You probably spend much of your time at work in front of a computer. When you are on the run, you use your Blackberry or iPhone for both work and pleasure. But who owns the data that is created, viewed and stored while working?

If you work in New York for a private company, you have a reasonable expectation of privacy for your electronic devices, work computers and cellphones. This is especially the case when the company that you work for does not have a policy regarding internet usage. As a result, I have been advising companies to cover their bases by clearly and specifically drafting internet usage policies that explains their employees expectation of privacy.

Restrictive internet usage policies usually include the following:

1. All the data that is stored on work computers is company property;
2. Employee’s have no expectation of privacy;
3. The Employer may monitor its employees computer usage without their knowledge.

The law regarding restrictive internet usage policies have been looked at with increasing scrutiny by the courts.  For example, a recent court ruling did not allow an employer to access the Hotmail account of its employee.

Despite a written internet usage policy, employers are not immune from potential lawsuits from employees. Listed below are restrictions that employers should be aware of:

• PRIVILEGED DISCUSSIONS. Discussions regarding attorney-client communications may continue to be privileged.  If an employee is using the internet for legally permitted employee, like union organizing her communications may be privileged.
• DISCRIMINATION. Be aware that you cannot treat your employees differently while monitoring their computer usage.
• ACCESSING PRIVATE ACCOUNTS. You cannot access your employee’s Twitter account simply because they accessed their account at work.
• NEW YORK STATE LAW. Believe it or not, New York State does not have an invasion of privacy law.  Be aware that you cannot fire an employee simply because she tweets.

Be aware that case law is changing on this subject.  As a word of caution, use your common sense and think about the golden rule.

For more reading:  Who Owns all the data in the Workplace

If you have any questions about who owns your data at work, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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Crain’s New York Business reports that members of the group of New York Tech Meetup are working to repeal the law that requires companies to pay a publication fee to form a New York Limited Liability Company (LLC).

Publication fees range from $1000 to over $2000 and are a burden on many start-ups. The rates depend on the county where the business is located.

The New York LLC publication law is as follows:

1.  Within 120 days of formation of a New York LLC, the LLC must publish a notice in two (2) newspapers, once a week, for a period of six (6) consecutive weeks, as follows:

(a)  The notice must include the name of the LLC, the date of filing, the county in which the office is located, the full street address of the LLC, the purpose of the LLC, and a statement regarding service of process on the secretary of state. The information must be precise… there’s no room for errors.

(b)  The notice must be published “as though the copy or notice were a notice or advertisement of judicial proceedings.”

(c)  The two (2) newspapers must consist of one (1) weekly paper and one (1) daily paper of general circulation in the county where your LLC was formed. The newspapers must be designated by the county clerk for such publication.

2.  After the LLC publishing is complete, you must obtain affidavits of publication from the newspapers in which the legal publishing was completed.

3. The affidavits of publication must be filed with the state, along with other information contained in a Certificate of Publication. There are fees for this filing.

4. If you fail to comply with the LLC publishing law within 120 days of formation, the authority of your limited liability company to carry on, conduct or transact any business in NY state shall be suspended, effective as of the expiration of such 120 day period.

5. The suspension will be annulled upon the filing of the Certificate of Publication, even if filed late.

The main beneficiary of the publication law is print publications like the New York Law Journal and Crains New York Business.  Hat tip to Crains for disclosing the conflict. With advertising fees in traditional media in a free fall, expect newspapers to fight for this important source of revenue.

The purpose of the publication requirement is to notify members of the public to know who they are doing business with.  I have never heard of anyone who reads the legal notices of any newspaper.  Moreover LLC information can easily be searched for free on the New York State Department of State Corporation and Entity Database.

The time has come to abolish the New York LLC publication requirement is law from an era whose time has passed. What do you think?

The Law Office of Frederic R. Abramson represents businesses in New York.  If you have a question regarding LLC formation contact me at 212-233-0666.

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On July 4, we celebrate the entrepreneurs who were our founding fathers who made a difference by bringing social change to America. Unlike July 4, there is nothing particularly unique about the date of March 4.  On that date back in 2006 final contact was attempted with Pioneer 10 by the Deep Space Network. Unfortunately, no response was received.

NYConvergance recently noted that the New York Tech scene has matured. One sign of its maturity is the bevy of tech events in the New York City area.

What could be better than making March 4, 2010 special by spending the evening celebrating the power of entrepreneurs to change the world.  According to the press release:

The event will feature a panel that brings together the nation’s most prominent advocates for both early stage investment and social enterprise.  Fred Wilson, founder of Union Square Ventures, is an advocate for early stage investment and the single most read blogger in the venture capital community.  Jacqueline Novogratz is the founder of the Acumen Fund, a global nonprofit venture philanthropy fund that hat uses entrepreneurial approaches to solve the problems of global poverty.  They are joined by Roger Ehrenberg, founder of IA Venture Strategies and one of the most active angel investors in New York and Jacob Gray, partner at Murex Investments. The panel will be moderated by Scott Edward Anderson, founder of the greenskeptic.com and a frequent commentator on the FOx Business Netowrk. This rare combination of finance and philanthropy leadership reflects GoodCompany Ventures’ unique mission to help social entrepreneurs develop scalable, for-profit businesses to address unmet social needs.

Here are the details:

Date:   March 4, 2010

Time:  6-8 PM

Location:

Green Spaces NY
394 Broadway
5th Floor
New York, NY 10013

Cost: $35

For more information: GoodCompany Ventures

Drop me a line and let me know if you are planning to attend.  I would love to meet up with you!

The Law Office of Frederic R. Abramson is not affiliated with the above event.  If you have any questions regarding legal issues concerning entrepreneurship, contact the Law Office of Frederic R. Abramson at 212-233-0666.

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One of the great problems of the information age has been the disruption of  local communities.  During the last generation, people were able to rely on their local community to help them sustain their businesses.   Accountants were able to order a pint of Guinness at their local Irish pub and pick up a new tax client before the time the beer has settled.  The local butcher could rely on his buddy’s from his softball team to pick up osso buco at his store.

Now the local accountant has been replaced by H&R Block and you buy your meat in shrink wrapped plastic on environmentally unfriendly styrofoam at Stop and Shop. Even the local watering hole has been replaced by a TGI Fridays.  In the process, our local communities are being destroyed.

You may be paying a bit less in the short term, but there is a price. Our lives are missing the interaction of oral conversations that last more than a couple of minutes.  These conversations are important not only financially, but socially. If you are a financially planner, the local accountant would naturally refer you business.  The butcher probably knows about the best poker night in town.

Now that our local communities have been upended, many of us are turning to socially networking to re-build our communities. Unfortunately, social networking sites such as Twitter do not allow for many deep meaningful interactions that lead to building communities very quickly.

A community looks to each other to grow the relationship and to interact.  According to Chris Brogan, community happens when you feel that you are among like-minded people and when you feel that your contributions matter.? Communities empower users of products or services, or people with like-minded interests to interact.

You may not realize it, but who you buy from really matters.   Spend a few moments and think about the impact of what you purchase.

Yesterday I bought a gift for a for a two year old girl at the Dolphin Bookshop, in my hometown of Port Washington, New York rather than Barnes and Noble. The purchase supports a local independent bookstore in the community. I love technology, but don’t expect Kindle stores showing up on Main Street anytime soon.

The next time you are wondering why someone from your community hasn’t bought something from you, you should think what have you done lately to build our community.

What do you think? What are you doing to help build your community? Have you been able to use social networking sites to build a community?

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According to the New York Times, the IRS is cracking down on companies that try to pass off regular employees as independent contractors. More than two dozen states are cracking down on employers that improperly claim regular employees as independent contract workers. The federal government believes that enforcement could yield $7 billion during the next decade.

Among the most often misclassified workers are truck drivers, construction workers, home health aides and high-tech engineers.

As an independent contractor, there is no employer-employee relationship with the person or company that you are doing business with.  The independent contract is a consultant who performs specific duties that the consultant is capable of performing.

At the start of the relationship, it is absolutely vital to have an independent contract agreement (also known as a consulting agreement) drafted to protect both parties.  The consequences of failing to establish a consultant as an independent contractor can have dire tax consequences.

In your independent contractor agreement, it is important to establish that the consultant performing the services  is not under the control of the employer.  In addition, the employer may not directly supervise the consultant.

When it comes time to draft an independent contractor agreement, you should focus on the fee for services rendered and provide a complete description of the services that are to be provided.

According to IRS, you should be aware of the following common law factors when it comes to providing evidence as to degree of control:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

If you have a legal question regarding independent contractors in New York, contact the Law Office of Frederic R. Abramson at 212-233-0666

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Calvin Chin, an American entrepreneur in China, wrote an insightful guest post in Techcrunch about startup culture in China.  He recently attended the World Economic Summit in Davos, so you know that he has his ear to the ground on what’s going on in the largest country in the world.

Calvin Chin believes that the Chinese government has placed a premium on stability with the goal of lifting millions out of poverty at the expense of freedom of information.  This emphasis on stability, with power in the hands of the few, allows for big decisions to made quickly and without opposition.

Many of our world business leaders are also placing a premium on government stability. Thomas L. Friedman, the op-ed columnist to the New York Times, noted that at Davos many are questioning the stability of the American government. With the Republicans unwilling to pass legislation in Congress and the Democrats running to the hills, the American political system is deadlocked. With the economy in crisis, and perhaps a Marshall Plan needed, many question the economic future of America.

Many successful tech startups in China understand that the stability of their government is paramount for economic growth, even if their freedom to operate is limited. Nimble startups are able to navigate by having a keen awareness of any political or market changes.

Because Chinese startups are obviously located in China, they are unable to pack up and leave simply because the law changes or if their computers have been hacked like Google.They simply adjust. When the government decides to censure microblogging sites, startups use the existing infrastructure to to set up a microblogging site that screen Tweets.

Other successful startups in China follow these models:

• Localize an international hit and making it cheaper and better. Chin cites Kuukie which basically rips off  Moo in the custom business card business.  Look for a Chinese startup to localize hot US startups like Foursquare.
• Look for a fit for Chinese net culture with a product that you don’t see elsewhere.

Founders of startups are still able to circumvent the censors and obtain information by using web clients.  The system makes it difficult for big companies to compete locally.

Washington must learn from China and remove the clouds of uncertainty that plague our political system.  American startups and small business are unable to take action unless they know the cost of health care.  Without action now, look for more startups from Mao Inc. at the expense of Silicon Alley.

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2010 tax year brings several changes to small business tax law.  I know, the thought of taxes isn’t a pleasant topic to think about, unless you are an accountant. However, a look now at the tax position of your company can help you assess how your business can benefit and comply with the amendments to the tax code.

Listed below are 6 amendments to the 2010 tax laws that could have an impact on your small business. This list is subject to change, especially since President Obama outlined in his State of the Union address that there will be more aid for small businesses.

1. Reduced Mileage Rates. The mileage rate that businesses can use to deduct for automobiles has been lowered.
2. Home Based Businesses and the First time owner tax credit. If you run your business out of your home and plan to purchase a home for the first time, there is a $8,000 tax credit. Be aware that you need to purchase your home by April 30, 2010.
3. Cancellation of some Business Debt. The rules are a bit complicated, but certain businesses can decide to delay recognition of income from the cancellation of business debt in both 2009 and 2010.
4. Domestic Production Activities Deduction. “Domestic production” applies to a restricted group of businesses including architectural, construction, engineering or a few other companies. In 2010 this deduction is upped to nine percent of qualifying business net income.
5. Tax Credit for Research and Development. This tax credit was set to end in 2009. The House of Representatives has voted to extend the credit, however the Senate has yet to vote on it.
6. Depreciation and Section 179 Expenses. Small Business had been able to deduct up to $250,000 of the cost of machinery, equipment, vehicles, furniture and other such propertused during 2009. In 2010, this limit is due to drop to $135,000.

These are just a few of the changes.  For more see, Tax Changes for Business by the IRS or contact my office at 212-233-0666 if you are in New York State.

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Tuesday January 26, 2010

05:15 PM to 07:45 PM Cleantech Corridor and the NY Technology Council: “Powering the Nation: Opportunities and Challenges for Smart-Grid Investors” Blank Rome LLC Chrysler Building 405 Lexington Ave 24th Fl. NYC, NY. Directions: Get to Grand Central Station and cross teh Stret on Lexington Ave. and get into our landmark Chrysl. Energy + telecommunications + information technology – three major technology markets are working together to bring a sea change to the power industry. Dress is Business. $40. You may join Cleantech Corridor and be eligible to attend. Hors d’oeuvres.

Wednesday, Jan 27 2010

07:30 AM to 12:00 PM WSTA: “How to Securely Leverage Cloud Computing” The Westin New York at Times Square 270 West 43rd Street New York, NY 10036. This seminar examines Cloud Computing as a solution with objectivity. It will be a meeting of the minds of those who understand and work on the the space. Dress is Business. $395. For Bernardo’s List readers $195. WSTA Members- no charge. WSTA Affiliates- $150.00. Beverages, Cold Buffet. RSVP: annmarie.vanpelt@wsta.org 732-530-8808

08:20 AM to 10:00 AM Manhattan Chamber of Commerce: “MCC Quarterly Green Business Networking Event” American Cancer Society Hope Lodge. Directions: 132 West 32nd St New York, NY. $15. RSVP: events@manhattancc.org 212-473-7875

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Crain’s New York Business reports that venture funding for New York startups was up about 1 percent in the 4th quarter. However, only 66 companies received funding, as opposed to 86 the year before.

Venture funding in New York area is concentrated in three industries:

• Biotech
• Medical Devices and Equipment
• Software

Investors appear to be more conservative, with late stage businesses receiving the bulk of the funding.

In terms of tech, it interesting to note that Foursquare Labs Inc., owner of Foursquare which just released its Blackberry app, that I wrote about a few days ago, received $2oo,ooo in early seed funding.

I predict that Foursquare is the tech business in New York that has the best potential for fast growth.  It is in a great position to take advantage of geolocation on smartphones, matching businesses such as restaurants with consumers located near by.

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Mayor Bloomberg outlined his agenda for helping NYC small businesses in his State of the City speech on Wednesday January 19, 2010.  Unfortunately, it looks like there are only three.

• He promised to steamline the City’s application process for restaurants and bars;
• Expand a job program to help immigrants;
• Help Haitians to apply for temporary protected status so they can find legal employment here.

Looks like small businesses are going to have go it alone for 2010 without much new help from the city.

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