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| Startup 101: What's an LLP? | |  This post originally appeared on the American Express OPEN Forum, where Mashable regularly contributes articles about leveraging social media and technology in small business. In recent years, new legal structures have emerged, including the LLC (Limited Liability Company). That's good news for small businesses -- because let's face it, not all businesses are the same, and the same corporation structure isn't right for everyone. Yet new options bring new questions about which business structure to use, and for many entrepreneurs, the process of picking a business structure is uncharted territory. If you're a small business owner or service professional, here's a quick primer on two important legal structures: the LLC and LLP (Limited Liability Partnership). We'll explore the key differences and details to help you determine which is better for your business. The Basics: Defining the LLC and LLP Let's start with the basics ... some definitions: An LLC is a legal entity that limits the liability of owners from liability found with the company. With the LLC, there are no shares. An LLC does not file separate taxes, either; all company profits flow through to the owners and are taxed at the personal income rate. It's great for businesses that want liability protection but minimal formality -- the LLC is free of much of the legal requirements and red tape that govern corporations, such as director meetings, shareholder requirements, etc. The LLP is a general partnership where partners enjoy some level of protection from personal liability. Similar to the LLC, the LLP is a hybrid of both the corporation and partnership, to give the greatest advantages of taxation and liability protection. The LLP is not a separate entity for income tax purposes -- profits and losses are passed through to the partners. Differences Across States It's important to understand that laws concerning LLPs vary widely state by state. Generally speaking, LLCs can be formed by any business, persons or person, while LLPs may be restricted to licensed professionals such as attorneys, doctors, engineers, architects and accountants. In California and Nevada, for example, licensed professionals can form an LLP, but cannot form an LLC. For this reason, a large law firm will opt to form an LLP; they are able to operate as an LLP in every state, but wouldn't be able to operate as an LLC in every state. You'll need to check with your state's Secretary of State office to determine the specific rules for your state. And if you're anticipating operating in other states down the road, you should look into their rules as well. Differences in Personal Asset Protection While both LLCs and LLPs help shield the personal assets of the owners, there are some critical differences. For example: In the LLC, members are protected from any debt or liabilities of the business. However, members of an LLC are not protected from the liability of another member. If a member in an LLC makes a client error that is legally actionable, then the LLC and all of its members can be held liable. In the LLP, partners can be protected from the liability of another member. A partner in an LLP is personally liable only for his own negligence (or of someone working under his direct supervision). Note that this is different from a general partnership, in which each partner is liable for the debts and obligations of the business, as well as the malpractice of other partners. In some states, a partner in an LLP can still be personally liable for a variety of partnership debts, such as obligations owed to lenders and creditors. However, some states regulate that partners are not personally liable for such debts and obligations. As mentioned above, it's important to understand the laws of your state. What About Taxes? Both the LLC and LLP typically do not require the business to pay income taxes on its profits; rather any profit or loss of the business is passed through to the members (LLC) or partners (LLP). By comparison, a corporation pays income taxes on its business earnings, and then if those earnings are distributed to owners, the owners must pay taxes on them again in their personal tax returns. A single-member LLC is considered a sole proprietorship, and the member must pay self-employment taxes. It's important to note that while most LLCs opt for pass-through tax treatment, some may choose to be taxed as a corporation. LLPs are treated strictly as partnerships, and profits are passed through to the partners. The Bottom Line for Your Business By mixing some of the properties of corporations, partnerships and sole proprietorships, the LLC and LLP can be very advantageous for new companies. Only LLPs give partners legal protection from the actions of another partner. For this reason, the LLP can be better for a group of professionals who plan to actively participate in the company. If you're forming a business, take a look at your state law to first determine which entity is allowable in your state, as well as the state laws regarding personal liability for each entity. More Small Business Resources From OPEN Forum: - Why Social Learning Benefits Your Business - 9 Steps for Getting Kickstarter Dollars - Choosing the Best Social Media Image courtesy of iStockphoto, skynesher, alengo |
| Judge Stops U.S. Sales of Samsung Galaxy Tab 10.1, Samsung Appeals | |  U.S. District Judge Lucy Koh has approved Apple's request for a preliminary injunction in the U.S. against Samsung's Galaxy Tab 10.1. "Although Samsung has a right to compete, it does not have a right to compete unfairly, by flooding the market with infringing products," Koh wrote on Tuesday. Apple filed a motion for a preliminary injunction in May 2012, claiming Samsung's Galaxy Tab 10.1 infringes on an iPad-related patent. Apple has also filed a similar motion against Samsung's Galaxy S III in June. The judge's order becomes effective after Apple posts a $2.6 million bond as protection against damages suffered by Samsung if the injunction is later overturned. It's important to note, however, that this ruling only affects Samsung's older 10-inch tablet, the Galaxy Tab 10.1. It does not affect the updated Tab 10.1 II, which was unveiled in May 2012. According to an IDC report from March 2012, Apple's iPad had a 54.7% market share in Q4 2011 while Samsung, which sells several tablet models, had a 5.8% share in the same period. Samsung, which has already appealed (PDF link) the decision, said it doesn't expect this ruling to have a big impact on its business. |
| Justin Timberlake Launches New Home Decor Site | | Tuesday, June 26, 2012 7:01 PM | AJP |
|  The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark. If you would like to have your startup considered for inclusion, please see the details here. Name: Homemint Quick Pitch: A site that makes suggestions for your home décor based on your personal taste. Genius Idea: Cutting the time it takes to find unique pieces for your home by working with small companies and artists to get great pieces to you on a budget. Your taste has probably changed since college. No longer do you wear ratty T-shirts in public, nor should you still have concert posters tacked to your ceiling. Homemint makes it easy to keep your home a reflection of the current style. While you may want to hang on to those posters, and they may in fact be beautifully designed, you might prefer to have them framed and hung on your wall. Homemint was started by the ubiquitous Justin Timberlake and stylist Estee Stanley. Stanley built her career in fashion styling before moving to interior design. Timberlake was her client before becoming her business partner. Together they decided to create a service that took the hassle out of shopping for your home. They work with largely unknown designers and artists to ensure that your home is a unique reflection of you. The pieces range from rustic to contemporary and all are things you won't find at Target. To begin, take a quiz to determine your taste. Each question aims to find out more about your taste in detail. A person who prefers spending time in the kitchen is going to have different items suggested than someone who enjoys hanging out in their living room. From there you will be shown items from several categories including: Homemint Private Collection - Their line of textiles, bedding, towels, etc. Collaboration - Their line of home accessories, think storage baskets, pottery, etc. Unique Finds - Their carefully curated collection of rugs and tchotchkes Art - Limited edition prints from low profile artists Throughout the different categories you'll find everything you need to make your home a reflection of you - except furniture. While there are a few ottomans and chaises, if you're looking for something more substantial like a sofa or bed, you'll need to shop elsewhere. Each item is given two prices, one for members, the other for non-members. A Homemint membership is $9.99 a month. If you do decide to become a member, your monthly fee will be credited to your account for the following 90 days. If you don't purchase anything during that time, it may not be worth it, but if you do you can save $10 in addition to the already discounted price. Items offered range from kitchenware to bedding and rugs. So, if you're thinking about buying something larger, a rug for example, you could save hundreds of dollars if you're willing to become a member. If it is approaching the end of the 90 day period, you could buy something as basic as a Scandinavian Wooden Spreader -- they come to $4.99 each, so buy two and you won't lose your $10. Alternately you could "save up" and buy something more substantial. Is this a service you would use? Share your thoughts in the comments. Series Supported by Microsoft BizSpark
The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark, a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. There are no upfront costs, so if your business is privately owned, less than three years old, and generates less than U.S.$1 million in annual revenue, you can sign up today. |
| Selena Gomez Tops Buzz at Cannes Lions [INFOGRAPHIC] | | Tuesday, June 26, 2012 6:34 PM | Stephanie Buck |
|  The Cannes Lions International Festival of Creativity wrapped up in the south of France on Saturday, but people continue talking about the event's hot awards and high-profile guests. Cruising into the top spot was Selena Gomez, who attended the conference to speak on a panel called "Millennials and the Future of Creativity." According to the infographic, created by SapientNitro, the actress and singer tweeted about her participation, earning over 2,600 additional tweets and conversations on Twitter alone. The seminar itself topped 3,863 mentions all together. SEE ALSO: Korean Band 2NE1 Dominates Social at Cannes Lions/a> Other notable speakers included singer-songwriter Deborah "Debbie" Harry, who spoke about the entrepreneurial spirit. "Does anyone ever start at their best?" she asked. "That would be so depressing, to start at the top and work your way down." Thumbnail image courtesy of Flickr, conceptx_design |
| Why California Judges Got Free Online Privacy Protection | | Tuesday, June 26, 2012 5:18 PM | Kate Freeman |
|  Some judges fear retaliation from the families of defendants they sentenced to long terms in prison. That's why companies such as Abine devised a solution specifically to protect judges' online privacy. Abine, an online privacy company, is partnering with the California Judges Association to offer its DeleteMe service to the association's members for free. DeleteMe erases personal information from people search websites, and ensures that information does not get re-posted. "DeleteMe will delete the judges' personal information, including their names, addresses, phone numbers, familial members and other data, from the largest online databases and people search websites, including Spokeo.com and WhitePages.com," the company said in a statement. Sarah Downey, an attorney for Abine and a privacy analyst, tells Mashable DeleteMe is for anyone who wants more control over their personal information -- but people in certain professions including "judges, stalking victims, or victims of identity theft may have a greater interest." "Through marketing databases, social networks, credit bureaus, and public records like birth certificates and marriage licenses, the judges' most personal information can often be found online," Abine's statement reads. "Their names, ages, current addresses, and family members' names are a few of the pieces of information up for sale." DeleteMe targets the top 50 most popular people search websites. Its operators, who are experts on those sites' terms of service and privacy policies, "ensure that all personal information is properly and swiftly removed." Every website has a different process regarding how to remove personal data from its site. Some require faxes, others ask for snail mail, others are through email, and others are web opt-outs. Many of these online personal data aggregators have numerous opt-out policies that most people simply don't have time to go through. If you do have the time and are concerned, Abine posts instructions on its site for how to change these settings yourself. But if time is an issue, a yearly subscription costs $99 with no added fees. DeleteMe scans the top 50 websites that collect this data about you every three months. Each quarter, you get an update with screenshots and a breakdown of the sites they checked. "Most people have no idea that companies like the data brokers that DeleteMe helps with exist solely to sell their personal information, and the practice facilitates harms like identity theft and stalking," Downey tells Mashable. "People need to take action now to gain control over their online lives, because the advertising and data broker industries profiting off their personal information won't do it for them." Downey says in the future they'd "like to see something similar to the 'Do Not Call' registry for data broker websites, a one-stop shop where consumers can prevent their information from appearing on these sites in a single, easy action." Abine is the same company that released this quiz to help users discover how much they're worth to Facebook in terms of ad dollars. Do you have a need for the DeleteMe service? Are you worried about your online privacy? Tell us in the comments. Image courtesy of iStockphoto, PashaIgnatov |
| Catch Up on 'Behind the Launch' With This Recap | | Tuesday, June 26, 2012 1:26 PM | Lauren Drell |
|  Tune in to the Behind the Launch finale on Wednesday, June 27! In Mashable's episodic video series, Behind the Launch, we took cameras behind the scenes at Vungle, an in-app video advertising startup. The finale airs on Wednesday, June 27, but we wanted to offer a quick recap of the season, in case you missed a few episodes. Check out the video above to see an abridged version of episodes 1-14, and then watch the full-length launch episode here: About Vungle Vungle is a San Francisco-based company that purveys mobile video ads to promote apps. In May, Vungle announced it had raised $2 million from big Silicon Valley and Alley names: Google Ventures, AOL Ventures, Crosslink Capital, Ron Conway's SV Angel, Dave McClure's 500 Startups, Charles Hudson's SoftTechVC's, Maynard Webb, Scott McNealy and Tim Draper. Vungle also has offices in the UK and Pakistan. Zain Jaffer, CEO and Co-Founder -- A successful and zany entrepreneur since age 15, Zain launched his first Internet company and built-up an impressive list of clients, including Google, Mozilla Firefox, MTV and Hilary Duff, before his 18th birthday. British. Jack Smith, Co-Founder -- Self-described lunatic marketer and hacker. Started his career as a freelance web designer at age 13, founded a video startup, MediaRoots, in college. Met Zain at King's College London University in 2009. British. Bryant Chou, CTO -- Full stack engineer and software architect with more than five years of experience developing mobile apps. He's an enthusiastic traveler who'll share his travel tales with you over a cold beer. American. Marta Bulaich, Chief Yoga Officer -- Marta's first job was with the masterminds behind the TV infomercial legends Chia Pet and Clapper. After a career of working with various startups and venture capital firm, she came to Vungle to do public relations and center their chi in full lotus. American. Ben Lindsey, Senior Software Engineer -- A veteran of four Silicon Valley startups with experience in Internet advertising, large scale databases and agile programming. When not slinging code, you cam find him cooking organic food, listening to electronica, backpacking around the world or running marathons. Colin Behr, Director of Business Development -- Previously founded an Internet company, CyberPlanet Ltd, with Zain in 2004, and then moved to San Francisco to start another venture. Colin eventually went to University but dropped out after speaking with Zain about his new venture, Vungle. Ray Myers, Software Engineer -- 25-year-old Linux geek who loves robotics and has been programming since he was 7. Ray is a Shotokan karate third-degree Black Belt, but you can usually find him at his computer, trying to make robots bend to his will. American. David Oh, Director of Business Development -- By the power of the Force, David trained and honed his skills in marketing, game production and business development in the video game industry. He has crafted business deals with leading brands such as Ubisoft, Google, HP and Humana. David enjoys mountain biking and hiking in Tatooine, with his sidekick Sarah, Empress of Chihuahuas. Sarah Vungle, Resident Pooch -- Sarah spends her days guarding the Vungle fortress and keeping peace amongst the engineering and business tribes. She enjoys battling the evil empire and licking the soles of her paws. Image courtesy of iStockphoto, Hiob |
| Laid-Off 'GOOD' Staffers Launch Kickstarter Campaign For New Magazine | | Tuesday, June 26, 2012 12:52 PM | Marc Georges |
|  On June 1, GOOD Magazine laid off six members of its Los Angeles-based editorial staff for "strategic" reasons. The ousted staffers, including two writers who voluntarily quit, have banded together to launch Tomorrow magazine. The project will be entirely backed on Kickstarter. The Kickstarter campaign for Tomorrow launched on June 25. The team has raised more than $22K with 28 days left on the fundraising platform. Backers who pledge $15 or more will receive a copy of the issue. For now, the eight-person team is promising 100 oversize pages of reporting, essays, illustrations and photography. The magazine focuses on "figuring out what's new, what's on the horizon." "We're committed to making at least one issue-but we're open to more," the founders write on Kickstarter. A digital version will likely follow after the print magazine is published in early fall. Are you looking forward to the latest project by former GOOD staffers? Share your thoughts with us below. |
| Google Shows Startups How to Master SEO in 10 Minutes [VIDEO] | | Tuesday, June 26, 2012 12:18 PM | Samantha Murphy |
|  Worried about how to fill out your meta keywords tag so your startup ranks best in Google results? Don't bother, the company says. Google search ignores it. Google released on Tuesday a video that provides startups tips and suggestions about how to master search engine optimization in just 10 minutes. The video features advice catered to small businesses with main web content on less than 50 pages looking to rank only a handful of related search terms. From how to add the best keywords and including analytics code on your site to how to approach marketing in general, Google aims to make it easier for startups to get their brands ranked higher on search result pages. SEE ALSO: How a Google Search Travels Around the World/a> "It's great to have a fancy site, but try not to focus so much on site fanciness that you don't actually have indexable and searchable text," Maile Ohye, developer advocate on Google's Webmaster Central Team, said in the video. "You want to use relevant keywords naturally in your text. These keywords are like query terms that normal people would use to find your product or your business." For example, companies that sell athletic footwear should include terms that are likely to be typed into search, such as "running shoes." In addition, each page should include a unique topic, title and meta description for the snippet that appears below the link listed on the Google search results page, but meta keywords tags aren't needed. Keywords should be in the file name and typed with lower case letters. The anchor text for every link should also be clear and include keywords, whether you are linking to your site or another. This means that "click here" is not descriptive enough phrase to highlight with a link. Instead, it should be "product specifications" or something that better matches the link with the content. Ohye also points out some major things to avoid: "Do not hire any rogue or shady SEO-- if they guarantee rankings, it's too good to be true," she says. "Don't participate in link schemes or buying links for the purpose of passing PageRank." Another question often on the minds of startups is whether they should invest time and resources into social media marketing. "Play to your authentic strengths," she added. "It's likely that your company has limited resources so if your CEO likes to tweet, go ahead and let them. If you have a salesperson who really enjoys Facebook, that's terrific... and let them interact with the community there." The company has been relatively candid recently about how a Google search works. In April, a Google software engineer head detailed in a YouTube video how Google scours the web on a daily basis to provide the most up-to-date results to users and last month, it released an infographic about how a Google search travels around the world to bring the latest results. Image courtesy of iStockphoto, gmutlu |
| Louis Vuitton App Helps You Pack a Suitcase | | Tuesday, June 26, 2012 11:40 AM | Lauren Indvik |
|  Louis Vuitton has added an interactive, step-by-step tutorial to instruct website visitors in the "art of packing." The web app outlines the basics -- place heavy items at the bottom, wrap shoes in felt bags -- as well as some of the more nuanced points of packing a suitcase or travel bag. To reduce creasing on a jacket, for instance, LV recommends you button it up, unfold the collar and wrap it around two other garments. The tutorial invites visitors to pack three different pieces of LV luggage in total -- a trunk, a rolling suitcase and a travel bag -- entirely with LV-branded clothing and accessories. Users can click on individual garments to get more specific instructions on how to fold them. The app is polished and persuasive, and contains no callouts to purchase the items featured therein. The only drawback? It was developed in Flash. So users who attempt to visit the app on their iPhone or iPad devices will be redirected to the homepage. Is this kind of instructional app useful? Should other brands be doing the same? Let us know in the comments. |
| Intuit Founder Cook on Giving Big Business a Startup Brain Transplant | | Tuesday, June 26, 2012 9:13 AM | Lance Ulanoff |
|  Can a nearly 30-year-old company be as nimble as a startup? It's a question Intuit's Scott Cook has been asking himself a lot lately. The company, which he founded in the early 1980's, makes some of the world's most popular personal and business financial software, including TurboTax, Quicken, QuickBooks and Mint, which it acquired in 2009. As Cook, who now serves as Intuit's chairman of the executive committee (Brad D. Smith is the company's president and CEO), sees it this is the golden age of startups. "We're living in a fabless economy for startups, particularly software-based." And those startups certainly have an advantage over older, larger and more established companies. At least when it comes to agility. Big businesses -- at 8,000 employees, Intuit qualifies as a big, established business -- are "not known for game-changing, speedy, thinking out of the box or breaking paradigms," Cook told Mashable. "As a successful scaled company, you cannot run the ship the way you used to. You'll get run over by a swarm of startups," lamented Cook. The obvious answer for Intuit and companies like it is to try and develop a startup mentality. Getting there, isn't easy. Big companies are not only hierarchy hives, they are extremely process-driven when it comes to decision making. Big Ideas Calcified decision trees hinder even the best ideas. "Decisions by hierarchy are slower and backward looking," said Cook. Business leaders believe their job is to make decisions, he explained, not get out of the way of new ideas. When people talk about innovation and bringing unusual ideas to market, they often point to Google and its 20% time program, which allows employees to use one-fifth of their time on projects outside their normal responsibilities. Some of these crazy ideas become products. Google News and Gmail both started as 20% projects. Some of the best Google Doodles were built in 20% time. Though Cook never mentioned Google by name he's clearly a fan of the 20% idea. He warned, though, that if you allow 20% time or, as he likes to call it "unstructured time" but the "decisions are still made by guys in suits who still need PowerPoint" it's not going to work. To be like a startup, Cook contends, you not only have to allow for experimentation, you have to break down the decision-making process until it's essentially gone. The transformation means that you go from allowing the boss to make the decision to data from the experiment driving the decision. You're "moving decision making from the most powerful to the most inventive," said Cook. Fruits of the Labor Intuit's own unstructured time has already resulted in a number of consumer and regional products including a mobile business tool for farmers in India and the SnapTax iPhone App, which allows you to file 1040 EZ tax forms simply by taking a smartphone picture of your W2 form. The apps OCRs (reads the text), asks nine questions and then files the form. In the case of the former, it survived two attempts to kill the project and now nearly a million farmers use the product. In the case of the latter, a tiny three-person team was allowed to experiment over and over again until they got it right. Cook readily admits that those working on their unstructured projects still have to get someone's approval, but "the goal is to eliminate the need to have someone sign off on the experiment." They want to allow ideas and teams to flourish "without the need for management to get involved," said Cook. Intuit's so committed to the idea of startup-like innovation that another small, two-person team built and launched a proprietary in-house tool to collect, build and manage new ideas. Called, naturally, "Brainstorm," Cook described it as a mix of Facebook, Amazon reviews and blogs. Any Intuit employee can add new ideas, which others comment on, debate and build upon. Brainstorm is also used to collect teams and resources for ideas. Intuit employees request volunteers with certain expertise and often get them. Intuit is using these tools and unstructured time to go faster and act like a big "network of startups." Still, Cook does not believe startups have all the advantages. Despite the agile thinking, speed and lack of institutional decision-making, it can still be tough out there in the business world, even for the most nimble startup: "The odds of success have not gone up," warned Cook. Intuit's blueprint for big company success in a startup world sounds promising, but could it work for all large businesses? Some might say Microsoft is acting more like a startup these days and that Google's startup agility is fading into a kind of arthritic tic. Apple is the antithesis of startup, with a tightly wound exec team still making the majority of major company decisions. So who has the startup mojo and who is losing it? Let's talk about that and how you use or don't use startup principles to win in your market sector in the comments below. |
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