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Innovative Legal Strategies

Howard County MD Business Law Blog

How serious illness can influence divorce rates

Maryland residents will likely be aware that a serious illness can place a great deal of strain on a marriage. However, they may be surprised to learn that the chances of a divorce only appear to increase if it is the wife who becomes sick. Researchers noticed this after looking at how cancer, lung disease, heart ailments and strokes affected 2,701 marriages, but they were unable to determine if it was the husband or wife who decided to seek a divorce.

The findings of the study looking into the relationship between serious illnesses and divorce were released in March 2015 and published in the Journal of Health and Social Behavior. While the rate of divorce increased by 6 percent when wives became sick, there was no corresponding higher divorce rate among couples when the husband developed a serious illness. Researchers at Purdue and Iowa State University speculate that ailing wives may seek divorce because they are unhappy with the quality of the care provided by their husbands.

Legal pitfalls new business owners should avoid

Entrepreneurs and small business owners in Maryland may be knowledgeable in their fields, but they may know less about the legal side of setting up a business. Pitfalls like failing to research ideas for business names and products may be easy to avoid, but new owners may not be aware of them. For example, being aware of other companies' trademarks might help avoid a lawsuit or costly name change.

It can also be important that business owners create a separate legal and financial entity. This protects the owner's personal assets in case of a business bankruptcy or legal troubles. In addition to creating a corporation or LLC, business owners should set up a separate business bank account and avoid mixing business and personal banking. This is important whether a new small business has 10 employees or is simply one individual offering consulting or other services from their home. More than 40 percent of small businesses faced an actual or threatened lawsuit in 2011, so even business owners who think the likelihood of such a situation is small may benefit from taking such precautions.

Lawsuits to address employment discrimination

Maryland business owners may find that firing an employee is necessary at times, but it is important to understand that the context of a situation could leave room for legal action in certain cases. Similarly, it is important to consider any changes in position or treatment when dealing with an employee who has made a complaint about adverse actions or conditions. As an owner of a business considers these issues, it is important to ensure that company policies are communicated to and enforced by supervisors, managers and other leaders.

A retaliatory firing could in some cases lead to a wrongful discharge lawsuit. Although it may be necessary to fire an employee for failing to do their job or for other policy violations, it is not legal to fire an individual who is engaged in protected conduct in a retaliatory manner. Examples might include firing someone for registering a complaint about a hostile working environment, using FMLA leave or reporting the corrupt actions of a co-worker or supervisor. Retaliation can also occur without firing an employee. A change in job position or a demotion for a worker following their complaint or other specific action could be viewed as retaliatory.

Incorporating a business in Maryland

If someone is considering starting a business, they may choose to form a corporation. This is actually a fairly simple process, most of which hinges on filling out and submitting articles of incorporation with the state and paying a processing fee, which ranges from $100 to $800.

The first step in incorporating a business is to choose a name. It must not violate any trademarks, and it must not be the same as any other corporation in the state. Additionally, the business's name must indicate that it is a corporation, which is generally done by ending the name with Corporation, Limited or Incorporated. A name does not need to be registered with the state because that will be done so automatically when articles of incorporation are filed.

Independent business versus franchise decisions

Maryland residents who wish to start a business may want to look at two models: independent and franchise. Either type of ownership model of business can succeed. There are factors associated with the decision to buy either one, and those should be carefully weighed prior to any action.

A franchise owner is under the control of a parent company, which controls what services and products the new business can offer with little opportunity for independent decisions by franchise owners. The upside is that those products and services have already been tested in the marketplace. An independent business owner has autonomy and can strike out in new directions with services based on preferences or market changes. However, this typically means less security.

Airline industry wary of merger between Expedia and Orbitz

Maryland travelers may appreciate the implications of a merger between online travel businesses Expedia and Orbitz. Expedia has agreed to pay in excess of $1 billion to acquire its competitor, which is expected to strengthen Expedia's ability to negotiate lower pricing with airlines and hotels. Both Expedia and Priceline, the company's biggest competitor, have been working to dominate the online market as the Internet has become one of the most common methods used for booking travel services.

According to industry experts, this larger share of the market will allow Expedia to enjoy a stronger position in the chain of distribution, making it possible to compete for better terms with travel service providers. Those representing officials in the airline sector indicate concern due to the effects on competition and customer activities. Officials within the hotel sector express concerns about the impact on consumer choices. These industries are worried that the deal could increase pricing for consumers, but Expedia counters that consumers will benefit due to competition from newcomers to the online travel sector and due to competition from actual hotels and airlines.

Why mergers fail in Maryland

According to a study conducted be a major accounting firm, more than four out of five mergers fail to improve shareholder returns. One reason why this so often happens is a lack of communication during the transition process. Many employees are going to be against the merger or are just going to become disengaged while at work. During the merger period, there is no such thing as communicating too much. Keeping lines of communication open can help win over employees who may not be on board with the change.

Employee disengagement is an issue that needs to dealt with at the outset. Failure to do so could result in employees who offer nothing to the company either in the present or in the future. Severing ties with these employees may make it easier to fully invest in those who do have something to offer in the long-term.

Factors used to determine acquisition price in Maryland

When a company decides to purchase a stake in a business, it will look at five key indicators. First, it will determine a multiple of EBITDA, which is earnings before depreciation, taxes and other costs that reduce final earnings. This multiple will determine how much an investor thinks that the company is worth. For instance, if a company had an EBITDA of $500,000 and the investor went with a multiple of five, the company would be worth $2.5 million.

A company will also have to consider EBITDA margin, which is generally thought as EBITDA divided by revenue. Increasing this margin may make a company more valuable to investors. After taking EBITDA issues into consideration, an investor will have to determine the growth potential of the company as well as how much of the venture the investor will own.

Business tax planning

Taxes are often one of the biggest expense items on any Maryland business's income statement. When managed properly, tax expenses can be kept under control, helping you and your business reach higher levels of profitability. Without proper planning, taxes can be a major expense, possibly causing your business to take a loss. In extreme situations, poor tax planning could lead to tax errors, which could in turn cause fines, interest and other penalties. For all of these reasons, it's critical that you have a skilled, experienced and knowledgeable tax attorney on your side.

Tax planning begins with business formation. Different business structures have different tax consequences. From sole proprietorships to limited liability companies to corporations, every type of business structure has its own set of tax rules and regulations. There is no right structure for everyone. Rather, you should use the structure that best fits your needs and goals. A knowledgeable tax attorney can consult with you and help you decide on the structure that best meets your goals and manages your liability.

The options that employees have when their rights are violated

There are several laws in place to protect the civil rights of employees. For example, workers cannot be overlooked for promotion because of their gender, race or religion. When the protected rights of Maryland workers are violated, they have a few options to initiate an employment dispute.

One of these options is informal negotiations between the employee and employer, rather than going through a court battle. The optimum result is that the employer consents to compensate the worker, while the employee consents to dismiss the right to take legal action. However, this is not always the result.