Articles Posted in Corporations

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AdobeStock_119264482-300x204Naming a business is a critical component of branding strategy for a person or entity involved in a California business. When the name of the business does not include the owner’s last name, a person or entity has to file a fictitious business name (FBN) statement with the office of the Registrar-Recorder or County Clerk in the specific county location for the business. This process is also known as registering a “Doing Business As” (DBA) or “Trade Name,” and a business without a location in California will have to register with the Clerk of Sacramento County.

The DBA requirement can be confusing for many people, but you do not have to handle everything on your own. Contact an LA business formation attorney with Structure Law Group, LLP for help with all your DBA needs.

When DBAs Apply

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AdobeStock_96879652-300x200When you are selling a business in California, it can be a somewhat complex but still rewarding process that requires an exit strategy to realize the gains from building and operating a successful business. The number of moving parts when selling a business makes documentation of the terms of a sale critical, and there will generally be four stages to follow.

You are going to want to make sure that you have legal counsel when you are negotiating the sale of your business. A California business attorney with Structure Law Group, LLP, can walk you through the entire process.

Preparing to Sell the Business

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AdobeStock_204199356-300x169The prospect of buying an existing business in California can be an extraordinarily exciting time for all types of people, but there will be several concerns of which a prospective business owner needs to be aware. You do not want to leap into any business venture without performing due diligence when it comes to research and preparation.

Structure Law Group, LLP is a business law firm that has offices in both Silicon Valley and Los Angeles to help focus on all kinds of business transactions and litigation for clients throughout California. When you are considering buying any business in the Golden State, be sure you are working with an experienced Los Angeles business attorney.

Get Full and Complete Disclosure

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AdobeStock_445476294-300x200When entrepreneurs are starting a business involving a partner or multiple partners, a buy-sell agreement will be a must-have because the agreement will establish protections for every party and the company if something happens or an exit event occurs with any of the business partners. Without this agreement, several variables may emerge, including a family member or other party taking ownership or a controlling stake without any concern for business success.

Formulating a buy-sell agreement can be a big demand, but you can get competent legal help in formulating this agreement. A Los Angeles business attorney with Structure Law Group, LLP can help you craft a buy-sell agreement that will focus on protecting your business for the long run.

When You Need a Buy-Sell Agreement

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AdobeStock_410226771-300x200The U.S. real estate market has been drastically changed by the effects of COVID-19. In the years before the pandemic, demand had already begun to outpace supply, but this problem became much worse very quickly when a global pandemic upended the market. The strong seller’s market is likely to continue throughout 2022. Learn more about interest rates, the factors that affect a real estate market, and how the corporate lawyers at Structure Law Group can help your business navigate these challenges.

Interest Rates

One of the key factors driving the real estate market has been low interest rates. Interest rates have, in fact, been at record lows for several years now. Low interest rates allow homeowners to borrow money at a low cost. Low mortgage rates lead to more homebuyers, which has slowly tipped the real estate market in favor of sellers. But there has also been inflation in 2022. For the first time in years, interest rates across the economy are starting to rise. So how will this impact the real estate market in 2022? Forbes spoke with three economic experts about their predictions for mortgage interest rates in 2022. Though their estimates ranged between 3.4 percent and 4.0 percent, all three experts predicted an increase in mortgage interest rates by the end of 2022. Rising interest rates tend to discourage some sellers from buying. While the rates can take some of the pressure off the current sellers’ market, it is important to understand that it is just one factor in a complex economy. Other factors will also determine whether 2022 sees a weak or strong real estate market.

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AdobeStock_386942563-300x131Entrepreneurs of all kinds face a daunting choice when trying to determine whether to establish their businesses as limited liability companies (LLCs) or S Corporations (S-corps). While an LLC will be a separate business structure, an S Corporation is actually a tax status, so forming an LLC involves filing paperwork with the state of California, while an S Corporation will involve filing paperwork with the Internal Revenue Service (IRS).

The decision between LLC and S-Corp status is not an easy one to make, so make sure you have proper legal guidance every step of the way. You will want to work with a San Jose business formation attorney at Structure Law Group, LLP.

Advantages and Disadvantages of LLCs

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AdobeStock_330254153-300x200Classifying workers as employees or independent contractors has many different legal implications. In recent years, massive litigation efforts from big companies like Uber have highlighted confusion in this area of the law. This confusion led to the passage of AB-5, which was signed into law in September 2019. The law creates a test for determining whether a worker should be properly classified as an employee or an independent contractor. Business owners should understand this law so they can apply it properly to all workers and thus avoid unnecessary liability.

How AB-5 Changed the Rules of Classification

The new test for classification is known as the “ABC Test”:

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AdobeStock_183215665-300x158A corporation is a legal entity that grants its shareholders and directors certain legal protections. While these members are generally protected from the debts of a business, it is not always the case. A plaintiff can “pierce the corporate veil” in certain situations, meaning that the court will hold the shareholder or director personally liable for the debts of the business. It also means that your personal assets can be used to satisfy business debts. Learn more about “piercing the corporate veil” – and what a corporate lawyer can do to help minimize your risk of liability.

What Is “Piercing the Corporate Veil?”

In common law, corporations have provided legal protections for their shareholders and directors. Shareholders and directors are not generally held personally liable for the debts of their business. In some limited circumstances, however, it might be possible to “pierce the corporate veil” of legal protection and hold them personally liable for corporate debts. Doing so allows plaintiffs to access the personal assets of shareholders and directors to satisfy the debts of the business.

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AdobeStock_185592300-300x200Business owners have been confronted with a host of costly legal issues as a result of the COVID-19 pandemic. For those with employees, the risk of COVID lawsuits has been a serious concern from the earliest days of the pandemic. Most employers assume that any COVID lawsuits will be covered by their liability insurance. Unfortunately, this has not always been the case.

Workers Comp Lawsuits V. Personal Injury Lawsuits

First, it is important for employers to understand the difference between workers’ compensation coverage and liability coverage. Workers’ compensation coverage pays for any injury that employees sustain in the scope and course of their employment. The employee does not have to prove negligence – so long as the injury occurred on the job, it will be covered. If an employee believes they can prove that the employer was negligent, they can file a personal injury lawsuit against their employer. These lawsuits are not covered by workers’ compensation coverage. An employer must maintain a separate general liability policy to cover claims of this nature.

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AdobeStock_101676859-300x200Corporations are subject to many fiduciary rules that govern their operations. Most business persons are familiar with the prohibition on interested transactions and placing one’s own financial interests ahead of the company’s. Yet the application of this rule varies widely from state to state. The Delaware Supreme Court has recently issued a ruling that will apply to the many businesses which fall under Delaware’s state laws of corporate governance. Learn more about the standard of review for interested transactions between a controlling shareholder and their subsidiary company:

In re MFW

The litigation started with a dispute between the shareholders of M&F Worldwide (MFW). A merger was proposed between the controlling stockholder and a subsidiary company. Minority shareholders objected to the merger and brought suit to stop it. Prior case law had subjected such transactions to the stringent standard of “entire fairness.” Yet, in this case, where there were two important procedural safeguards protecting the minority interest, the Court of Chancery held that the more lenient “business judgment” standard could be applied. The ruling was appealed to the Delaware Supreme Court. Because the Supreme Court affirmed the ruling, it has created a new legal standard under Delaware law.

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