Fall 2014 final legal eats slides (11.22.2014)

Presented by:

Legal Eats

Legal Resources for

Food Justice Enterprises

Agenda

10:15 – 10:20: Introduction

10:20 – 11:20: Legal Presentations

11:20 – 11:30: Resource Advisor Introductions

11:30 – 12:30: Resource Fair

Forming a Business Entity

Aaron Voit

Business Entity Choices

Questions to Ask

Who will own the business?How will the business be managed?Should the business pay taxes

separately from you?Do you want to be protected from

liability?

Sole Proprietorship & Partnerships

◦ One owner: Sole Proprietorship◦ Two or more owners: Partnership

Pros: easy to set up; no additional fees; organizational freedom

Cons: higher risky; personal assets (home, savings, etc) at stake; responsible for partner’s mistakes

Business

Owner

Profits

Taxes

Liability/Risk Pg. 2 and 3

in Handbook

Insurance

Limited Liability Company (LLC)More protection than Partnership/Sole Proprietor,

less complicated than a Corporation Must file with the state; $800 annual feePopular for small businessesLiability/Risk Protection

Business

OwnerProfits

Taxes

Liability

Pg. 3 in Handbook

CorporationsOwners = shareholdersProfits and Control determined by amount of shares

◦ If you own 25% of the shares of the company, you can receive 25% of the profits and your vote counts for 25%

Pros: Liability protection; easier to get loans/raise investment money

Cons: complicated; can be double taxed if profits are distributed to shareholders; $800 annual fee

Pg. 3 in Handbook

Public Benefit and Nonprofit Corporations

Ownership: No Owners

Taxes:

Can apply for tax exemption/Can receive tax-deductible donationsProfits: May not distribute its profits to private individuals

Donations:

May be eligible for grants and tax-deductible donations

Cooperative Corporations

Ownership: Members (1

vote/member)

Taxes:

Pass through to members(like an LLC)

Worker owned

Consumer owned

Profit:

Distributed to members on basis of value or quantity patronage

Free Resources (P. 4 in Hand Book)

◦Filing California Secretary of State

(http://www.sos.ca.gov/business/be/forms.htm)

◦Books Nolo Press

◦Business Counselors San Francisco County Small Business Development

Center

◦Legal Services The Sustainable Economies Law Center Legal Café Lawyers Committee for Civil Rights’ Legal Services

for Entrepreneurs project Green-Collar Communities Clinic of the East Bay

Community Law Center

COOPERATIVES!

Janelle Orsi

smallbakery

Hostess

How to Make Bread in the

in a conventional business

Corporate Shareholders

LandWater

Seeds™

Corporate Shareholders

Work Money

Corporate Shareholders

Work Money

Corporate Shareholders

Work Money

Corporate Shareholders

Shareholder-Elected Board

Work Money

Corporate Shareholders

Shareholder-Elected Board

Work Money

Corporate Shareholders

Shareholder-Elected Board

MoneyPower

JobsFoodMoney

Power

Current Legal and Economic System

Corporate Shareholders

Shareholder-Elected Board

Darden Restaurants

One half billion in profits per year

No paid sick time

$2.13/hour + tips

Corporate Shareholders

Shareholder-Elected Board

There is nothing to keep the system from

becoming extremely

imbalanced.

93% of the wealth

20% of the people

7% of the wealth

80% of the people

Cooperatives change two key characteristics:

XX

Board elected by workers, consumers, or both.

Profits distributed to workers on the basis of the value or quantity of their

work.

Or to consumers based on value or quantity of

purchases.

Or both.

Board elected by workers, consumers, or both.

Some people think all cooperatives are this:

Two things to remember about cooperatives:

1. Board elected on a one-member, one-vote basis. Capital investment doesn’t determine voting power.

2. Profits distributed on the basis of patronage. Capital investment doesn’t determine profit share.

Cooperatives in California generally form as either:

1. A Consumer Cooperative Corporation

2. An LLC that adopts an operating agreement based on cooperative

principles.

7% of the wealth

80% of the people

Co-ops will changehow wealth flows in society and multiply

the wealth for the 80%

Work Money

Corporate Shareholders

Shareholder-Elected Board

Extractive!

This entity is designed to

extract.

Jobs

Generative!

This entity is designed to

provide, nourish, and

protect.

What kind of co-op is it?

BREAD COOPERATIVE

Now let’s play…

•WORKER coop: Members are worker-owners of the bakery.

•PRODUCER coop: Each member has an independent bread baking business and the co-op markets or sells their product.

•CONSUMER coop: Members are the people who buy the bread.

EMPLOYMENT LAW

Presented by Janelle Orsi

Slides created by: Roopika Subramanian & Zishan Lokhandwala

Why is Employment Law important?

Four Kinds of Worker Relationships

Independent Contractor

Business PartnerVolunteer

Employee

Intern

What is an independent contractor?

Independent contractors usually:• Work under their own direction• Set their own hours• Use their own tools• Have their own workplace• Work for multiple people• May hire their own assistants

If you form a cooperative of people that work independently, that is usually known as a “producer cooperative” or “marketing cooperative,” not a “worker cooperative. “

What is a volunteer?

Volunteer = A person who donates services without contemplation of payment for humanitarian, public service or religious purposes is not considered an employee and therefore is not subject to the wage-hour laws. 

- Tony & Susan Alamo Foundation v Secretary of Labor (1985) 471 US 290

Having volunteers in a for-profit business?

What is an intern?1. The training, even though it includes actual operation of the

employer's facilities, is similar to that which would be given in a vocational school;

2. The training is for the benefit of the trainees or students;3. The trainees or students do not displace regular

employees, but work under their close observation;4. The employer derives no immediate advantage from

the activities of trainees or students, and on occasion the employer's operations may be actually impeded;

5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

An employer’s obligations

To an employee To the government

An employer’s obligations

To an employee

Pay Minimum Wage:

SF: $10.74 $11.05 starting

1/1/2015Federal: $7.25

Overtime (unless exempt)

More information http://www.dir.ca.gov/

An employer’s obligations

To an employee

Hours Breaks Nonexempt employees (one

day off per week) 30-minute meal break for any

shift of five hours or more, and a10-minute break for every four hours worked

Restrictions on hours for young people

More information http://www.dir.ca.gov/dlse/

FAQ_MealPeriods.htm http

://www.dir.ca.gov/dlse/ChildLaborPamphlet2000.html

Sun Mon Tue Wed Thr Fri Sat

Work Work Wor

kWor

kWor

kWor

kDAYOFF

An employer’s obligations

To an employee

Working conditions & job safety Occupational safety and

health laws Maintaining records of

work-related injuries and illnesses

OSHA resources http://osha.gov/dcsp/

smallbusiness/index.html

An employer’s obligations

To the government

Registration with the CA Employment Development Department

Verifying eligibility to work in the U.S. (I-9)

Payment of payroll taxes

Post the requisite notices around the office so employees know their rightshttp://www.eeoc.gov/employers/upload/eeoc_self_print_poster.pdf

An employer’s obligations

To an employee

Workers’ Compensation Obtain workers

compensation insurance Occupational safety and

health laws Maintaining records of

work-related injuries and illnesses

An employer’s obligations

To an employee

Pay

Hours and Breaks

Working Conditions & Job Safety

And more!

To the government

Registration with the CA Employment Development Department

Verifying eligibility to work in the U.S. (I-9)

Payment of payroll taxes

Post the requisite notices

Workers Compensation

And more!

Thank you

Name it, License it,Permit it!

Presented by: Neil Thapar

Getting a Name!Step 1: Pick a name!Step 2: File a Fictitious Business Name StatementStep 3: Notice in the newspaper

Legal Name DBA Name

Neil Thapar Neil’s Rum Cakes

The Cake King LLC

Neil’s Rum Cakes

Step 1: Search online to see if the name is already taken!

Step 2: Fill out the form and submit to the County Clerk ($47)

Pg. 6 in Handbook

Step 3: Publish notice (within 30 days of filing) in a local newspaper (once/week for 4 weeks)

See list of approved publications on county website

Getting a License!In SF, it’s called a Business Registration. You need one for every place of business, even if it’s your home

It’s how the City can keep track of and tax you!

Search “San Francisco Business Registration” to get the form ($76)

Pg. 6 in Handbook

Submit form:In person (City Hall – Room 140)Via Mail (Office of the Treasurer & Tax

Collector)

Getting a Permit!You need a Seller’s Permit if you:• are engaged in business in CA, and• sell tangible personal property ordinarily

subject to sales tax

It’s free and you can apply online!

http://www.boe.ca.gov/pdf/pub73.pdf

Pg. 40 in Handbook

Publications 22, 73, and 287

State Sellers Permit

City Business License

CountyFBN

Statement

Neil Thapar

Health and safety

What You’ll Need to Do

1. GET CERTIFIED!

2. GET A PERMIT!

Pg. 29-32 in Handbook

Get Certified

For Operators:Food Safety Certificate

For Employees:Food Handler Card

Get a Permit to Operate

What do I have to do? It depends:

Restaurants Temporary Food Facilities

Cottage Foods

Restaurants

• Certificates:o Operator: Food Safety

Certificationo All Employees: Food Handler Card

• Permits: File an application and a Health Inspector will arrange an inspection with you. Permit issued after inspection, application, supplemental documentation, and fee.

Restaurants

• Equipment requirements: for example, separate sinks for varioustasks

• Sanitize equipment/utensils, wash hands regularly

• Observe cooking/holding temperatures

TemporaryFood Facilities

• Certificates: o Operator: Food Safety

Certificationo All Employees: Food Handler Card

• Permits:o Sponsor application + Temporary Food Facility

applicationo Deadline: 14 days before the event

TemporaryFood Facilities

• Must have covering

• Equipment for washing hands /utensils separately if serving non-prepackaged

food

• No home food prep

• Different workers must do different tasks – for example, same person can’t handle money and food

Cottage Foods• Certificates:

o Food Handler Cardo Cottage Food Course

• Permits:o Direct sales (Class A): Self-

certificationo Indirect sales (Class B): Annual

Inspection

Pg. 53-54 in Handbook

Cottage Foods

• Wash, rinse, and sanitize surfaces, equipment and utensils before each use

• Keep small children and pets out of kitchen during food prep

• No domestic activities during food prep (for example, entertaining guests, making dinner, etc.)

• Legal Eats Handbook, pp. 29-32

• San Francisco County Department of Public Health, Environmental Health Program

• California Retail Food Code (CA Health & Safety Code §§ 113700 - 114437

Resources

To Recap…1. GET CERTIFIED!

Food Safety Certificate Food Handler Card

2. GET A PERMIT!

To Recap…

Z O N I N GSara Stephens

Activities

Facilities

Zoning Map

Zoning Map

Valencia and 16th: NCT (Neighborhood Commercial Transit District) and RTO-M (Residential, Transit-Oriented - Mission Neighborhood

“P” designates permitted activities in the corresponding zone.

“C” designates activities that are permitted only upon the granting of a Conditional UsePermit (CUP) in the corresponding zone (see Chapter 17.134 for the CUP procedure).

“#” designates activities subject to certain limitations or notes listed at the bottom of the table.

Blank space designates activities that are prohibited except as accessory activities according to the regulations contained in Section 17.010.040.

San Francisco Planning Code

P

C

San Francisco Planning Code

sfplanning.org Permits & Zoning Find My Zoning

1650 Mission Street, Suite 400

San Francisco, CA 94103Tel: (415) 558-6378

sfplanning.org Permits & Zoning Find My Zoning San Francisco Property Information Map

1)Identify a location2)Check the zoning map and

planning code3)Ask the Planning Department

whether your use is permitted, conditionally permitted, or prohibited

4)Apply for any necessary permits

4 STEPS

Liability and Insurance

Yoona Kim

A Very Brief Guide to

Liability,Insurance, and Risk-Management

for Food Enterprises…

We will…Discuss risk management and why it is so

important;

Types of insurance; and

How to save money while protecting your enterprise.

Why Worry?

Types of Insurance

What Kind of Insurance Do I Need?

Will you interact with the public?

What kind of food will you sell?

Will you have employees?

Will you use vehicles?

Commercial General Liability Insurance

Workers’ Compensation Insurance

Vehicle Insurance

Property Insurance

Product Liability InsuranceWill you rent or own a building?

happens.

Commercial General Liability Insurance

Covers accidental injuries, food poisoning, and damage to the property of others.

Especially important if the public will be personally visiting your business (for instance, if you have a store, restaurant, market stall, or food truck).

Note other special kinds of commercial liability insurance for restaurants

Product Liability Insurance

If you are not interacting with the public, you probably do not need general liability insurance. But you will need product liability insurance to protect against food poisoning.

E.g., selling/shipping product over the Internet or to grocery stores

Note: This may be covered by your general commercial liability insurance as “products completed operations insurance,” so check with your insurance provider.

Property Insurance If you own a building or have

business personal property (e.g., inventory, tools), property insurance will cover you in the event of fire and water damage, along with vandalism, and other disastrous events.

You can purchase additional insurance to cover theft and earthquake.

If you rent, it will cover any improvements you made, as well as any equipment that you own.

Vehicle InsuranceProtection from losses

incurred while employees and volunteers use of your vehicles for business purposes, and for any damage done to the vehicles. E.g., “Any Auto” or “Non-Owned” Coverage

Not necessary if your drivers are independent contractors who have their own insurance and drive their own vehicles.

If you have employees, you are legally required to have worker’s compensation insurance for them (and you can’t make them pay for it).

Not necessary for volunteers (but you can include them in your policy if you want to).

In exchange for these benefits, the employee gives up his/her right to sue the employer for a given incident.

Workers’ Compensation

Insurance

What Kind of Insurance Do I Need?

Will you interact with the public?

What kind of food will you sell?

Will you have employees?

Will you use vehicles?

Commercial General Liability Insurance

Workers’ Compensation Insurance

Vehicle Insurance

Property Insurance

Product Liability InsuranceWill you rent or own a building?

How Can I Save Money??

Try to balance risks and costs, and decide how much insurance you really need.

Shop around, and reach out to other, similar businesses for advice on what they did.

If you are a non-profit, you may be eligible for special rates.

Have employees take food-safety training.

Re-assess your needs as your business grows and changes.

Consider a BOP (Business Owner’s Policy) if appropriate for your business.

Managing Risks Ask volunteers to sign a

liability waiver.

Form a limited-liability company to protect your personal assets.

Be safe!