Florida Business Legal Questions

If I understand correctly, you started an S-Corp as the parent company of a retail business wholly owned by the S-Corp.  You then sold the corporate asset of the retail business, but maintained the parent S-Corp.  I’m assuming the retail business was a fictitious name/dba.  So, assuming that you have properly maintained the S-Corp with the state of Florida and it is Active, then, sure, on those facts, there shouldn’t be a problem using it for the tech start-up.  However, that is assuming there are no company documents that prevent it (and, if the s-corp was just you, I would doubt it).  That said, if your reason for using the S-Corp is just because it is there, I would caution you to at least consult with a business attorney (and perhaps a CPA) to discuss all of your entity options.  FL gives you several options and each has its own pros and cons – you could find a simple investment of time and money in the beginning may save you headaches, money, and time later.... Read More

Sounds a little unusual to me, but that doesn’t mean it is impossible.  The answer comes down to the contracts that were signed as part of the sale.  I’m assuming you didn’t have an attorney for this agreement, and I’d be interested if the buyer did.  The closing agent acts on the authority that is given to them.  This authority should be delineated in the contract.  I would advise making an appointment with a business attorney ASAP, taking all of your closing documents and any correspondence with you.  These type of situations can get pretty complicated, so, in my experience at least, you’ll be better going at it with an attorney than alone.... Read More

Failing to pay a debt is not a crime, it is a civil matter.  No arrest warrant can be issued for simply failing to pay a debt.  You can be sued and, if a judgment is awarded against you, the creditor can take steps to obtain payment, such as garnishing your wages, or auctioning off your assets, but the first step would have to be the commencement of a law suit against you, which from what you've written has not occurred.  Moreover, even if you're sued, and even if you owed the money, if the loan was taken out 8 years ago it is likely that the statute of limitations  has run on the claim (although it can be revived if you admit to the debt.)  My advice to you would be not to agree to anything with these people.  If you have a lawyer, you should tell Solomon and Metro to call the lawyer, and not you.  If they are a legitimate law firm or collection agency, they would then be required to stop harassing you, and deal with your attorney.  There is a federal statute called the Fair Debt Collection Practices Act.  If this really is a law firm hassling you, or a debt collection agency, I believe they may have violated this statute by threatening you with criminal prosecution to convince you to pay them.  ... Read More

I assume that this "$20 + mil company" is a separate legal entity, such as a corporation, or llc.  Officers and employees of such an entity are not responsible for the corporation's obligations, nor, in most cases, are shareholders.  As with any employee, however, a CFO could potentially be liable (most often to shareholders) for his personal actions taken on behalf of the corporation.  For example, if you sign off on a fraudulent financial statement which a bank relies on in loaning money to the company, you could be personally liable for that fraud. As for whether there are "any other potential legal issues", that is just too broad,.  There are many potential legal issues which may be implicated by your position, depending on the particular facts, ranging from possible liability from signing securities filings, liability for violation of securities laws if the company releases misleading information into the marketplace, potential insider trading problems, obligations not to usurp corporate opportunities, etc.... Read More

If the web designer was contracted to do something and didn’t do it, then you may be due something as a breach of contract.  However, that doesn’t mean that each and every little detail entitles you, for example, to a full refund.  The legality of it has to do with whether the breach was material or not.  Of course, really it all comes down to the contract.  Web design is a combination of creative art and technological skill; therefore, it has started to become a hot topic for breach of contract.  Have your contract reviewed by an attorney and discuss the issues you have with the site.  That will be the way to determine your legal standing, figure out your options, and decide how to proceed.... Read More

Well, that’s certainly possible, but I would think they’ve encountered that loophole before you.  My point being that I’d be willing to guess they’ve tied up that loose end in the lease or in the rules and regulations that connect to the lease.  To get to the direct answer, you’ll need to look to the lease and then to whatever rules or regulations the complex has in their entirety (and how they are connected to the lease).  If you’re uncomfortable doing this alone, you might find it helpful spend a few bucks for an attorney to research it and give you your answer.... Read More

If you signed a contract on behalf of a non-existent entity, the other party may have the option of rescinding it, but is not obligated to do so.  You do not have the right to rescind based on your wrongdoing, whether it was by mistake or deliberate, and you are personally liable for that contract.... Read More

Any right you had to profit sharing would not be on the basis of law, but on the basis of contract.  Did you have a contract which provided that you would be entitled to profit sharing, or did you just receive it as a form of voluntary bonus?  If it was voluntary, it is up to your employer whether or not to give you a share (unless your employer gives others in your situation profit sharing but doesn't provide it to you because of your race, sex, religion, etc .)  If you did have a contract, what does it say?  Does it say that you have to be an employee to get profit sharing, or does it say that you will get profit sharing pro rata for any part of the year you worked, even if you were not employed by the employer by the end of the year? ... Read More

Generally, no… at least on that general fact pattern.  If you were gifted a few shares, but never signed any personal guaranties, you shouldn’t be on the hook personally.  That said, let me be clear, that answer can change with more facts and depending on what type of legal entity the business exists as.  Additionally, it is unclear if you just an employee or if you are an officer or director (which certain liabilities can arise from).  However, to keep it simple according to your question, generally a shareholder isn’t going to be held personally liable for the debts of the business.... Read More

I'm not sure what the yogurt guy is talking about.  Restrictive covenants in shopping centers are not uncommon.  For example, before a bakery moves into a shopping center, it might seek a lease provision which prohibits the landlord from renting to any other tenant which will offer fresh baked goods. HOWEVER, you would need such a lease provision BEFORE the landlord rented out the other space.  Absent such a lease provision, there is nothing (assuming no zoning problems) to prohibit the owner from renting to a competing business.  In other words, absent some previous agreement, the other owner is under no obligation to provide a non-compete if he doesn't want to.... Read More

The key to protecting your personal assets in the context of having a single-member LLC is to keep things separate and operate the LLC as a business and not as your alter-ego.  The legal term for a business creditor going after your personal assets is called “piercing the corporate veil.”  In order to prevent the piercing, you need to operate the LLC completely distinct from your personal affairs.  Probably the most obvious way is to keep separate bank accounts and don’t mingle the uses.  If its business, use the business.  Don’t just use the business credit card/debit card for personal uses.  Keep good records and take your draws and place them in your personal account used for personal affairs.  Also, you want to keep very good records.  It may seem silly when you’re a single member LLC, but I advise keeping a record of your business decisions.  Of course, keep good financial records.  Now, with regard to protecting the LLC from a lawsuit… well, there’s no real way to do that other than best practices.  That is, pay your bills and operate your business in accordance with relevant laws and regulations.  Keep good communication with vendors, supplies, customers, etc. and have good contracts.  If your creditor gets a judgment, it will likely file a judgment lien and then attempt to levy against assets or bank accounts (…hence business insurance).  I'm unclear what you mean by "taking over" the LLC.  Creditors want money.  Now, in the case of a bankruptcy things get a little more complicated, but essentailly I advise a best practices and detailed planning to save you headaches from LLC creditors.  If your concern is with the 2010 Olmstead decision, that's a complicated discussion.  In that case, the Court basically considered the lack of exclusive language in the statute to allow a choice of levying and foreclosing against the interest... essentially considering LLC interest the same as corporate stock.  So, yes, in that case, there is a risk that a creditor could seek to levy against your interest; however, by the same token, the statory athority for levying and foreclosing also generally applies to help corporate stock.  January 1, 2013, a new FL LLC statute goes into affect that should clear up this confusion and update the statute... it has been in the works for several years.  All this said, this is a complicated topic that attorneys vary in opinion - your best bet is to chat with a FL lawyer.  If you already have a single member LLC, talk about what liabilities you are concerned about (and have an operating agreement drafted).  There are numerous entities that vary in operation, protection, and tax consequences - a discussion that simply can't be done through this venue.... Read More

Ok, so if I understand correctly, you signed an operating agreement to create an LLC that operates in FL.  The split is 70/30 and you’re the 30, and your role is passive.  You both invested money and the majority member tells you there’s a profit, but hasn’t provided any financial statements even though your operating agreement says he’s supposed to.  Well, probably isn’t where you want to go with this because there’s simply not enough here for criminal charges.  In fact, it is unclear whether he’s actually absconded with any money.  You should make a formal written demand for an accounting.  If he refuses to provide an accounting, you can go to court.  If the agreement you have is an operating agreement, it should spell out more of what he’s supposed to be doing as the managing member.  If not, FL Statutes Chapter 608 will fill in the gaps.  (Side note – FL’s LLC laws change on January 1, 2013).  Basically, although it is hard to tell from the limited facts, your recourse is going to be through the civil Courts.  I would advise discussing the details with a FL attorney.  In my experience, when a case has similar facts, it is a communication problem that can be solved without court intervention.  However, if it simply can’t be fixed, your recourse will depend on your facts.  I wouldn’t advise letting the problem linger… early communication is generally the way to go.... Read More

Sounds to me like you have a breach of contract on your hands.  Now, of course, without seeing the actual contract, I can only give some generalities.  That said, if the contract states that in exchange for a certain payment to you as the land owner, the lumber company may take all of the pine on 2 lots (the 20 and 40 acre), but are not allowed to take the hardwood, and they make payment but still take the hardwood, that sounds like they are in breach of the contract.  While it may not be that cut and dry, let’s assume it is and that it is a breach.  Well, you aren’t going to be able to get the trees back, they’re gone… so, you have to go after money damages.  Upon demand, the lumber company may make an offer to you before any court action.  Even if they do, I would highly advise seeking the counsel of an attorney.  And if court action is necessary, do not go at it alone.  Litigation is far more complicated than it may seem.  I don’t see in your description when the incident happened so I would advise seeking a consultation with an attorney sooner rather than later.... Read More

If you are not using the name for commercial purposes but just to protest its activities, it would likey be considered fair use, and not a trademark violation.  I believe that any law that restricted you from using a company's name in order to protest its activities would be unconstitutional as violating the First Amendment.... Read More

In order to avoid possible claims from either former employees or their new employers, many employers make it a practice, when asked for references from potential employers, to only confirm the dates their former employees worked for them, and possibly the positions the former employees held.... Read More

Well, the short answer is that a company can’t just take your money and run… that’s not how it works.  Generally, you can find answers to LLC questions by turning first to the LLC’s operating agreement.  With that, there should be provisions on the membership (how and when a member may be added or how and when a member may withdraw?)  There should be records of contribution and the ownerships interests of each member.  Finally, you’re likely to find a provision that would prohibit the LLC from taking someone’s equity (especially without paying them for it).  On that side, it sounds like there are some issues with regard to the whether or not your investment was intended to give you any equity in the firm.  If it was not, then your investment would be a loan and you would be a creditor.  In either situation, it sounds like you are owed money.  Assuming that the sale of the business resulted in a profit, if it turns out your investment was for equity, then, yes, you should be owed for your portion of ownership.  If there was no profit, then there’s nothing to distribute to you.  Now, if your investment was actually intended to be a loan of some sort, then you would argue that you are a creditor that is due the money.  Then, you would be paid as part of the winding down.  Again, assuming there’s enough money to pay all of the debts, you would be owed as a creditor.  Please understand that this is general information regarding the facts you’ve given.  There are a number of variables that can affect your rights.  I would highly advise seeking the counsel of a business litigation attorney to discuss the details.... Read More

Your question involves the law of intellectual property, particularly trademarks, which is much too complicated to cover in one email, but I'll try to give you a short overview.  You don't indicate that you have registered the name of your business as a trademark, which would provide you with some protection, and it is questionable whether you would be able to do so because the name (Munchies Pizza and Wings) may be deemed merely descriptive and thus not qualified to be a trademark.  For example, the name "McDonald's", as applied to fast food, is obviously fanciful, and (assuming other factors are met) can be registered as a trademark; the name "Best Buy", however, is merely descriptive, and can only receive trademark protection if the public associates it with one particular business.  Even then, Best Buy probably can't prevent one of its competitors from claiming to offer the "best buy in electronics".  Whether a name like yours qualifies as a trademark basically depends on whether it has acquired "secondary meaning", meaning that consumers associate the name with your particular business and no other, so that the other store's use of the name is likely to confuse consumers.  Not registering does not mean that you can't sue for trademark infringement, it is just that it will be harder for you to prove your case.  One problem you may have is that you apparently did nothing to protect your rights when the other pizza guy used the name last year, which may mean that you have waived any rights you might have.  Another problem is that litigating a trademark case, particularly one where you have to prove secondary meaning, can be very expensive. ... Read More

Contracts for the sale of goods over $500 have to be in writing, but the writing can be found in your emails.  Assuming that your emails formed a binding agreement (which did not in some way limit the damages you could recover for breach, by, for example, limiting your damages to recovering your deposit) which the seller then breaches by reneging on your deal and selling the aircraft to another, your damages would likely be the amount by which the fair market value of the plane exceeded the amount you agreed to pay.  From your email, it appears that that amount would be approximately $20,000.  In the alternative, it is possible that you could, under the theory that once you contracted to buy the plane, any profit from its sale should be yours, recover the money the seller received from the new buyer, minus the amount you had agreed to pay.... Read More

A majority shareholder owes fiduciary duty to the minority shareholder and the minority shareholder has certain rights under Florida law for breach of this duty. Unless there is an agreement in place between you and the majority shareholder that governs what would happen in the event one of you cannot perform your duties, then you probably have a cause of action against your business partner.... Read More

An employer is responsible for the actions of its employee within the scope of their employment, so to the extent that the teller did something wrong, the bank would be responsible.  However, you don't say how you were monetarily damaged by what the teller did.  In general, although there are exceptions, it is not enough to be able to prove that someone did something wrong, you have to be able to show that you lost money in some way because of that wrong before you can win a civil suit.  It is likely that the bank's breach of confidentiality breached one or more banking statutes or regulations, but unless those statutes authorize recovery even without monetary damages, I'm not sure you have a case.... Read More

Florida law provides that an unlicensed contractor can be prosecuted for a third-degree felony. Additionally, there are civil remedies for being an unlicensed contractor, namely having the entire contract voided. It's important for you to consult with an attorney before you speak with the police. Speaking with the police will not help you.... Read More