Suttons Bay Law

What happens to your business if you suddenly do not show up one day and are unable to come to work for an extended period of time, such as a month or longer? Being prepared for an unexpected event may seem overwhelming, but according to the book, Being Prepared*, it can be easily broken down into two categories: things that happen to your stuff and things that happen to you. If something happens to your stuff, you call people—the IT consultant for computer problems or the disaster specialist for flooding, fire, etc. When something happens to you, however, a plan is necessary for the continued management of your business, particularly if you are the sole owner or sole employee. Being Prepared lists 5 practical principles that you can implement right away to put yourself and your business on track if you find yourself unexpectedly absent due to, for example, disability or incapacity from an unfortunate accident or illness.

1. Define who will be involved and the roles each will play. Include a contact list with emails and telephone numbers, including those of your attorney and accountant.
2. Enable your team by gathering together a manual that contains procedures necessary to run your business and serve your clients.
3. Empower your people by giving them the appropriate background information and direction; and also the authority to pay bills and collect payments.
4. Keep you manual in a safe place, but also in an available place so that it is accessible in an emergency.
5. Inform your team that you have devised a plan and organized a manual in the unfortunate event that you are unable, due to incapacity, disability or death, to run your business. Inform them who the “go-to” person is—who is responsible for safekeeping the manual.

A few questions to ask yourself: Who will be responsible for determining what my obligations are that day? How will they know? Do they have access to my calendar and password? Who is someone I trust to act on my behalf? Should I consider leaving a “trail”—such as journal entries that track important client/customer matters that may be ongoing?

The degree to which your personal affairs and your business affairs are intertwined may determine whether you need a well-drafted power of attorney and additional documents that may assist your team with the ongoing management of your business should you become incapacitated.

*authors: Lloyd D. Cohen and Debra Hart Cohen, 2008.

Dan A. Penning

Tags: Business Management/Law, Know it Now by Dan Penning
No Comments »

Businesses wishing to raise capital by issuing and selling securities (typically “stock”) face a complex maze of laws, rules and regulations, both at the federal level and in each state where the securities are to be offered and sold. These laws govern the process for the registration of the securities, set forth the criteria which must be met in order for the securities to be exempt from registration, regulate the conduct of those involved in the offer and sale, provide for enforcement and set forth fines, penalties, and both civil and criminal liability for violations.

This regulatory landscape changed in Michigan on October 1, 2009 when the new Michigan Uniform Securities Act became effective (“MUSA” for short.) MUSA replaces former Michigan law dating back to 1965. In enacting MUSA, Michigan became one of 17 states that have so far revamped their securities laws based upon the Model Uniform Security Act issued in 2002 by the National Conference of Commissioners on Uniform State Laws. One of the purposes of the model act is to provide a more efficient system of regulatory and enforcement authority that more closely follows federal law, all with the intent of protecting investors. Some of the key changes found in MUSA pertain to the registration of “investment adviser representatives,” changes pertaining to exempt securities and exempt transactions, enhanced enforcement powers and enhanced penalties for violations, particularly where violations involve individuals over 60 years of age or individuals who are deemed unable to protect their own interests due to such things as disability or illiteracy.

The Michigan Office of Financial and Insurance Regulation (“OFIR”) is charged with the responsibility of administering MUSA, including enforcement. Although MUSA went into effect on October 1, 2009, the exhaustive rules and regulations that OFIR will use in interpreting, applying and enforcing MUSA are not expected to be finalized until sometime in 2010.

Any business seeking to raise capital or attract investors, and any person involved in the offer and sale of securities, needs to be aware that this activity raises securities laws considerations under the new Michigan Uniform Securities Act.

Tags: Asset Protection, Business Management/Law, Know it Now by Dan Penning
No Comments »