Project management is both an art and a science and successful project managers understand the technical tools that are available to assist them in planning and implementing projects as well as the needed to be flexible and innovative in order to deal with the unforeseen events that will inevitably occur regardless of how well a project has been charted and planned in advance. This week's report includes some general guidelines for increasing the chances of success for projects.
Limited liability companies have been around since the mid-1990s and law and practice regarding this type of business entity has been rapidly evolving. Progress has been slow at time due to the lack of a widely accepted model statute that could be followed by the various states. In July 2006, a new Revised Uniform Limited Liability Company Act (the “RULLCA”) was adopted and states are now beginning to consider this model act as a foundation for changes to their LLC statutes. This report summarizes key aspects of the RULLCA and provides a basic checklist of steps to be taken to form and organize an LLC.
While the Internet has created significant advantages for all types and sizes of businesses it is important to consider the appropriate way to regulate Internet access in the workplace. This is generally done through the use of company Internet and e-mail policies that identify acceptable uses, and prohibited misuses, of the company’s communications tools. Many firms adopt a comprehensive policy covering all aspects of the business-related uses of the Internet as well as the company’s in-house computers and networks. The attached report discusses some of the issues that management must consider and include a sample of a basic Internet access and use policy.
Given the current economic difficulties it can be expected that vendors will seek additional security before they extend credit to their customers. Traditionally vendors have sought guarantees from the owners of customers including parent companies when the customer was a subsidiary. Most guarantees are guaranties of payment that allow the vendor to proceed directly against the guarantor if there is a default by the customer; however, guarantors may want to bargain for a guaranty of collection that provides that the guarantor will only be liable after the vendor has reduced its claim against the actual customer to judgment and judgment has been returned unsatisfied or the customer has become insolvent or it is otherwise apparent that it is useless to proceed against the customer. The attached report includes more details as well as a form of Limited Guaranty of Collectability of Indebtedness.
The directors, as well as the senior officers, of every corporation have specific duties with respect to identifying and managing the risks associated with the business activities of the corporation. Under state corporation laws, for example, directors and officers must satisfy their fiduciary duties of care and loyalty and this generally means that they are required and expected to exercise reasonable judgment in overseeing the activities of the corporation by, among other things, developing internal reporting and monitoring systems that will allow them to keep abreast of material risks. Once a material risk has been identified the directors and officers must exercise their good faith business judgment to manage those risks in an informed and disinterested manner. In addition, Section 404 of the Sarbanes-Oxley Act places explicit burdens on the leaders of public companies to regularly assess the effectiveness of their internal controls and stock exchange requirements, such as those mandated by the New York Stock Exchange, require that members of the audit committee of any listed company must discuss the company’s policies with respect to risk assessment and management as well as the company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. Finally, any actual or perceived failure with respect to risk management will likely expose the company and its directors and officers to intense scrutiny by the media and the financial community that may substantially damage the reputation of the company, impair its ability to obtain additional capital and trigger inquiries from regulators. The current state of the economy raises the level of risk for everyone and directors and officers of every company, as well as their advisors, should review this week’s report on prudent governance practices in troubled times.
Franchising is extremely popular and franchised businesses have been a significant sector of the United States economy for some time. There are currently about one million franchise outlets in the United States which sell a variety of products and services. Estimates put employment in the franchising industry—including franchised business, and business-format and product-distribution franchises—at over 20 million jobs, and it is believed that there are 1,500 different franchisors operating in the United States and more than 320,000 franchise retail outlets in the United States. It has been estimated that the economic output from the franchise industry in the United States in 2005 was over $2.3 trillion. Franchising is also flourishing in foreign markets and recent estimates were that approximately 500 United States-based franchisors have been operating in excess of 40,000 franchised units outside of the United States in a wide array of foreign countries. This week I’m passing along a report report on recent changes in the regulation of franchising arrangements on both the federal and state level that also includes a brief introduction to some of the key documents in the relationship between a franchisor and a franchise. In addition, the report outlines franchise regulation outside of the United States.