Business Legal Questions

An EIN, Employer Identificatin Number, is the taxpayer identificaton by which your business will be known to the IRS, just like an individual uses a Social Security Number.  Businesses may need EIN's for many reasons, but certianly the business needs an EIN if it has employees and/or if it is taxed as a corporation or partnership.  If you are going to operate your business as a sole proprietorship and have no other employees,  you may not need an EIN.  Whether you should structure your business as a corporation, an LLC, or some other structure is a different issue.... Read More

Partners can pretty much have whatever duties and receive whatever compansation the partners agree to.  If that person is alos working for the partnership, the 20% can be in the form of salary, partnership dividends, or some combination.  The person can own 20% of the equity, or any other percentage teh parties agree to.  There is no problem having a partner who receives 20% of the profits and no other compensation.  There is also no problem having an employee whose compensation is 20% of the profits but isn't a partner.  However the two of you decide to structure your deeal,  I would recommend havinga written partnership agreement clearly documenting the terms.  I would also recommend consulting an attorney, or at least an accountant, for tax and other advice on how best to structure the agreement. ... Read More

I need to know more information to see if I can further assist you.  One thing that we need to learn about is how was the beneficiary in the policy, was it your sister only and was your name mentioned in the policy and how much.  If you were listed and for some reason, your sister received all the funds, then you may also have a claim against the insurance company.  Simply put, we need more information from you.... Read More

There is no reason that an operating llc can't have the same members as a holding company llc.  They often do, in an attempt to minimize potential liability for any particular project.  For example, real estate development businesses often form new entities for each new project.  To avoid shared iability, though, you need to operate as if the entities are separate and acting at arms' length, for example charging market rate rent to the initial llc.... Read More

LLC and DBA really have nothing to do with each other.  The first is a structure of business operations by which the business is owned and operated by an entity, not you personally, and you own the entity.  Its principal advantage is that the individual owners of the llc are not generally personally responsible for the llc's obligations.  Because of this, many with whom the llc does business (i.e. landlurds, suppliers, etc.) may require guarantees from the individual owners before they will do busines with the llc.  The principal disadvantage is the extra taxation and costs of operation.  "DBA" simply means "doing busness as", and while it requires some registration and fees, does not affect the structure of the business.  An LLC can operate a business as a d/b/a.  For example, XYZ LLC. can operate a restaurant doing business as "Tony's House of Tacos."  Using a d/b/a has nothing to do with avoiding personal lliability, however.  If an individual operated a business under his/her own name or under a d/b/a, he/she would still be personally liable for the business's obligations. ... Read More

Generally, under Colorado law, a Colorado corporation must have one of the following terms or abbrevations as part of it's legal name: "Corporation" "Incorporated" "Company" "Limited" "Corp." "Inc." "Co." "Ltd." A Colorado LLC (Limited Limited Company), on the other hand, is not a colorado corporation so you would not have those terms or abbrevations above and different legal and tax rules applies. For a Colorado corporation you would prepare and file Articles of Incorporation with the Colorado Secretary of State and set up Bylaws. For a Colorado LLC your would prepare and file Articles of Organization with the Colorado Secretary of State and set up an Operating Agreement. As mentioned above, there is different legal and tax aspects of each type of entity.... Read More

In general, you have great flexibility to set the terms of the operating agreement of an LLC.  The equity %s do not always need to be the saem as the profit/loss %s.  Further, equity %s do not in general need to reflect actual capital contribution %s.  Based om the terms pf the operating agreement, the capital contributions do not need to be the same %s as the equity ownership %s.  Saying all that - The IRS does have certain regulations such as the Substantial Economic Effect rules which coudl be applicable to curtail some types of allocations so care needs to be made in drafting the operting agreement.... Read More

In general, an LLC should set up its own Operating Agreement to reflect the specific terms of operations, including ownership %s and management terms, as well as the specific tax aspects including who will be the Partnership Representative and details for the authority to act per the new Centralized Partnership Audit Regime IRS rules.... Read More

Defamation invovles a false statement of fact which harms another's reputation and causes them monetary damage.  Depending on what false infomration was communicated, the plaintiff may have to prove monetary damages, or they may be presumed.  Either way, however, only statements of fact can be defamatory, not statements of opinion.  Your rating could be viewed as a statement of opinion, but if I were the daughter, I would argue that your rating contains an implied statement of fact that you had dealt with that business and had an unsatisfactory interaction which, based on the facts you've recited, is false.  I don't know that this argument would succeed, and I also don't know if this statement would fbe considered defamation per se (the type where the defamed party need not prove monetary damages) but it is possible.  Thus, although it is likely that the daugher is bluffing and/or that you would prevail in any lawsuit, the safest course of action is probably to remove the rating.... Read More

Corporations are separate legal entities which exist apart from their shareholders and continue past the lifetimes of their shareholders.  If your husband was the sole shareholder of the corporation and you were the sole inheritor of his estate, then you inherited the shares and own the corporation.  However, if the corproation has paid no corporate taxes for the years since your husband's death, it may have been dissolved by the state and/or have tax liens against its property..  Assuming that the corporation was not dissolved for non-payment of taxes, it - not you personally - would continue to own any assets it owned before your husband's death, including the real estate you mention. Corporations also have obligations for which they are responsible, not their shareholders.  In the normal course, if the corporation borrowed money from a bank, it would be responsible for repaying that obligation, and its property could be used to satisfy that debt; you and your personal assets would not be at risk.  However, becasue shareholders are not personally liable for their corporation's obligations, the bank would likely have wanted your husband's personal guaranty of the loan, and his estate would be liable on that guaranty.  Also, i would have thought that the bank wuld have wanted a personal guaranty from you as well. You need to straighten out (a) what the corporation's status is; (b) whether it owes any back taxes; and (c) which people and/or entities are liable on the obligation to the bank.     To do this you need to get together all of the relevant paperwork, and it may be helpful to engage a local attorney if the cost is not prohibitive.... Read More

Assuming that New Mexico law is the same as in the jurisdictions in which I practice (it should be, the following is pretty basic), the members of an llc are not personally liable for the llc's obligations as long as they operate the llc correctly as a separate entity.  In order to pierce the veil of the llc, a plaintiff would need to show that the members completely dominated the llc so that it had no separate existence (which is normally shown by a failure to observe the proper formalities, commingling of personal and company funds, transfersw of funds from the company to the individuals without fair consideration and to the detriment of company creditors, etc.) and that the llc form was used to commit a fraud or similar wrongdoing.  If you operate the LLC properly, there is little risk of piercing the veil.  Of course, those doing business with the LLC (e.g. landlord, banks or other sources of business financing, etc.) know this as well, and so may require the individual members to personally guarantee the company's obligations before extending credit.... Read More

Yes.  A waiver, particualrly a form waiver which is not negotiated and in connection with which the customer had no opportunity to negotiate, can only go so far.  As a general rule (not sure if Ohio is exactly the same) you can waive claims for negligence, but not for recklessness and certainly not for intentional acts.  In other words, if the mats are so slippery form recent sweat that someone slips and falls on them, the waiver may bar a claim.  If you get angry and intentionally knock someone through a wall, it will not. There are obviously a lot of areas in the middle where the outcome is not certain.... Read More

An attorney who provided legal services in exchange for a share of your business would be entering into business dealings with his/her client.  While this is not always prohibited, it does give rise to many ethical issues, particularly where the client is not represented by independent counsel in negotiating the business terms.  MY guess is it will be difficult for you to find an attorney who would be willing to enter into such a relationshipk, particualrly with a start up.... Read More

It is unlikely that a llifetime restriction will be enforced for this business, and I also wonder if 15miles may be deemed too broad, but it is possible that, even if the Court believes that hte restriction as written whould not be enforced, it may "blue pencil" the clause, i.e. narrow it to an acceptable scope (e.g. a year post-employment and 3 miles) and enforce the narrowed clause.... Read More

The short answer is yes, your business can operate in areas and types of business outside your company's stated business purpose. The longer answer is that this is generally known as the doctrine of ultra vires. An action by a corporation is considered ultra vires when it is outside the authority of the corporation. Thus, in jurisdictions that have adopted the ultra vires standard, any of these actions by a corporation are not binding, since a corporation cannot do more than it is authorized to do. Generally the ultra vires doctrine is a defense to an obligation owed by someone to a corporation.  However, Ohio explicitly excludes the ultra vires doctrine through R.C. 1701.13(H). This provision does not allow for any company to use the ultra vires, or outside of the stated business purpose, defense to void a contract or other obligation owed to your corporation.... Read More

The answer depends upon the business arangement you had with your "partner".  Was a formal business entity established to govern your partnership or to own the property?  If so the foundational documents of that entity (LLC - operating agreement, Partnership Agreement, Inc. - By laws) will likely direct what rights you have.  To the extent there is no business entity and there were only verbal agreements, you may have a claim for promissory estoppel, breach of contract or unjust enrichment.  Just depends upon the circumstances.  In any event, sending a demand letter from an attorney laying out his/her malfeasance and explaining your rights might get the partner to start acting more reasonably. Feel free to contact me if you would like to discuss more. Best, Russo Law LLC www.russolaw-llc.com   *Russo Law LLC is not acting as your attorney and will not do so until you've executed an engagement letter.... Read More

From what you've written, you were an employee at will, meaning that you could be fired at any time for any reason not prohbiited by statute (e.g. race, religion, gender, etc.)  Texas law may be different, but in the states in whcih I practice, an employer can require an employee to enter into an employment contract as a condition of continued employment. although it does not necessarily follow that all the provisions of the agreement will be deemed valid if the employer ever sues to enforce them.... Read More

You would add the clause by adding the clause, but of course it might be of some evidentiary value, it is not binding on your former employer who is not party to the contract.  You can’t guarantee that your former employer won’t sue you, but the more proof you have that you didn’t poach the more likely you are to win the suit. ... Read More