Friday, October 09, 2015

LexVid: The Cure for the CLE Blues

It's that time again. I just received my New York attorney renewal registration and along with it, a wave of dread about meeting my bi-annual CLE obligations.

As usual, I'm pretty short on credits, there's not much time to squeeze in a two-year cycle's worth of lectures, and I'm very determined to not have to file for an extension this year.

On the previous cycle I finished up some of my straggler CLE requirements using the online CLE provider LexVid. At the time LexVid's courses were free, but they've since changed to a pay program. Free is always good, but who can blame them for charging - you can't continue to provide high quality lectures and not get paid somehow.

LexVid offers several packages, including a 30-hour multistate package that will meet both my 24-hour New York requirement and my 30-hour, three-year requirement for Florida. The cost, just $89. A bargain for sure.

Plus they store my certificates in my account, so I don't need to deal with paper certificates.

My previous experience with LexVid was positive (which is why I am returning). The lectures were easy to access and were of reasonably good quality.

And while I am not quite looking forward to binge watching a bunch of lawyers ramble on about practice nuances as much as I did with Netflix's new series Narcos, LexVid does make the dreaded process a bit easier.

If you are in a jam to meet your CLE obligations, give them a look. It's a great value.

Thursday, December 16, 2010

Tax Tips For Newly Self-Employed Professionals

Steve Furnari was quoted this week on the CNBC Special Report in an article about tax tips for newly self-employeed professionals. Check out the article to discover Steve's entrepreneurial tips. See:

Wednesday, November 10, 2010

The next wave in microwave cooking: Tech firm partners with packagers, equipment brands to ensure food safety; competition also heats up.

Steve Furnari was quoted this week in Crains New York in an article about strategies for fending off competitors working to rip off your hot new product. Check out the article to discover Steve's entrepreneurial tips. See:

Friday, July 02, 2010

Personal Finance and Investment Tips

Fraudulent investment scams and schemes can often lure people in with a free meal and plenty of empty promises of large investment returns. Today, The Faster Times published an article titled, "How to Avoid a Costly "Free" Lunch", in which tips on how to recognize and avoid investment scams are given by experts in the field.

Click here to learn how to spot an investment scam and save yourself from possibly losing thousands of dollars!

Tuesday, April 13, 2010

Should You Incorporate Your Business?

Are you thinking about starting your own business or incorporating your sole propreitorship?

I will be presenting at the Freelancer's Union special two-part seminar "Should I Incorporate" on June 16th and June 23rd. Together with tax expert Howard Samuels, CPA, I will be speaking on the ins and outs of incorporating your freelance business from both the taxation and legal perspective.

This event will cover the following topics:
• Structural differences between S-Corps, C-Corps, LLCs, and Sole Proprietorships • How business entities differ for tax purposes • How business entities are taxed on a state/city level • How business entities differ from a legal and personal liability standpoint • How to ensure that a creditor will not "pierce" the corporation or LLC to hold you personally liable • Accounting/bookkeeping requirements for entities • How to hire an accountant for your business • What to ask when retaining a lawyer for your business

Part-one is coming up soon!
Wednesday, June 16, 2010
Wednesday, June 23, 2010

6:30 PM – 8:30PM
15 MetroTech Center, Brooklyn

Register for this event at:

Monday, November 09, 2009

IBD Article on Entrepreneurialism

Investors Businesss Daily just published a great article recently on Entrepreneurialism. It touched on:

All issues that our clients regularly face, and that we have resources on in the Aricles page of our website.

Check out the the article here.

Monday, November 02, 2009

Can You Pay a Finder to Raise Capital?

This issue has been coming up a lot lateley. We have unfortunately been the bearer of bad news to clients who want to raise capital, and pay an unlicensed finder to do it for them.

I think it's a sign of the times. You have a lot of people tapping into their entrepreneurial skills these days, some out out necessity (been laid off from a job and there aren't so many options out there).

To compound matters, the "stable" stock portfolios of angel type investors who typically fund early stage businesses have taken a dive, so there's less money around for speculative type funding.

Raising capital for an early stage business has never been easy--and it's particularly difficult in times like these.

Neverthless, as a business owner, you should be educated about the rules around raising capital. Make a mistake now (like paying an unlicensed finder a commission for raising capital), on even the smallest of investments, may cause serious problems when the economy turns a corner.

If you are a business owner and raising capital is in your company's future, please read the following article that describes what you can and cannot do:

I was recently a speaker at a conference for entrepreneurs. My topic was about the different ways to raise investment capital. At the end of the program, a young entrepreneur spoke with me about how he was raising capital to produce a film.

A couple of weeks later, I received a letter from an accounting firm who was soliciting investments for the young filmmaker.

On its face, the letter seemed like a excellent idea: the polished letterhead from the accounting firm (and their endorsement) made the young filmmaker seem more credible; this was a great reason for the accounting firm to contact new people; and, if the filmmaker raised the money he needed, the accounting firm would surely have a great new client.

Problem is, both the filmmaker and the accounting firm violated a number of state and federal securities laws by mailing that letter.

Let's face it, raising investment capital for a business isn't easy-and most entrepreneurs would take all the help they can get.

Entrepreneurs are a clever bunch of people who are often required to make things happen with limited resources. Problem is, many of the techniques that you would rely on to fill a pipeline of prospective clients often times violate state and federal securities laws when used to find investors.

For example, if you're selling shares in your company to raise cash, it seems logical that you should get your company's sales staff, or outsourced services, to help you out. Perhaps you can even pay them a high commission on stock sales and they'll be extra motivated.

After all, few things motivate someone to sell like a big commission check.

Better yet, what about hiring one of these guys who call themselves "consultants" or "finders" and claim to help companies raise money? Just about anyone who's done some networking in the venture capital seminar scene has likely run across someone like this. They work on great terms: you don't pay unless they raise cash. And even if the fee they charge for their services may be high, who wouldn't give up a big chunk of cash (or a kidney) for the ease of having someone find investors for you?

On a fairly regular basis, my entrepreneur and investor clients ask me if they can pay their employees, or a finder-consultant a piece of the deal if they help the company raise investment dollars.

In almost every case, the answer is a definitive no. The payment of a finder's fee or commission in connection with the sale of securities to a person who is not a broker registered with FINRA (formerly the NASD) is generally illegal.

Another common misconception among entrepreneurs is that the payment of finder's fees falls within a "gray area" of the law. This is just wrong. It's a myth that seems to be perpetuated by entrepreneurs and finders who have engaged in this activity and haven't been caught.

I can't tell you how many times I have heard from clients "well, I know ABC Company who paid a finder a commission and didn't have any problems." My reply is always the same: "ever drive a car on the West Side Highway at 75 miles per hour and get passed by someone going faster than you and neither of you got a ticket?" Just because you didn't get nabbed by New York's Finest doesn't mean you weren't breaking the speed limit by a fairly wide margin.

In my practice, I've represented clients who have had problems with regulators by unknowingly violating these rules. In nearly every case, the company went out of business or sought protection from creditors under the bankruptcy laws as a result of the mistake.

The business of getting paid commissions for introducing investors to companies is something that our government has taken a keen interest in regulating.

If you are serious about growing your business, you will need to become adept at raising capital when your company requires it. Educating yourself about what your employees and consultants can and cannot do to help you raise capital is critical to your company's health.

Here are the basics about using employees and finder-consultants to help you with your capital raising efforts:

What is a "finder?"
A finder is an individual, company or service that receives compensation in connection with the solicitation of potential investors. The most common examples of legal finders are broker-dealers or investment bankers working for broker-dealers.

What is a broker?
A "broker" is defined under the securities laws as "any person engaged in the business of effecting transactions in securities for the account of others." Helping a company sell shares to raise capital, engaging in other activities like participating in presentations and negotiations, making recommendations to investors concerning securities, receiving transaction-based compensation (i.e. commissions or finder's fees), and continuing or regular involvement in sales of securities are evidence of activities rendering a person a broker.

If your employees or finder-consultants perform these tasks, typically the person is obligated to be registered as a broker with (and thus regulated by) FINRA.

How can an employee help a company raise capital lawfully?
Under certain conditions, a company can permit its employees to help it raise investment capital without triggering the broker registration requirements. For example, the SEC's Rules allow an employee, officer or director of a company to participate as a finder in a private offering provided that the employee:

** is not considered by the SEC to be a securities industry "bad boy";

** does not get paid commissions in connection with the offering;

** is not an associated person of a broker or dealer at the time of his participation; performs a job for the company other than in connection with the company's offering (i.e., marketing or customer relations);

** was not within the last year a registered broker; and

** does not participate in the company's securities offerings more than once every 12 months (with certain restrictions).

Keep in mind, that each state has its own set of regulations that may differ from federal regulations. For example, in some states only officers and directors of a company are permitted to engage in the sale of securities.

Does a finder-consultant always have to be a registered as a broker with FINRA?

There are some circumstances where a finder-consultant is not required to register as a broker. However, if you're acting as a finder (or you're a company hiring a finder), you must take extreme care to ensure that the finder's activities are limited so that he or she is not functioning as an unlicensed broker.

Finders can avoid registering as a broker by limiting to:

** merely introducing prospective investors to a company without engaging in negotiations;

** not recommending the company's securities to prospective investors;

** and basing their compensation on a flat fee that is not contingent on the closing of a securities sale (for example, the finder gets a fee of $50,000 for making the introduction to an investor, regardless of whether the investor purchases shares or not).

What kind of compensation cannot be paid to finder-consultants?

Transaction-based compensation, or success-based compensation, like a finder's fee or commission, is compensation that is contingent on the transaction closing. Often the fee is a percentage of the amount of securities sold. Unregistered persons are not permitted to receive this type of fee from a company.

Permissible forms of compensation may include professional fees based on hourly billing rates or fixed fees; non-transaction based consulting fees; non-transaction based due diligence fees; or expense reimbursements.

You'll notice that common theme among permissible forms of compensation is that the fee is paid regardless of whether funds are raised. My experience is that most companies are unwilling, or at least reluctant to pay a finder a fee for services that may or may not turn into an investment.

Many companies have attempted to disguise a commission as a permissible fee. For example, entrepreneurs often hire "finders" as "consultants" and call the finder's fee a "consulting fee." However, if the compensation the consultant receives is ultimately tied to their activity of selling shares in the company, and they would not have received the fee absent the company raising capital, then the payment of the fee to an unregistered person is not permissible.

Regulators will easily sniff out a thinly disguised form of success-based compensation, and the fee will not be considered valid.

What can happen if a regulatory agency determines that a finder-consultant or employee is acting as an unregistered broker?

If a regulatory agency, like the securities division of a state or the SEC, determines that a finder-consultant or employee has acted as an unregistered broker, the SEC or state could impose fines on the finder, which may include disgorging to the issuer commissions paid. Further, regulators could bar the finder in some cases from ever registering as a broker in with their agency in the future.

What can happen to a company if the SEC determines it unlawfully used an unregistered finder?

If a regulator determines that a company used an unregistered finder to locate investors, they could force the company to offer investors the right to rescind their purchase and obtain a return of their entire investment. This may be a problem if you've spent the investment money and there's nothing in the company's coffers to purchase shares back from investors.

Also, under certain circumstances, the regulators could impose fines on the company for participating in a transaction that violated the securities laws or prohibit the company from engaging in securities transactions in the regulators' jurisdiction in the future.

Finally, any irregularity in early financing activities can make subsequent rounds of financing more difficult to complete. When disclosed to subsequent investors, errors made in early-stage funding efforts may cut the company off from funding options in the future.

For more information about raising capital for your company, visit

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Monday, October 05, 2009

Becoming A Contender: A Marketing Plan to Put You in the Running with the Nation’s Largest Law Firms

Steve Furnari was quoted this week in the Wisconsin Law Journal, offering up some insightful marketing ideas for small law firms. Check out the article here for his advice on staying in contact with prospective clients and how a small, well-thought out gift can make a big difference.

Wednesday, September 30, 2009

Quicktip: Arbitrate Disputes and Save Time and Money

BIG CONFESSION: I’m involved in litigation with former business partners.

As much preaching as I do about business partners having a good quality written agreement, we didn’t have one. You know the story about the cobbler who lets his kids run around with holes in their shoes. My bad.

It’s a long, sad story about how we got here. Mostly it’s the result of strong personalities and differing opinions about how a piece of commercial real estate should be managed.

Hindsight being 20/20, as we now progress into the second year of litigation, a side battle with my first set of lawyers, and generally a lot of aggravation, the dispute has greatly changed my opinion about the use of arbitration clauses in commercial contacts.

In any contract, the parties can agree to arbitrate any dispute that may come up.

Arbitration is a form of alternative dispute resolution (ADR), that allows parties to resolve disputes outside the courts. One or more “arbitrators” are selected who hear each party’s side of the story. The arbitrator makes a decision about the outcome of a case, and their decision is legally binding on the parties.

Once you enter into an agreement to arbitrate, absent a new written agreement from both parties to change the terms of the arbitration clause, courts will not let either party "opt out" of arbitration. By the way, our over-burdened court system LOVES arbitration clauses.

Arbitration can be a lot like achieving a settlement in litigation. Unlike the final verdict in litigation, where there is usually a "winner" and a "loser", arbitration panels take into consideration each party's interests when rendering a decision. Rarely are there ever pure winners or losers.

The downside, of course, is when you are 100% "in the right" and would likely win a claim in litigation (eventually), you could end up with a decision in arbitration for an award that is something less than 100% of what you feel you are entitled to. Also, if you don't agree with the award, you are stuck with it--appeals are not an option in Arbitration.

In my opinion, this is a small price to pay for getting yourself into the dispute in the first place. Most disputes are avoidable by drafting good agreements at the outset of a relationship and picking partners, customers and vendors selectively.

In the end, parties who resolve disputes in arbitration wind up with a final outcome that is fairer and rendered more expediently than in litigation. The result is less time wasted and a fraction of the expense spent as compared fighting battles in court.

When you factor in the benefit of reduced time and legal expense, prudent business people--especially the owners of small businesses whose customers may have deeper pockets that their own--should seriously consider adding mandatory arbitration clauses to all their contracts.

If arbitrating potential disputes is right for your business, I have set up a way for you to get a copy of an Arbitration Clause that you can easily add to your agreements. Go to

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Monday, September 21, 2009

To LLC or not to LLC?

The Freelancer's Union picked up on our quote in Crain's New York last week and mentioned us in their Blog .

While you’re there be sure to sign up for the “Legal Basics For Every Freelancer” Seminar on September 30th.