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Small Business FAQ’s

How much is your business worth?

To find out how much a business is worth, you should start with your own accountant who can give you a good idea based on a review of the financials. Or another low-cost option is to contact the Small Business Development Center which offers assistance with business valuation, market research, business plan, and projections.

You could also contact a CPA who will want 2-3 years of business taxes, Profit and Loss reports, and include the Balance Sheets.  The CPA will only be looking at numbers (revenues, debts, assets) and will not consider the market or other outside factors.

Where can I find no-cost business assistance?

The Small Business Development Center will provide market research, business plan, projections, loan syndication and other state options for wage grants based on certain types of jobs.

How should I handle a bad review?

A bad review can be very frustrating and even more so because such actions are out of your control.  However, what it usually boils down to is how you respond. We find that picking up the phone and calling the individual can make a huge difference.  It may give them an opportunity to yell and be mad, but it also gives you an opportunity to tell them (calmly) that you hear and understand the frustration, however, you are running a business and have certain policies in place to protect and keep your business running.  Here are some points to help you:

  • Stay calm
  • Document everything (phone calls, conversations, a timeline on what’s happened) and keep those records somewhere accessible.  Email is a great way to document!
  • Respond with phone calls.
  • Respond with emails and text messages, “We are trying to get in touch with you to discuss, please call us.”
  • Respond to the reviews, “We tried to call you to discuss.  We understand this frustration but we have policies in place to protect the machines we rent out.” For reviews, people need to see how you responded when there’s a negative review up.  Did you respond calmly or did you get wrapped up in the client’s emotions?

At this point, you need to decide if you want to work with the customer (give some of the deposit or all of it back to get them to back down) or hold firm.  If anything ends up in a lawsuit, the court also wants to see how you responded initially and that’s why it’s so important to write down what’s happened and the steps you took to get it under control.  You can only control how you handle the response so stay calm and try to talk to them.

Here’s a video to help you take the necessary steps to deal with a conflict situation and hopefully avoid ending up in court: Stop, Talk, Listen

Business Entity FAQ’s

How can I make changes to a Utah legal entity?

If you need to make a change to your legal entity like with the registered agent, location address, etc., then you will click on this link to get started:

Watch this quick video we put together to show you what to do once you’ve clicked on the link above: WATCH VIDEO.

Am I clear to transfer the title of my rental property into an LLC?

When setting up an LLC to own real property, you will need to have a quitclaim deed recorded to transfer the title over to the LLC.  Contact a title company to help you.

Avoid any surprises that could come up with transferring the title to an LLC. Figure out first:

  • Whether the title insurance company allows such a transfer especially if the individuals listed on the title are different than who is a member of the LLC; and
  • If there is a mortgage, does the mortgage lender allow such a transfer?

What is the benefit of forming an LLC or Corporation?

A legal entity can keep your personal assets out of a lawsuit against the business if there’s no evidence of intent and you have maintained the legal entity.  In contrast, registering as “Doing Business As” (DBA) on its own, or as a Sole Proprietorship, does not offer any legal protections, and you can be held personally liable for the business’s debts and obligations.

How do I set up an LLC?

The state of Utah has a couple of options to form an LLC.  If you form the LLC yourself then remember to hire an attorney for the maintenance documents: operating agreement, consent forms, etc.

What are some important things to consider between an LLC and a Corporation?

LLCs are flexible and Corporations are not. For example, with an LLC you can:

  • Choose to be taxed as a sole proprietor or an S corp.
  • Transfer the ownership at death easily to a trust with an “Assignment” where an S Corp, it is much more complicated, and you may not avoid probate.

When should I hire a CPA?

Contact your CPA as soon as your LLC is registered! The CPA will need to review the attached LLC documents to appropriately handle your tax status.

Do I need a local business license?

Be sure to contact the city (or county if not in city limits) where your business is located to obtain a business license. Certain home-based businesses MAY be exempt from licensing fees. A license is still required to conduct business; however, you may be exempt from paying an annual licensing fee.

When do I need Worker’s Compensation Insurance?

If you are a business with no employees, you may qualify for a Workers’ Compensation Coverage Waiver. Otherwise, contact your insurance agent as soon as you hire employees!

How soon can I open a business bank account?

Most banks will want the LLC registered before you can open a business bank account. And they will verify by checking the state’s website.  Then, the bank will require an employer identification number (EIN).  This EIN is your permanent number and can be used immediately for most of your business needs, including:

  • Opening a bank account
  • Applying for business licenses
  • Filing a tax return by mail

HR Compliance FAQ’s

What is the ADA Interactive Process?

  1.  Employee submits an accommodation request in writing that includes a description of the requested accommodation, the reason for the accommodation, and how the accommodation will help the employee perform the essential functions of the job.
  2.  After receiving the written request, the Company will engage in an interactive dialogue with employee to determine the precise limitations of the employee’s disability and explore potential reasonable accommodations that could overcome those limitations.

Accommodation Decision

The Company is not required to make the specific accommodations requested by Employee and may provide an alternative, effective accommodation, to the extent any reasonable accommodation can be made without imposing an undue hardship on the Company.  If the disability or need for accommodation is not obvious, the Company may ask the employee to provide supporting documentation showing that they have a disability within the meaning of the ADA and applicable state of Utah laws and that the disability necessitates a reasonable accommodation. If the information provided in response to this request is insufficient, the Company may require the employee to see a health care professional of the Company’s choosing, at the Company’s expense. In those cases, if the employee fails to provide the requested information or see the designated health care professional, the request for a reasonable accommodation may be denied. The Company will keep confidential any medical information that it obtains in connection with the employee’s request for a reasonable accommodation.

Exempt or Non-Exempt from Overtime?

  1. The employee must be paid on a regular salary basis, with the requirement that the pay not be reduced based on quality or quantity of work and must be paid even if no work is available.
  1. The yearly salary must be no less than $35,568 (can include bonus and commission pay).
  1. The employee must also meet the required job duties under these 5 job categories: Executive, Professional, Computer, Administrative, and Outside Sales. 

Check out: Does the New Overtime Rule Affect My Business?

Can I protect my business if I don’t have an NDA?

You still have rights as a business owner to protect your trade secrets even when there’s not a signed “Confidentiality Agreement.”  Continuing obligations and legal risk apply to employees and independent contractors who (due to their position and to be able to perform their jobs) have access and knowledge about the business that is not known by others (other employees, independent contractors, etc.) or the public (Business Secrets).

Examples of such information could include client lists and the specifics about each client like ordering history, payment history, requirements that are particular to such clients, and other similar data.

Utah courts have repeatedly stated that Key Persons may use general knowledge, experience, memory, and skill, however, gainedif such individual does not use or disclose any of the company’s secret processes or business secrets that benefit themselves or that benefit a competitor of the company.  Key Persons who misuse or disclose confidential company information can cause significant damage by impairing or destroying the value of the confidential information.

What can I do if I discover an employee has misused my business secrets?

You could send a letter to the individual’s new employer about (i) the continuing obligations to protect the company’s business secrets; (ii) description of the discovery of a violation; and (iii) request that the new employer takes action to stop the unlawful disclosure and prevent further violations. Then you would file an injunction based on evidence of threatened or actual misappropriation to preserve evidence and prevent business secret disclosure. If things cannot get resolved then file a lawsuit against the individual seeking damages, attorney fees and even criminal penalties if your client data was downloaded from the Company’s database.

I am considering cutting hours or pay as an alternative to permanent layoffs. How should I decide which employees will receive a cut in pay or hours?

To avoid a wage-claim lawsuit, you should make this decision very carefully.  Your goal as a business owner should be to proceed objectively and consistently to avoid a claim of discriminatory decision-making based on a protected class, such as race, religion, age, or sex.  One option which presents the lowest risk to the employer is to implement an across-the-board wage cut to every employee equally, preventing a claim of discriminatory treatment.  If cutting for certain positions, it is crucial that there be objective and reasonable criteria for selecting those positions, and the criteria and decisions should be defined, documented, and consistently applied.

I am unhappy with an “at-will” employee’s performance. Is it true that the way I approach this may affect their “at-will” status?

Yes, disciplinary policies that allow for discipline only under specific circumstances, or through a progressive discipline approach, may create the expectation that these policies be implemented for at-will employees, inadvertently modifying at-will employment status.

Can I be liable for the actions of my employees?

Businesses are liable for the actions of their employees, based on a concept known as vicarious liability.  Business owners can mitigate these risks by ensuring robust onboarding, training, and performance evaluation practices.

Do state and federal anti-discrimination laws apply to my business?

It depends on how many employees you have.  If you have at least one employee, you are required to ensure that male and female employees receive equal pay for equal work.   Businesses with fifteen (15) or more employees are covered by state and federal laws prohibiting discrimination based on various protected classes, such as race, sex, age, and religion, in various employment practices.  You can find more information on our “Necessary Utah Employment Laws” page.  Whether you are hoping to prevent any discrimination-related litigation, or have received a claim of discrimination, contact us right away.  We can help!