People operating businesses or startups probably have so much on their plate that they don’t spend much time worrying about the legal issues they may face.
It would be wise to familiarize yourself with some of the common legal issues that small business owners are occasionally faced with.
A startup is a company in the early phases of its development, known for its innovative business model and potential for quick expansion. Often technology-driven, it encourages high levels of creativity and innovation. On the other hand, a small business is usually operated by its owner. They adhere to a more conventional business model, concentrating on offering products or services to a particular local market.
Startups aiming to disrupt the industry frequently look to alter the current situation. They emphasize creating new technologies or products that can be rapidly expanded. Conversely, small businesses usually stick to a more conventional business model, focusing on delivering products or services to a particular local market.
Startups typically have a greater capacity for growth compared to small businesses. They often concentrate on creating a product or service that can be expanded rapidly and has substantial market opportunities. Conversely, small businesses generally have restricted growth potential, focusing on a specific local market.
Startups and small businesses can have different legal structures. To protect liability and attract funding, startups are frequently organized as corporations or LLCs. In contrast, small businesses are commonly organized as sole proprietorships or partnerships.
Startups and small businesses should also consider taxes. Startups might qualify for tax incentives or credits to promote expansion and progress. While small businesses might have a simpler tax framework as they concentrate on a particular local market.
The number of team members in startups is usually smaller than that in small businesses. Startups tend to concentrate on creating innovative technologies or products, necessitating a compact group of highly proficient personnel. Conversely, small companies generally employ a larger workforce to deliver products or services to a local market.
Startups take longer to become profitable than small businesses because they are dedicated to developing new technologies or products, which may require longer to bring to market and expand. In contrast, small businesses generally achieve profitability more quickly because they concentrate on a specific local market and can generate revenue rapidly. Do not hesitate to contact KAASS LAW if you have questions about California Startup or Small Business laws or discuss your case confidentially with one of our experienced attorneys.
Interested in investing in business startup? It is crucial to understand your rights as an investor to ensure you are making a safe investment.
Investing can be a very stressful process for first-time investors. Knowing your legal rights as an investor can ease this process and provide you comfort in moving forward with an investment. To effectively assess the legitimacy of an investment, investors have the right to honest advertising, complete and accurate information, and disclosure of risks and future obligations. Providing investors with false or misleading information is against the law and subject to civil, criminal, or regulatory penalties. It is a good idea to become familiar with business law or get help from an experienced professional before opening a business.
Honest Advertising. The person or entity selling the investment is required to provide honest and lawful information about the investment they are advertising. Advertisements can be deceiving and an easy way to convince potential investors to invest their money and trust that it will provide them with a solid return. An investor will never know the true position of that person or entity in the market without conducting proper and thorough research to learn “what they’re all about.” In 1986, ZZZZ Best, Inc., claimed itself as a multimillion-dollar carpet cleaning company and after going public, reached a market capitalization of $200 million. Shortly after, the owner, a teenager at the time, was found to have “built” this company based on fraudulent invoices and documents. The owner provided dishonest advertising to investors and as a result, spent 25 years in prison.
Easy nine step guide for Startup or small business owners interested in forming a corporation in California.
Your business name may not be the same as, or deceptively similar to, other corporate names on file with the Secretary of State (limited exceptions apply). Additionally, the name may not contain the words “bank,” “trust”, “trustee,” or related words. Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
Under California law, a corporation must have at least three directors, unless there are less than three shareholders. In that case, the number of directors may be equal to or greater than the number of shareholders. For example, if the corporation has only one shareholder, the number of directors may be one or two. If the corporation has two shareholders, the number of directors may be two (or three, which is the normal minimum). California does not set forth a minimum age or residency requirement for directors. Either the articles of incorporation or the corporation’s bylaws must state the number of directors that will constitute the corporation’s board of directors.
Many people use UberX, a transportation service, to help them get around town. It is much cheaper than a traditional taxi and the cars tend to be nicer too.
What happens though if the driver is negligent and gets into an accident while on transporting a passenger? Even more interesting, what happens if the Uber driver gets into an accident without transporting a Uber passenger? Does Uber or Lyft provide insurance coverage for drivers injured due to a car accident? Does Uber driver's personal insurance policy cover the accident? Can injured passengers sue Uber/Lyft or their drivers? These are just a few questions many Uber, Lyft, and other TNC users are concerned about when involved in an accident while using these popular ride-sharing services.
On New Year’s Eve, a six-year-old girl was struck and killed by an UberX driver in San Francisco. The family sued Uber for wrongful death, but Uber denied liability. Since there were no passengers in the vehicle, the driver was not on duty and was not covered by Uber’s insurance. The family argued that since the driver was logged into the Uber app, he was on the job. At that time, Uber had very strict provisions as to what they are liable for. They only claimed liability between the times that a driver was requested and the fare was paid. This means that if a driver is driving around looking for a fare, they are not considered to be on the job; therefore, the driver will not be covered by.
Many tribal casinos have active insurance policies and have waived their immunity. In these situations, the liability insurer would pay monetary damages. However, it's important to note that Tribal/Indian lands are sovereign entities. Tribal/Indian laws must adjudicate all businesses within their jurisdiction. In summary, the businesses that operate solely on Tribal/Indian lands are not subject to many U.S. laws. Like any other sovereign nation, the Tribes have a right to self-governance.
Due to Tribal/Indian sovereign immunity, it is very difficult to pursue a legal matter against tribal Casinos.
Tribal casinos may be sued in U.S. courts if they willingly waive their immunity. In short, someone must obtain the Tribes' consent to sue them. It seems clear how undesirable it would be to do so. Yet some, like the Navajo, have done so in the past. Some of these tribal casinos have insurance and have waived their immunity in cases where their liability insurer would pay monetary damages. Many tribes have insurance but do not consent to waive their sovereign immunity. Usually, these tribes offer a minimum value for the only to make it disappear.
Bankruptcy proceedings are initiated when individuals or businesses are unable to repay significant debts, prompting them to file for bankruptcy in court. This article discusses the significance of bankruptcy proceedings, the process followed by corporations, the authority they possess during bankruptcy, the division of assets, and the potential consequences of non-compliance with court orders and decrees.
Bankruptcy proceedings hold significant importance for both individuals and businesses due to the following reasons:
However, it's important to acknowledge that bankruptcy proceedings may have negative impacts, such as a decline in the value of a company's stock or the complexity, time-consuming nature, and expenses associated with the process.
You must select a proper entity while structuring a business. Corporations and limited liability companies (LLCs) are two common options in the United States, each with a unique combination of benefits and drawbacks. Therefore, this blog strives to offer a thorough breakdown of the variations between corporations and LLCs in Delaware, USA, and how they contrast with those in other nations.
Corporations are well-known and frequently used business entities in every country. Here are a few essential traits of corporations:
Complete and Accurate Information. Having access to complete and accurate information will allow investors to make well-informed decisions about their investments. Companies are required by law to provide investors with all the information necessary to make that informed decision. It is illegal for companies to hide information from the public or from potential investors to make their company sound healthier than it really is. As an investor, you have the right to seek more information needed to make your decision including any formal documentation, financial statements, or annual reports.
Disclosure of Risk and Future Obligations. The person or entity selling the investment is required to provide information about any risks they face or future obligations they are expected to meet. There are many different factors that can make an investment risky and knowing exactly how risky it is will be a crucial indicator to the long-term success of that investment. Individuals or companies, who have future obligations that they are required to meet, increase the risk of the investment and put investors in an undesirable position. A business lawyer at KAASS LAW can provide you with any legal assistance you may require regarding business law. Receive legal assistance from an experienced professional now!
In all, be sure to know your rights as an investor so that you can make the best-informed decision you possibly can. There are many people and companies who make an effort to provide the least information possible while making a great effort to reel you in. Be cautious of the investments you decide to take on and remember that you are protected by the law in situations where there are efforts to fraud an investor out of their money.
The filing fee is $100. The Secretary of State website has a sample of articles of incorporations with instructions.
California law requires a corporation to create bylaws. There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the Secretary of State, but the corporation must keep a copy at its principal place a business.
The filing fee is $25. The Secretary of State’s website has a simple, fill in the blank form for the Statement of Information. Instructions are included. It must be filled within 90 days of filing the articles of incorporation.
Request an Employer Identification Number (EIN) from the IRS. There is no filing fee. If you will be paying at least $100 to an employee or employees in a quarter (this includes corporate officers), you are subject to California employment taxes and must register for a California employer account number within 15 days of paying that $100. You can register for employment taxes and get your account number online using the Employment Development Department’s website. These taxes must be paid quarterly. Whenever you hire an employee in California, you must inform both the IRS and the State of California. The IRS details all of the necessary steps, including verifying work eligibility and withholding allowances certificates, on its page entitled Hiring Employees. You can find information for the state level in the California Employer’s Guide and on the website for California’s New Hire Reporting Program. If you have employees in California, you must carry workers’ compensation insurance. There are other informational returns that you may have to file annually or semi-annually with both the IRS and the state. California imposes an $800 minimum franchise tax on corporation doing business in the state. This minimum tax is separate from any income, self-employment, or payroll tax. For many, this $800 minimum tax could be significant impediment to forming a corporation in California, especially if you have little or no expected income from your online publishing activities. California’s current income tax rate for corporations is 8.84%.
It is a good idea to keep business’s finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN), a copy of the articles of incorporation, and a resolution identifying authorized signers if those names are not listed in the articles. Our lawyers in Glendale, Los Angeles, CA can provide you with any sort of legal assistance regarding business startups.
In March of this year, Uber announced that they would be changing their insurance coverage. They would now cover accidents as long as the Uber driver was at fault and logged into the Uber app, even if they were not transporting a passenger. Although this is a big step forward, there are still some provisions to be aware of. Uber’s insurance will only cover the accident if the driver’s personal insurance fails to do so. They will also only cover up to $100,000 in bodily injury and $25,000 in property damage.
UberX is a cheap way to get around town if you need transportation, but it is important to educate yourself on policies and provisions that may affect you. If you are an Uber passenger and are involved in a car accident, it is important to find an experienced personal injury attorney.
Make sure your rights are not violated! Don't settle for pursuing a court case without guidance. Our Glendale auto accident attorneys at KAASS LAW can provide you with any sort of legal assistance you require.
Tribes are also immune from other U.S. laws, including the Americans with Disabilities Act, Age Discrimination in Employment Act, and all other discrimination laws. Because of tribal immunity, any suit accusing a tribal business of discrimination under these laws will be thrown out of court.
Tribes have tribal courts. However, they do not provide the same level of protection and rights as one would get under the laws of the United States.
Second, authorities treat criminals on tribal lands a little differently. Unless we are dealing with a “major” crime, tribal courts have authority over all crimes committed in their jurisdiction. Thankfully, the “Major Crimes Act” states that any major felony on tribal lands is within the jurisdiction of the United States Federal Courts.
So next time you’re planning a trip to an Indian/Tribal Casino, remember to be careful and follow the laws of the sovereign state you are entering.
There are ways to go through the Tribal/Indian courts and maximize the case's value. You may do this by contacting an experienced attorney who has delivered such results. Contact your tribal personal injury lawyer to get more information.
This content serves educational purposes only. KAASS LAW's lawyers in Glendale, Los Angeles, CA, are authorized to practice law in California. We provide this information specifically for California residents. This content provides only general information, which may or may not reflect current legal developments. KAASS LAW expressly disclaims all liability for actions taken or not taken based on any of the contents of this website. The above content DOES NOT create an attorney-client relationship. KAASS LAW does not represent you unless you have expressly retained KAASS LAW in person at the KAASS LAW office.
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Delaware corporations typically undergo bankruptcy proceedings under Chapter 11 of the Federal Bankruptcy Code. Chapter 11 enables a company to continue its operations and work towards returning to normal business operations and financial health in the future, in contrast to Chapter 7 bankruptcy, which involves ceasing all operations and going out of business entirely.
In bankruptcy proceedings under the Federal Bankruptcy Code, a corporation possesses the powers and duties of a trustee, unlike in Chapter 7 bankruptcy where a court-appointed trustee sells the company's assets. The court orders and decrees are executed by the corporation without requiring approval from directors or stockholders. During the bankruptcy process, authority is granted to elected trustees, designated officers, or court-appointed representatives to facilitate the effective administration and resolution of the bankruptcy case. However, it is important to note that despite the significant authority granted, compliance with court orders and decrees remains crucial. Filing relevant documents with the Secretary of State ensures transparency and legal compliance. Moreover, companies filing for bankruptcy retain their ability to continue operating and take actions such as altering bylaws, restructuring the board of directors, amending the certificate of incorporation, changing capital or capital stock, engaging in mergers or consolidations, issuing bonds or debentures, and leasing property.
The distribution of assets in bankruptcy follows a specific order:
1. Secured Creditors: Typically, banks hold the first claim and are paid first.
2. Unsecured Creditors: This category includes banks, suppliers, and bondholders, who have the next claim on assets.
3. Stockholders: They have the last claim on assets and may not receive any distribution if the claims of secured and unsecured creditors are not fully satisfied.
Non-compliance with court orders and decrees during bankruptcy proceedings can have various ramifications, including:
In conclusion, bankruptcy proceedings hold significant importance in providing financial relief, creditor protection, and the opportunity for a fresh start. However, they also come with potential drawbacks and require compliance with court orders. Seeking professional legal guidance is crucial. We offer expertise in navigating bankruptcy proceedings, ensuring compliance, and achieving favorable outcomes for our clients. Feel free to contact us for a consultation at 310.943.1171.
The popularity of restricted Liability Companies (LLCs) has grown recently as a result of their adaptability and restricted liability protection. Let's examine their main characteristics:
Furthermore, Delaware's relatively straightforward formation requirements, along with its greater flexibility in structuring stock classes and LLC ownership, the option for a single-member board of directors for corporations, the choice between member-managed and manager-managed LLCs, and the less formal requirements for corporate records and meetings, are some of the key differences that set Delaware apart from other nations in terms of corporations and LLCs. These distinguishing characteristics not only highlight Delaware's reputation for flexible and advantageous business regulations but also solidify its position as a highly desirable destination for companies seeking to incorporate in the United States. Therefore, to ensure compliance and make wise choices, it is crucial for business owners to take into account the particular laws and regulations of the nations in which they conduct business.
Despite the fact that this blog offers a broad overview of the distinctions between corporations and LLCs in Delaware, the USA, and other nations, it is essential to seek legal counsel from a licensed professional to get personalized legal advice. Additionally, an experienced lawyer can evaluate your particular business needs, assist with business formation, and guarantee adherence to all applicable rules and regulations. By consulting a qualified attorney, you can gain valuable insights, and receive personalized guidance. Also, make well-informed decisions that support your company's objectives and safeguard your interests. Therefore, we encourage you to contact us today at 310-943-1171 or visit our website to explore our range of services and areas of expertise.