Environmentally friendly industries are currently growing at a time when many others are dwindling.  According to MSNBC, the fastest growing sectors are recycling, energy efficiency, solar, wind and water conservation.  This “green” market is a hot bed for innovative thinkers and entrepreneurs who have what it takes to start a ground-breaking environmentally responsible business on their own.

A 2008 Dechert LLP Annual Report on Trends in Trademarks indicated 2007 was the busiest year ever for trademarks.  There were 300,000 applications for the first time in history, which surpassed the old record of 289,000 during the Internet surge of 2000.  The word “green” was the most popular branding of all trademark applications.  In 2007, the number of applications containing the word “green” increased from 1100 to over 2400.  This was the third year in a row in which the word “green” has significantly increased in the number of applications.  Applications for incorporating the word “earth” increased approximately 60% from 550 to over 900 in 2007.

Due to the recent economic downturn, it is only inevitable that the overall number of patent and trademark applications have decreased.  However, the Dechert LLP Annual Report for 2009 indicated that “applications for marks containing the word GREEN increased 32% in 2008 (to more than 3,200 filings), ECO-prefix marks were up 86% (with 1,700+ applications), and applications for more than 500 ENVIRO-marks were filed, representing a 22% jump. The word CLEAN was also a popular buzzword, appearing in over 1,000 marks to suggest environmental friendliness, up 30% from the year before.”

While there are some industries that will suffer from the hardship of extreme gasoline prices, there are other markets that will flourish.  Being environmentally conscious is a worldwide trend that will continue to escalate and intensify during the coming years.  When considering starting a new business venture, think how the new company can prosper and thrive in an ever growing “green” world.

Now let’s think about this.  How could the LLC not be bound by its own agreement?  I mean it is the operating agreement, after all, that set the guidelines for management and ownership of the LLC. However, after reading further I found the real issue at hand is whether or not the LLC itself be required to sign the agreement, and if not, is the LLC really bound to it.  There are state statutes that unsuccessfully define “parties” to the agreement, or even bind the LLC as an entity separate from its members.   So what does that really mean and does it even matter?  Well, as you’re about to read, failure to clearly define such terms allowed the managing member of a Wisconsin LLC misappropriate funds and there was nothing the LLC could do about.  What you’ll also find in the article is how once again Delaware sets the bar for all things corporate.  See the excerpt of Proctor’s article below:

One of the early cases dealing with this issue held that a Wisconsin limited liability company that did not sign the operating agreement was not bound by it. (Bubbles & Bleach, LLC v. Becker No. 97 C 1320, 1997 WL 285938 (N.D. IL May 23, 1997) In Bubbles & Bleach, the limited liability company brought suit in Illinois federal court against the managing member for misappropriation of funds. The managing member moved to dismiss the Illinois federal case. The operating agreement included an arbitration clause that required arbitration in Wisconsin under Wisconsin law. The operating agreement was binding on the “parties” to the agreement, but the term “parties” was not defined. Further, Wisconsin defined an operating agreement as an agreement among the members. The court found that there was no indication that Wisconsin intended to bind the limited liability company as an entity distinct from its members. So the limited liability company was not bound by the arbitration provision in the operating agreement.

Delaware takes a completely opposite approach. In 2002, Delaware amended its limited liability company law to provide explicitly:

“A limited liability company is not required to execute its limited liability company agreement. A limited liability company is bound by its limited liability company agreement whether or not the limited liability company executes the limited liability company agreement.” (Delaware Limited Liability Company Act Section 18-101, as amended by 73 Delaware Laws, c. 295, Sections 1 and 2)

(As an aside, Delaware’s defined term is “limited liability company agreement,” but it can be referred to as an operating agreement, so the references are to the same agreement.)

It might have seemed that Delaware, considered a bellwether in these matters, would have settled this issue. But, as a recent Illinois case illustrates, the issue is far from settled. (Trover v. 419 OCR, Inc. 921 N.E. 2d 1249, Illinois Appellate Court, Fifth District, January 12, 2010).

Trover was a member of Far Oaks Development Group, LLC (FODG). Trover and the other members of FODG authorized the managing member, Halloran, to transfer land held by FODG to 419 OCR, Inc. (419 OCR, Inc. was owned by Halloran and Macaluso who were also members of FODG.) But Trover alleged that the agreement transferring the land included an oral promise by Halloran and Mancuso, representing 419 OCR, Inc., to pay FODG, in addition to the estimated price of the land to be sold, an additional sum of money to be determined as the land was developed and sold. Although the land was developed and sold at a profit, no additional funds were paid to FODG. The litigation by Trover was based on a derivative action on behalf of FODG alleging breach of contract and fraud.

Halloran and Macaluso sought to compel arbitration under the operating agreement of FODG. The trial court denied the motion to compel arbitration and the defendants appealed.

The court acknowledged that the arbitration provision in the operating agreement was broadly worded. In this case, some of the claims involved defendants (such as 419 OCR, Inc.) who were not members of FODG and were not parties to the operating agreement. Clearly, with respect to these defendants, arbitration could not be compelled. But the more interesting question was whether the limited liability company itself was considered a party to and bound by the terms of the operating agreement that created the limited liability company.

To read the full article click HERE. (requires free account to log on)

The minimum amount due for Maximum Stock corporations (those companies that have over 5000 authorized shares) has increased.  Maximum Stock corporations that file under the Assumed Par Value Capital Method will now be assessed a minimum amount due of $350.  The standard $50 annual report fee will also be added to this amount due, for a new minimum amount due of $400.

The annual franchise tax fees for Non Stock corporations have also increased.  Non Stock corporations will now pay $75 franchise tax, in addition to the $50 annual report fee.  Therefore, the new minimum amount due for Non Stock companies will be $125.

All fee changes are effective for the 2010 franchise tax year, and will be due by March 1, 2011.  Harvard Business Services will start sending reminder notices beginning in October 2010, so there will be ample opportunity to make timely payment arrangements.

As always, we can assist with the filing of the annual franchise tax report for a nominal fee for any company you may have, whether it is registered with us or not.

Harvard Business Services is always here to assist with any franchise tax questions or concerns you may have.  Feel free to contact our office via email (franchisetax@delawareinc.com) or telephone 1-800-345-2677, ext. 6901 (1-302-645-7400 outside of US) and we would be glad to help.

Anyone who’s ever had to form a company can sympathize with how difficult it can be to create a company name that is descriptive yet unique.

However, some companies have gone a less-traditional route and used some pretty unique naming conventions.
Here are some examples of interesting company names and the backstories behind them.

1. Google

The name started as a joke about the amount of information the search engine could search, or a “Googol” of information. (A googol is the number 1 followed by 100 zeros.) When founders Larry Page and Sergey Brin gave a presentation to an angel investor, they received a check made out to “Google.”

2. Hotmail

Sabeer Bhatia and Jack Smith had the idea of checking their email via a web interface, and tried to find a name that ended in “mail.” They finally settled on hotmail because it had the letters “html,” referencing the HTML programming language used to help create the product.

3. Volkswagen

Volkswagen literally means “people’s car.” Adolf Hitler initially came up with the idea for “cars for the masses,” which would be a state-sponsored “Volkswagen” program. Hitler wanted to create a more affordable car that was able to transport two adults and three children at speeds of 62 mph. He choose the car manufacturer Porsche to carry out the project, and the rest, as they say, is history.
To read the full article click HERE.

Hong Kong means Fragrant Harbor and was formerly a British Colony and was handed over to the People’s Republic of China in 1997. Even though they are now part of China they have their own currency (Hong Kong Dollar) and the Hong Kong Government is financially independent from the Government of The People’s Republic of China. The city of Hong Kong is very industrialized and is growing by the second. As of today there are currently 7 million people living in Hong Kong, everyone speaks both English and Cantonese and it is known as the safest city in Asia.

One of the things I enjoyed most about Hong Kong was how genuine the people are there. They make you feel right at home and welcome you with open arms.  During my 10 days there I saw a great deal of the city. Hong Kong has it all from great restaurants, to great markets, to magnificent views. Even for me a person whose biggest pet peeve is to shop I enjoyed it, because the best part was I could bargain the price and walk away feeling good about what I paid for it.

I found Hong Kong to be one of most fascinating cities I have ever been to and one of the main reasons I went there was to educate myself on the potential business opportunities Asia has to offer. On my plane ride over I read a really interesting article from USA TODAY. The article was called “Asia Holds Growth Potential”. The article talks about how the recent recession has whet US companies appetite for growth in Asia. In 2008, nearly half of the US companies surveyed saw their China-based businesses perform better than the overall company, the US-China Business Council found in a poll of its members. The percentage of US companies whose China operations are profitable is 84% to 16% not profitable. The results show that the once-prevalent notion that US companies “cannot be profitable in China is a myth,” says John Frisbie, the council’s president.  American companies that are able to break into the Asian market will have the potential to leverage the consumer base of some of the fastest growing economies in the world. Some of the American industries that are betting on Asia: Pharmaceuticals, Autos, Casinos and Consumer Products.

I would highly recommend all entrepreneurs to visit Asia, but especially Hong Kong as it is a one-of-kind city and is full of opportunity for the global enterprise.