Articles Tagged with “sacramento business lawyer”

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Law Office of Kristina M Reed selected for 2017 Sacramento Small Business Excellence Award

Sacramento,CA – November 30, 2017 — Law Office of Kristina M Reed has been selected for the 2017 Sacramento Small Business Excellence Award in the Lawyers classification by the Sacramento Small Business Excellence Award Program.

Various sources of information were gathered and analyzed to choose the winners in each category. The 2017 Sacramento Small Business Excellence Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Sacramento Small Business Excellence Award Program and data provided by third parties.

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When you are forming a business, you have many entities to choose from. One option is a limited partnership. These entities are governed in California by the California Uniform Limited Partnership Act of 2008 (CULPA). However, the law regarding limited partnerships may be about to change, so if you are considering forming one of these entities you should seek out business counseling.

What is a Limited Partnership?

When people think of partnerships they often think of business arrangements where two or more people share equal stakes in a company. A limited partnership is a different kind of partnership. While there will be one or more general partners, there are also one or more limited partners. This type of arrangement is very common amongst law firms, accounting firms, film production companies, and real estate investment projects.

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When you decide to form a business, there are many decisions you have to make which require business counseling and advice. One of those decisions is the decision regarding what sort of business entity you will form. Different laws, regulations, and responsibilities apply to each type of business, whether it is a partnership, an LLC, or a corporation. Even if you have experience with one or more of these types of business, the regulations change over time so it is important to get advice regarding how your rights and responsibilities may change over time. One recently changed law is the Revised Uniform Limited Liability Company Act (RULLCA), and a California appellate court recently decided what the operative date of the new law is.

Effective Dates versus Operative Dates

Usually when legislative bodies pass laws, one of two things happens. In some cases the law specifically says when it goes into effect right there in its language. Some other laws that do not contain this language are presumed to go into effect on a certain date by default, often January 1 of the year following the law’s passage. However, the “effective” date and the “operative” date of a statute may not be the same. The “effective” date of a statute is when it becomes the law of the land. The “operative” date is the date upon which the directives of the statute can actually be implemented. Often these two dates are the same. Imagine that the legislature passes a statute that says it is a felony to steal an ice cream truck, and that the statute goes into effect on January 1, 2016. For that sort of statute, the effective date and the operative date would be the same because as soon as January 1, 2016 roles around anyone who were to steal an ice cream truck could be arrested and prosecuted for the crime. Sometimes, however, the effective date and the operative date are not the same.

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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.

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From November 27, through December 15, 2013, hackers stole credit card numbers and encrypted debit card PIN data from as many as 40 million credit and debit cards swiped at Target. The security breach was the second-largest data breach in United States retail history. According to Target, it “alerted authorities and financial institutions immediately after it was made aware of the unauthorized access, and is putting all appropriate resources behind these efforts. Among other actions, Target is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident.” In a letter to customers, Target warned that customer names, credit and/or debit card numbers, expiration dates, and the CVV (security codes) were stolen. Target is facing significant financial ramifications including legal costs as well as owing money to the credit card companies that must reimburse their customers. Target also faces significant damage to its reputation.

Several months ago, Forbes magazine reported on class action lawsuits over the failure of businesses to secure consumers’ personal data, such as what occurred in the Target breach. While the filing of such cases may become the trend, it does not appear that they will be successful as recent cases have been dismissed for failure to prove standing. The judges in those cases have specifically ruled that the possibility of future injury in the form of an increased risk of identity theft, is insufficient to establish a present injury, and thus, plaintiffs do not have standing.

Interestingly, just two months before the Target data breach, California Governor Jerry Brown signed into law an amendment to California’s Security Breach Notification Act. According to Forbes, the new law requires “consumer notification if ‘a user name or email address, in combination with a password or security question and answer that would permit access to an online account’ was compromised. The law applies even if that information is not combined with a name, and applies to all types of online accounts.”

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What are the consequences of an improperly formed partnership? The case of Utnehmer v. Crull (In re Utnehmer), 2013 WL 5573198 (B.A.P. 9th Cir October 10, 2013), recently decided by the Bankruptcy Appellate Panel of the 9th Circuit here in California, may shed some light on this question.

The Facts

In 2005, real estate developer William Utnehmer, the debtor and defendant in this case, undertook to develop a luxury property in Venice, California. Mary and Patrick Crull, the judgment creditors and plaintiffs in this case, were offered an opportunity to participate in the project, which they accepted. Utnehmer sent the Crulls a packet of documents, which included a cover letter, a loan agreement for $100,000, a promissory note, and a private offering memo. The loan agreement provided that $50,000 of the initial $100,000 was intended to be superseded by execution of a formal operating agreement which would recharacterize the $50,000 of the Crull’s interest as an investor’s equity interest in a limited liability company to be formed, with an annual preferred return, and a percentage participation in profits on a prorated basis. At the time these documents were exchanged, the documents for formation of the limited liability company and the operating agreement were allegedly being drafted. The parties subsequently executed a promissory note, which was consistent with the loan agreement but made no reference to the expected recharacterization of the $50,000 as an equity interest.

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It is becoming increasingly more difficult for startups to survive. According to one report, long-term survival rates for startup companies have been plummeting over the past 20 years: Between 1994 and 2010, survival rates have declined from a nearly 100 percent survival rate in 1994 to just 25 percent in 2010. Separate studies performed by the U.S. Bureau of Labor Statistics and the Ewing Marion Kauffman Foundation — a nonprofit that promotes U.S. entrepreneurship — found that of all companies, only about 60 percent of startups survive to age three and approximately 35 percent survive to age ten.

So, why do some startups fail and how can you ensure a successful startup. Harvard Business School Professor Noam Wasserman has written a book called, “The Founder’s Dilemma: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.” In the book, he has identified some reasons why startups fail. One of the major reasons startups fail is that they are co-founded by individuals who have a prior social relationship, not a prior professional relationship. According to Wasserman, such teams end up in disaster. Another major reason startups fail is that the founding teams divide the equity within a month of founding when uncertainty is at its highest.

While there are some factors that are beyond the control of startups, but may contribute to their demise, such as the economy or new government regulations, there are some things startups can do to help create a more stable company and one capable of surviving. Following are some of the factors experts say are likely to accompany a successful startup: (1) Starting the venture as part of a team and preferably with someone whom you have a prior professional relationship; (2) Drafting a business plan; (3) Starting the business on a full-time basis; (4) Starting a larger company, i.e., larger initial investment, greater number of employees, and greater size of assets; (5) Starting in a notoriously favorable industry; (6) Obtaining work experience in your targeted industry prior to starting your company; (7) Implementing and using a marketing plan; and, (8) Ensuring that financial controls are in place. These are important factors for startups to consider and implement, but what about the founders themselves.

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For years, California has been plagued by abusive lawsuits aimed at business establishments for alleged violations of the Americans with Disabilities Act (ADA). On September 19, 2012, California Governor Jerry Brown signed into law, Senate Bill 1186, which is an attempt to curb the abusive lawsuits based on the ADA and related state laws, requiring that places of public accommodation be accessible for persons with disabilities. The law went into effect in January of 2013.

Prior to the Bill’s enactment, unscrupulous law firms devised a scheme where they would send disabled clients to as many business establishments as possible until an ADA violation was found. Once a violation was encountered, the disabled clients would repeatedly visit the guilty business establishment to encounter the same accessibility violation. Under California civil rights law, each violation triggers a minimum statutory penalty of $4,000 The law firms would then send to the guilty business establishment/property owner/lessor a “demand for money” letter or the firm would file a lawsuit on behalf of the disabled client, requesting damages for each violation (“stacked claims”). Instead of fighting an expensive legal battle, the business establishment would quickly settle. In one notorious case, an illegal immigrant and convicted felon, who also happens to be a paraplegic, filed over 500 lawsuits against businesses, and earned $165,000 in settlements, for ADA violations.

The Bill has five main provisions. The first and most important provision of the Bill is that it ends “demand for money” letters from attorneys. Attorneys may still send letters to business establishments alerting them of potential violations, but the letter may not include a demand for money. The letter must contain several items, including, identification and location of the alleged violation; an explanation of how the alleged violation interfered with the disabled person’s access; and, the date of the alleged violation/interference. The law firm must send a copy of the California State Bar and the California Commission on Disability Access.

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The Law Office of Kristina M. Reed has a strong reputation for providing results-driven client-focused legal services to individuals, property owners, investors, entrepreneurs, small to medium sized businesses, real estate agents and brokers, and property management firms. The law firm has been located in Downtown Sacramento since 2008, and has been an active part of the growth, revitalization, and redevelopment of that area. The firm provides small businesses and entrepreneurs with quality legal services at rates affordable to new businesses.

The Law Office of Kristina M. Reed is committed to small businesses and entrepreneurs, and a champion for the growth and revitalization of the Downtown Sacramento area. In keeping with these goals, the firm, along with other local businesses and organizations, recently sponsored the 2013 Calling All Dreamers Competition, an annual competition with the goal of fostering Sacramento’s entrepreneurial spirit and cultivate the next dreamers in Downtown Sacramento. Beginning in April, applicants submitted their businesses concepts for the competition. A panel of business experts selected eleven semi-finalists based on the following criteria: creativity, sustainability, and entrepreneurial passion. The panel then selected five finalists out of the eleven semi-finalists. The panel ultimately selected Andy’s Candy Apothecary as the winner. The candy store will carry packaged candies from around the world and well as locally-made handmade candies. Andy Paul, the founder of Andy’s Candy Apothecary, received a cash prize of $10,000 as well as free rent and business support services, including 10 hours of business and real estate related transactional legal services provided by the Law Office of Kristina M. Reed.

While starting and running a new business requires passion, it also requires confidence and a strong foundation. The Law Office of Kristina Reed provided Andy’s Candy Apothecary with a strong foundation, and we can help your small business as well. Many small businesses pay little attention to the legal side of their business, which can prove detrimental. An attorney experienced in assisting small businesses can help your business make key foundational decisions about the structure and organization of the business as well as developing strategies and making deals that will make your business successful. We can also help draft employment agreements and ensure that your business is in compliance with all relevant ordinances, such as zoning ordinances. Hiring an experienced lawyer up front to help your small business get off the ground can save you from headaches down the road. It can help protect you against expensive lawsuits brought by employees, customers, and suppliers.

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Several months ago, we featured two articles about California’s ride-sharing startups. Ride-sharing companies, such as uberX, Lyft, and FlightCar, are in the business of providing vehicles-for-hire. Using apps and other online programs, the companies connect those in need of rides with non-professional drivers driving their own cars. Beginning in late 2010, the California Public Utilities Company (CPUC) issued cease and desist orders against all three ride-sharing companies for operating unlicensed charter party services, and the City of San Francisco followed up by suing FlightCar, alleging that it was undercutting rental car companies at the airport by acting like a rental car company, but ignoring the regulations that govern them. This past August, California became the first state to legalize ride-sharing companies when the CPUC issued a proposed set of rules that would grant state licenses to the ride-sharing companies and allow their vehicles to remain on California roads. The proposal creates a new category called the Transportation Network Companies and requires a ride-sharing company to apply for a license to operate in the state.

uberX Appeals Effort to Regulate It

Fast forward several months: This past Wednesday, attorneys for Uber Technologies, Inc., which runs uberX, filed an appeal — or an application for rehearing — challenging the CPUC’s power to regulate it, contending that uberX is a technology company, not a vehicle-for-hire services and that the CPUC does not have jurisdiction over technology companies that do not provide transportation services. uberX argues that it does not have to comply with the CPUC’s requirement to obtain a license because “it operates no vehicles and does not hold itself out or advertise itself as a transportation service provider.” Rather, it merely developed a software and mobile application service, which simply connects the transportation service provider with those persons seeking transportation. uberX does not own, lease, or charter any vehicles for the transportation of passengers and, therefore, should not be required to obtain a license to operate in the state of California.