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Issue Season

Spring

Document Type

From the Practitioner's Corner

Abstract

Entrepreneurs tend to be self-styled “idea” people. They often believe they have the next “Big Concept”—one which could change the world, reaffirm their self-worth, and, of course, make them and their venture team a fortune. In contrast, as they build a company to implement their business dream, entrepreneurs also tend to eschew or trivialize administrative details. Why should they waste their creative juices on minutia? As a result of this insensitivity to detail, these captains of capitalism often trip in their entrepreneurial journey. For example, they might:

• Forget to remit payroll taxes on schedule.

• Fail to document the justification underpinning the dismissal of a key employee.

• Allow the company’s liability insurance to lapse.

• Neglect to report sales usage tax.

• Verbally grant employee incentive stock options during an informal luncheon meeting, at a yet-to-be-determined exercise price and without the board of directors’ approval.

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