Articles Tagged with “San francisco business law attorney”

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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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California’s tax code includes a provision that makes it so a domestic corporation that fails to pay certain taxes can have its corporate rights suspended. If your corporation’s rights are suspended under this provision, it can affect both the corporation’s ability to bring legal actions and to appeal the outcomes of legal actions.

Causes of Action Filed by Suspended Corporations

When a corporation is suspended there is a straightforward way for it to revive its corporate rights. According to the tax code, the corporation can revive its rights by:

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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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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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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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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.