholder is sued, it’s possible that a judgment creditor could end up controlling the shareholder’s stock, including the right to vote. In an LLC, the judgment creditor of a member is only entitled to a charging order, which is the right to receive distributions when and if paid. The judgment creditor of an LLC member cannot participate in the management of the LLC.

If you’re looking for ways to raise capital for your company, you may consider crowdfunding. These ten facts will help you decide if crowdfunding is right for you. If you need help deciding what is best for your business, contact the business attorneys at BrewerLong today. 1. Come Together Republicans and Democrats in Congress came together to pass the Jumpstart Our Business Startups (JOBS) Act of 2012, and President Obama signed it into law on April 5, 2012. The stated purpose of the JOBS Act is to ease the burden on smaller companies looking to obtain capital from public and private sources. The JOBS Act makes crowdfunding legal. 2. Who Needs a Mil? The newly created crowdfunding exemption allows a small company to sell up to $1.07 million worth of the company’s stock or other ownership interests within a 12 month period. 3. It Takes a Crowd. Crowdfunding investors are limited in how much they can invest in each company. For investors with annual income or net worth less than $107,000, the limit is $2,200, 5% of annual income, or 5% of net worth, whichever amount is greatest. For investors with annual income or net worth of $107,000 or more, the limit is $107,000. The numbers are set to adjust for inflation every five years. 4. A Portal to Jump Through. Companies can’t tap into the crowd on their own. Crowdfunding offerings must be conducted through a registered broker or a registered funding portal. FINRA approved funding portals include SeedInvest, NextSeed, MicroVentures, and Wefunder. The broker of the funding portal is responsible for ensuring that crowdfunding investors are qualified and provided information about the company. 5. Keep it Quiet. Companies cannot advertise their own crowdfunding offerings, except to direct potential investors to their designated broker or portal. 6. Hold On Tight. Crowdfunding investors are required to hold onto their investment in the company for at least one year unless they sell to the company, an accredited investor, a family member, or as part of an IPO. 7. Let the Sunshine In. Companies must file information with the SEC, including the names of directors, officers, and majority shareholders, a description of the company’s business, a description of the company’s financial condition (including other offerings), and financial information. The same information must be provided to each crowdfunding investor. 8. Rights for All. Each crowdfunding investor will have rights in the company provided by state law and organizational documents. These rights might include the right to vote on the election of directors and certain actions, the right to review the company’s financials, and the right to demand a fair repurchase price. The SEC’s anti-fraud regulations also apply to crowdfunding offerings. 9. So Long “S”. S corporation status generally requires that a company have no more than 100 shareholders and excludes most other companies as eligible investors. A company with these restrictions might have a hard time raising significant capital through crowdfunding. 10. What Else You Got? Crowdfunding is not for every company. Fortunately, there are numerous ways for a growing company to raise need capital, including “friends and family” financing, commercial and private loans, intrastate offerings, and federally exempt private offerings. A company should review all of the alternatives before deciding on crowdfunding.

Though you can be in business without setting up a legal entity, we don’t recommend it. The following points will help you decide on the best entity for your operation. 1. Human Error Carrying on business without a business entity means that each of the owners is 100% personally responsible for all of the business’s liabilities.  That isn’t good. A business entity [corporation, limited liability company (LLC), or limited liability partnership (LLP)] protects the owners from personal liabilities, except professional liabilities and personal wrongdoing. 2. Pass the Buck The tax code divides corporations into C corporations and S corporations.  The main difference is that with C corporations, the corporation pays income tax on its net income and the shareholders also pay income tax on dividends. With S corporations, such as LLCs and LLPs, only the shareholders pay income tax on the corporation’s net income. 3. Exclusive Owners’ Club S corporations have strict rules about who can be shareholders:  no C corporations, LLCs, or LLPs; no trusts (with a few exceptions); no non-US residents. S corporations may have a maximum of 100 shareholders.  Even if you’re not planning to have these types of owners, the S corporation owner restrictions can limit (or make more costly) future opportunities to sell stock to new investors or take advantage of common estate planning techniques. 4. Charge! It is possible for creditors of a corporation’s shareholder to take the corporate stock in satisfaction of their debts.  Generally, the same is not possible for interests in LLCs or LLPs.  Creditors of an LLC member or LLP partner are limited to a charging order, which means that creditors can receive distributions from the LLC or LLP, but they do not get control. 5. Head of the Class For C corporations, LLCs, and LLPs, it is possible to create different classes of stock or interest that entitle the owners to different rights.  For instance, classes can differ on distributions, participation in management, and liquidation rights.  S corporations cannot have different classes of stock, other than voting and non-voting stock. 6. All Good Things Every partner in a partnership (whether LLP or general partnership) has the right to withdraw from the partnership at any time.  It may be a breach of the partnership agreement, but a partner’s withdrawal might still result in the dissolution of the partnership.  Corporation shareholders and LLCs members do not have the right to withdraw unless this right is provided in an owners’ agreement. 7. Gainful Employment Profit distributions from an S corporation are not subject to employment taxes, provided owners who work in the business are also paid a reasonable (taxable) wage.  Profit distributions to the working owners of an LLC or an LLP are subject to employment taxes, whether or not the owners also receive wages. 8. Healthy, Wealthy and Wise Payments for health insurance and other fringe benefits are generally deductible by a C corporation, regardless of the recipients.  Health insurance and fringe benefits provided to the owners of an S corporation, LLC, or LLP are not deductible generally. 9. Keep it Simple A separate income tax return must be filed for each separate business (except a sole proprietorship or 100% subsidiary), even though S corporations, LLCs, and LLPs generally do not pay taxes themselves.  The corporate income tax returns are relatively simpler than the LLC and LLP income tax returns because LLCs and LLPs are governed by complicated rules about the allocation of profits and losses. 10. Changing Course If circumstances require a change in the choice of entity, it’s almost always possible, at a price.  The laws in most states now have simple filing procedures for converting from one type of entity to another.  That’s the easy part.  But conversion might trigger taxes, especially when converting from a corporation to another entity. No matter what business entity you choose, it’s a good idea to consult with an attorney. You can contact us online or by calling 407-660-2964.