Whether you are starting a small business or running an established company, it is vital to understand business laws and regulations. But that is easier said than done. My goal is to provide business-related legal services so that you can spend more time dealing with the actual business and less time with legal intricacies of operating your business. My services include:

Business formation

You have a new and innovative product or service and you are interested in forming a new business. You may have concerns about liability, taxes, investors and other considerations. As your small business lawyers, we will assist you in deciding whether your startup business should organize as a limited liability company (LLC), partnership, S corporation or C corporation. We will form the most appropriate business organization for your new business and register the business in all jurisdictions in which it will conduct business.

Mergers and acquisitions

If your business is fortunate to thrive and become a merger or acquisition target, we can represent you as the seller; or if you are on the other side and looking to acquire a business, we can assist with the due diligence in purchasing a business. We will review various approaches in purchasing a business through merger or acquisition. We will discuss with you various structures in purchasing the stock or purchasing the assets of an acquisition target. In either case, your business will need thoughtful and comprehensive representation in all aspects of a merger or acquisition.

Government contracting

Government contractors face numerous issues when contracting with the government. And with a hands-on approach and substantial experience, we will help you navigate those legal issues. We prepare teaming agreements, subcontracts and joint venture agreements and can handle a variety of other government contract matters. As government contract lawyers for your small business, we can assist you in applying for programs for HUBZones, service-disabled veteran-owned small businesses or women-owned businesses. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Business transactions

Once you have an ongoing business, however organized, you will have a host of various commercial transactions. We prepare agreements with lenders, lessors, partners, customers, employees, and consultants. We provide business legal services for your company, preparing confidentiality agreements, nondisclosure agreements, licensing agreements, distribution, employment agreements, independent contractor agreements, lease agreements, and many others. We will help you understand what each part of these agreements require and make sure that these agreements provide protection to you and your business.

Corporate law

Once your startup business has been created, your company will have ongoing requirements to maintain its separate status. We will assist in guiding you on how to prepare corporate minutes or resolutions of the company to maintain the corporate form and other steps to protect the limited liability of your company. You will also have to make sure that your bylaws or operating agreement continues to reflect the needs of the business organization. We are available to assist you in addressing these issues. And once your company is ready to raise additional capital from investors, we can work with you to determine whether you are subject to securities laws or fall within one of the exemptions.

Business disputes

Few businesses are immune to business disputes. If your small business was well-advised, you have an agreement that will provide guideposts on how to resolve your business dispute. If you are unable to settle your dispute, you may have a dispute resolution mechanism such as mediation or arbitration in the agreement. An alternative dispute resolution mechanism such as arbitration or mediation generally can provide a relatively quick resolution of your business dispute. If not, then you may have to consider litigation. We handle business disputes, including pre-litigation matters, mediation, arbitration and litigation.

Anti-corruption compliance

Every company should have procedures and policies to minimize its exposure to allegations of corruption or bribery. An integrity compliance program (ICP) is essential for businesses doing work internationally for the United States government or work financed through one of the development banks. We can assist in reviewing or preparing an ICP to assure that is consistent with the anti-bribery and anti-corruption guidelines from the World Bank. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Non-profit law

We work with organizations to obtain their tax exempt status under Section 501(c)(3) of the Internal Revenue Code. There have been recent changes to obtaining 501(c)(3) status and we have worked with organizations in submitting successful applications on the simplified track by filing a 1023-EZ and the more rigorous 1023 application for larger organizations. Nonprofits also face similar legal challenges to assure that they comply with business requirements and additional requirements to assure that they do not jeopardize their tax exempt status. As a law firm for nonprofits, we work with nonprofit organizations to guide them through these issues.

FAQ Small Business Attorney in DC

What is considered a small business?

Almost all our clients fall within the definition of small business/startup as determined by the Office of Advocacy of the U.S. Small Business Administration. Under this definition, a small business has fewer than 500 employees. Small businesses encompass about 99.9% of all business organizations in the United States.

Which industries do you serve as a small business attorney?

Most of our clients are service providers such as consulting companies, law firms, accounting and bookkeeping services, cybersecurity consultants, video production companies, and lobbyists, just to name a few. We also represent foreign and domestic manufacturers and software developers.

As a small business lawyer in DC, we represent some retail operations, such as bookstores and restaurants. We also represent numerous nonprofits with varying missions. Our government contractors clients hold various IDIQs (Indefinite Delivery, Indefinite quantity Contracts) and GSA schedules.

In which areas of the law does a small business or startup need legal assistance?

Most times, small businesses/startups need the services of outside general counsel. As outside general counsel for small businesses, we can handle most matters as a small business attorney that small businesses generally encounter. Usually, anything with the word agreement or contract is within our practice areas. This includes operating and shareholder agreements, which are used for small businesses and startups that are formalizing their relationships with their owners. Once a business is formed, then we prepare and review a host of other agreements, such as service agreements (which may be referred to as client agreements or consulting agreements), independent contractor agreements (which may be referred to as subcontracting agreements), employment agreements, teaming agreements, purchase and sale agreements, merger agreements, option agreements, license agreements, lease agreements, and the list goes on.

What factors should a small business and startup look for in retaining the services of a lawyer for small businesses?

With our extensive experience of working as a small business attorney in DC for decades now, background and experience should come right at the top of the list when looking for a small business lawyer. We think that accessibility and communication are essential for a successful relationship between an attorney and a client. Hourly rate is important but not as important as quality of service.

What kind of experience do you have in advising small businesses as an attorney?

Keith Rosten has not only legal experience but also business and practical experience that allows him to relate to the trials and tribulations of a small business owner. Keith has BigLaw experience before working for small and medium-sized businesses, first at his own law firm focused on small businesses and then with Berliner Corcoran & Rowe LLP.

Keith has substantial business experience. He received an MBA from the Tuck School at Dartmouth College. During his business studies, he worked on several group projects with small businesses, including a furniture manufacturer, a manufacturer of leak location precision equipment, real estate developer. After business school, Keith operated a successful real estate business in California and overcame numerous issues, such as asbestos abatement and underground storage tank remediation.

Keith worked as a legal adviser to a government contractor and was a legal adviser to a major initiative in Russia. Keith ran another small business, selling and marketing solar energy equipment. The business had an e-tailer component, hosted the largest solar energy forum online, and sold solar energy equipment to the government. Keith negotiated two GSA schedules for the business and obtained HUBZone certification for the business. Keith was also president of the Dartmouth Entrepreneurial Network – Washington, a networking organization for small businesses in the greater Washington, DC community.

Keith has also volunteered for Compass Pro Bono, working with local business professionals to conduct long-term consulting engagements for local nonprofits in fundraising, governance, and strategy.

With this breadth of legal and business experience, Keith is attuned to some of the challenges facing small businesses, which allows him to provide effective advice and guidance.

As a small business lawyer, do you take in-person meetings only?

Yes. We are located in downtown Washington DC and host many of our clients. For those clients who cannot come into our offices, we usually meet over Zoom or by telephone.

How do you charge for your services as a small business attorney?

We charge our clients based on hourly fees. We usually provide a budget of how much certain matters cost so that startups and small businesses know in advance the ballpark cost of the matter.

What if a client does not like our services?

Clients can terminate our services anytime if they don’t find it satisfactory.

Should my small business lawyer or startup lawyer be in the same state as me?

No, not always necessary and may depend on multiple factors. For example, though we are an expert small business lawyer in DC, we have also provided consultation to other cities’ clients.

Beware Nonprofit Board of Directors: Your Organization Does Not Belong to Anyone

I recently came across a nonprofit in which the chairperson, who had recently died, bequeathed her interest in the nonprofit to a close relative. Little did she realize that a nonprofit is not property that you can transfer or otherwise give away. A nonprofit is fundamentally different from a for profit organization, such a corporation which issues stock. This article describes some corporate governance aspects of nonprofits. If you have any questions about nonprofit management, you should consult with a nonprofit lawyer.

Structure of a nonprofit compared to a for profit

For profit organizations generally have three tiers of corporate governance. The shareholders own the organization. They select a board of directors, which provides the overall direction of the organization. The board of directors selects the corporate officers, who manage the daily affairs of the organization. The structure of a for profit business organized as a limited liability company is similar, except one person may combine one or more of these roles.

A nonprofit is not owned by anybody

In a for profit organization, the owners hold shares or interests in the organization. For a corporation, the shareholders hold shares of stock. In a partnership, the partners own partnership interests. And in a limited liability company, the members own membership interests in the company. None of this applies to a nonprofit. A nonprofit is not owned by anybody.

Related article: Forming a New Business

Since there are no owners in a nonprofit, the organization is governed and controlled by its board members. There are some exceptions such as a member nonprofit, or a nonprofit set up as a trust, which has trustees. But the vast majority of nonprofits are set up with a corporate structure. Each member of the board of directors in a nonprofit has heightened duties of trust and loyalty.

The reason that the organization was approved as tax exempt is because the organization convinced the IRS that it is being used “exclusively for charitable purposes.” The board of directors is responsible to assure that the nonprofit adheres to this purpose.

And these board members have various duties. Each board member has a duty of care. If you are serving as a board member, you should be familiar with the organization’s activities and its finances. A nonprofit board member has a duty of loyalty and to act in the best interest of the corporation, not the board member’s individual interest. Finally, the board member has a duty of obedience to be faithful to the organization’s purpose.

Board member’s duty in reviewing transactions

How do these duties translate in practice? If you are a board member, then you should independently review each transaction that the board must approve. These are some of the considerations you should take into account when reviewing the transaction.

• The interests of the nonprofit should be paramount in your mind. What is the best for the organization?

• Does it comport with the purpose of the organization? When the organization submitted its application for nonprofit status (Form 1023), an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3). As a board member, you should determine whether this particular transaction advances the cause of the organization.

• Is the transaction fair to the organization? Are the terms similar or better than what would be offered to a for profit organization. If you are hiring a vendor, are the terms commercially reasonable?

• Does the transaction benefit a private individual? If the purpose is to benefit someone over others, then you need to take a close look at the transaction.

• Does the transaction cause a conflict of interest or is there a concern about self-dealing. We will discuss in more detail private inurement and private benefit transactions below, but these are areas of particular concern for any nonprofit.

Private inurement prohibited

You probably have seen this admonition to nonprofit organizations: “No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual.” What that means is that insiders such as board members and officers should not get a sweet deal on sales of goods or services. An individual is not entitled to unjustly enrich him or herself at the organization’s expense.

If someone is looking to set up a nonprofit and then pay an excessive salary, this would violate the private inurement language. If the organization were to provide a low or no interest loan to an insider, then it would run afoul of the rule on private inurement.

Private benefit transactions prohibited

Private benefit is broader than private inurement, and applies to any individual, regardless of whether they are associated with the organization. The idea is that a nonprofit should not target a service or a financial transaction for a specific individual or narrowly defined group rather than the public. Private benefit does not have to be financial. The board needs to be vigilant that individuals do not reap a benefit that is not within the exempt purpose of the organization.

Sanctions for violation of nonprofit rules

The ultimate sanction for violating the rules on private inurement or private benefits is revocation of the 501(c) (3) status. Since 1996, the IRS has a middle road and may impose intermediate sanctions on a “disqualified person” who benefited from the transaction and on organization managers. If you are a board member, the IRS may impose an “excise tax” on you if you “knowingly, willfully, and without reasonable cause” participated in these transactions. If you relied in good faith on the written opinion of a lawyer on matters within his or her expertise, you are entitled to a rebuttable presumption that you acted reasonably.

Nonprofits face many of the same legal challenges as other small businesses. Consulting with a small business attorney who works with nonprofit organizations can assist in minimizing the risk to the organization and to the board members and officers.