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Companies Served Since 1981

The HBS Blog


The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.

Margaret Heffernan: Dare to Disagree
By Carleigh Lowe Tuesday, September 4, 2012

Disagreements can actually help a business grow. So says entrepreneur Margaret Heffernan, who discussed promoting disagreement in organizations for constructive collaboration. See her TED talk, below.

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HBS Announces Partnership with LicenseLogix
By Michael Bell Wednesday, August 29, 2012

Rick Bell, Chairman and CEO of Harvard Business Services, Inc., announced today a strategic partnership with LicenseLogix, LLC, the nation’s premier provider of state and local compliance services.

“We are pleased to offer new and existing clients this seamless service, from entity formation and Registered Agent service to business license filings, renewals and compliance audits. The collective service offering represents the entire sequence of regulatory compliance needs that can now be taken care of effortlessly,” said Bell, “which is a first in our industry.”

Now, our two companies will ensure that businesses are in good standing with state and local governments and maintain compliance for the life of the company.

About LicenseLogix, LLC:

A team of attorneys, legal service providers, and technology professionals formed LicenseLogix, LLC to address a growing need for helping companies deal with various compliance requirements in all 50 States.

The experts at LicenseLogix, LLC provide business license research, application assembly, initial filings and renewals.  LicenseLogix, LLC prepares all documents necessary for the licensing process.  All the client has to do is sign the applications.  This helps businesses to get state and local licenses faster, and keeps them compliant with the law throughout the life of the company.

LicenseLogix offers personalized service with easy-to-use technology, ensuring that clients are properly licensed and their questions promptly answered.  Each client has a dedicated account manager who helps determine the appropriate license(s) required, fills out any applications, and communicates with the relevant licensing authority.

LicenseLogix services all companies, from single-owner LLCs and corporations to large companies with multiple entities doing business in all 50 states.

LicenseLogix and its Client License information Center (CLiCä) provide a user-friendly, secure, and cost-effective method to keep track of licenses in every jurisdiction while automating renewals and streamlining new license filings.  Information on deadlines, renewal fees, and relevant corporate documents is easily accessible and customized to each client.

Account managers are available any time to answer questions about CLiC, a company's existing license portfolio, or license requirements in a new jurisdiction.

“We look forward to assisting the current and future clients of Harvard Business Services. In recent years, the regulatory burden has grown to be too much for many small companies to handle business licensing compliance efficiently in-house. We are pleased to supplement the outstanding services of HBS and certain to provide an excellent experience to their clients.” said David Yount, Founder and CEO of LicenseLogix LLC.

Why are licenses so important and necessary?

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101: Independent Contractors
By Gregg Schoenberg Monday, August 27, 2012

I was recently talking with a close friend of mine who runs a small exercise studio, and she mentioned that she was struggling with whether to hire more employees or rely on independent contractors. It turns out this is actually a pretty complex question with a host of financial, legal, and workplace consequences that all small-business owners should be familiar with. So let’s look at some of the pros and cons of each option.

Advantages of Using Independent Contractors

  • They’ll save you money. While the hourly rate that you’ll have to pay an independent contractor is usually higher than the equivalent hourly rate for an employee, your total cost will most likely be lower. That’s because you don’t have to provide contractors with any employee benefits, and you are not required to pay for Social Security or Medicare taxes, state unemployment compensation, or worker’s comp insurance. These expenses can add 30% or more to your total cost to hire an employee, so make sure to factor them in when deciding whom to hire.
  • You’ll have more flexibility. Just because you have a small business it doesn’t mean that you only require a small number of specific skills from your employees. But unlike your large competitors you may not be able to afford a full-time workforce that can cover all of the bases. Hiring contractors with specialized skills for finite projects can be a great way to get the help you need when you need it, and to free up that money for other uses when the contractor’s services are no longer required.
  • You’re likely to have fewer legal issues. Wrongful termination lawsuits are the most frequent labor suit brought on employers. And since independent contractors cannot file this type of lawsuit you’ll avoid some potentially costly headaches if a relationship goes sour. Just make sure to structure contractors’ agreements so that your rights to terminate are clearly stated; if you need it, get some help from a lawyer when drawing up the agreements.

Advantages of Hiring Employees

  • Increased control. Most independent contractors are independent because they like a certain degree of autonomy and the ability to control their schedules. Interfere with that and you’re likely to have a strained and/or short-lived relationship. Plus, in the view of the IRS one of the differentiating factors between employees and contractors is how much control employers exert over them. If you exert too much, Uncle Sam may tell you that your contractor is actually an employee.
  • Greater continuity. A frustration I hear a lot from entrepreneurs is that they’ve found a great contractor, but he is often not available when they need him. That’s one of the risks you run with contractors and why they are best suited for shorter-term specialized projects. If you have a job that needs to be done day in and day out, you’re probably better off finding someone to fill it on a permanent basis. Consider hiring permanent part-time workers for jobs that are too big for contractors but too small for full-time employees.
  • You’re less likely to hear these dreaded words: Your company is being audited. While you might prefer contractors, the tax authorities definitely prefer employees, because the more folks that are classified as employees the more money they can collect. There are a whole host of authorities from the IRS to the Department of Labor that can audit your business if they believe you have misclassified your workforce.

So whichever route you choose, make sure that you are familiar with these IRS tips for determining whether your staff classify as independent contractors or employees. If you incorrectly classify someone as an independent contractor, you may be required to pay back taxes and penalties and to provide him or her with employee benefits.

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101: Branding Basics
By Gregg Schoenberg Tuesday, August 21, 2012

“Build your brand.” “Develop your brand strategy.” “Branding is everything.”  We’ve all heard advice along these lines when it comes to running our businesses. But what exactly does it mean, and how are we, as small-business owners with limited resources, supposed to build valuable brands?

Because there tends to be a great deal of confusion around the topic, let’s start with some basics definitions. Your brand is both a promise to your customers and a reflection of your company values. And your brand strategy represents your tactics for raising awareness of your brand. That strategy can include marketing, advertising, PR, and the like, but before spending a dime on any of that you’ve got to answer the question: What is my brand?

If you don’t know what your company’s brand is, or if you think you know but you can’t articulate it in a single sentence, then it’s time to engage in some good old-fashioned brainstorming and a bit of soul searching in order to come up with the answer. Start by gathering your most trusted colleagues in a room and asking them to join you in spending twenty or thirty minutes writing down as many answers as they can think of to the following questions.

  • What does your company stand for?
  • What is its mission?
  • What problems are you solving for your customers?
  • What images do you want people to associate with your company?
  • How do you want people to feel when they hear your company’s name?

After this exercise is complete you should have the raw materials to help define your brand. Spend as much time as you need sifting through the results and picking the winners, and engaging in more brainstorming sessions until you’ve got a clear vision for your brand, remembering that it needs to reflect who you are and what your promise to your customers is.

Once your brand concept is rock-solid, your next challenge is figuring out how to articulate that brand in a way that resonates with customers. To do this you’re going to need a few things:

  • A voice. How you speak to customers, both verbally and in printed and online materials, matters tremendously. The voice needs to reflect the brand and appeal to your core customer base, and you need to make sure that all of your customer-facing employees are able to speak and write with that common company voice.
  • A look. All of your company materials should have the same look and feel; pick a color scheme and a font family and stick with them.
  • A logo. Your logo should be everywhere, from your website to your walls, so take this job seriously and get professional help if you need it.
  • A tagline. While not every business does this, when you stop and think about some of the great corporate taglines out there, like Nike’s “Just Do It.”, you realize just how powerful a few words can be. So take the time to try and come up with a short snappy phrase that reflects who you are and what you do, you’re much more likely to leave a lasting impression on customers that way.

And most importantly you’re going to need consistency in all of the above, because it’s impossible to build a recognizable brand without a consistent message from the company that stands behind the brand.

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Stock Split
By Michael Bell Monday, August 20, 2012

I was recently thumbing through my USA TODAY app on my iPad and came across a great article called "Investors Seem to Love stock Splits, But Do They Matter? Many companies that do a stock split do so to attract investors to their company, and many investors love the idea of having more shares without having to invest additional money.

In a stock split, a company increases its number of issued shares by a certain multiple, such as 2 or 5, or whatever they want, and distribute that stock back to the shareholders themselves. If they do a “2 for 1 Split” the owner of each share of stock will get another one, at no cost. If you own 1,000 shares, you’ll get another 1,000 shares. Before this can take place,however, it must be voted on by the Shareholders and approved by the Board of Directors.

Usually, at the same time, the price of the stock will be half of what is was the day before, so the shareholders don't actually get a real gain, just more stock, though it is worth less money. "The total value of the company stays the same, but the company is sliced into a greater number of pieces. This means that from a valuation standpoint, a stock split is meaningless," says Matt Krantz of USA TODAY.

So why do companies split their stock? There are some benefits to a stock split including attracting new investors, who may not want to get into an expensive stock, when they can afford less than 100 shares. but will buy 100 shares of a stock they can afford.

Why do many individual investors love stock splits so much? For current shareholders they like owning twice as much of the stock, even if it’s not a financial advantage, initially. They perceive that it will become more valuable as time goes on.

Although the concept is fairly simple, the paperwork involved can be daunting. It is best done after consulting with your corporate attorney. There are many sources to learn more about stock splits, if you are interested.

The first thing to know before you consider a stock split is how many shares your company has Authorized, so you’ll be sure to have enough shares authorized to make the split. To check on the number of Authorized shares your Delaware Company has, just give us a call or an email – we’ll look you up on the State of Delaware’s Corporate Data Base and let you know.

 

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