Pennsylvania Business Legal Questions

The key issue in the transfer of your business to your son is whether or not you are giving it to him or he is buying it from you.  If he is giving it to you then you need to be careful of the possibility of the transfer resulting in the assessment of a gift tax on the transaction.  Gift tax is a tax many people are not even aware of.  Ifthe business is worth more than $17,000 then you may owe gift tax on the transfer.  $17,000 or less is currently exempt from the tax.  You can also structure the transaction to avoid the tax in certain circumstances.  You will also need to ensure that any licenses to operate the business are transferred to your son.  I have represented dozens of business buyers and sellers over the past 20 years so my advice - get an experienced business transactions attorney to help you do this the right way.... Read More

Without more information I cannot answer your question properly.  The answer depends upon what you are trying to protect yourself from.  I would further advise you to be very careful about mixing the loan, the LLC and the leases.  If you are obtaining the loan on the property and the lender is relying at all on the income from the rent to help pay the mortgage back you need to be careful about mixing and matching or you may, in fact, vreate personal liability for yourself that you may think the LLC protects you from.  Find a competent attorney who deals with LLCs and real estate to make sure you've set this up properly.... Read More

For one thing, you need to have a Promissory Note drawn up stating the amount of the loan, an interest rate if you want to get interest on the loan, plus other terms a typical loan would include.  Some other specific aspects of the transaction you are considering would be including in the Note what is called a "Confession of Judgment" - this is a way to protect yourself if he defaults (does not pay you when he promised) - if he does not pay, you can go to court and have a jufgment lien recorded automatically without having to incur the expense of suing him and winning in court.  Very simply is do not loan that amount of money without proper documentation including a mortgage on the property.  From what you've stated already your lien willbe second to the mortgage lien already there.  So, you also need to ensure that the property is worth enough to pay back the mortgage plus your loan if he didn't pay.... Read More

Any time someone tells me they are considering embarking on a new business which involves mobility or work to be performed at a location other than a fixed place of business I cannot help but mention the potential liability if an unfortunate accident were to occur.  Did you know that if you use your personal vehicle for business your personal auto liability insurance may exclude coverage for an accident?  If your insurance denies a claim because of that you could be personally liable for any damages.  So, number one issue is to organize your business properly so that you protect yourself by having proper insurance plus being a corporation or limited liability company helps protect your personal property from loss in a lawsuit.  It may seem far-fetched but I can tell horror stories of people who've lost their car, furnitutre, homes and more vecause of being too unprepared to run a businessthe right way from a legal perspective. ... Read More

In PA, there is no requirement to register a fictitious name, per se.  Rather, failure to do so may prevent you from filing a lawsuit under that name.  Other than that, you are free to use any name you wish with the understanding that you are personally liable for all debts and the business as it is a sole proprietorship.  The alternative is forming a corporate entity.. I trust this answers your question, but do not hesitate to call or email on a free initial basis. Matthew R. Nahrgang, Esquire 35 Evansburg Road, Ste 400 Collegeville, PA 19426 610 489-3041 o 610 489-3042 fax mnahrgang@verizon.net nahrganglaw.com ... Read More

Thank you for your inquiry, but I strongly recommend that you engage a business law attorney ASAP to specifically advise you regarding these answers as this forum does not lend itself to a quick answer for this very complex questions.    I trust this answers your questions, but you are welcome to call or email me on a free initial basis.     Matthew R. Nahrgang, Esquire 35 Evansburg Road, Ste 400 Collegeville, PA 19426 610 489-3041 o 610 489-3042 fax mnahrgang@verizon.net nahrganglaw.com ... Read More

Generally, there is no requirement that you incorporate.  However, it is generally advisable for several reasons.  The first reason is to insulate yourself from liability.  While I appreciate that a counselor, like a lawyer, can still be personally liable for negligence, etc, an LLC will generally insulate you from liability for trade debt.  Also, I find that it is cleaner as a corp, and an LLC is merely a form of corp, will require a separate business bank account and tax return.  However, if you are a solely owned LLC, the IRS requires that you file a Schedulke C on your 1040.  I regret if this sounds a little too much inside baseball, but suffice to state that, if you are considering incorporating, you should speak to an attorney about your options. I trust this answers your questions and, if you live in the Delaware Valley, feel free to call or email me on a free initial basis. Best Regards,   Matthew R. Nahrgang, Esquire 35 Evansburg Road, Ste 400 Collegeville, PA 19426 (610) 489-3041 o (610) 489-3042 fax nahrganglaw.com... Read More

The information you seek is well beyond a simple Q & A forum like this one.  You form business entities by filing with the Pennsylvania Corporations bureau.  You'd be best served by retaining an attorney to assist you with the formations.  If you want to DIY, the Department of Community and Economic Development has some self-help guides as well but there are lots of traps for the DIY unwary.  ... Read More

I'm not sure whether you propose to form another llc that you and your husband would own, or to have the first llc own the second llc.  In either case, the two llcs COULD share equipment, but it may not be a good idea unless the owning entity charged the using entity market rate rent for the use.  The advantage (apart from your insurance issue) of having separate entities is that neither will generally be liable for the other's obligations, nor would you and your husband be personally liable for the obligations of the llc's.  If, however, you don't treat the llc's as independent entities, but rather as one and the same, you run the risk of a claimant "piercing the corporate veil" of the entities to hold one liable for the obligations of the other, and even to make your husband and you personally liable for the obligations of the entities.... Read More

That depends.  What are the terms of the lc?  Does the business owe money to other creditors and if so what are the terms of the contracts with those creditors?  Are there other owners of the business and if so what are the terms of the agreements between the owners?  The bottom line is that if the terms of the lc allow drawing on it for personal reasons, it doesn't violate any of the agreements with other creditors and doesn't prevent any of them beins paid, and it doesn't violate any agreements with any other owners, I see no reason why it wouldn't be legal, but it may still be problematic because the commingling of personal and business finances may allow a creditor of the business to "pierce the corporate veil" (assuming that the business is a corporation or other separate legal entity)  and hold the owner personally responsible for debts of the business.... Read More

Private employers are not subject to the Right to Know Law.  There would be no reason for your employer to provide anyone with your resume and job application.  Even if your employer is subject to the law, there are many exemptions from disclosure.  Your application or at least certain information on the application and your resume are probably exempt.  ... Read More

Before you do this, check with your current auto insurance carrier to see if your insurance would cover you for any losses arising out someone else operating the car for rent.  You must maintain insurance on the car and what they platform provides is not a substitute and won't fulfill your legal obligation.  If your auto insurance doesn't cover, in my view what the platform offers is not nearly enough.  ... Read More

I don't think there's any legal or practical difference between the labels that you put on any of the companies.  Any company can be extended credit by a lender if its deemed credit-worthy.  Most lenders will require a pledge of collateral in return for a loan so if the "holding company" has no assets, you might be required to pledge assets of other companies and/or personally guarantee the loan.  ... Read More

The general rule is that the individual owners are not liable for debts of the LLC.  If you personally signed for any loan or other obligation of the LLC, you will remain liable though.  Its best to tell these folks that you want out and put together an orderly exit.  Don't avoid the conversation . ... Read More

Under certain circmstances you can collect unemployment comp benefits after voluntarily quitting your job.  The circumstances that compelled you to quit have to be fairly serious.  Having a mean co-wokrer alone is probably not enough.  However, depending on the nature of the harassment it might be.  If the co-worker subjects you to racial slurs, insults base on gender and things like that, its probably enough.  These cases are very fact-specific and defy a general rule.  But since you quit anyway, you should certainly file and see what happens.  Be preprepared to give a specific account of the nature and frequency of the harassment, your efforts to have management deal with it and their failure or refusal to do so.  ... Read More

The answer depends on a few things.  First, an LLC member is not entitled to be employed by the LLC just becasue he or she is a member. So if this person has an employment relationship with the LLC and provided the two remainig members have majority voting rights, the answer is yes you can terminate this member's employment relationship with the LLC.  Can you terminate his or her membership in the LLC?  That depends on what your Operating Agreement says about terminating an LLC member.  Under the law you probably cannot force this person out. ... Read More

Is your business a corporation or limited liablity company? If so, dissolution is usually a 2-step process.  You file any tax returns and pay any taxes due and obtain a tax clearance certificate from the state.  Once you have that, you can file the dissolution paperwork with the department of state. if you didn't form your business as a corporation or LLC, there's probably no formal dissolution process for you to worry about.... Read More

You'd need an EIN if you are going to be collecting and remitting sales tax for your products.  You can obtain and EIN by filing an SS-4 form with the IRS.  The form is available on the IRS website.  Depending on where you are located, your municipality may require some type of registration or licensure to operate a small business from home.... Read More

If you have workers comp insurance, your company will assign an attorney to you.  If you don't have insurance, then yes you'll need to retain your own attorney.  you'll likely defend the claim from the employee as well as a claim against you by the state for failing to have insurance.  We've represented employers like you against claims.  Feel free to contact me.... Read More