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Starting a business in California can be complicated. You have to figure out a business plan, find investors, find real estate, and depending on the business, maybe even find employees. On top of all of that, you also have to figure out what kind of business entity you want to set up for your business. The decision to go with a corporation, an LLC, or a partnership will affect your business for years to come. Ultimately it’s a decision that should be made with an experienced business attorney at your side.

New Rules Regarding LLCs in California

With that being said, we would like to provide you with a little information about a change in California law regarding LLCs, or limited liability companies. This information is important both for those considering forming LLCs and for those who have already formed them. On January 1, 2014, a new law called the California Revised Uniform Limited Liability Company Act (RULLCA) went into effect. The law it replaces can be found here. The new law will affect any operating agreements that are entered into after its effective date. However, it will also affect any act taken by an LLC or its members after January 1, 2014, even if the LLC was formed before that date. There are five main changes to the law.

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Small business owners have really struggled for a few years, and things are starting to finally turn around. The improved economic climate has allowed existing small business owners to expand, and has allowed new entrepreneurs to fulfill lifelong dreams by bringing their new startups to life. In an effort to continue this economic turnaround, the House approved a tax law aimed at helping small business owners.

The Wall Street Journal reports that the House voted on June 12 to make permanent a tax break that allows small businesses to write off up to $500,000 in new equipment purchases. Dozens of Democrats joined republicans to make this bipartisan effort possible. The stated reason for making what has been a temporary tax break permanent is to provide both business and government budget writers with some level of certainty going forward. The $500,000 break has existed since 2010, but it would drop to $25,000 this year if Congress fails to act.

USA Today explained in an article exactly what this tax break does for small business owners. It helps them in two ways. First, it allows business owners to write off the costs of computers, machinery, and other equipment sooner than they would otherwise be allowed to under the tax code. It also allows business owners to write off the costs of improving retail property in a similar expedited fashion. The tax break expired at the beginning of this year.

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Building a small business is hard work. Even with a great idea and a stellar work ethic, multiple hurdles will come up along the way. Some of those challenges, like how to organize your business or obtain the proper real estate for your business can be made easier through the assistance of a licensed attorney. But there is one other big hurdle: funding. For years, entrepreneurs have had to negotiate the often difficult landscape of obtaining loans or finding private investors to keep their doors open in those early days before the business makes a profit. In order to expand, small business owners have faced the same hurdles. But now there may be a new, easier way to get needing funding more quickly: a cash advance.

What is a cash advance?

The term cash advance sometimes has a bad connotation, because it is usually associated with cash advances from credit cards. This is a system where an individual uses his or her credit card at an ATM machine to receive cash directly, rather than using the credit card directly at a merchant. This sort of transaction can carry very high transaction costs–interest without a grace period plus associated ATM fees. Plus, in personal finances, it can contribute to the cycle of credit card debt. That is not the type of cash advance we are talking about here, though.

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Earlier this month, in Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., The California Court of Appeals held that patentable ideas that are kept secret can be protected by trade secret law. This decision clarifies an area of law that was muddied in 2010 by the court’s decision in Silvaco Data Systems v. Intel Corp., which seemed to indicate that trade secret law did not protect such ideas. This seeming change in the law is a good reason for California businesses, both small and large, to contact a licensed attorney who practices business and commercial law.

The Court’s opinion in Altavion starts by explaining the purpose of trade protection, that it “promotes the sharing of knowledge, and the efficient operation of industry by permitting the individual inventor to reap the rewards of his labor by contracting with a company large enough to develop and exploit it.” The basic idea is that those who come up with ideas should be able to pitch their ideas to companies without fear of the company using the idea without compensating the person who came up with it

Altavion invented a process for creating self-authenticating documents through the use of barcodes that contain encrypted data about the original documents. Konica Minolta is a research subsidiary of a company that manufactures multifunction printers. The two companies entered into negotiations for Konica Minolta to use Altavion’s newly developed technology. Of course, in those negotiations, Altavion had to disclose details about the technology, so both sides agreed to a nondisclosure agreement. After negotiations proved unsuccessful, Altavion learned that Konica Minolta had filed for patents encompassing Altavion’s technology.

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May 12 through May 16, 2014 is National Small Business Week. This very special week celebrating the entrepreneurs who drive our economy has been recognized by the President of the United States each year since 1963. The week provides an opportunity to recognize the sacrifices of those who take the brave steps to start their own business. This year’s National Small Business Week is particularly exciting, though, because new survey results have been released that show that women are performing exceptionally well as small business owners.

Women are Starting their own Businesses

The San Jose Mercury News reports that women are starting small businesses at what it calls a “torrid pace.” An American Express analysis shows that women are starting 1,288 companies each day in the United States. This is a massive jump from the 602 companies that they started each day in 2011-2012. The total number of women-owned businesses in the United States has risen by 68 percent since 1997. The same survey shows that female small business owners are starting businesses that deal predominantly with educational services, administrative services, are involved in arts and recreation, or that handle waste management.

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Documentary transfer taxes are something any small business owner needs to consider when making real estate decisions for the business. Each municipality may have different taxes, and tax codes change over time, so before making any final decisions about your business, you should speak with a licensed Oakland real estate attorney. However, the following basic principles can help you understand what documentary transfer taxes are and why you should consider them in any real estate deal.

What is a Documentary Transfer Tax?

On a very basic level, documentary transfer taxes are taxes levied on the documents related to real estate transfers. California law allows the board of supervisors of any county or combination of a county and city to impose these taxes on deeds or other writings that transfer real estate so long as the value of the interest in the property being transferred is at least $100. The tax authorized by the state is 55 cents for each $500 of value. Compared to some other states, this tax is relatively low.

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Right now may seem like a tough time to start or own a small business. With concerns about the Affordable Care Act (Obamacare) and talk of raising the minimum wage, some people may wonder if this is the right time to venture out and live a life-long dream of owning their own company. However, so long as you seek out the advice of a knowledgeable and licensed attorney, now can be a great time to take that leap. And new surveys show that those who have done it are more optimistic than they have been in years.

Nationwide Small Business Owners Feel Circumstances Have Improved

The Central Valley Business Times reports that small business owners nationwide have an improved outlook according to the U.S. Bank Annual Small Business Survey. The survey measures the opinions of thousands of small business owners, and has done so for the past five years. Those surveyed are truly small business owners by any standard, as they all report less than $10 million in annual revenue. Half of the businesses have under $200,000 in annual revenue. This is the first time it has shown that the majority of small business owners are optimistic about the economy, saying it is in a state of recovery or expansion. This compares to the 2010 survey where nine out of ten small business owners classified the economy as being in a recession.

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In creating a start-up, it is important to form the business as the type of legal entity that best suits its needs and goals. Because there are numerous forms of entities to choose from, each with their advantages and disadvantages, choice of entity can be, absent expertise, a daunting task.

The three most common types of entities to choose from are Corporations, Limited Liability Companies, and General Partnerships. Often, the manner in which the start-up is to be funded is a primary factor in entity selection. For example, if you are seeking funding from family, friends, or angel investors, it makes sense to form as an LLC. This is because an LLC is a “pass-through” entity: it does not have entity-level taxation. In other words, it is the responsibility of the LLC’s shareholders and members to pay taxes on the entity profits relative to their respective ownerships portions. In addition to this single layer of taxation, LLCs are also an attractive choice because an LLC’s owners, or “members,” are not personally liable for the debts of the company.

Some of the most famous companies in the world began as start-up LLCs:

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A recent federal court ruling offers a good reminder of the many unique claims that may be made against employers by their unhappy employees. All Sacramento business owners–from established enterprises to start ups–should be familiar with their risks before trouble arises.

The Situation

Shaw Rahman was employed by Crystal Equation, a staffing company that assigned him to a job with AT&T. Rahman signed more than one document that specifically described his employment as “at-will,” and stated his employment could be terminated at any time.

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Many business owners, particularly start-ups, remain unaware of the complex legal issues involved in employer-employee relationships. It is critical to have guidance on these matters, to understand your risks, rights, and obligation as an employer. Consider employer duties to accommodate employees with disabilities.

For example, a case recently passed through the federal district court system regarding an employer’s failure to accommodate an employee with a disability. The Americans with Disabilities Act (ADA) states that an employer must make reasonable accommodations for an employee with a disability, if such accommodations are possible and do not cause undue hardship. Common accommodations include providing wheelchair accessible offices or meeting spaces, modifying work equipment or schedules, and adapting training procedures or specific job duties. Reasonable accommodation must be made to allow employees to complete the interview process, training programs, and regular job duties.

Gooden v. Consumers Energy Co.