Thursday, August 16, 2018

Music and Motivation Underwater?

We love sharing new business ideas that entrepreneurs offer, particularly those that greatly impact or benefit humanity. This month, we're looking at a great idea by a woman-owned business.

Get ready to listen to music underwater!  

You heard that right, and we're not talking about dolphin or whale noises.  Thanks to the technological innovators at Zygo, headed up by Sheera Goren, CEO, the Playa Vista, CA startup is making waves in the digital wireless headset industry. 

Zygo recently announced that it's proprietary technology transmits audio through vibrations instead of earbuds, providing a safer and more comfortable solution in aquatic environments. The handheld transmitter broadcasts high-quality audio up to 3 feet below the surface at a distance of at least 50m making it perfect for above water to below water communications.  Above water, it’s over half a mile and we can see how this use can be extremely critical for search and rescue operations in marine environments. Take that Meg! 

The anticipated retail price of $225 (USD) includes the headset and transmitter and comes with a free App now available on the Apple App store.  While no launch or order fulfillment date has been announced, you can sign-up at to get on the wait list. 

About American Startup: American Startup is one of the few corporate service providers that specializes in assisting attorneys, wealth managers, and bank holding corporations by automating routine entity maintenance and compliance tasks, assist with annual state filings, offer standardized shareholder and board resolutions, certificates of incumbency, and serve as your Registered Agent in California and Delaware. Learn more at

Monday, September 4, 2017

How to Form a LLC

How to Form a Limited Liability Company (LLC)
What do I need to form a LLC?

Forming a LLC (limited liability company) is straightforward in most cases. Follow these steps and you'll be on your way to LLC ownership.

Form Your Own Corporation
LLC or Corporation?
American Startup Guide to Single-Member LLC
American Startup Guide to Multiple-Member LLC
American Startup Guide to Member-Managed or Manager-Managed LLC
California LLC Formation Kit
Delaware LLC Formation Kit

Step 1
1. Select a business name for your LLC. The name must be available in your state (not in use by someone else). In most states, you can search the state records online. For example, in California search for "California business search" and the link usually will come up in your search result. Your LLC name must include either one of the words or letters such as, "LLC, L.L.C., or Limited Liability Company, such as Mary's Cakes, LLC. The comma after the business name and before the LLC designation is optional. The best way to ensure that your name remains available for you is to file a LLC name reservation. The reservation allows you time (usually 30-60 days) to figure out the information needed to form the company such as address, members, and other details.

Step 2
2. Find the state form of certificate or articles of formation or organization for the LLC. Be sure to read all the instructions that usually accompany the state form and complete the information. At this time you'll need to determine whether your LLC will be member-managed (meaning all members will run the company together) or managed by a manager (the members designate one person to handle the management). You'll also want to designate a Registered Agent as required by each state. American Startup is an approved Registered Agent and can assist you in fulfilling that requirement. Order registered agent service and keep your company's business private.

Step 3
3. Submit your LLC form to the state with the appropriate filing fee ranging anywhere from $100 to $800 depending on your state. If your state offers an opportunity to obtain a copy of the document, order that too. The copy cost is usually only a few dollars more. We can submit your LLC forms to the state here.

Step 4
4. Prepare a operating agreement for your LLC. The operating agreement helps the members (and manager or managers, if selected) run the company by setting up the rights, procedures, and goals of the company. Nearly every state requires the LLC to have an operating agreement. The operating agreement also outlines the percentages of ownership of each member if, particularly important if ownership is not split equally. Have all members and any managers sign the operating agreement.

Step 5
5. Obtain a taxpayer identification number for your LLC. You may use IRS Form SS-4 or use the online taxpayer identification number application. Once you have your tax ID, you'll be able to open a bank account in the name of the LLC.

Step 6
5. Find the state form initial report or statement of information. File your initial report with the state.

Order your LLC Formation Kit
The American Startup LLC Formation Kit contains all of the documents and forms needed to for your LLC.
Need more information? No problem! Contact American Startup at (310)752-1157 or by email at

Saturday, April 1, 2017

Record Keeping for Coders, Inventors, and Startup Geeks

A startup's value to the company and its investors rests firmly in its intellectual property rights. Intellectual property ("IP") is the single biggest asset of 60% of U.S. startups today and that number is expected to grow exponentially over the next five years. If there is ever a dispute about who owns the IP, an inventor's notebook could very well be the saving grace.

Determining the Author and Inventor
To determine inventorship, you must first determine what the invention is and then determine who contributed to making it. Often, inventorship is defined by negatives. For example, an inventor is not someone who merely contributed non-inventive information; or, an inventor is also not someone who simply ran routine tests.
How to Record Your Invention
Keep detailed notes of meetings, telephone calls, alpha/beta testing dates and outcomes, work and other writings in a bound notebook. Have the pages of the notebook witnessed, meaning signed and dated by someone who understands the invention but is not a co-inventor. Maintain records of slides and or disclosures made in presentations and copies of your reports.
The Purpose of a Coder's Notebook
A software patent for example, grants its owner the right to sue those who manufacture and market products or services that infringe on the claims declared in the patent. Typically, governments award patents on either a first to file or first to invent basis. Therefore, it is important to keep and maintain records that help establish who is first to invent a particular invention.

The inventor's notebook is a systematic device for recording all information related to an invention in such a way that it can be used to develop a case during a patent contestation or patent-related lawsuit. The notebook is also a valuable tool for the inventor since it provides a chronological record of an invention and its reduction to practice. Each entry must be signed and dated by a witness. The witness should not be someone with a conflict of interest (such as a research partner). If an inventor ever has to go to court to prove he or she was the first to invent, then the witness would be called to the stand to testify that the signature is theirs and they signed that page on that date.
Virtual Mistake
A "virtual inventor's notebook", in which one scans note pages and emails them to oneself, would not provide the same legal protection as a bound inventor's notebook since it is easier to commit fraud with a virtual notebook.

The need for an inventor's notebook will diminish in the future as the United States is progressively implementing a first-to-file system. It has been said that first-to-file eliminates a troubling source of litigation, particularly for individual inventors who may lack the processes and legal resources to defend against evidentiary challenges by large corporate research organizations.
Physical Requirements for Your Notebook
Integrity is the primary reason for a physical book. To best serve its evidentiary function an inventor's notebook should be in a form where it will be readily apparent that the contents have not been tampered with, such as having pages that may have been removed, replaced, or altered. Accordingly, an inventor’s notebook should:
  • Be permanently bound with a fixed number of pages (no loose-leaf binders);
  • Have all of the pages sequentially numbered;
  • Have space on each page for at least one witness to sign and date.
Permanency matters, so be sure to:
  • Write in permanent ink & legibly; 
  • No empty spaces or skipped pages;
  • Permanently attach any supplemental materials;
  • NEVER make alterations of any kind. Never tear out pages, erase anything, or alter notebook entries. If you make a mistake while making an entry just draw a line through it so that the mistake is still readable, then date and initial next to the line. 
  • Don’t record any communications with your Attorney. These are always confidential and protected from disclosure under the attorney-client privilege. 
American Startup is a full-service online retailer of legal forms, corporate formation kits, and corporate legal products including several Inventor's and Software Coder's permanent notebooks, Non-Disclosure and Confidentiality Agreement forms. Check out the selection of Record Books here or visit for more information.

Thursday, November 24, 2016

The REAL Cost of Your Employee

How much does it cost to hire an employee? Take a look at the chart below.
An employee's cost to the company is more than just the wage or salary you offer them. You are required to pay taxes on the wages your employee earns. Some of these taxes are split between the employer and the employee, while others are the sole responsibility of the employer. The rates vary based on the employee’s earnings. You can chalk it up to the cost of doing business, but it’s important to understand what your true cost will be before making that next key hire.
Your true cost to hire is a sum of the employee wage plus employer taxes. Of course there are additional expenses that are optional for businesses, like health and dental benefits, equipment, and office space, but for now let’s just focus on the payroll costs.
In California the payroll tax rates for employers break down like this:
  • Social Security: Social Security is a federal insurance program that provides benefits to retired employees and the disabled. Employers must pay 6.2% of taxable wages on the first $113,700.
  • Medicare: Medicare is a federal system of health insurance for people over 65 and certain younger people with disabilities. Employers must pay 1.45% of taxable wages on the first $200,000, then 2.35% of taxable wages beyond that.
  • California Unemployment: A state-sponsored insurance program, California provides benefits to unemployed workers, the disabled, and those on paid family leave. The employer tax rate varies from 1.5% to 6.2% of taxable wages on the first $7,000 depending on the rate given to you by the Employment Development Department (EDD). The standard new employer rate is 3.4%.
  • Federal Unemployment: The Department of Labor oversees state unemployment programs that provide benefits to workers who become unemployed due to no fault of their own, and meet certain other eligibility requirements. The employer rate of 1.2% of taxable wages on the first $7,000 per employee is dependent on your timely filing of all state unemployment taxes and includes a credit reduction for California.
  • Employment Training Tax: The ETT provides funds to train employees in targeted industries to improve the competitiveness of California businesses. Employers must pay an extra 0.1% of taxable wages on the first $7,000.

Sunday, November 13, 2016

Business Growth Projections for 2017

Get ready for growth in 2017!
Several sources, including the U.S. Chamber of Commerce and the Kaufman Foundation, have published reports on how well small and medium businesses have performed in recent years. The disappointing news is that business policies, regulations, high corporate taxes, and skyrocketing health care premiums during the last eight years, have caused many would-be small business owners to either throw in the towel, or postpone business growth altogether. According to the Wall Street Journal's Ben Leubsdorf, before the U.S. Presidential election, forecasters agreed the U.S. was set for only moderate economic growth.
Running on a pro-American business platform, Donald J. Trump persuaded voters around the country to support his agenda resulting in a major election night upset and his victory. Susan Solovic, said in her post-election blog, The Small Business Expert, that she views the President-elect as someone who can remove many of the barriers that small businesses face. "I’m counting on you to create a vibrant economy which gives all Americans an equal opportunity to work hard and build success," she wrote in her articles congratulating Trump. Similar sentiments have entrepreneurs and investors alike expecting a surge of startup businesses in 2017 in large part due to the promises of lower taxes and post-election pro-business policies. We hope they're right.
For more information about how to start your company, find a networking event, or to order your custom incorporation kit, go to

Friday, February 12, 2016


Despite what you may have been told, registering your new fictitious business name, corporation, or LLC does not protect your trademark rights.  And, even if you are able to file and obtain a company name in your state or county, it does not mean that your use of the company name as a trademark in the marketplace is without some risks.  Let me explain.

What many business owners forget is that trademark rights derive from the actual use of a word, logo, or other distinctive symbol directly associated with specific goods and services.  You should be aware that, third parties may have prior rights in the same or a similar trademark and your use could prompt a “cease and desist” letter, or worse, a trademark infringement lawsuit filed against you and your company.  The fact that you may have made a successful registration for a new company, corporation, LLC or fictitious business name is not a defense in a trademark infringement action against you.

Therefore, if you plan on using your new name as a trademark for specific goods and services, please consider taking the following steps:

Preliminary Trademark Search

A preliminary search of federal applications and registrations of trademarks in your planned industry or “field of use,” helps identify third parties who have taken the time and expense to formally protect the same or similar trademark or brand with the U.S. Patent and Trademark Office.  The cost to obtain such a search generally runs between $300 and $500 (USD) and includes basic legal advice on how to proceed.  Such a search helps you identify potentially serious obstacles that you should be aware of before you make any commitments or spend money on packaging, websites, and other materials with the brand. 

Full and Comprehensive Search 

A full search is exactly what it sounds like. This is a more thorough search of trademarks, domains, logos, and designs in the United States – both registered and unregistered, and helps locate common law references of third parties who have made use of their marks and business names.  There is also significant online research done in looking for trademarks on the web.  If you are going to be making substantial investments of money and time and commitments which cannot be readily reversed or discontinued, it is wise to obtain such a search.  The cost of these searches generally runs between $1,500 and $2,000 (USD).  You can never get a guarantee that your mark is problem-free when you launch, but this is the type of search that most major brand owners obtain before any launch.

Federal Trademark Filings

Once you have cleared your trademark and start to use it directly associated with specific goods and services you will immediately develop what are known as “common law rights” in your trademark.  These rights extend to the specific geographic areas of the United States where you have use.  But for most major brands where a significant investment is being made, owners first file federal trademark applications to register the brand name for those goods and services.  An “Intent-to-use application” may be filed and will enable you to reserve your rights for several years before you launch. 

To obtain a federal trademark registration you eventually will need to make use of your brand name for specific goods and services (in some cases, foreign-based entities may obtain a U.S. trademark registration without use).  When that registration issues, you then have nationwide presumptions as to exclusivity, and your “constructive date of first use” goes back to your original filing date.  The cost to obtain a federal trademark registration varies greatly depending upon complications that might arise during the process, the scope of your protection, and how long it takes you to prove use.  But a basic filing in a single category that does not encounter great difficulty should cost about $1,200-$2,000 to obtain. 

State Trademark Issues

Trademarks that are descriptive of a feature of the products or services or that are a surname or geographic location might not be protectable at the Federal level until there has been use for a long time.  Therefore, it is good idea to get more information before you launch if you think this might be an issue. For example, if a product or service is “illegal” at the Federal level, such as a product that includes medical marijuana, you will be unable to register that trademark with the U.S. Patent and Trademark Office.  In those cases, and if your product or service is legal in your state, a state trademark filing may be the best course.

All 50 states and Puerto Rico have Trademark Registers and some businesses may obtain a state trademark registration, especially in their own jurisdiction.   

International Registration

Trademark rights are territorial.  So even if you obtain a trademark registration in the United States of America or make a trademark use in the USA without difficulty, this does not develop rights in other countries.  If you plan to use your trademark abroad, serious consideration should be given making appropriate searches before you decide to file for a trademark.  In most countries outside the U.S. and Canada, trademark rights derive from merely obtaining a registration. Therefore, in some special situations it is more important to get a trademark registration in a foreign jurisdiction than in America.

If you are interested in searching or filing for any trademark rights in the United States or elsewhere in the world, or have other trademark questions, please contact us at and we will refer you to one of our trademark experts.