In this episode we aim to address some of the common legal questions raised by the Hawaii agriculture producers we have met. We are grateful to Cat Taschner, co-founder of the nonprofit Business Law Corps in Hawaii. At a recent meeting with the University of Hawaii’s “AgConnect” course, she addressed questions she often hears and agreed to share an edited version here. She discusses topics like legal structure, liability waivers, contracts, online taxes, where webinars and templates for common legal documents are available, and how to sign up for free 30 minute calls to answer specific questions.
Brought to you by University of Hawaii College of Tropical Ag. and Human Resources (CTAHR), and the Seeds of Well-being (SOW) Project. This podcast is supported by the Farm and Ranch Stress Assistance Network (FRSAN) grant from the U.S. Department of Agriculture, National Institute of Food and Agriculture and Hawaii Department of Agriculture.
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In this episode we aim to address some of the common legal questions raised by the Hawaii agriculture producers we have met. We are grateful to Cat Taschner, co-founder of the nonprofit Business Law Corps in Hawaii. At a recent meeting with the University of Hawaii’s “AgConnect” course, she addressed questions she often hears and agreed to share an edited version here. She discusses topics like legal structure, liability waivers, contracts, online taxes, where webinars and templates for common legal documents are available, and how to sign up for free 30 minute calls to answer specific questions.
Brought to you by University of Hawaii College of Tropical Ag. and Human Resources (CTAHR), and the Seeds of Well-being (SOW) Project. This podcast is supported by the Farm and Ranch Stress Assistance Network (FRSAN) grant from the U.S. Department of Agriculture, National Institute of Food and Agriculture and Hawaii Department of Agriculture.
Resources:
Find out more about us:
The views, information or opinions expressed during the Seeds of Wellbeing series are solely those of the individuals involved and do not necessarily represent those of the University of Hawaii College of Tropical Agriculture and Human Resources, our funders, and any affiliated organizations involved in this project. Welcome to a Seeds of Wellbeing"Voices from the field" podcast featuring voices of Hawaii agriculture producers for Hawaii agriculture producers. These podcasts were made possible by a grant from the University of Hawaii College of Tropical Agriculture and Human Resources, also known as CTAHR, and the Seeds of Wellbeing, or SOW project, and is supported by grant from the US Department of Agriculture, National Institute of Food and Agriculture, and the Hawaii Department of Agriculture.
Jim:In this episode, we aim to address some of the common legal questions raised by the Hawaii ag producers we have met. We are grateful to Cat Taschner co-founder of the nonprofit Business Law Corps in Hawaii. At a recent meeting with the University of Hawaii's AgConnect course, she addressed a number of questions she often hears and agreed to share an edited version of that webinar here. She discusses topics like legal structure, liability waivers, contracts, online taxes, where webinars and templates for common legal questions are available for free, and how to sign up for a free 30 minute call to address specific questions.
Cat Taschner:My name is Cat Taschner, I'm the co-founder and vice president of the Business Law Corp. So we are a nonprofit organization that provides free legal services to small businesses and entrepreneurs. And so as you graduate out of the AgConnect program, as you move into starting your own businesses, think of us as a resource, I put our website on this slide. And so if you go to our website, we have a bunch of resources among them are free legal forms. So if you decide that, okay, you know, I'm ready to start up on my venture, I really want to do an LLC, we have LLC forms for you that you can download. Obviously, we recommend tailoring them, but it at least gives you a flavor for what kinds of information you should need. There's also information on how you can apply for free legal services. So every week, we have four 30 minute consultations. So you can make an appointment through either MCBL or HTDC. And I dropped the links there. But you can just talk to an attorney for 30 minutes about whatever question you have, like, you know, "here's my specific situation, do I want to be an LLC? Why would I form in Hawaii, if I live in California?" you know, whatever questions you might have that are specific to you, and you have a 30 minute window, just go nuts and ask whatever you want. That's probably a good resource as you start kind of feeling your way through choice of entity drafting contracts. If after that 30 minute consultation, you decide, okay, I actually need help drafting these documents, I need more than just, you know, a 30 minute phone call. We also have an application for free legal services on our website. And so you can kind of say,"This is my business. This is my idea. These are many people I employ, no, I can't pay for a lawyer. But here's what I need." And then we can try to match you with one of our volunteer attorneys. So those are resources that I wanted to draw up and I'll again, I'll send a copy of these slides so that you can access the links after but a good resource to have up front. One more other resources I wanted to share before I dive into things. As part when COVID happened, a lot of businesses had to stop. And so we wanted to create kind of a library of resources for people who wanted to restart their business. So we did eight different webinars. And then we have forms attached to each of the webinars, kind of going over really classic small business questions, you know, what do I how do I avoid taxes? Or how do I minimize taxes? How do I hire people? Are they an independent contractor? Are they an employee? questions like that we go through and so I dropped the kind of eight topics that we went through. But again, this is a good kind of online resource that you can always access. And there are forums attached to it if you actually need to take you know the ideas into into into reality. So resources for your enjoyment later. So briefly what I wanted to go over today, just first things first, I really wanted to spend most of my time on choice identity. And then a couple of the other questions that Jim forwarded to me that you guys might have about your specific issues.
Jim:Question, just about the links and you mentioned there's usually some template documents that are on the website. Is that the same as the dropbox link that that I think Mike sent me when you and I were on the call?
Cat Taschner:I think so yeah. The dropbox goes to these resources, the free legal forms. These, the YouTube ones are separately accessible. And I think the link is through that YouTube account.
Jim:Because I noticed in the Dropbox or a lot of forms, right. So should we just focus on the ones that start with Hawaii or reference Hawaii? In that whole list?
Cat Taschner:I'll go over that. Like, why would I pick Delaware? Yeah, I'll go with that.
Jim:Thank you.
Cat Taschner:Okay, so any questions on the agenda or anything that you want me to dive into more before we go into detail? Cool. Well, again, stop me if you if you want me to dive in deeper. So first things first, this is kind of just a typical slide, you guys are already a little bit deeper into business planning, and actually looking at the technical aspects of your job. But you know, are you ready to be an entrepreneur? What is your idea and how are you going to support it? So we always like to frame the discussion with those. But since you have, you're a little bit more mature than that we'll move on to choice of entity. So I listed Why would you have a separate legal entity? You know, I think a lot of small businesses, it seems seen as a humbug, right? Like, wow, I had to do a separate tax return, I have to do all these filings with the state what's in it for me? So the main reasons why people like to have a separate business entity is legal protection, right? This is America, people get sued. Having a separate legal entity ensures that your personal finances are safe. So that really is typically the primary reason why you would want to have a separate legal entity. Other key factors that go into Okay, well, what type of legal entity should I do? Is one of your goals to attract investors to you want to have people investing capital on you? If so, that might impact what type of entity you choose? What are the tax implications? Some corporations require separate tax returns, some entities don't. What makes sense for you and for your personal growth? Who makes the decisions. In some cases, you want to entrust somebody else to run it day to day, in some cases, you want to be king in the castle, which entity type is going to allow you the type of flexibility and oversight that you want for your business? And lastly, you know, Can the business entity accommodate your personal growth goals. If you want to be you know, a mom and pop that sells to people in Hawaii, that's a very different business growth goal, then I want to go public, I want to have the next you know, I want to have the next big thing I want to do a big kind of tech startup, depending upon you know, what your personal goals are, that's going to impact your choice of entity. So I put a, an image of these are not all of the entity choices, but they're the ones that we typically see most regularly. And for small businesses, the LLC, the S corp, and a C Corp really are the ones that we see the most of. So I'm going to focus today's discussion on those three entity types. If you want to talk about one of these other ones, your partnerships or sole proprietorships, let me know and we can go into it. But really, I think the the primary benefit is going to be coming from an LLC, S corp or C Corp. LLCs are probably the most common entity type that we see with small businesses, primarily because you get to do pretty much whatever you want. As a small business owner, you got to make a lot of the decisions and control how operations are run. And so most businesses like that, in the pros category, it's a pass through entity, so it's not separately taxed. That is and especially if it's just you, if you're a single member entity, it's even easier, you can report it on your own personal income tax report returns. So it's a it's a pass through entity not subject to separate taxation. The flexibility is what most people like you get to set the terms on what voting looks like when you get paid how you make decisions. And so a lot of small businesses tend to like that. There are no eligibility requirements. I'll go more into that on the S corp, which has a lot of eligibility requirements but here there are none. And importantly you get that personal liability shield. So let's say you sell a product and you know maybe there's an issue with it, maybe there's mold on it and somebody gets sick. What you want with an LLC, you want them to sue the entity right now you personally and so having that LLC means that the entity will protect you. And as long as you're treating the entity like a separate legal entity, your personal finances, you know, your house, your car, all of that is protected. So that that's again that personal liability shield is really a an important part of why you want to have an entity on the cons is not suitable for venture cap venture capital financing. So I mentioned earlier Do you want to get investors? LLCs aren't the most popular vehicle for people to invest in. So if that is one of your goals, maybe not the right entity choice. It's difficult to issue equity awards. So to give away like stock or ownership interests can be challenging, not impossible, but it just takes a lot of legal legwork. Complexity, because it's flexible, it can be complex, right? Because you get to do whatever you want. It just takes a lot to document that. So that's why it can be complex. And then there's no, you can't go public with it. But so again, just kind of frame this with, you know, what are your personal goals for growth, then that should help you to figure out okay, do these pros and cons apply to me? Any questions on
Jim:I do. If no one else does. LLCs?
Cat Taschner:Yeah, go for it.
Jim:Okay. So the personal liability shield is that, I mean, I've heard the phrase over the years, piercing the corporate veil, right, as if you're a single member LLC, and it's really you, and only you, and it's like, so you're really just setting up an LLC in order to shield yourself from liability. Is that can that be pierced? Can that all go away? Are there certain things that you need to make sure you haven't placed like separate financials?
Cat Taschner:Exactly. Yeah, I think the rule of thumb is if you treat the business as though it's a separate legal entity, the law will treat it as though it's separate. So for example, as soon as you start your own LLC, you should get your own LLC bank account. Right? When it commingling assets, you know, like cashing a check on behalf of the company into your own personal bank account. That's a big nono, right? You're not really treating the entity as though it's separate. And so that's the perfect opportunity for to pierce the corporate veil. You can't, obviously, there are certain things that the entity can't protect you from right, if you punch someone in the face, you can't say, oops, it was the LLC that did it. But as long as you are acting on behalf of the business, so when you sign contracts, let's say you get into a vendor agreement, make sure that the agreement is between the LLC and the vendor, not you personally, and the vendor, just treat the business as though it's separate. And then the law should follow accordingly.
Jim:And maybe this is an accountant question, but I believe that with an LLC, you can still file under the one tax return and do it as a separate schedule, and not have to do an entirely new return for the LLC. But
Cat Taschner:Exactly, it's a pass through entity. So you know, it doesn't get taxed separately.
Jim:So I'm not too horrible, either. Okay, thank you.
Cat Taschner:Yeah, it's not it's not so cumbersome. I think, you know, the we'll get into C corporations, that's when you get that double layer of taxation, which, for most people, it's a deal killer. Any other questions on LLC? Cool. All right, let's move on. As corporations, again, it's a pass through entity, but you get that personal liability shield. S corporations are a subcategory of corporations. So they they come with a lot of restrictions. There are some benefits to them. So it's a quid pro quo. S corporations, actually all the Corporations, but that's probably the oldest entity form and they've been around for a while. The S election is something that you do when you create the entity and you agree to abide by certain rules. The eligibility requirements are that you know, you're a natural person, there's a limitation on how many stockholders you can have. But the benefit is that you get that pass through entity. And that you can limit some of the self employment taxes that are owed, and so that And I think, yeah, it seems like it's not kind of the scope of it's a dance to do with your accountant. But we see a lot of LLCs. Let me back up. Sorry, let me let me let me back up to the beginning. So when you create an entity, you form it under state law, for purposes of federal tax law, however, you can elect to be taxed as different things. So you can elect to be you can form as an LLC and elect to be taxed as an S corporation. That is what a lot of businesses choose to do, because you can eliminate some self employment taxes. And I can go over that. When I go over the taxes faze. As corporations because there are stockholder eligibility requirements, investors don't typically like it. And so again, it just it depends on what your personal goals are for your business. Do you want to attract financing? If so, the S corporation is probably not the right vehicle for you. That's in contrast to the C corporation, investors love C corporations. And so when you see big companies, they often are C corporations. It gives them the flexibility to do an IPO. And for sophisticated investors. It's like speaking English in the business world. Everyone speaks it and so it really is kind of the go to entity type. If you are high growth, we can talk about C corporations. But for most small businesses because there's a double layer of taxation, it's not a particularly popular choice. When I say double taxation, I mean that, so let's say the corporation makes money, it's taxed at the corporate tax rate. When a distribution is made to you, as the owner, as a stockholder, you also get taxed. So there's two layers of taxation at the company, and then at your level. So because of that, it really isn't too popular. So if there's someone on this call that does want to talk about C corporations, I'm the small farmer group that we tend to be. It's like, am I more than happy to go into details. But typically, the the right in saying that the benefits to S&C corp are on the threshold, the barrier to entry is that double taxation. So if tax, like or investors level? it's not of interest to you guys, I'm happy to skip over it and kind of focus on what would be more helpful for you. Investors? Yeah, if you want to have investors, it's definitely something. I can go into what I mentioned earlier, so what we see a lot with small businesses is we have they want to be an LLC, for purposes for state law, gives them flexibility, and you can kind of set the rules. And then for federal tax purposes, they elect to be taxed as an S corporation, then they can eliminate some of the self employment taxes that might be owed on profits of the company. So again, my recommendation is, you know, get an appointment with with an attorney, and we can really talk through what your issues are. And then we can make a recommendation that's a little bit more tailored than you know, I'm kind of keeping it at the surface level.
Jim:Someone was also asking about partnerships was that? Was that another? That sounds like another potentially common one for a small business?
Cat Taschner:There are partnerships. Partnerships, in some cases, don't give you the personal liability shield. So because of that, and it's not something that we typically recommend you want to protect your personal finances, there are ways to limit that. But there are also some limitations on partnerships. So we can we, if that is something that someone wants to, there are some industries where partnerships are kind of the go to, like I was a partner at my law firm, right? There are industries where partnerships do make sense. So just schedule an appointment. And we can kind of talk through the nuances as it applies to your particular business and what your partners are, and what kind of exposure and liability you're willing to have. That's a question that we often get is how do I, you know, how do I have a nonprofit arm or should I have a parent entity with a bunch of different LLCs for different businesses. I mean, there are a lot of businesses have a philanthropic arm. Those generally have to be pretty carefully negotiated or documented as a nonprofit. Typically what you're going for is a tax exemption, right, and so those tend to be a little bit more regulated, because you're getting these kind of freebies on tax. And so I think the documentation for those tends to be a little bit heavier, just because you, you don't want to be claiming non taxable activities as non taxable events. And so it's just a little bit, but it certainly is a thing that can be structured. And so again, it's really up to kind of what your operations look like, you know, some businesses have, let's say, like a, they have an operating farm, and then they have maybe a food product. And sometimes they want to keep it separate, just that they keep the businesses separate. And they have different partners and different distributions. So we can talk about the relationship between the companies, if you guys get schedule an additional appointment.
Jim:Well, I think that's a common theme we're seeing with a lot of the folks in the cohort is, you know, produce and, and selling ag products is the main business line, but then I think many wants to do an educational component, right, which would be workshops. And yeah, actually, I'd say half or more of the cohort and it seems like a theme, right? A big part of its trying to make sure you spread the word about the benefit of, of local produce, but it's also and teaching some of the some of those skills, but but I think in most cases, folks are thinking of doing that. So I think what we've been talking about with the business team is, is the LLC, if you were just for simplification, right, the LLC would be the farm name, and then there'd be a subsidiary that would, that subsidiary for the educational component, that would apply for the 501 nonprofit status. Does that seems pretty straightforward to you, are as a starting point?, okay.
Cat Taschner:Yep. As long as it's documented appropriately that sounds appropriate.
Jim:Thanks.
Cat Taschner:It's also I, I feel like I feel like such a lawyer like liability, but it really is something that like guides a lot of our decision making. And when you have two very discreet business operations, you know, the operation of a farm and, you know, selling a product, let's say that you've just catastrophic issue on the product, they're all contaminated, and you sell it and everyone gets sick. And there's all these potential losses. The benefit of having a separate business for the food product company is that the food product company gets sued, and maybe has all this liability. But if the farm is under a separate entity, it doesn't get touched. If you have very disparate products, and you want to protect one from the other, for whatever reason, it doesn't have to be, yeah, it creates that separation, so you protect the assets of each business, even if you're the one that's ultimately running both of them. So anyway, that's a really general overview of choice of entity, please, you know, call us come talk to us. And we can, you know, kind of walk through some of the nuances. And again, if if you get to the point where you want to actually start drafting documents, you know, we have a bunch of LLC templates on our website. Some of them are Hawaii entities, we also have Delaware entities, the only reason that's up there is that, you know, this is our database for all small businesses, particularly those that are high growth with a really want to go public and get a bunch of, you know, VC, venture capital investment, Delaware entities make its it facilitates that type of investment. And so those are up there for them. But for I think your purposes, the Hawaii entity probably makes the most sense. Other legal considerations? So I got, I think some of the questions that were posed related to like, what kind of contracts and agreements do I need for my business? And I listed some very typical agreements, right? Vendor customer partners, nondisclosure. As a small business, you kind of have to use your discretion when deciding, like, which contracts do I really need to have? And when I do have contracts, like, how serious are they? I've seen small businesses, you know, just Frankenstein together a 20 page document and give it to somebody and like that, that's kind of scary to be on the receiving end, or like, do I need to sign this 20 page agreement, to kind of pick and choose what makes sense to you, we have some forms on our website, and we can help you draft you know, if you constantly get into vendor agreements, maybe you want to have one really good form that you can, you know, plug and play the different names of vendors into it, so we can assist with that. But it obviously helps to you don't need to have a big thick contract. But it does help to have even just a back of napkin, high level, what are the business terms? How much am I paying you? When am I paying you want am I delivering those kinds of things, it's easier to pre agree upon it, and have it in writing versus fighting about it after the fact. So if I if I could make a recommendation, just really high level is probably a good starting point. For those of you that are doing online business, I think we have some privacy policies, terms and conditions, legal disclaimers that you can use. So those are on our website.
Jim:So the ones that you list here should usually be a template of some sort, on the website?
Cat Taschner:It helps, yeah, as a start. It's a start. We can always help you tailor it, but those are going to have. Taxes. So all businesses are going to be subject to certain taxes. You know, all businesses except for partnerships have to file an income tax return, for example, right, depending upon what kind of business you have, and what kind of industry you're operating in, it's going to impact what kind of taxes you'd have to pay. In addition, if you're doing online business, or if you're selling products to other states, you might owe taxes in that other state as well. So unfortunately, each state has its own set of rules. Sometimes you owe taxes, if you... I put a graphic there, double check in when you actually start doing business, but it's at least a helpful kind of overview of when do I, when do I have to start paying taxes in a different state. You know, green is if you transact $100k or more, that's the threshold. So if it's under $100k, with residents of a state of the people and of the states in green, then you probably don't have to, if you exceed $100k, then you're going to be subject to their their taxes. So just something to be aware of. Once you start doing this once you start doing business interstate,
Jim:And looks like green is the lowest level right from, can't quite read that...
Cat Taschner:Green is the lowest level. Well green, that green and then the blues are all$100k In the blue set a 200 transaction limit. So even if you have a bunch of little ones, it's tricky. Okay.
Jim:That's great. That's a pretty cool little graph.
Cat Taschner:It's helpful. It's irritating that every state is different. And it just, it just puts the burden on the person doing business right to check, especially if you're doing online business, you have to know each state. So
Jim:And if you get to that level, I guess that's a good problem to have, right? If you're
Cat Taschner:Yeah, like oh, shucks, I'm doing $500k woth of revenue in Texas, darn
Jim:and I know there are there are outfits that will actually take that on, and just you, you give them your numbers, and they roll the hassle of paperwork, state by state unique stuff.
Cat Taschner:Yeah, it's on websites, like if you if you use them as your platform have, you know, this type of compliance built into it. So it just depends on if you're, you know, if you guys are going to be doing a lot of online business, that might be something to just think about, you know, which platform you sign up with and if they're going to, if you can unload this type of work onto them, so that you can focus on what you're really good at. And then the last thing that I have to talk about are licenses and permits. You know, so we're talking about kind of the business registration. When you set up your business, you know, if you do it in Hawaii, they the DCCA. So the Department of Commerce and Consumer Affairs is the state agency that regulates all businesses, they have, like a wizard, where when you set up your business, you can also set up your tax accounts, and then they're linked. And so that's a pretty convenient tool to have. Other licenses you might think about or whether you want to have a trade name, people often think of that as like a DBA. So do you want to have your farm but doing business as you know, farm XYZ or whatever. That's another thing that you can add on when you're going through that wizard. If you are employing people, you might need other licenses or need to comply with other laws. That's why I put employer requirements and then any occupational licenses that you might have. Again, if you're doing business in other countries, in other states, you might have to qualify to do business, there was a slightly different analysis than the tax analysis. But it's the same kind of feel right? Do you have a physical presence there? Should you be qualified to do business there? For example, if you have an employee that lives in California, probably best if your company registers to do business in California, same as if you have like a warehouse, there are some kind of physical nexus. There were specific questions that about camper vans. And so I actually, I in my day job, I actually ran into DPP about this. So I just cut and pasted their, their guidance as to when you can do camper vans, what kind of permit you need, what area you have to be in. And again, I'll send copies of the slides so that you guys can access this, but this was DPPs guidance on camper vans and whether or not you needed to get a conditional use permit. And whether whether you were eligible for one. And then the last question that I got from Jim in advance was food trucks. So I listed some of the licenses and permits that would be required. And then the city and then the state respectively, both have resources on mobile food establishments. So and you know, what permits would be needed, do you need to be tied to a commercial kitchen for food safety and all of that? So
Jim:Yeah, and I think food trucks in particular might have been like, if, if you, there's so many food truck vendors, right, these days, so it seems like if you have a if you have an arrangement - maybe maybe it should be a contract based on one of your previous slides - but if you have an arrangement with a food truck, that comes to your property for certain events let's say, it sounds like they need to do all these things. You don't need to but you need to maybe your your contract with them says that they need to.
Cat Taschner:That they're responsible, because you don't you don't want to be stuck complying for them. So just being very clear about expectations upfront is generally a good thing.
Jim:I did have one question back on, you know, related to business registration and DBA question mark. So DBA, could you just talk to that a little bit more? I mean, a D, why would I want, because I if I go on and I register my business, right, and would I need a DBA on top of that, because,
Cat Taschner:No
Jim:no right, but
Cat Taschner:You don't need it. Some people like having a separate DBA like, for example for some reason <redacted>, that's the name of a business locally. They do business as<redacted> because <redacted> is their trade name, but their actual corporate name is<redacted>.
Jim:So yes, and you don't have
Cat Taschner:They have a bunch of different trade names that they operate under. So it just gives you flexibility.
Jim:Yeah, you don't need to use no like you need to register Um<redacted>, as a business registration because you've done
Cat Taschner:If you were to register it as a business. So the other let me let me actually share my screen and I'll go to the DCCS website. So this is the DCCS website. For those of you who haven't started up it, can you see my screen? Yep. Okay, so for those of you who haven't started a business yet, I would recommend going into this as a database and checking to see is my business name available. So let's say I want to open up<redacted>,. You search, and it'll show you okay, somebody has already registered the name<redacted>,. When you click on it in Hawaii, right, you click on it, and you see, okay, the registrant is this company, you can click on them. And then you can see oh, they actually own a bunch of different trade names, you can see who the owners are, or the who the officers are all their different trade names. So it's a really good resource for you as you're trying to figure out what should I name my business. Then you'll find out if there's any competing businesses. It's better to know it upfront than to you know, spend a bunch of money branding your business only to find out that someone else already owns it. So that this is a good resource. This has all of the state of Hawaii businesses and trade names, if you are going to operate on a national level, consider whether you need to get a federal trademark. And so this is the federal trademark registration system, you can do the same thing. You can search to see if there are any competing marks, and you can do the same. And then it'll pull up all of the registered <redacted> yeah, that across the nation. Again, you can click on it and see that it's much faster to the same company. And this gives them nationwide protection, whereas the Hawaii registration will give you Hawaii registration.
Jim:And um tell me if you, if you agree, I feel like the the setting up a trademark is a fairly simple process. I mean, it's not too horrible or expensive. If you wanted to do that.
Cat Taschner:Yeah, no. That setting up a so trademark registrations in the state of Hawaii, I think are $50 for five years. So it's like a one or two page form that you submit to DCCA. It's pretty straightforward. And so if for if that's really important to your brand, that's your name, I think it's a worthwhile stake to put in the ground to say this is my name. Nobody else can steal it, I'm claiming it as my own. And you could put that, The federal registration is a little bit more expensive. I think it's like $250 for every class of goods or services. So it's a little bit bigger of a bite, but it does give you national protection. And I think that was for a period of 10 years.
Jim:And you need to do both. If you want, like you have to do if you do federal you need to do Hawaii?
Cat Taschner:It would it's a belt and suspenders method. It's better to do both but federal will give you nationwide protection.
Jim:If you want the R with a circle around it, right, Yeah. for registered trademark, it has to be federal, right? Correct. Liability waivers, right? Like, just as an as a simple example, everyone signs liability waivers to be part of this program. Are they garbage?
Cat Taschner:They're their contracts? They're legally enforceable? .
Jim:Yeah. So but...
Cat Taschner:I mean, not if you're like twisting my arm and making me sign it right, if I can prove that I signed it under duress or whatever. There are obviously exceptions, but as a general rule, yes, they're enforceable.
Jim:But, again, don't punch anybody in the face.
Cat Taschner:You know, I think it is this strength of the liability waiver, particularly if there's going to be like a hazardous activity. Come on my farm. And I'll teach you how to use pesticides, right? Like those kinds of activities. If you can disclose in advance, like, Hey, this is the type of activity that this is intended to cover. You are accepting the risk of that, that that might strengthen it, just so that it's very explicit and very clear. And it just closes the risks involved.
Jim:I mean, because we're all on farms in Hawaii, right? And it's uneven ground, we're on an active volcano, you know, and on this island. I mean, it's just, it's just not easy to get around. So is that implied if you're doing a farm tour, or you need to spell that all out and your liability waiver?
Cat Taschner:I mean, it's I would spell out at least some, you know, you accept a certain amount of risk, like you know, sprained your ankle because of uneven ground or something like that. Even if you have volunteers coming on site to do you know, an a work day or something i It's, yeah, I would recommend getting a liability waiver from each of your attendees. If they're under age, having their parents sign off, things like that. You know, I would probably look to see like, what are other people in the industry do doing particularly like the larger entities. If you can kind of piggyback off of the research that they've done or that the forms that they've created, that's probably a good first start versus, you know, each of you doing a tremendous amount of legal research and crafting your own craft crafting your own forms. You don't what, no point in reinventing the wheel for if you could, particularly if there's a Hawaii entity that you're like, okay, they're doing it right. That might be someone to ask, because state law might defer to,
Jim:Yeah, I'm thinking like, some of the bigger up, it's maybe I can try reaching out to some of the bigger farms, right, because it's, or ones that have more people coming through, that might be a good start and see what I can come up with there.
Cat Taschner:If not, that might be a good, you know, something that you know, UH and we, I am, that might be something that we can collaborate on to through the Business Law Corp. And I think we're always trying to find a way to engage our attorneys. And that might be an interesting project for us to work on. Can we do, you know, Hawaii state law research to craft, you know, guidance and helpful forms for you guys. So that you're not stuck litigating, you know, something that really isn't at the key of your core competency?
Jim:Yeah, I mean, I think more and more from for a variety UH things that are working on a talk to have talked to a lot of ag producers on the islands, right? And I think, I think that would be certainly valuable. I think more and more are moving towards a couple of things to try to stay profitable state, keep farming, and one is farm tours, workshops
Cat Taschner:diversify commercial offerings,
Jim:and also Airbnb kind of structures, right. and I think, you know, some of the questions you saw, and that were asked ahead of this, which are maybe not your kuleana are probably zoning issues, right? More or less? Yeah,
Cat Taschner:Yeah, if you have any legal questions that it can be related to choice of entity or any kind of business transactional issue, feel free to raise it with us, we're happy to help. We have a volunteer corps of, but mostly most of the large firms. And so even if it's employment or tax or business related, hopefully, we'll be able to support you. And so the HTDC one, we often have no appointments, I would call them and see if we, you can get on the schedule each. So there's a rotation of maybe like eight or 10 of us. So every week, it's a different attorney, you actually might be a benefit to you to have a different set of eyes. And in particular, if you if you know that you have like I have a really tax heavy question, can you try to schedule me on the week that the tax specialist is there, they usually try to be accommodating. If you have an actual document that you want us to review, send it to them. Some attorneys will review in advance I'm at some of them won't, but at least maybe you can kind of talk through the issues and they can actually look at the wording of the contract.
Jim:It causes me to ask Cat, do you know anyone that's has any experience with Kamehameha Schools, Bishop Estates contracts? Because they're pretty common and complex.
Cat Taschner:They're beasts aren't they? Almost every real estate attorney has had to deal with one of those at one point in our career. We've all seen them. Yeah, I what you want to do is talk to someone who regularly works with KS leases.
Jim:If we connect to those websites and those 30 minute sessions, is that the way to go or to start?
Cat Taschner:Start there. I would start there. If you have specific questions, just email me, I generally do most of the back of house stuff for BLC so I can get you in contact with the right people as well.
Jim:For all of us, I really appreciate it. appreciate you letting me record it. I know a couple people weren't able to make it so. So they're really great. There'll be really grateful to have this as well.
Cat Taschner:Yeah, hopefully they're good resources. It was nice to meet you all good luck. Good luck with everything. You'll have a lot of hats to wear. I really respect your ability to jump from farm to office to okay, today I'm an accountant, to today I'm an HR expert. It's it's, it's a lot so I have a lot of tremendous respect for farmers and entrepreneurs.
Jim:This goes back to that. Do you want to be an entrepreneur side that we skip past but yeah, I think we're all committed. We thank Cat for sharing her manao, and addressing some common Hawaii agricultural producer legal questions and concerns, as well as providing some links to templates they can use to address some of their needs. If you're only listening to this, you may want to watch our video version on YouTube to see some of the things referenced, and be sure to check the show notes. If you want to know more about the University of Hawaii's Connect program, then listen on for brief description and use the link in the show notes. Mahalo. And this quick version is we have we tried to match up post farms and skilled ag technicians to work together for eight weeks or more 16 hours a week and the goal of which is to kind of figure out if they want to work together long term and what that might look like. What they've all submitted this morning is a two year business plan that shows, with Financials that shows how that might look for the next two years starting January of 2024. And so, those have all been submitted. So kinda in the last phase where those are being reviewed, and we have people like Linus Tavarus and Erik from GoFarm and Mike from Business Strategies in Hilo. So people that are going to have the strong financial background that are helping review those, this final piece and then we're kinda pau.
Thao:The intention of these podcast series is to create a safe space for respectful and inclusive dialogue. With people from across a broad and diverse spectrum involved in growing and making accessible the food we share together. A diversity of voices, perspectives and experiences can serve to deepen mutual understanding, to spark creative problem solving and provide insight into the complexities of our agricultural system. If you, our listeners, have experiences with Hawaii agricultural ecosystem from indigenous methods, permaculture smallholder farmers to large including multinational agricultural, industrial companies, and everywhere in between, and you would like to share your story, please contact us. We welcome your voices and perspectives