Articles Tagged with “oakland startup attorney”

The Small Business Administration (SBA) has a seemingly wonderful program under which certain federal contracts are supposed to be reserved for competitions among small businesses, called the “8(a) Business Development Program.” The SBA describes the program as “a business assistance program for small disadvantaged businesses” and states that the program “offers a broad scope of assistance to firms that are owned and controlled by at least 51% by socially and economically disadvantaged individuals.” The program is supposed to provide business for startups run by members of various racial minorities who have suffered from economic disadvantage. It does this in part by setting aside certain government contracts for small firms to compete over without having to compete against larger corporations. However, it turns out, the government contracts that are supposed to be handled by these small businesses are actually being handled by large corporations.

Problem with the 8(a) Program

The Washington Post reports that contracting officers from various federal departments are not ensuring that work awarded to small businesses under the 8(a) program is being performed by those small businesses. Historically the program has been abused, usually by the small business getting the contract and then passing much of the work (and a portion of the profits) along to a large corporation that did not have the right to bid on the contract. To stop this abuse, regulators put strict limits in place on how much of the work the small business awarded the contract can subcontract out. If the limits are violated, the small business can be fined $500,000.

In the aftermath of the Affordable Care Act (ACT), which is also colloquially known as “Obamacare,” many small business owners and potential small business owners have been deeply concerned about the cost of employee health insurance. However, there is good news that should help calm some of those concerns. The cost of employee health care premiums is growing at a slower rate than it did before the ACA became law.

The Kaiser Family Foundation Report

The New York Times reports that the Kaiser Family Foundation published its annual survey this week on health plans that employers nationwide are offering to employees. According to the Times, the Kaiser survey is generally considered the most reliable measure of what is happening in the employer health care market. The Kaiser Family Foundation has existed since 1948, and was revamped in 1991 with a goal of providing trustworthy information about health care not biased by the large number of stakeholders who may have personal or professional agendas. This is the sixteenth year that the foundation has published a study like this one. The study’s big finding was that “growth in health insurance premiums was only three percent between 2013 and 2014.” This is the lowest that growth rate has ever been in those 16 years (although at least one of those other years tied the 3% growth rate). Typically, the growth in the premiums employers pay for their employees’ health insurance has been in the double digits, making this extremely low number even more encouraging.

Los Angeles Mayor Eric Garcetti proposed this week that the city raise the minimum wage to $13.25 by 2017. The current minimum wage in Los Angeles is $9.00 per hour. This is the minimum wage for all of California, but some cities throughout the state have enacted even higher minimum wages. For example, San Diego has approved a minimum wage of $11.50, and San Francisco voters will decide later this year whether they want to increase that city’s minimum wage to $15 per hour. This potential wage increase of nearly fifty percent in Los Angeles carries with it serious pros and cons that have to be considered both by anyone planning on creating a new business in Los Angeles, or anyone considering expanding a business to Los Angeles.

How Would the Minimum Wage Increase Work?

According to USA Today, the proposed increase would make the minimum wage in Los Angeles one of the highest in the nation. Of course, the mayor cannot act unilaterally, and will need the approval of the City Council to make the increase law. As the proposal stands now, the increased would be gradually phased in. In 2015 it would jump to $10.25, then in 2016 it would increase to $11.75, and finally in 2017 it would increase to $13.75. Then, in the future, additional increases would be tied to the Consumer Price Index for urban wage earners.

Every state wants to attract businesses. Whether it is an existing business, or a brand new startup, politicians are always courting business people to move to their jurisdiction. While there are usually many states (or cities within states) vying for a new business, it used to be uncommon for states to directly attack one another in these quests. However, that is all starting to change, as evidenced by a current battle between Texas and California.

Battle Starts With Texas Poaching California Businesses

The Los Angeles Times recently reported on the ongoing battle between California and Texas over businesses. This battle has been going on, in a one-sided fashion, for more than a decade. It began with recently-indicted Texas Governor Rick Perry publicly pushing California businesses to move to Texas. And, his public statements along with pro-business government programs have been effective. One out of five businesses that relocated to Texas in 2011 and 2012 were previously California Businesses.

Starting a new business requires a substantial investment of both time and financial resources. While some entrepreneurs have enough financial resources to do this on their own, most new business people need to seek out others who are willing to invest in their business. From purchasing or leasing real estate, hiring a staff, or purchasing raw materials and equipment, the front end costs of a business can be huge and it can take a while before you start to see a profit.

To help business people who are just starting out, Forbes recently created a list of common mistakes small businesses make when seeking out investors. We have included some of Forbes‘ tips below, as well as some tips from the U.S. Small Business Administration (SBA).

SBA Tips for Securing Investors

Starting a new business requires help from a lot of sources. You need excellent employees, the advice of an experienced and licensed Sacramento small business attorney, and investors. Throughout the down economy, that third requirement was sometimes hard to meet for small business people. Fortunately, those times are changing.

Easier to Find Bank Loans

The New York Times reports that small businesses are finding bank loans easier to come by. Its report tells the story of Jake Fitzsimmons, the owner of a burger joint. Mr. Fitzsimmons opened his bar and restaurant in 2010, immediately after the recession. Thinking getting a loan would be impossible in the financial climate, Fitzsimmons wound up borrowing the money he could not save from his father. He did the same again when he opened his second restaurant in 2012. But now that he is opening a third location, things are different. He had banks bid on the opportunity to finance his expansion; and it worked. As banks become more eager to lend to the right borrowers, they are willing to compete with one another, resulting in better terms for the borrower than Fitzsimmons could have imagined back in 2010.

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.

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.

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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