California Corporate Legal Questions

I have never done it. To change the name, go to www.sos.ca.gov/forms and fill out and file the form for amending the Articles of Incorporation of the corporation. Then you will need to fill out similar forms to notify the California Attorney General, the California Franchise Tax Board, and the IRS. I expect that each will want a copy of the Amendment to Articles of Incorporation stamped by the Secretary of State's office to show it has been accepted. I also expect that each of those agency has its own name-change or amendment form which you can get off their websites. Good luck. Dana Sack 510-286-2200  ... Read More

Yes. You can name your company in his name, but don't have him own it. If you try to do anything with the corporation which could be construed as involving conflicting interests, the other side might legitimately require you to have someone appointed as the child's guardian, tasked with protecting his best interests. If the child owns the corporation, for example, the corporation could not, or at least should not, compensate you for your services or even reimburse you for expenses of the corporation which you pay with your own funds, without either court approval or approvaly the child's guardian. When she or he turns 21, he or she will be entitled to sue you for every bad decision you made, with the benefit of 20-20 hindsight. On the other hand, in a family limited partnership, you could be the sole general partner, empowered to make all decisions, and any children who were named as investors would be silent partners. Why do you want to do this? I expect that there is a better way to accomplish what you want to do. I can set up a basic family limited partnership for you for $1500.00. Dana Sack 510-286-2200... Read More

Yes, you have substantial claims, but some of them are going to expire 3 years after the event, and some already hae expired 2 years after the event. You must hire an attorney and file your lawsuit immediately. My law firm is not taking on any more contingent fee lawsuits at this time. "Contingent fee" means you don't pay the lawyer anything until he collects a judgment or settlement from the other side. Since you don't have money to pay us now, you need to findl a contingent fee lawyer. Good luck. Hurry. Dana Sack 510-286-2200  ... Read More

Yes, it is a legal principal older than the Bible and Christianity called "restitution." The government can punish the wrongdoer by imposing fines and incarceration, but that doesn't do much for the victim. All of society benefits from the the wrongdoer being taught a lesson, hopefully being deterred from doing it again, being separated from society for a time so that he might calm down and learn his lesson before returning to society, and being punished. However, the victim does not receive any more of those benefits than everyone else in the community. Therefore, society reserves the right to require, either in addition to or, as in this case, partially in lieu of fines or incarceration, restitution to the victim. the victim in this case has lost a tooth, required dental treatment to restore the tooth or otherwise deal with the gap, may have lost time from work, and endured the pain and humiliation of the assault. He deserves some sort of compenation, separate and in addition to the punishment society imposes that benefits all of us. The DA in this case has accomplished that by offering you the opportunity to reduce your son's sentence in exchange for compensation paid directly to the victim. if you didn't like paying restitution to the victim, you could have let your son pay his full 5 year debt to society. You're lucky. Many times, the DA is only interested in maximum jail time and fines. Here he gave you an opportunity to reduce your son's jail time by paying restitution to the victim. He did  you and your son a huge favor. Not everyone is made such an offer. You should be grateful, not mad. Dana Sack  ... Read More

If your church is set up as a corporation or limited liability company, then nothing can be hidden from the Board Members. Sounds like a good reason to have a small board with lots of committees, and have the committees include lots of non-board volunteers to get the work done. Put one board member on each committee to communicate back and forth between the board and those committees, excepting the Executive Committee and the Compensation Committee, which might be board members only. If you are not a corporation, then you can do whatever you want. Yes, it is appropriate to keep the pastors' compensation secret and private. On the other hand, the members probably should know which pastors are compensated and which are pure volunteers, even if they aren't told how much. If non-pastor board members are receiving compensation, the general membership probably would like to know that, even if they aren't told how much. I urge your church to establish itself as either a corporation or a limited liability company in order to protect the members of the church against third party claims. Without such a legal entity, a plaintiff's attorney might try to treat all of you as agents or partners for each other and make all of you liable for the mistakes of any member. For example, if someone signed a contract for a lot of money over a long period of time, like health insurance or fire insurance, the other side could come after all of you or any of you and all your assets in order to get paid. Same result if a member using a car, truck or bus to do church business cause substantial damage to property or personal injuires or death. Your personal homes and savings could be seized and sold to satisfy the judgment. We charge $1000.00 plus about $200.00 in expenses paid to others to form a corporation, and $1200.00 plus expenses to set up a limited liability company. Dana Sack 510-286-2200   Dana Sack 510-286-2200... Read More

We've seen this kind of problem lots of times, and we have spent a lot of time setting up companies to try to guard against such fallings out and unnecessary conflicts. You and your partner have enough problems trying to develop the product, customers, and protect your space in the marketplace, without fighting with each other.  Our first assignment would be to identify whether or not your partner is up to no good and try to mediate and negotiate getting the business back on track with protections against such conflicts in the future. First, we'll need to know a lot more about the company, starting with the type of company, who owns what shares, and who has what controls.  Please see my resume and a description of my law firm regarding our qualifications to assist you.We charge $300.00 per hour plus expenses, bill monthly, and expect to be paid promptly after delivery of bills. We would want a $5000.00 deposit before beginning. The deposit would be applied to late payments and restored as soon as the late payment is received. At the end of the assignment, the deposit would be applied to the last invoice and any balance remaining would be paid to you immediately.Dana Sack 510-286-2200... Read More

I urge you to use a Certified Tax Specialist. I am not one. The IRC sections for establishing an irrevocable trust look straightforward enough, but there all kinds of traps for the unknowing. You want someone specially trained and who does them often enough to keep up with the latest legal rulings and articles on the subject. www.calbar.org has a list of Certified Tax Specialists. Not all irrevocable trusts can own S-corporation shares. Make sure your attorney checks those requirements, too. Failure to comply will automatically and retroactively convert your S-corporation to a C-corporation, with the resulting negligence penalties and interest. Good luck. Dana Sack 510-286-2200... Read More

No. You can't have it both ways. It is possible to keep separate financial records and then consolidate them at the end of the year in order to produce a single tax return. However, once you merge there is only one entity. All of the directors and officers owe their fiduciary duty to that single entity. They cannot remain loyal to only half the entity. They cannot keep secrets from the other half of the entity. That means that if a majority of the directors did not want to allow half the entity to "pull out," they could prevent such a pull-out. It might even be argued that the directors who stated a loyalty to either of the former entities would be barred from voting. This might mean that ONLY directors who opposed the pull-out would even be entitled to vote. Two entities can share office space, share staff, share web access and phones, in order to save money, and still exist as separate entities, with separate decision making boards and officers, and tax returns. This way the directors and employees of each group could remain loyal to their own group, and without assuming loyalty to the other. Whenever a conflict arises, directors and employees must decide which entity they will be loyal to and resign and not take any action or vote on behalf of the other entity. Staying separate avoids that problem.  We charge $300.00 per hour plus expenses, bill monthly and expect bills to be paid promptly. I would expect that such an arrangement could be negotiated and drafted for not more than $2000.00. I would represent one side or the other, but the other side could agree to reimburse the side I represent for half of those fees, and the side I represent could instruct me that my assignment was to make the agreement as fair and even to both sides, as possible. If you would like help negotiating an agreement for such a "sharing" arrangement, please call me.  Dana Sack 510-286-2200  ... Read More

Since you have majority control, you should be able to do pretty much whatever you want, as long as it is not punitive to your other shareholders and intended to either hurt them or benefit yourself. I would want to document a strong case that whatever you choose to do is in the best interests of the company and its shareholders. 15% should not stop you, unless he also has other contractual rights. I need to know what other rights you might have given him. Suing the finder isn't going to get you those new investors. If that finder's fee is too expensive, you'll just have to find other investors. We advise clients regarding these kinds fo problems and problems with suppliers and customers, all the time. It helps to have us already know all about your business, so that when you have a question, we already know enough about you and your business that we can get right to the current problem and not learn about your business first. Please call me to set up a time to meet and learn more about your company. Dana Sack 510-286-2200  ... Read More

If you are a corporation or limited liability company, then you can either change the legal name of the company by filing an amendment to the Articles of Incorporation or Articles of Organization with the Secretary of State or you can file a fictitious name statement and have both names. The legal name would remaing the same, but your company would also be entitled to legally use the other name, as well. If your company is just some people acting together with a fictitious name statement filed and published somewhere, then you can just file another one and have both names. I strongly urge you to conduct this business as either a corporation or a limited liability company. We can discuss the choice. If there are several of you, and especially if you have an paid employees, each of you is personally liable for any harm caused by any wrongful conduct of any of the others, including failure to pay for goods and services any of them agree the group will pay for. We form simple corporations and limited liability companies for $1200.00, about $200 of which is filing fees. That includes filing the Articles with the Secretary of State, Bylaws for a corporation and an operating agreement for an LLC, and organizational resolutions to cover certain decisions needed to get started. If you would like to discuss this further, please call me at 510-286-2200. Dana Sack... Read More

I would recommend that your company and your partner set up a new company, maybe a corporation, maybe a limited liability company, maybe even a limited partnership, to operate the new granite business, in order to protect you and your company against any losses or claims caused by either the new partner or any employees of the granite business. If you would like to discuss the proper entity, negotiate an appropriate agreement with your new granite partner, and setting up the appropriate entity, please call me at 510-286-2200, or email me at ds@sackrosendin.com Dana Sack  ... Read More

Lots of precautions. Clients and investors are very different categories. Investors give you property or money which you are going to use to operate a business, and the investors are going to share in the  profits. The interests in your business are securities. That's the definition of a security. All securities must be registered with the SEC, a lengthy and expensive process, unless the securities are exempt from registration. Many state have their own registration and exemption rules to protect investors who live in that state. Many of these exemptions require that no commissions be paid. So you really need to find an exemption which allows commissions and make sure you set up the investment to qualify for that exemption. If clients give you their money to invest for them in other businesses, you are an investment advisor or investment bank, which are heavily regulated industries. You and certain of your employees may be required to obtain the appropriate securities license, which may require hours of classes and passing a rigorous test. If you would like to discuss your proposed business and the legal way to set it up, please call me at 510-286-2200 or email me at ds@sackrosendin.com Dana Sack  ... Read More

You are going to need to discuss many aspects of your business and your future plans with a knowledable attorney or accountant  in order to arrive at the right answer. California imposes a 10.4% income tax on regular C corporations and a 1.50% tax on income of even S corporations. Most states have lower rates and no tax on income of S corporations. So you are probably going to end up forming a new non-California entity for your non-California business. You will probably keep the California entity for your California clients and customers, so only the revenues from them will be taxable by California. Depending on your exit strategy, who you might sell the business to, you might want to be a Delaware corporation. Depending on the number of investors, you might prefer to be a Delaware limited partnership or limited liability company. Depending on how much exposure there is to the general public, might also recommend a Delaware entity, maybe a corporation, but maybe an LLC. Every time my clients by or build a new property, we set one or more new entities to own and possibly to operate it. As a result, I go through this calculation with my clients all the time. If you would like to discuss what entity you should use for your new Texas location, please call me at 510-286-2200 or email me at ds@sackrosendin.com. To learn more about my law firm, go to www.sackrosendin.com Dana Sack  ... Read More

That language does not cancel the need to acquire any other license associated with the activity. For example, lots of construction companies are LLCs. They still require a contractor's license. If you set up a massage business or a driving lesson business, you would still need those licenses. And if your investment banking business requires an SEC or state license, being an LLC does not cancel that requirement. Dana... Read More

Yes, you can make a gift of stock. The person who recieves the gift will have the same tax basis in those shares that you had when you transferred them. If the value is $14,000 or less, then there is no gift tax. If it is more than $14,000, then it counts against your uniform lifetime exemption from estate and gift taxes, but no gift tax will be due now. If the person receiving the stock is making any contribution of cash or property to the corporation, then it is better to treat the stock as payment for such cash or property. Then the buyer of the stock will receive a tax basis equal to the amount of cash or the fair market value of the property. He might elect to take a tax basis equal to his tax basis in the property, in order to avoid tax on any capital gain for selling property in exchange for stock, since he won't receive any cash from the sale with which to pay the tax. If you would like me to help document such a gift on the records of the corporaton, I am Dana Sack at ds@sackrosendin.com,510-286-2200.... Read More

It could be legal if the facts regarding the landlord are correct. I would want to make a thorough record, including signatures and representations by the landlord in order to make sure the units for the landlord would be exempt from federal and state registration requirements. Reg D is a safe harbor, but it is not the only way for units to be exempt from registration. If you can make a strong case that these non-voting units are not part of any public offering and are being offered privately and only in this state, you should be able to warn off any disgruntled investor trying to get his money back from the promoters by arguing that the offereing was not exempt and since it was not registered the investors are entitled to back out and get their money back. I would be able to help you work this out with your landlord and the appropriate documentation to protect you. Dana Sack www.sackrosendin.com 510-286-2200  ... Read More

First, you have used two separate terms to describe directors: "directors" and "executive directors." Do such distinct titles or offices exist under your company's Articles of Incorporation or Bylaws, or does your company have just one class of directors? Companies with large boards sometimes have an executive committee to provide guidance to the officers and answer their questions between meetings of the larger board. Is that what you mean by "executive directors?" If so, then the answer is no. At a meeting of directors, all directors are equal. The absence of directors who are members of an executive committee cannot prevent the other directors from taking action. In order for the board of directors to take any action a quorum must be present. Most bylaws provide that a quorum is half the total number of directors. Some provide that it is half the total number of directors offices including vacancies. Resolutions are approved by majority vote. If there are 3-6 directors, then the quorum would be either 2 or 3 directors, and the votes of two of them would be enough to pass a resolution. Smaller quorums for meetings of shareholders are sometimes provided in the bylaws and may be appropriate, especially for corporations with a large number of shareholders, and many actions for which shareholder approval is required. I cannot think of any situation in which a smaller quorum for meetings of directors would be appropriate. That you should discuss with an experienced corporate attorney. Please call me if you would like to discuss this further. Dana Sack 510-286-2200... Read More

No, not if you did not agree to it. What would happen if there were such a policy and no one told you about it before you took the course? The answer should be the same. What would happen if the policy were buried at the back of a thick employment manual? What if you signed something saying you agreed to everything in the manual, but had never been given time to read it? What if you were given the opportunity to read the employment manual, but never got as far as this provision before you gave up and signed the agreement? The answer should be the same, unless you were specifically told that reimbursement would be required if you left before the company had earned the cost of the course back from your work. If they call and threaten you, consider hiring us to defend you. Dana Sack 510-286-2200  ... Read More

Petition for Writ of Mandate. I've never done one against a private corporation. Usually I have defended against them when neighbors sued the city or county over permits my clients had obtained. I am familiar with the procedures and legal standards, even though I've nver actually sued a corporation to force a meeting. If you would like me to help you with this, please call me. Sometimes a phone call to the president, the property management company, or the HOA's attorney is all it takes. But if it takes more, our lawyers love a good courtroom fight. Dana Sack 510-286-2200  ... Read More

If you went through probate court proceedings in California, the probate department clerks are very thorough in searching for undisclosed assets and making sure every bit of the estate gets to the person the decedant designated in his or her will. During the probate, your attorney had the power to subpoena the bank's records regarding the CDs and your brother's bank accounts. Those should have shown which accounts the CDs went into and where they went after that, whether he sold them or spent them. If the probate is closed, I don't know what's left to do. There are statutes of limitation on all claims. When the statute of limitation expires, the claim becomes unenforceable. The statute of limitation for a claim based upon a writing is 4 years. The statute of limitation for fraud is the later of 3 years or 1 year after discovery. There are others for other types of claims, but most are shorter. The point is that you might have waited too long, but if there are any claims that have not expired, they may expire very soon. If you're not ready to give up on this, then you better hire an attorney and get him going immediately. If you would like me to look into this for you, we charge $300.00 per hour plus expenses. We send out detailed invoices monthly and expect to be paid upon delivery of the bills. Since we do not have a prior relationship with you, we would want a $5000.00 deposit before beginning, and we would expect you to maintain that deposit by paying our invoices promptly. If these terms are acceptable, please let me know and I will send you our usual attorney client fee agreement so we can get started. Dana Sack www.sackrosendin.com ds@sackrosendin.com 510-286-2200  ... Read More

The short answer is yes. But for some states you might not want to. All the assets and any profits of the company, even a non-profit, which signs the contract are available to creditors  and claimants if something bad happens. As a company grows, it usually separates different geographical or operational sections of the company in order to limit the assets available to satisfy a judgment arising out of the activities of one portion of the company. For example, if you have a lot of valuable contracts in both California and Arizona, you might want to guard against an expensive debt or judgment in one of those statement bankrupting all the work in both states. The solution is separate corporations for the two states. You don't need a separate corporation for every state. Your Board should decide how big any of the companies can get before you start the next one. $5 million or $10 million seem like logical levels at which to break into separate companies. We set up corporations and limited liability companies and limited partnerships all the time. Dana Sack www.sackrosendin.com 510-286-2200 ds@sackrosendin.com    ... Read More

I am not a class action lawyer, but no, I have never heard of that. I am not convinced that the legalese that accepting the money meant you could not sue is enforceable. Why couldn't you take the position that you accepted it as a downpayment and partial compensation for what you are really owed and what your really damages are? Just because they write something like "in full and final satisfaction" on the back of the check doesn't mean you can't cross it out and treat it as just money they have paid you. You can still ask for more. They probably figure that having received that amount, most people will respect their language about it constituting a release and waiver of further claims, most people won't bother trying to get any marginal additional money, and if they did, the court might make you return the money as a condition precedent to hearing your case. Even you aren't inclined to pursue the matter further. But this is not my area. I'm a real estate and construction attorney. Dana Sack 510-286-2200 www.sackrosendin.com  ... Read More

Many LLC Operating Ageements include restrictions on transfers. As a single owner LLC, you might not have any operating agreement, and if you have one, it might be very short and omit such restrictions. If there is an operating agreement and it has such restrictions, then comply with them.  Same for any other assets transferred to the trust. Banks, insurance companies, and stock brokers all have their own rules for transferring assets  and accounts on their records. Find out what they want, whether they have forms they want, and comply. LLC member certificates are not required. The LLC's records of who owns it count. Dana Sack www.sackrosendin.com ds@sackrosendin.com 510-286-2200  ... Read More