Articles Tagged with “Oakland business law attorney”

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California has a somewhat confusing answer to the question of whether LLC interests are considered securities in our state. In some situations they are, and in others, they are not. Here we explain when they are and when they are not. If an LLC interest is considered a security it can have significant regulatory implications, particularly when the interest transferred or offered for sale. There are ways around these regulations, but the process can require additional work and filings and is not a sure thing.

When LLC Interests are Considered Securities

California’s first LLC law was called the Beverly-Killea Act. When it became law the legislature amended the corporations code. This amendment provided that a security includes an interest in a limited liability company. So this is the default position. However, this is not the end of the discussion. The legislature also carved out some substantial exceptions to this general rule.

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Business owners have many obligations. They have to consider their obligations to customers, to employees, to vendors, and sometimes even to law enforcement. One set of obligations that sometimes gets overlooked, however, is a business’s obligations to the public at large. One such obligation may come in to play when a business is considered a public forum. So the question becomes, when is a California business obligated to allow other members of the community to do things like solicit donations at their business? A recent court decision addressed that very question.

Shopping Center Policy on Solicitation

The Court’s decision was in a case called Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach. The realty group controls the Fig Garden Village shopping center, which is an outdoor shopping center with about sixty retailers. The shopping center has a policy that prohibits the solicitation of donations on shopping center property. Other forms of expressive activity, like collecting signatures for petitions, are allowed but only in a designated “public forum area.” One day, back in 2013, two solicitors for Nu Creation Outreach went to the shopping center and solicited donations for their organization on sidewalk areas adjacent to store entrances within the shopping center. The next day six to eight solicitors from the organization showed up and started soliciting donations. Shopping center representatives explained the policy and asked the solicitors to leave, but they refused. The shopping center then called the police, but the police refused to arrest the solicitors without a court order.

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While our state legislators here in California regulate businesses to a great extent, the federal government also passes laws that affect small businesses, especially those that do business in multiple states. Therefore, when you start a small business of your own it is important to keep track not just of the goings on in our state legislator, but of those of Congress as well. One relevant bill Congress is considering now is the “Small Business Hardship Relief Act.” The bill is sponsored by Rep. Raul Ruiz from California’s 36th congressional district.

What is the Small Business Hardship Relief Act?

The name of the bill certainly makes it sound good, but it is not all that descriptive. This can be fairly common in federal legislation as well as legislation in some states. In the case of this bill, the hardship relief in question actually has to do with the Affordable Care Act, also known as Obamacare. The bill, if passed, would amend the Internal Revenue Code. It would exempt businesses that have no more than 100 full-time employees and are experiencing a “hardship” from the Obamacare mandate that they provide minimum essential health care coverage for employees. In other words, such businesses would not face a tax penalty for failing to provide the required health care to their employees. “Hardship,” however, does not just mean any sort of difficulty. A “hardship” is defined by the bill as a situation where:

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For many of our clients, determining whether they do business in California is simple, because they either hold substantial real estate here or engage in the majority of their business dealings here. But whether or not your business is doing business in California is not that simple of a question. So we are going to take this opportunity to address some issues that could come up for those out-of-state businesses doing business in California.

You May be Doing Business in California Without Even Knowing

At least, that is the position of California’s Franchise Tax Board. As an example, consider a company called Swart Enterprises that runs a farm in Kansas. The company has no physical presence in California, and it owns no property in California. It is a Kansas farm company. However, the Franchise Tax Board claimed that Swart was doing business in California simply because it passively held an investment in a manager-managed California LLC. And the board went on to tax Swart accordingly. Swart filed suit, and the trial court ultimately agreed with the Kansas company, but it remains to be seen what might happen on appeal.

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Starting your own business can be daunting. There can be a seemingly endless list of things you have to consider and decisions you have to make. One of those decisions is whether you are going to strike out with your own concept, or whether you are going to enter into a franchise agreement to become a part of a larger business that already has a proven track record. If you go the franchise route, you will have to sign a mostly binding franchise agreement–a sometimes long and sometimes quite complicated document that should be reviewed by an experienced lawyer. I say “mostly binding” because a California court held that one common part of these agreements is not enforceable in California.

Frango Grille USA Inc., v. Pepe’s Franchising Ltd.

The case in which the Court made this decision is Frango Grille USA Inc., v. Pepe’s Franchising Ltd. Pepe’s Franchising is a company from the United Kingdom that grants aspiring business people the right to operate and franchise Pepe’s restaurant. Last year, Pepe’s Franchising entered into such an agreement with Frango Grille which gave Frango Grille the right to operate Pepe’s restaurants in California. Then, this year Frango sent a letter to Pepe’s saying it wanted to end the agreement. Frango also sued Pepe’s in Los Angeles, making allegations that had to do with breaches of franchise law.

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Some small businesses in California are getting an extra year to comply with the requirements of the Affordable Care Act, which is also colloquially known as “Obamacare.” Radio Station 89.3 KPCC is reporting that a bill signed by Governor Brown this week will give the smallest mom and pop businesses in the state an additional year before they are required to comply with the requirements of the Act.

Requirements Under Federal Law

Federal law requires that employer-offered health insurance plans must cover essential health benefits. There are ten specific essential health benefits listed in the act. These are listed on the federal government’s website, HealthCare.gov:

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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.