Fw: SCORE Legal Team | 8.2.13

[Michael Reading]

Hi Team,

Here are notes from my meeting with the SCORE Legal Team.

-M

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Michael L. Reading
Master of International Business - The Fletcher School | Tufts University

Climate CoLab Fellow -  Center for Collective Intelligence | MIT

+1.612.860.3099

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On August 7, 2013 at 3:18:55 PM, Michael (mlre...@gmail.com) wrote:

From Evernote:

SCORE Legal Team | 8.2.13

• LLC v. S Corp:
• • Recommendation of LLC, over S Corp
  • • less complicated set-up, more flexible governance structure
    • avoids double taxation issue (money taxed as revenue into the firm and as income when distributed)
    • • under LLC, money is only taxed when distributed

• Integrating independent contractors
  • Does not see issue with ind contractors being paid only for client work, not biz dev
    • could write contracts that specifies different rates for different activities
  • Search for full-time job search shouldn't have bearing on questions of incorporation

• Where to incorporate?
• • incorporate where business is located
  • each state has its own rules requiring what level of contact constitutes "doing business in" that particular state
  • • If threshold is reached, should register in that state, and thus be subject to taxes in that state
    • No way to know ahead of time, but something to look into if doing lots of business in a particular state
    • (Sources elsewhere say that doing business over the phone or online with a client does not constitute doing business in that state)
    • >> check the Secretary of State's website in states - helpful information.
  • Should we incorporate in DE?
  • • Advantages:
    • • business friendly laws
      • experience in courts for litigation
    • Disadvantages
    • • need agent in DE: we would need to pay company to be agent - and "agency service"
      • unfavorable taxes
      • • would need to pay both DE taxes and taxes where ever else we register

• How to ensure limited liability protection, in addition to LLC status?
• • Create business bank account
  • • make sure clients pay business, not individuals
  • When representing self 
  • • make clear that we are there as consultants for the firm
  • In proposals and contracts
  • • Enter into contract as the client + the company (Catalyze Ventures)
    • sign forms as Name, Role of Catalyze Ventures

• Do we need insurance?
• • Company would want:
  • • general liability
    • professional liability
  • Independent contractors to company would want:
  • • professional liability
    • Could check in company's policy would cover independent contractors
  • Other recommendation:
  • • Make sure that company is providing recommendations, not guarantees or warranties
    • • Soften language in proposals and deliverables.

[Sarah Clark]

Thanks Michael!