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Intellectual Property and Other Legal Issues For Entrepreneurs

This document discusses various business structures including purchasing an existing business, franchising, sole proprietorships, partnerships, and corporations. It also covers intellectual property, patents, copyrights, trademarks, business licenses, and other legal issues affecting entrepreneurs. The key points are that existing businesses may be for sale due to lack of profits, new competition, or retirement. Franchising provides an established product or service but fees can be costly. Sole proprietorships have minimal regulation but unlimited liability. Partnerships and corporations distribute risk but involve sharing responsibilities and profits. Intellectual property protects original creative works.

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39 views

Intellectual Property and Other Legal Issues For Entrepreneurs

This document discusses various business structures including purchasing an existing business, franchising, sole proprietorships, partnerships, and corporations. It also covers intellectual property, patents, copyrights, trademarks, business licenses, and other legal issues affecting entrepreneurs. The key points are that existing businesses may be for sale due to lack of profits, new competition, or retirement. Franchising provides an established product or service but fees can be costly. Sole proprietorships have minimal regulation but unlimited liability. Partnerships and corporations distribute risk but involve sharing responsibilities and profits. Intellectual property protects original creative works.

Uploaded by

S H A S H I
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Intellectual property and

other legal issues for


Entrepreneurs
Purchase an Existing Business

Owners sell businesses for a variety of reasons


including:

 insufficient profits
 new competition
 fear of changing economic conditions  retirement
 dispute among partners
 illness of a partner
There are many ways to find a
business that is for sale including:
 advertisements in the newspaper

 Consulting a business broker

 Networking
Advantages of Buying an Existing
Business
The equipment, suppliers, and procedures are in place.

Goodwill may already be established.

The seller may train the new owner.

Established financial records exist.

Financial arrangements may be easier.


Disadvantages of Buying an
Existing Business
The business may be for sale because it is not
profitable.

Serious problems may be inherited.

Capital is required.
Steps in Purchasing a
Business
Write specific objectives about the kind of business you
want to buy.

Identify businesses for sale that meet the objectives.

Meet with business sellers or brokers to identify


specific opportunities.
Visit during business hours to observe the business in
action.

Obtain accounting records for the prior three years.

Get important information in writing.

 reviewed by a lawyer
 reviewed by an accountant
Franchise Ownership

 franchise

 a legal agreement that gives an individual the right to


market a company’s products or services in a particular
area
 Franchisee- the person who purchases a franchise

 Franchisor-the company that offers the franchise for


purchase
Operating Costs of a
Franchise
initial franchise fee
the amount the local franchise owner pays in return for
the right to run the franchise

Startup costs- the costs associated with beginning a


business
royalty fees
weekly or monthly payments made by the local owner to
the franchise company

advertising fees

paid to the franchise company to support television,


magazine, or other advertising of the franchise as a whole
Investigate the Franchise
Opportunity
Franchise Disclosure Document (FDD)

a regulatory document describing a franchise


opportunity that prospective franchisees must receive
before they sign a contract

must be provided to franchisee at least 14 days before a


contract is signed
Information contained in the FDD includes:

background and experience of the business’s key executives

costs of starting and maintaining the business

terms of the franchise agreement

acceptable reasons for contract termination

the responsibilities you and the seller will have once you
have invested in the opportunity
Evaluate a Franchise

Study the disclosure document and proposed contract


carefully.

All costs and royalty fees should be provided.

Interview current owners.


Advantages of Owning a
Franchise
An entrepreneur is provided with an established
product or service.

Franchisors offer management, technical, and other


assistance.

Equipment and supplies can be less expensive.

A guarantee of consistency attracts customers.


Disadvantages of Owning a
Franchise
Franchise fees can be costly and cut down on profits.

Owners of franchises have less freedom to make


decisions than other entrepreneurs.

Franchisees are dependent on the performance of other


franchises in the chain.

The franchisor can terminate the franchise agreement.


Sole Proprietorship

Sole proprietorship

a business that is owned exclusively by one person


Advantages of a Sole
Proprietorship
minimal government regulation

accurate tax records


certain employment laws

Sole proprietorship is the most common form of U.S.


business ownership.
Disadvantages of a Sole
Proprietorship
It can be difficult to raise money for the business.

You bear the burden of all the risks.

If the business fails, your personal assets can be


jeopardized.
Partnership

Partnership
A business owned by two or more people

Advantages of a partnership include:

 multiple sources of capital


 risks are spread among partners
 minimal government regulation
Disadvantages of a
partnership include
responsibilities and profits are shared

can be held liable for errors of partners


Corporation
a business that has the legal rights of a person but is
independent of its owners

share of stock- a unit of ownership in a corporation

The corporation, not the owners, transacts business.


board of directors -a group of people who meet several
year to make important decisions affecting the company

Determine dividend payments

Dividends- distributions of corporate profits to


shareholders

The board of directors is not involved in the daily


management of the company.
Disadvantages of a
Corporation
The disadvantages of a corporation include:

A lawyer is required to establish a corporation because a


corporation is complex.
 costly
Advantages of a Corporation

In a corporation, personal liability is limited to the


amount of money each shareholder invested in the
company.

Personal assets of shareholders are protected.

Corporations can raise money by selling stock.


Intellectual Property

intellectual property

the original creative work of an artist or inventor

songs, novels, artistic designs, inventions

No one can use someone else’s original work to make


money.
Patent
patent

the grant of a property right to an inventor to exclude


others from making, using, or selling his or her invention

lasts for 20 years

provisional patent application -allows inventor one year


to research details of an idea prior to filing a patent
copyright
-an intellectual property law
 protects works of authorship
remains in effect for 70 years after the death of an
author

trademark -name, symbol, or special mark used to


identify a business or brand of product
Laws that Protect Consumers

Licenses

State and local governments require some businesses to


have licenses.
 training may be required
 inspections may be required
Legal Issues Affecting
Business
Learning some basics about the laws affecting
businesses will help you handle minor legal issues
independently.

Sometimes you will need to hire a lawyer.

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