Hawaii Franchise Forms - Hawaii Franchise Law

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Hawaii Franchise Forms FAQ Hawaii Franchise Asset

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.

What are Articles of Incorporation?

Articles of Incorporation are legal documents that establish a corporation as a separate legal entity. They provide important information about the corporation, such as its name, purpose, registered agent, initial directors, and share structure. In Hawaii, the Articles of Incorporation need to be filed with the Hawaii Department of Commerce and Consumer Affairs. Additionally, the articles must meet certain requirements outlined by the state, including the payment of filing fees. By filing the Articles of Incorporation, businesses can formalize their existence as a corporation and gain legal protection and benefits.

What to Include in Articles of Incorporation

When creating articles of incorporation in Hawaii, you should include basic information about your business. This includes your company name, which should be unique and not already taken by another business. You should also include the purpose of your business, whether it's providing services or selling products. Additionally, you need to state the duration of your business, whether it's perpetual or for a specific period. You should also mention the initial number of shares and their value, as well as any classes or series of shares if applicable. Lastly, it's crucial to include the names and addresses of the initial directors or the board of directors who will oversee your company. Keep it simple by including these key details in your articles of incorporation to start your business in Hawaii.

1. Full Name of Corporation

The company, ABC Corporation + in Hawaii, is a business entity that operates in the state of Hawaii. It is a full-fledged corporation that engages in various activities and services within the region. The company's name, ABC Corporation, is straightforward and easy to understand. The "in Hawaii" part signifies that the company is located and functions specifically within the Hawaiian geography. They aim to serve the local community and provide their products or services to the people in this area.

2. Principal Place of Business

The Principal Place of Business refers to the main location where a company conducts its daily operations and makes crucial decisions. In the beautiful state of Hawaii, having a principal place of business can bring unique advantages. With its stunning natural landscapes and tourist-friendly environment, businesses located in Hawaii can attract customers and clients from around the world. Additionally, the Aloha spirit and laid-back lifestyle of the Hawaiian culture can contribute to a positive work atmosphere. However, it's important for businesses in Hawaii to also consider logistical challenges, such as the distance from other major business hubs and potential limitations in terms of resources and talent pool. Despite these potential challenges, having a principal place of business in Hawaii can provide companies with a distinct and appealing identity.

12. Limitation of Director’s Liability

In Hawaii, there are limitations on the liability of directors of a company. This means that directors are not personally responsible for all the debts and obligations of the company. They are protected from being held personally responsible for the company's losses or legal disputes. However, these limitations have certain conditions. For example, directors may still be liable if they act in bad faith, commit fraud, or breach their duties. It's important for directors to understand these limitations and fulfill their responsibilities to the company and its stakeholders.