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SMALL BUSINESS | SMALL TALK: Advice From the Small-Business

Attorney Can Help Writer Avoid Copyright Infringement


Question: I am writing a reference guide for the Internet. I will have to mention company names but do not want to infringe on copyrights or have my guide interpreted as an endorsement. How can I find out about disclaimers? Should I hire an attorney to review the guide?

--Jane Puglisi, Palmdale


Answer: Merely mentioning the name of a company and factually stating its Internet address, for example, should not constitute trademark or copyright infringement. However, use of a company's logo or design, or implying that your product is affiliated with a company, might constitute trademark or copyright infringement or be prohibited under a variety of state laws.

It would be prudent to have your reference guide reviewed by an attorney specializing in intellectual property. Ask him or her to advise you on how to minimize your risk of infringing trademarks or copyrights.

However, disclaimers have not stopped companies from successfully suing for trademark and copyright infringement in some cases. Further, using a disclaimer does not guarantee that you won't be sued for trademark or copyright infringement, even if you eventually prevail in the suit.

--David Farah, intellectual property attorney, Sheldon & Mak, Pasadena


Q: I am currently involved in a small-business start-up with three partners. In setting up a corporation, how do we determine the number of shares and liability?

--Richard D. Rocha, Burbank


A: First of all, don't jump to the conclusion that a corporation is the right entity for your business. Limited liability companies (LLCs) offer the same level of protection from liability as corporations and they are often more popular for small businesses because they offer more flexibility and lack of formality.

Both LLCs and corporations provide full liability protection for their owners. In some cases, depending on your gross revenue, an LLC can cost a little more to run because the annual franchise taxes can be higher.

Usually, the number of shares-- or the percentage of the company--that each partner owns depends on how much he or she is contributing to the formation of the business. One person may come in with capital, another may bring in a trademark, another may bring in some particular expertise. You and your partners will have to sit down and come to an agreement on this point.

What is far more important for you to decide now is what vehicle to form. If you start your company in the wrong mode it can be a disaster for you later. I have seen this happen where huge tax bills later accrue that can wipe out your business.

So, I urge you to meet with an experienced attorney or accountant and get some firsthand advice on what entity to form and how to do it correctly. There really is no substitute for that.

--Jeffrey A. Unger, business and real estate attorney, Beverly Hills


If you have a question about how to start or operate a small business, mail it to Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016 or e-mail it to Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.

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