One Day, Joe’s Crab Cake Shack Woke Up and Discovered That It Had Been Transformed Into a Monstrous Vermin

A recent article in the New York Times tells the stories of individuals and small businesses that received unexpected notices that the banks where they held accounts had suddenly and irrevocably closed down their accounts.  When they called the banks to find out why, they did not get any clear answers, except that the banks had previously filed suspicious activity reports (SARs) about the accounts with the federal government.  These reports are, by nature, confidential, so the banks could not tell the customers about the contents of the reports.

The New York Times posited, however, that these reports were about transactions that raised suspicions about fraud, money laundering, or other financial crimes.  These are some types of transactions that raised red flags:

• Cash deposits just below the federal reporting threshold of $10,000
• Wire transfers to and from foreign countries
• Accounts belonging to people with criminal records

If you have a criminal record, you know it.  You also know about the transactions your account has made.  What takes the account holders by surprise is that the criminal conviction took place years before they opened the account, and they have been selling products to overseas customers for years.  Of all the people who fit this description, why us?  After all of these transactions, why now?  It is as cruel and inexplicable as when mild-mannered Gregor mysteriously turned into a cockroach at the beginning of Kafka’s Metamorphosis, but as with everything else in small business, you just have to roll with the punches.

Contact Tobin O’Connor Ewing About Bouncing Back Quickly From the Unexpected

It isn’t fair when banks shut down your small business bank account, but the show must go on.  A Washington, D.C. small business attorney can help your small business land on its feet after inexplicable financial setbacks.  Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.

Source:

nytimes.com/2023/11/05/business/banks-accounts-close-suddenly.html

Read the Fine Print in Your Lease Before Freezing Through the Winter

Much like the vital organs of the body, heating, ventilation, and air conditioning (HVAC) systems do not occupy our attention until something goes wrong with them.  You might not notice how important a properly functioning HVAC system is to your business, but would customers dine in your restaurant if the seating areas were uncomfortably hot or cold?  Successful storage of supplies is often dependent on the temperature of the storage area, and not only when you are storing food.

Commercial lease agreements should indicate how the landlord and the tenant will apportion responsibility for HVAC repairs.  For example, if the HVAC system serves an entire building and multiple tenants benefit from it, then maintenance of the system should be the landlord’s responsibility.  If the system only serves one tenant, then it might be the tenant’s responsibility to repair it, especially if the tenant was the one that installed it.  This means that it is the tenant’s responsibility to choose an HVAC unit that is unlikely to malfunction; this is not an issue when you are buying a new HVAC system, but if you are buying it used, you should be prepared to demonstrate that you know that the system is in good condition.

If you are planning on renting a commercial space where multiple units depend on the same HVAC system, you should ask to see a recent inspection report of the HVAC system before you sign the lease.  The age of the HVAC system should be a factor in whether you decide to sign the lease and in what constitutes a fair rent amount.  If you are unsure about the implications of the HVAC provisions in your lease agreement, you should consult a lawyer.

Contact Tobin O’Connor Ewing About Commercial Lease Disputes

A Washington, D.C. small business attorney can help you protect your rights when signing a commercial lease agreement.  Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.

Source:

jdsupra.com/legalnews/don-t-overlook-the-importance-of-hvac-16429/

Small Business Tasks for Which Artificial Intelligence Is Well Suited

Early on in your business venture, it becomes obvious that there is only so much that one person can accomplish in one hour of work.  The decision to hire additional employees is never an easy one, as it increases your expenses.  What if you could save time for yourself and your current employees by automating certain tasks with artificial intelligence?

In most tasks, bots cannot take the place of humans.  These are some tasks that lend themselves well to automation:

• Sending reminder text messages about upcoming appointments and payment due dates
• Posting brief promotional messages on social media
• Answering routine questions through an online chat function on your website (you should program the bots to forward the questions to a live person when the questions fall outside the scope of the bots’ knowledge)

You will have more time to spend on planning and implementing your plans, and your employees will have more time for hands-on tasks and responding to customers about more complex matters.

Automating Tasks Is Only Part of Your Business Strategy

Using artificial intelligence for routine matters can help your small business save time and money, but it will not, by itself, make your business successful.  Bots are not very good at drawing inferences, so the areas in which they can make accurate predictions are very limited.  They certainly are not very good at resolving interpersonal disputes.  For these higher order tasks, you need your own human brain.  For really challenging issues like breach of contract, negotiating about business debts and major purchases, and entering new legal agreements, you need a business law attorney.

Contact Us About Small Business Strategy

A Washington, D.C. small business attorney can help you avoid and resolve problems in ways that chatbots cannot.  Contact Tobin, O’Connor & Ewing in Washington, D.C. or call 202-362-5900.

Source:

forbes.com/sites/charlesrtaylor/2023/08/09/how-artificial-intelligence-is-helping-todays-small-businesses/?sh=4656d1ad1a48

What Is an Influencer Agreement?

In an influencer agreement, the parties are a social media influencer and a company whose products the influencer is promoting.  The influencer agrees to do a certain type of promotion for the brand, for example, wearing clothing produced by the company in five videos and mentioning this verbally in the videos and in writing in the credits.  The company promises to provide a certain amount of compensation, for example, a certain amount of money per video, plus letting the influencer keep the clothing.  It is similar to a business contract in which a freelancer promises to do short-term work for a company in exchange for payment.  Before you sign an influencer agreement, you should review it with a lawyer and discuss how the terms of the agreement would or would not protect you if certain problems were to arise.

What to Do If a Brand Does Not Hold Up Its End of the Agreement

If you sign an influencer agreement with a company, but it does not pay you what it promised to pay, you have the right to file a breach of contract lawsuit.  The best contracts include detailed provisions about what the parties should do if they are unable to meet their contractual obligations, in other words, how to modify or cancel the terms of the agreement without resorting to litigation.  If you have exhausted these remedies, you can take the breach of contract dispute to court.  You can win your case if you can prove that you fulfilled your contractual obligations, but the other party did not fulfill theirs, and you suffered financial losses as a result.

Let Us Help You Today

A Washington, D.C. estate planning attorney can help you draft business contracts and resolve breach of contract disputes.  Contact Tobin, O’Connor & Ewing for help today.

Source:

law.justia.com/codes/maryland/2013/article-gcl/section-22-701

Which Partners Will Stay, and Which Ones Will Go?

When you file the initial paperwork to establish a business, one of the first steps is to choose an entity type, also known as a business structure.  Some business structures require the owners of the business to write a partnership agreement.  This agreement should contain provisions about how to dissolve the partnership as well as for the procedures to follow if one partner wishes to leave the partnership or if the other partners want to remove a partner because of misconduct or non-fulfillment of obligations.

Do You Need a Lawyer to Dissolve a Business Partnership?

In the best cases, the partners simply follow the procedures in the partnership agreement so that the partners can divide the company’s assets and settle its debts when it dissolves.  Determining the value of the assets owned by a company and the debts it owes can be much more difficult than determining the value of the assets and debts of an individual.  The partners might disagree about how much money there is to go around, even if they agree about which former partner should get which fraction of it.  A business law attorney can help you resolve disputes about the valuation of your company’s assets and debts.

It is especially important to hire a business lawyer if the business is dissolving or trying to remove a partner because that partner has been trying to conceal assets or has otherwise been engaging in dishonest dealings.  Another instance where a business partnership breakup could require the help of a business lawyer is if you do not have a partnership agreement or other document that includes details about dissolving the business entity.  A lawyer can also help you if the business entity has already resolved but you want to sue a former business partner for the financial losses you suffered because of his or her actions.

Contact Us About Dissolving a Business Partnership

A Washington, D.C. estate planning attorney can help you break up with your business partners or dissolve a business entity.  Contact Tobin, O’Connor & Ewing in Washington, D.C. or call 202-362-5900.

Source:

businessexpress.maryland.gov/manage/close-business

Even Mom and Pop Ecommerce Stores Can Stand on the Shoulders of Giants

The biggest advantage that huge corporations have over small businesses is that it is less expensive to operate at a large scale.  It costs less to order, store, and ship 1,000 units of an item than it does for ten units.  This does not mean that you should buy a bigger house so that you can pile up thousands of units of merchandise in the garage, dining room, and spare bedroom.  Instead, you should participate in one of the platforms designed to enable small businesses to benefit from the large, well-organized warehouses and streamlined third party logistics services that big companies use.  By offering your products through a large, widely recognized ecommerce platform such as Shopify, you automatically get a user-friendly website.  Some ecommerce platforms offer shipping and warehousing services.  Most customers do not want to type their credit card information by hand on a buggy website and then wait for you to walk their order to the post office and ship it to them, even though that was the only way to do ecommerce in 2005.  Using an established ecommerce platform will help you and your customers save time and money.

Keep Your Local Identity While Participating in the National or Global Marketplace

Meanwhile, the biggest advantage that small businesses have over retail giants is their uniqueness.  People visit your ecommerce store to find products that they cannot buy from Walmart or any other huge corporation.  Stick to the products that you do best and do not spread yourself too thin simply for the purpose of diversifying your product line.  If customers love the tea cozy they bought from Crabby Crochet Company, don’t start selling sweaters just so you can sell more stuff to the same customers.  Show your appreciation with seasonal emails so they will remember you at the holidays and buy more tea cozies as Christmas presents for their friends.

Contact Us About Staying Competitive as a Small Business

A business doesn’t have to be huge to be successful.  A Washington, D.C. small business attorney can help your small ecommerce business save on costs while competing in a market dominated by online retail giants.  Contact Tobin, O’Connor & Ewing in Washington, D.C. for help.

Source:

womply.com/blog/10-ways-business-can-compete-amazon/

What Is Third Party Logistics?

The phrase “third party” in the supply chain logistics does not mean the same thing it means in other contexts.  Rather, the supply chain logistics industry categorizes logistics into the following models:

• First party logistics – Your company handles all its production, warehousing, and shipping in house. You knit tea cozies in your living room, store them and pack them in your garage, and drive them to the post office or FedEx store in response to customer orders by email.
• Second party logistics – You rely on UPS or another courier service for shipping. It automatically provides shipping-related services such as tracking.
• Third party logistics – You hire a logistics company to manage warehousing, order fulfillment, and shipping. The company might store your products in several warehouses in different states and decide which warehouse to ship the products from, based on the customer’s location.  Third party logistics (3PL) companies constantly analyze data to fulfill orders more efficiently.
• Fourth party logistics – You outsource the decision making to a logistics company and sit back and wait for the paychecks (or financial losses). The company makes decisions about sourcing of materials and manufacture of products, as well as the processes that 3PL companies handle.

In other words, using 3PL means that you can focus on developing and manufacturing your products and leave the storage and delivery of products to a company that specializes in these processes.  Engaging with 3PL is an effective way to scale your business.

Contact Us About Scaling Your Business

Outsourcing can help you scale your business, but it is important to work with a lawyer when your company enters into an agreement with a larger company.  A Washington, D.C. small business attorney can help you make your small business go big.  Contact Tobin, O’Connor & Ewing for help.

Sources:

clinicmastery.com/concept-10-100-1000-per-hour-tasks-tasks-really-worth-investing/

inflowinventory.com/blog/small-business-3pl/

What Does the No Surprises Act Do?

The No Surprises Act limits the amount of money that hospitals, physicians’ groups, labs, and other healthcare businesses can charge for emergency medical treatment.  When an insured patient visits a hospital emergency room, the ER physician, radiologist, and lab might not be in the patient’s insurance network.  Likewise, if a patient gets airlifted to a hospital, the patient’s insurance may or may not cover air ambulance services.  Pursuant to the No Surprises Act, the maximum amount that the providers can charge patients is the amount that an in-network provider would charge for the same services.

The No Surprises Act also establishes an arbitration process, known as Independent Dispute Resolution (IDR), through which the doctor and the insurance company negotiate about how much the patient’s insurance company will pay for the charges that, were it not for the No Surprises Act, would be the patient’s responsibility.

How Small, Private Practice Healthcare Providers Can Deal With Independent Dispute Resolution

Collecting payment through IDR is no more difficult than spending a few months badgering patients about bills that everyone knows they can’t pay and then selling the unpaid debt to a collection agency for pennies on the dollar.  It is considerably more work for small doctors’ offices, where the billing staff is only one or two people, than it is for large hospitals and physicians’ groups.

IDR is certainly fairer to patients than holding them responsible for medical bills they never expected and can never pay, but in arbitration, bigger companies always have an advantage over individuals and small businesses.  It is in your interest to have a lawyer represent you in arbitration, including in IDR related to the No Surprises Act.

Let Us Help You Today

A small business attorney can help you when the law requires arbitration and you need a lawyer to negotiate on your behalf.  Contact Tobin, O’Connor & Ewing for help.

Sources:

urban.org/research/publication/no-surprises-act

fiercehealthcare.com/providers/no-surprises-act-largely-successful-protecting-consumers-though-gaps-remain-regulators

D.C. Councilmembers Introduce Bills to Help Restaurants Regain Their Footing After the Pandemic

Many restaurant owners in the District of Columbia have resorted to desperate measures to prepare for Initiative 82, which took effect at the beginning of May.  Some have eliminated table service, while others have moved their restaurants across the border into Virginia or Maryland.  One of the most popular solutions with restaurant owners, however, has been adding service charges to customers’ bills.  As you can probably guess, this solution has not been very popular with customers, but some restaurant owners feel that adding service charges is their only option if they want to avoid defaulting on the debts that their businesses racked up during the pandemic.

The D.C. Council is currently considering two bills, one by Kenyan McDuffie and the other by Charles Allen, that aim to protect both the higher wages of restaurant workers and the viability of small restaurants.  The new bills would allow restaurants not to count the money they received through service charges as taxable income.  The bills are, for all practical purposes, a tax break for restaurants.  The goal is that, by keeping all of the money received through service charges instead of paying a portion of it in taxes, restaurant owners will more easily be able to afford to pay servers and other tipped employees the higher wage while also paying down the debts that many restaurants accumulated during the pandemic.

The “everything is expensive” problem does not appear to be going away anytime soon.  A business law attorney can help you develop a short-term and long-term plan for the financial wellbeing of your restaurant.

Contact Tobin O’Connor & Ewing About Coping With Business Debts

A Washington, D.C. small business attorney can help your restaurant regain its footing after the pandemic.  Contact Tobin, O’Connor & Ewing today.

Sources:

dcist.com/story/23/05/03/dc-bills-service-charges-restaurant-relief-tipped-wage-initiative-82/

dcist.com/story/23/01/17/dc-council-votes-to-delay-initiative-82-increase-to-may/

wusa9.com/article/news/investigations/more-surcharges-fees-coming-to-dc-restaurants-tipflation-intiative-82/65-08a4741a-1e64-46c2-b481-9f330f0ed0d4

Subchapter V of Chapter 11 Bankruptcy Law

In a chapter 11 bankruptcy filing, the business applying for bankruptcy proposes a plan for restructuring its debt.  In most chapter 11 bankruptcy cases, some or all of the creditors must approve the proposed plan before the bankruptcy court signs off on it.  Subchapter V of chapter 11 enables eligible businesses to restructure their debt without the creditors getting a veto vote.  Instead, the court appoints a trustee, much like in other types of bankruptcy filings.  Before 2019, subchapter V filings were only available to businesses seeking to restructure $2.7 million or less in debts.

During the COVID-19 pandemic, the federal government amended subchapter V to increase the amount of eligible debt to $7.5 million.  The purpose of this measure was to help struggling small businesses survive the disruptions related to the pandemic.  Three years later, while the businesses that have not closed down have seen a rebound in customer demand, but because prices have remained high, the opportunity to restructure more than $7 million in business debt comes as a relief to small businesses.

The subchapter V amendment has attracted a lot of participation from eligible businesses, and the demand for it only seems to be growing.  2022 saw even more subchapter V filings than the years preceding it.  The most populous states had more subchapter V filings than smaller states; Florida, Texas, and California each accounted for more than 140 subchapter V chapter 11 filings in 2022.

Filing for small business bankruptcy is not the only option if you are determined to stay in business but you cannot repay your business debts in the amount that you currently owe.  A small business attorney can help you find the best option and negotiate with creditors.

Reach Out to Us Today

A Washington, D.C. small business attorney can help your small business restructure its debts and continue to operate.  Contact Tobin, O’Connor & Ewing today for help.

Source:

law.com/dailybusinessreview/2023/03/22/this-new-bankruptcy-filing-option-favors-small-businesses-and-florida-is-a-hot-spot/