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The Florida Durable Power of Attorney

At some point in our lives, most of us will rely upon on a third party to make a legal or financial decision on our behalf. For example, an elder individual may rely upon a trusted family member or friend to manage his or her checking account at a local credit union. However, how does that credit union know this trusted family member or friend is authorized to make such decisions on your behalf? What Is a Durable Power of Attorney and What Does it Do? A durable power of attorney (“DPOA”) is a legal document that authorizes a third party (the “agent” or “attorney-in-fact”) to act on your behalf in the event you (the “principal”) become incapacitated or unable to handle your legal or financial affairs. Third parties (i.e., financial institutions, courts, etc.) rely upon this legal document as evidence that the agent has the authority to make decisions on the principal’s behalf. A DPOA is similar to a power of attorney (“POA”) in that both are legal documents that authorize a third party to act on your behalf. However, there is a key difference. With a POA, the agent’s power to act your behalf automatically ends (is revoked) in the event you become incapacitated. With a DPOA, the agent’s powers remain in full force and effect in the event you become incapacitated or unable to make decisions yourself. How Do You Create a Durable Power of Attorney in Florida? In Florida, durable powers of attorney are governed by Chapter 709, Powers of Attorney and Similar Instruments. Pursuant to Chapter 709, the following are required to create a valid durable power of attorney in Florida: The durable power of attorney must be signed by the principal, the agent, and two witnesses in front of a public notary. Florida Statute

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Living Wills in Florida

Family members often struggle with end-of-life decisions regarding a loved one. The decision to take a family member off life support can haunt someone for the rest of his or her life. Fortunately, there is an estate planning tool that families can utilize to help obliviate some of the stress and uncertainty associated with making end-of-life decisions for a family member. What Is a Living Will and What Does It Do? A living will is a legal document that sets out one’s end-of-life wishes. Specifically, a living will addresses the use of life support and other treatments at the end of one’s life or in the event of a serious accident or debilitating medical condition. In Florida, living wills are governed by Chapter 765, Healthcare Directives, of the Florida Statutes. Florida Statute § 765.101 (13) defines a living will as follows: (13) “Living will” or “declaration” means: (a) A witnessed document in writing, voluntarily executed by the principal in accordance with s. 765.302; or (b) A witnessed oral statement made by the principal expressing the principal’s instructions concerning life-prolonging procedures. Pursuant to Florida Statute § 765.302 (3), once executed, a living will establishes a rebuttable presumption of clear and convincing evidence of one’s wishes regarding end-of-life medical treatment. When Does a Living Will Apply? Pursuant to Florida Statute § 765.306(2), before one’s directives in a living will are carried through, it must be determined that: (a) One does not have a reasonable medical probability of recovering capacity to a level that he or she can make medical decisions directly. (b) One has a terminal condition, has an end-stage condition, or is in a persistent vegetative state. (c) Any limitations or conditions expressed orally or in a written declaration have been carefully considered and satisfied. In determining whether one has a terminal medical condition, has an end-stage

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Intellectual Property Basics

Businesses in Florida own many different types of assets including real property, personal property and intellectual property. It is commonly understood that real property includes real estate and anything attached to it, such as an office building or residential home. Personal property includes all other physical assets such as equipment, desks and inventory. However, many people are unclear what constitutes intellectual property. Intellectual property is defined by Black’s Law Dictionary as “a category of intangible rights protecting commercially valuable products of human intellect.” Intellectual property includes ownership rights over names, logos, works of art, literary works, ideas, inventions, computer code, and more. Just as you can own real or personal property, you can also own intellectual property. These ownership rights are protected by federal and state law which were designed to help the creation and use of ideas in our economy. These laws separate intellectual property into copyrights, trademarks, patents and trade secrets, and understanding which one applies to your property is the first step to protecting it. What is a Copyright? A copyright protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. If you write a book, for example, you would apply for a copyright to protect your rights to the content of the book. Copyright protection is provided by Title 17 of the United States Code and all copyrights are registered in the Copyright Office of the Library of Congress. A copyright gives the owner the exclusive right to reproduce and distribute the protected work. This includes displaying art or performing musical or literary works in public. A more recent development is the protection of computer software with copyrights. Copyrighted material is often marked with the © symbol. The term of copyright protection depends on

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Franchise Basics

People dream of starting their own business, but getting a new venture off the ground is extremely risky, given the time and financial commitments involved. One way to effectively offset the risk is to buy a franchise business instead of trying to develop a new concept on your own. Operating a franchise business allows you to capitalize on the success of an established business while still enjoying many of the benefits of owning your own business. What is a Franchise? A franchise is a type of license arrangement that allows the franchisee, the person buying the franchise business, to utilize the franchisor’s already established business concept, including all proprietary information, intellectual property and proven business models. After learning about the franchise and completing any required training, the franchisee is allowed to offer services and/or sell merchandise under the name of the franchisor. In a typical franchise arrangement, the franchisee pays the franchisor an initial fee, commonly referred to as a “franchise fee,” as well as an ongoing licensing fee or royalty which is usually a set percentage of the business’ revenues for an established period of time, such as ten years. The ongoing fees are typically collected on a weekly or monthly basis. Beyond the basics, franchise arrangements can differ significantly from one to another. Some are heavily structured with a high level of oversight, while others provide franchisees a considerable amount of autonomy in how the business is operated. The details of the franchise relationship are set forth in a written contract typically referred to as a “Franchise Agreement.” Information about the franchise and the financial investment required to start the business is provided to the franchisee in a document called a “Franchise Disclosure Document” or “FDD.” What are the Benefits of Franchising? Both the franchisor and the franchisee

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Non-Disclosure Agreements in Florida

Non-disclosure agreements (NDAs) allow businesses and individuals to protect trade secrets and other proprietary or confidential information from being shared with third-parties without their consent. It sounds simple enough, but in order to have a valid and effective NDA, it is important to understand how NDAs work and the potential risks associated with enforcing these agreements. What is a Non-Disclosure Agreement? An NDA is a legal contract between at least two parties where one party agrees not to disclose certain information that was provided by the other party. The whole purpose of an NDA is to ensure there is a confidential relationship between the party disclosing the confidential information, and the party with whom the confidential information is being shared. An NDA ensures that the person who is trusted with the confidential information has knowledge that the information is secret and that he or she must not share it with anyone else. There are typically two types of non-disclosure agreements: Unilateral – Where one party agrees not to reveal information provided by another party, such as agreements between employers and their employees or businesses and their vendors. Mutual – Where both parties share information with one another and agree not to disclose the information to any third-party. Typically used when individuals or businesses are exploring a potential relationship, such as a partnership, collaboration, merger, or purchase, and both sides need to share sensitive information with the other in order to make decisions about that relationship. When are Non-Disclosure Agreements Used? Almost every type of business in every industry uses NDAs. Many business owners use NDAs when developing a new product or contemplating a new business relationship with another party. Many find the only way they feel comfortable enough to talk freely and honestly during a meeting about a new product

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The Need for an Operating Agreement in a Florida LLC

Limited liability companies (LLCs) have become the most popular entity in the State of Florida. Since 2015, there have been more than twice as many LLCs created in Florida than the second most popular entity, corporations. An LLC is a statutorily created hybrid entity that has characteristics of a corporation and a partnership. See Florida Statutes, Chapter 605, Florida’s Revised Limited liability Act. Their popularity continues to grow because LLCs offer the benefits of both types of business entities without most of the drawbacks. Starting an LLC in Florida is a formal process. The owners of an LLC, called members, must file a document entitled Articles of Organization with the Florida Division of Corporations. While not required by law, it is advisable for any multiple member LLC to also execute an operating agreement during the organization process. What is an Operating Agreement? An operating agreement is a binding legal contract between the members of an LLC that sets forth the rights and obligations of each member. An operating agreement also outlines the fundamental functions of an LLC and how the entity will be managed. Florida law allows for a great deal of flexibility regarding the form and substance of operating agreements. Members of an LLC can adopt an operating agreement at any time before or after an LLC is created. Operating agreements can be in writing, verbal or a combination of both. However, if an operating agreement contains both written and verbal provisions, any inconsistency will be resolved in favor of the written provisions. To avoid any uncertainty between the members and hopefully reduce the likelihood of litigation, it is recommended that an operating agreement be in writing and address the following topics: The ownership interest of each member; A description of how the LLC will be managed (by its

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Franchise Disclosure Requirements

Franchising your business is an exciting process and an effective way to expand your commercial footprint. However, there are numerous federal and state laws that must be complied with before you can offer and sell franchises to potential franchisees. The Federal Trade Commission (“FTC”) is the federal agency governing the sale of franchises and its regulations are commonly referred to as the “franchise rule.” See 16 C.F.R. Part 436. This rule was created to protect consumers who are considering investing significant funds into a franchise business. The franchise rule requires franchisors to provide prospective franchisees with certain information related to the business and the expected investment in the business. This disclosure is known as the Franchise Disclosure Document or Uniform Franchise Disclosure Document (“FDD”), and must be provided to the franchisee at least fourteen (14) days before any agreement is signed or before any initial money is exchanged. The FDD was previously known as the Uniform Franchise Offering Circular (“UFOC”) before it was revised by the FTC in July 2007. What Must be Included in the FDD The FDD must contain information deemed essential to potential franchisees. This information must be structured in a particular format and be written in “plain English” rather than legalese. The FDD must include: 1. A description of the franchisor’s company, its history and any relationships it has with affiliated companies; 2. Professional biographies of the franchisor’s officers, directors and executives; 3. A description of current and past criminal and civil litigation involving the franchisor and its management; 4. A description of any bankruptcy petitions filed by the franchisor and its management; 5. Identification of any initial fees required to be paid to the franchisor or any affiliated company, such as the initial franchise fee; 6. Identification of all other recurring fees and payments that

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The Letter Of Intent

Most complex commercial transactions, such as merger and acquisition agreements and joint venture arrangements, are reduced to writing and memorialized in a formal written contract.  Negotiating these complicated transactions and arrangements, however, can be time consuming and require parties to devote significant amounts of resources before a formal agreement can be finalized.  Additionally, other opportunities may be lost by one or both parties while they complete the negotiation process and draft the final contract.  It is understandable, then, that parties entering into such transactions or arrangements might want something in writing indicating that the other party is serious about reaching a final agreement.  A letter of intent, or LOI, provides such reassurance. A letter of intent typically contains an outline of an agreement between two or more parties that will be memorialized in a more detailed, formal written contract at a later date.  A typical letter of intent is relatively short and written either in an outline or abbreviated format because the details of the agreement have yet to be negotiated and/or agreed upon by the parties.  Think of it as an agreement to reach a final agreement. It serves as a roadmap for future negotiations between the parties and as a guide for all subsequent negotiations while the final agreement is being hammered out.  The thought being that a letter of intent tends to facilitate an agreement on the remaining terms and provides a certain level of significance to the parties’ negotiations.  With an executed letter of intent, the parties are signaling to one another that they are serious about making the transaction happen. Are Letters of Intent Binding? Letters of intent can be binding, non-binding or partially binding, depending upon the intent of the parties and the express language in the letter of intent.  For the most part,

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Explaining The S-Corp

C-Corporation v. S-Corporation While starting a new business venture, many entrepreneurs will consider operating their business as a corporation. Incorporating offers many substantive benefits to business owners in addition to providing a more professional appearance to customers, vendors and competitors. The two most popular types of corporations in Florida are C-Corporations and S-Corporations. Corporations are, by default, C-corporations with the letter “C” referring to the applicable subchapter of the Internal Revenue Code (IRC) that governs corporate taxation.  For some businesses that meet the requirements under subchapter S of the IRC, it may make sense to elect “S-corporation” status with the IRS instead of operating as a C-Corporation. C-Corporation and S-Corporation Basics In many respects, C-corporations and S-corporations are the same. In Florida, both types of corporations are formed by filing Articles of Organization with the Florida Division of Corporations. In both cases, the corporate business entity is a separate legal entity from its owners (shareholders) and the entity enjoys a perpetual existence. Both C-corporations and S-corporations issue shares of stock to investors/owners and must adhere to certain corporate formalities required by Chapter 607, Florida Statutes.  For example, Chapter 607 requires the corporation to hold an annual meeting of its shareholders (Florida Statute § 607.0701), keep minutes of all meetings of its shareholders and board of directors (Florida Statute § 607.1601), and file an annual report with the Florida Division of Corporation (Florida Statute § 607.1622). The shareholders of both C-corporations and S-corporation also enjoy limited liability. This means that a shareholder, even if he or she is the sole or majority shareholder of the entity, is generally not personally liable for the business’ financial obligations.  So, if the company is sued by a customer, vendor, or other party, the shareholder may lose her investment in the corporation, but his or

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Non-Compete Agreements in Florida

Has a potential employer asked you to sign a non-compete agreement as a condition of employment or has your current employer asked you to sign one because you have been offered a promotion within the company? Maybe you signed one when you accepted your current position and you now wish to resign that position, but you are concerned about how the non-compete agreement will impact your ability to accept a new job after you resign. In all of these scenarios, it is imperative to understand what a non-compete agreement is, whether it is enforceable in the State of Florida, and what are the consequences if it is enforced. What Is a Non-Compete Agreement?    A non-compete agreement, also referred to as a “covenant not to compete,” a “non-competition clause” or a “restrictive covenant,” is a contract between an employer and an employee in which the employee agrees not to enter into competition with the employer during and/or after employment.  It is easy to see why an employer might feel the need for a non-compete agreement under certain circumstances. From an employer’s perspective, the employer wants to prevent an employee from going to work for a competitor or starting a competing business, and making use of trade secrets, customer lists, business practices or other sensitive information obtained while employed by the employer. For example, assume you work for a software company selling one of its products. As a sales representative, your employer has spent time and resources training you on how its product works, has introduced you to its customers and paid you to develop relationships with these customers, and has provided you with information regarding the pricing of its product which, in many instances, is not public information.  Without a non-compete agreement in place, there is very little stopping you

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