IT'S A MATTER OF LAW

Monday, June 24, 2013

Finding a Better (and less bitter) way to Divorce. by Amy Alvis

Collaborate dispute resolution is a process that couples voluntarily may chose as an alternate way to resolve their issues in a divorce, legal separation, or other relationship termination without having to litigate issues in court. It is similar in ways to mediation however, it takes a more holistic approach by involving attorneys, counselors, financial advisors, tax advisors and any other professional who may be needed to help the parties settle their issues. Unlike mediation, where no legal advice is provided to the parties by the mediator, the parties are each represented by legal counsel.

In order for this process to work both parties need to agree to participate in the collaborative process, typically in writing as well as the following:

1. They agree to fully disclose all relevant information to each other in the spirit of mutual cooperation and the avoidance of litigation.

2. They agree to act in good faith in the process and the goal of reaching a solution/settlement that is acceptable to each of them.

3. They each have their own attorney (typically one that is a collaborative practitioner or will act in such capacity) and accept that their attorney’s representation will end if the matter becomes contested. This is known as a “limited scope” representation. This is also different than mediation where the parties may have an attorney advise them during mediation, but then later represent them in court if they are unable to reach an agreement in mediation.

4. The parties agree to engage the services of financial, tax, mental health, and/or other professionals to the extent their situation warrants, to evaluate the facts and then advise and make recommendations to the parties. These professionals will also stop their representation if the matter becomes contested.

The benefits of this process is that the parties feel much more in control of the outcome and solutions. All persons involved become very familiar with the family, the financial issues, and all other relevant factors that go into the solution that becomes the mutual agreement. Decisions are not left to the courts that often have very limited familiarity with the particular case and facts, nor really know the parties involved other than what they may see in their courtroom or read in the court pleadings. And finally, there is more trust in the process and confidence in the final agreement because the parties are each providing information to each other freely and openly.

To find out if collaborative practice is right for you, call Amy Alvis at Alvis Frantz and Associates at 925-516-1617. Amy is a member of the International Academy of Collaborative Professionals.

Wednesday, May 15, 2013

What’s in a Name?

By Marie Quashnock

Even experienced attorneys have a hard time explaining the difference between different types of intellectual property that a business can own. While patents protect the ideas, and copyrights protect how the ideas are expressed or written down, trademarks protect the goodwill in a product or service. Specifically, trademarks identify your product or service in the consumers' minds

A trademark is not necessarily the same as your company name, but it can be. For example, The Coca Cola Company makes “Coca Cola”, so both its company name and trademark are the same. The Coca Cola Company also makes other popular soft drinks. All of those names are different than the company but they are protected by trademark.

Names are not the only things which can be trademarked. You can also trademark logos, designs, slogans, shapes, smells and even sounds. For example, Intel owns a trademark for the 5-note sound played at the end of its commercials. (U.S. Trademark Registration No. 2315261, described as "a five tone audio progression of the notes D FLAT, D FLAT, G, D FLAT and A FLAT.")

What does trademark protection mean? When you register a trademark, you get the right to use it exclusively for your product or service. State trademarks protect marks that are used locally or only in one state. Federal trademarks protect marks that are used in more than one state. If you find out someone else is using your mark, you can ask them to cease and desist.

You might think that your trademark is safe because you did an internet search and you did not find anyone else with your name out there. However, a trademark owner can force you to cease and desist even if your mark is not identical, so long as it is substantially similar to yours. When you did your internet search, you probably were not looking for similar marks. Trademark search companies use search algorithms that break down your mark and look for marks that are even remotely similar.

If you find yourself in this situation, the best you can hope for is a negotiated agreement for both companies to use the mark concurrently. At worst, you could be forced to give up your mark entirely, which means changing all your signs, menus, advertising, website, etc. This could be very costly. An ounce of protection is worth a world of cure.

For more information about protecting your trademark and other intellectual property, please contact us at Alvis Frantzand Associates.

The information provided is for informational

purposes only and not for the purpose of providing

legal advice. You should contact an attorney to

obtain advice with respect to your particular issue

or problem.

Wednesday, June 6, 2012

The REAL Cost of DIY Incorporation

By Ed Younger.

If you run your own business, you are a smart and talented individual. You can probably handle any task that you set your mind to, and if you are thinking about incorporating or forming an LLC, you’ve probably heard advertisements for low cost do-it-yourself incorporation services. These ads claim that you can save money by incorporating or forming an LLC online by yourself. But as a smart business person, you should know that there is more to the story than as advertised.

First, most of these services fail to disclose the true cost. The advertised price is for the bare minimum. It does not include important documents and steps that must be purchased at an additional cost.

Upselling of unnecessary options is also common so beware. One popular website automatically subscribes you to ongoing services that cost hundreds of dollars per year. In the end, it can cost more than seven times the initial advertised price for a complete DIY kit. One of the biggest problems is since you are not receiving legal advice, how do you know if you are making the right choices on how to structure your business? If you make a mistake it may cost you much more to correct it later, and even worse, you may not get the personal liability protection or benefits you were after in the first place.

Another factor to consider is time. Time you spend doing your own legal work is time lost developing your business or serving your customers and earning revenue. While the DIY services promise to be “quick and simple”, in reality you will need to research the proper business structure and setup for your needs.

Each situation is unique and there are many factors to consider. If you don’t have the time to dedicate to doing this homework, you will end up frustrated by the DIY process or worse yet, stuck with a structure that hinders your objectives. Successful entrepreneurs recognize the value of their time and this should not be discounted when deciding the value of DIY incorporation services.

Are you willing to risk your dream business and your personal security by trying to save a few bucks?

At Alvis Frantz and Associates, we can help get your business entity formed with confidence. Let us be a trusted part of your team that helps you maximize the potential of your business.

Ed Younger, is an associate attorney at Alvis Frantz and Associates and is dedicated to helping your business. Our LLC and Corporation services are complete packages that take care of Federal, state, and local filings. Call Ed 925-516-1617 or email him today to discuss your business formation.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.

Copyright © 2012 Alvis Frantz and Associates.

Friday, January 27, 2012

So You’re a Non-Profit Really? Are you Sure?

Right before and after the holidays, there are many solicitations for “tax deductible” donations to many organizations. Some you recognize, some you don’t. If you donate to a non-profit that does not have 501(c)(3) status, you could be jeopardizing your right to take that deduction.

A 501(c)(3) public benefit organization or corporation is an organization that has gone through the scrutiny of the IRS to determine if its purpose serves the public good. A non-profit (501(c)(3)) that has been in existence for several years may not have filed the “Form 1023” that is now required by the IRS to obtain 501(c)(3) status.

However, if your organization, an existing non-profit, has not filed the 990 tax return with the IRS for the past 3 years, you will lose your status, and then have to file the Form 1023 to be reactivated….And there is no guarantee that this time around, you will be granted non-profit status.

Once you receive Federal “tax exempt” status (501(c)(3)), you must then apply to the State for equivalent status. You can create a completely new application with the state on the Form 3500 for California, or you can wait for your status to come through with the Federal Government, and then make an abbreviated application with the state (details on how to do that are not covered by this article).

After you receive the State’s approval, then you must submit an application to the California State Attorney General’s office to be entered into the Charitable Registry. This brings us full circle. If you are a potential contributor to a non-profit, you can visit www.oag.ca.gov/charities and look at the Tools on the right side of the page for a Registry Search to see if your charity is listed. There is also an explanation of the site on the left toward the bottom.

If as an officer of a non-profit, you assume that you are in good standing, guess again. The majority of non-profits started out legitimately, but failed to file necessary paperwork to stay in good standing. As the founder of a non-profit corporation, I have direct experience that will help you determine if your non-profit is in good standing, and what to do if it is not.

Thursday, December 1, 2011

Employers - Incentives That Work

During these recessionary times, I often counsel frustrated business owners trying to find ways to give their employees incentives other than money but that are also effective in promoting the behavior and results that the business is looking for.

For instance, the owner of a yoga studio wanted her employees to sell more yoga apparel but she was already giving employees a 20% discount without requiring them to meet any sales goals to receive that discount. Our solution: revamp the program to give the employee discount only after a certain level of clothes sales had been met. It’s a win-win with employees receiving the discount and the business receiving increased sales.

Keep in mind that different incentives work for different employees. What’s important to one employee is not necessarily important to another and, thus, the solution oftentimes is to offer more than one type of incentive program. The goal, however, is to find a win-win solution that gives the employees something they want and at the same time the business gets what it wants.

Some other examples of non-monetary incentives include:

1. Recognize and thank good performance; don’t wait for a performance review to acknowledge good performance. Many employees truly appreciate the recognition and the business gets a continuation of the good performance.

2. Give employees extra time off with pay (assuming you or other staff can cover) but make sure you tell the employee(s) in advance; nothing ruins extra time off faster than simply springing it on employees and they have not had a chance to plan or make necessary arrangements with family and the like. Even a few days advance notice is usually adequate.

3. Seek employees’ opinions and ideas. According to many experts, a large proportion of employees leave their jobs not because of low wages, but because they feel overlooked and neglected; that their voices are not being heard. Take advantage of your employees’ experience and ask for input.

Just because employees are staying in their jobs doesn’t mean businesses are getting full productivity from them. Most businesses are continuing to function on bare minimum staffing but that doesn’t mean business owners can’t be creative in providing incentives to get the most out of their staff. And in doing so, employees can be given the opportunity to get what’s important to them.

For more assistance and ideas tailored to your particular business, contact Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617. I have been assisting employers with these types of issues as well as all aspects of the employer-employee relationship for 20 years.

It's Cheaper to Prevent it than to Defend it

Many, many employers practice an ostrich approach to employee relations; they stick their heads in the sand and hope for the best. Of course, this leaves another part of their anatomy exposed, but for some this strategy works just fine for years. But then that employee happens—and we all know who that employee is—and the gig is up. Employers MUST be pro-active and implement appropriate policies and procedures BEFORE that employee happens.

Employment litigation is one of the most expensive types of lawsuits. Additionally, the California labor laws are “gotchas.” Employers are either in compliance or they’re not, and there’s no grey area. For example, employers either strictly comply with the overtime pay requirements or that employee will eventually bring a claim before the Labor Commissioner who will look back at three years of payroll records and potentially cause an audit of all employees’ payroll records.

Typically, an employer that is out of compliance with one aspect of their employee relations is out of compliance with many. Recently, a woman employed by an upscale retail establishment reported her employer was violating the laws related to overtime pay, meal and rest breaks, frequency of pay, and itemization of pay, and had then fired her for filing a claim with the Department of Labor. Similarly, employers routinely confide they are operating without employee handbooks, without the required postings, without a solid system for documenting employees’ hours worked, and the like.

While most employers are not purposefully violating labor laws, the effect is the same—you pay. Defending against these claims and ultimately paying for years of transgressions is almost always a very expensive proposition and has been the downfall of many businesses. The solution is to get your ship in order NOW, before that employee comes along. In fact, that employee may already be working for you.

For more assistance tailored to your particular business, contact attorney Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617 or Rhonda@alvisfrantzlaw.com. As the only employment law specialist in East Contra Costa County, I have been assisting employers with implementation of appropriate policies and procedures, as well as all aspects of the employer-employee relationship, for 20 years.

"Hot" off the Press from the Courts - Another Victory for Employers

California employers have enjoyed some relatively rare victories in recent months. Most recently, in June 2011, the California Supreme Court – in a unanimous decision no less – sided with employers on an issue involving employer liability for employee actions at work. In so doing, the Court also provided a helpful primer on the history and rationale behind tort liability / comparative fault system.
In Diaz v. Carcamo, Docket No. S181627, filed June 23, 2011, the California Supreme Court ruled that when an employer admits vicarious liability for the negligent act of its employee, the plaintiff is precluded from also pursuing a negligent entrustment claim against the employer.
Plaintiff Dawn Diaz was severely and permanently injured when the vehicle she was driving on southbound Highway 101 in Ventura County was struck by a truck driven by defendant Jose Carcamo, an employee of Sugar Transport of the Northwest, LLC. The Carcamo/Sugar Transport truck had come across the center divider after it had been struck by a vehicle driven by defendant Karen Tagliaferri. Diaz sued Carcamo, Sugar Transport, and Tagliaferri, alleging 1) negligent driving by Carcamo and Tagliaferri; and 2) vicarious liability for employee Carcamo’s negligent driving and direct liability for its own negligent hiring and retention by Sugar Transport.
Before closing argument, Sugar Transport stipulated with plaintiff to vicarious liability for employee-driver Carcamo’s negligence, if any. Over Sugar Transport’s objections, the trial court admitted evidence of Carcamo’s driving and employment history (which included two prior accidents – one occurring only 16 days before the Diaz accident – Carcamo’s illegal immigration status, use of a “phony” Social Security number, lies on his employment application, and negative information garnered from reference checks).
The jury awarded over $17.5 million in economic damages and $5 million in non-economic damages, finding Carcamo and Tagliaferri had both driven negligently and that Sugar Transport had been negligent in hiring and retaining Carcamo as a driver. The Court of Appeal affirmed. Because of a conflict with prior decisions [Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853 and Armenta v. Churchill (1954) 42 Cal.2d 448], the California Supreme Court granted the petition for review of defendants Sugar Transport and Carcamo.
In reviewing the history of tort liability, the Court noted that when Armenta was decided in 1954, the California courts imposed tort liability on an “all-or-nothing” basis; that is, if the plaintiff contributed in any measure to his/her own injury, recovery was barred. Similarly, once an employer admitted vicarious liability for an employee’s tortuous conduct within the scope of employment, it didn’t matter whether it was submitted to the jury on a negligent entrustment claim and/or on a negligence claim against the employee. Either way, the employer would be liable for 100% of a plaintiff’s damages, or else not liable at all.
The “all-or-nothing” system was replaced with the comparative fault system in 1975. Under comparative fault, a plaintiff’s negligence merely reduced the damages awarded in proportion to the amount of negligence attributable to plaintiff, and damages among tortfeasors were now apportioned on a comparative negligence basis.
Finally, in 1986, California voters adopted Prop. 51 (as codified by Civil Code Sec. 1431.2) that limited the scope of joint liability amongst tortfeasors. More specifically, in cases based upon principles of comparative fault, each defendant is liable for all of the plaintiff’s economic damages, but only his/her/its proportionate share of the non-economic damages. Thus, non-economic damages are to be apportioned amongst the universe of tortfeasors, including non-joined defendants.
One group of defendants excluded from allocations of fault under Prop. 51 are employers who face only vicarious liability under the respondeat superior doctrine for torts committed by its employees in the scope of employment. In such cases, the universe of tortfeasors does not include the employer; rather, the employer’s share of liability corresponds to the share of fault allocated to the employee.
In reaffirming its holding in Armenta, the Court expressly disagreed with the plaintiff’s argument that an employer can potentially be held responsible for two shares of fault; one based on the employee’s negligent driving in the scope of employment (vicarious employer liability) and one based on the employer’s own negligence in hiring or retaining (direct employer liability). The Court reasoned that assigning to the employer a share of fault greater than that assigned to the employee whose negligent driving was a cause of the accident would be an inequitable apportionment of loss.
In a noteworthy footnote, however, the Court allowed that it could conceive of instances in which the employer may be liable for its own negligence independent of its employee’s acts. The example given was if an employer provides a driver with a defective vehicle. However, when, as in Diaz, the plaintiff’s theory of employer liability was based solely on a negligent hiring/retention, the admission of vicarious liability precluded a separate claim for direct negligence on the part of the employer.
Thus, to recap, when an employer admits to various liability for the negligent act (if any) of its employee, the plaintiff is precluded from also bringing a negligent hiring/retention/entrustment claim against the employer.

--------------------------------------------------------------------------------

Rhonda Shelton Kraeber has practiced in all areas of employment law, including wrongful termination and discrimination and harassment litigation, since 1991. Formerly with Shapiro Buchman Provine, Rhonda counsels employers and employees on all aspects of the employer-employee relationship, including compliance with the many state and federal laws that apply in the employment context, and drafts, reviews, and negotiates all types of employment-related agreements such as severance agreements, employment contracts, and confidentiality agreements. Rhonda has also practiced general commercial litigation, including real estate disputes, contract issues, and corporate control disputes, and is licensed to practice in both California and Oregon.

Thursday, November 10, 2011

What should you know about discrimination in the workplace?

The employment arena as for some time, and continues to the present, to be confusing and complex, especially when attempting to navigate the waters of discrimination in the workplace. This is true from the perspective of both the employer who wants to know "Why can't I do that?" and the employee who wants to know "Can they do that to me?"

There are many state and federal schemes that bar employment discrimination based on specified characteristics, such as race, sex, religion, national origin, or age. There are both similarities and differences in these various schemes. The following is a brief overview of the various avenues currently available to individuals who believe they may have been the victims of workplace discrimination, as well as a general roadmap for employers who wish to be aware of the myriad of options available to employees, applicants, and former employees.

In California, the primary state antidiscrimination statute is the Fair Employment and Housing Act (FEHA). Under Federal law, the major players are Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA), and the Equal Pay Act of 1963 (EPA).

However, as a general proposition, to establish that an employer is liable for workplace discrimination, an individual must demonstrate that the employer is subject to the law (for example, large enough to be subject to a particular law), and that the individual was adversely affected in his or her employment as a result of discrimination based on a classification protected by the law (such as race, se, religion, or age). The claimed discriminatory conduct on the part of the employer can be either intentional or merely have a discriminatory effect.

CALIFORNIA LAW

In California, the FEHA permits an employee, prospective employee or former employee who believes himself or herself to have been aggrieved by a violation of FEHA to file a civil action against his or her employer (once certain administrative remedies have been exhausted). In brief, the FEHA makes it an unlawful employment practice or an employer to discriminate against any person in recruiting, hiring, training, promotion, compensation, discipline or discharge, or any other term, condition, or privilege of employment, because of that person's race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, marital status, sex, or sexual orientation. The FEHA also prohibits discrimination in employment gainst persons over 40 years of age or against female employees because of pregnancy, childbirth, or related medical conditions.

To be covered by the FEHA, employers must regularly employ five or more persons (except for harassment claims that only require regular employment of one or more persons).

To proceed with a civil claim against an employer based on the FEHA, the individual must first file a complaint with the Department of Fair Employment and Housing (DFEH) within one year of the most recent act of discrimination, and receive from the DFEH a so-called "right-to-sue" letter.

FEDERAL LAW

Title VII prohibits an employer from failing or refusing to hire, or to discharge, or to limit, segregate, or classify an individual (or otherwise discriminate) with respect to his or her compensation, terms, conditions, or privileges of employment, because of that persons' race, color, religion, sex, or national origin. Typically, Title VII cases fall under one of two theories of liability--"disparate treatment" (employer treats employees differently because of race, color, religion, sex or national origin) or "disparate impact" (otherwise neutral employment practice impacts on a group protected by Title VII more harshly than others).

As with a claim under California FEH, prior to filing civil litigation under Title VII, the aggrieved employee or applicant must file a timely complaint with Equal Employment Opportunity Commission (EEOC) and obtain a "right-to-sue" letter. Also, employers subject to Title VII are those with 15 or more regular employees.

The Age Discrimination in Employment Act (ADEA) protects individuals who are at least 40 years of age and provides similar protections to this class of individuals as does Title VII for the classifications enumerated in that law. An EEOC complaint is likewise required before one may proceed with civil litigation under this Act. However, the EEOC's procedures and enforcement tools differ from the Title VII-based complaints as compared to ADEA complaints. Also, covered employers are those with 20 or more employees.

The Americans with Disabilities Act (ADA) has garnered considerable press since its entry onto the scene in the early 1990's. It remains in a state of flux with the courts continuing to struggle to interpret its various ambiguous provisions. Indeed, cases are sometimes published on almost a daily basis interpreting this law.

In its simplest terms, the ADA prohibits discrimination against disabled persons by employers and the like. More specifically, an employer is prohibited from discrimination on the basis of disability with regard to recruitment, job application procedures, hiring, promotion, tenure, demotion, termination, rates of pay, job assingments, seniority, leaves or absence, sick leave, fringe benefits, training, and social and recreational programs sponsored by the employer. Further, the ADA prohibits, in some contexts, pre-employment medical examinations, and requires employers to "reasonably accommodate" disabled persons. Employers covered by the ADA are those with 15 or more employees.

Finally, the Equal Pay Act (EPA) prohibits wage discrimination on the basis of sex. That is, the EPA prohibits wage differentials based on sex for jobs requiring equal skill, effort, and responsibility, and are performed under similar working conditions (i.e. equal pay for equal work). Unlike its federal counterparts, the EPA does not require that an aggrieved employee file a complaint with the EEOC before the individual may bring an EPA claim to court. Also, the EPA essentially applies to every employer.

Authored by Rhonda Shelton Kraeber

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Wednesday, June 15, 2011

BEWARE SMALL EMPLOYERS - TOP 10 WAYS TO AVOID BEING SUED

Lawsuits can be death for small businesses. In more than 20 years of legal advice to employers and employees, I have seen repeated mistakes by employers, most of which could have been avoided. Don’t despair if you recognize yourself in this list; most employers stumble on more than one. The solution is to change your procedures NOW, before a disgruntled employee takes action.

DO NOT:

1. Hold an employee’s final check “hostage” until return of uniform, cell phone, keys, and/or other company property.

2. Automatically characterize all employees as “exempt” from the overtime laws and pay them a salary.

3. Pay employees in cash. You still have to take withholdings, itemize, and document.

4. Allow employees to work through breaks and leave early.

5. Hire “independent contractors.” Most workers do not qualify as independent contractors and various taxing authorities are watching this closely.

6. Loan money to employees and then deduct whatever is still owing from final paychecks.

7. Have a “use it or lose it” vacation policy.

8. Fail to document your employees’ hours worked.

9. Ignore complaints that an employee is being “bothered.” Red flag. This is code for sexual harassment.

10. Fail to have an employee handbook. All employers should have one, even small employers.

While these may be my “top 10,” unfortunately there are many more ways that employers—especially small employers—can run afoul of the labor laws, sometimes with catastrophic results. Your best strategy is to be pro-active and get solid policies and procedures in place with the help of a knowledgeable professional. As the only employment law specialist in East Contra Costa County, I can help: Rhonda@alvisfrantzlaw.com or (925) 516-1617.

By: Rhonda Shelton Kraeber, Esq.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Monday, March 28, 2011

I started a new business.... now what?

Yay! The economy is moving, you’re starting up a new business, now what? I have probably helped over 700 businesses start up since I started practicing law over 30 years ago. It has been my specialty. People back in the 70’s said, “nine out of ten businesses fail in their first few years. How are you ever going to survive?” I always had a standard reply. “Wow, if it’s that scary, imagine how they feel.”

I have dedicated my legal career to helping business owners, because I am passionate about business. Good thing, because running a law practice is a business as well, and it has a couple of complications like a Trust account to go along with it. I was overwhelmed by the paperwork, the questions about what to do first, and bringing in that first money, all while actually practicing law. It’s one thing to have information, it’s another to actually “do the business.”

One of my invaluable resources which is free, is the Small Business Administration’s “Business Information Center”. There are three in northern California: San Jose, Oakland and San Francisco. These Centers have books on all of the aspects of starting, running and growing a business. They have classes for a nominal amount of money, and they have retired executives who can guide you.

The one thing they don’t provide is legal advice, and depending on your type of business, you may need a fair amount of that… what structure do you take, what should your contract with your customers look like, how do you hire your first employee.

I’ve noticed that in your first 9 months there are so many legal questions. Lawyers charge out at between $300 and $450 per hour. I wanted my clients to call me as much as possible, but I hated charging them for every phone call or letter. So our firm established the “Corporate Start Up Plan” to help new business owners in their first 9 months of “incubation.” Check out our website http://www.alvisfrantzlaw.com/ for more details or give us a call.

Be sure to follow us on facebook as well: http://www.facebook.com/alvisfrantz

To find out more about business law or corporations, call Alvis Frantz and Associates, A PC at (925) 516-1617. HAVE A LEGAL QUESTION YOU WANT TO SEE ANSWERED HERE? Go to our website and “Contact Us”.

Monday, November 29, 2010

Incorporate in Nevada? Not so Fast

Many clients who come to our firm hear from someone that incorporating in Nevada is the way to go. It’s private, there are no state taxes, and it’s kind of sexy.

However, before you file those papers, think again. California tax laws may change your mind.

The reason to file in a particular state most often is motivated by tax issues. Most people believe that they won’t have to pay state income tax if they have a Nevada Corporation. The California Franchise Tax Board will determine if you do business primarily in California or not. If your federal tax return shows any “nexus” or connection with California, you will be taxed by California in accordance with the proportion of revenue that you receive in California.

Say, for example, your sales reps are in Nevada, but your main office and your home are in California. The Franchise Tax Board, in an audit, has the ability to look to see where your credit card and gas card charges are from. If it looks like you live in California, and it looks like your business is operating out of California, they can charge you California taxes. The amount of taxes you pay to California is also affected by the percentage of revenue you receive from California sales in relation to other states. So somebody with an internet business where the goods are shipped from a manufacturer in Florida to somewhere outside the state of California would not be subject to California tax. But if you are shipping from California, you are subject to California tax.

There are many exceptions to the rules, and specific circumstances that can change the result. That’s why it’s good to see an attorney who can help you sort out which state is best for incorporation. Our firm will walk you through the decision making process to make sure you accomplish the result that you want.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Friday, November 5, 2010

If I set up a living trust, does this guarantee that my estate will not have to go through a probate?

Unfortunately, despite what most people believe, the answer to this question is not always “No”. Yes, a properly drafted living trust is very effective at avoiding probate of your estate at death; however, there are several situations which can arise which will require some, or maybe even all, of your assets to still have to go through probate. In fact, many of the probate cases I handle for my clients are for one or two assets that were just not in the decedent’s living trust.
One primary reason for this is that when people create their living trust, especially when they try one of the “do it yourself” methods, they fail to properly “fund” the trust. What this means is that they do not re-title all of their assets like real estate, bank accounts, and brokerage accounts into their living trust.

Another reason for this is that people simply fail to review their trusts and assets on a regular basis to ensure that they are still funded in their trust. For example, it is extremely common that when you refinance your home, the lender will require you to pull the property out of your living trust to fund the loan. After escrow closes, people often forget to put the property back into their trust and then, when they pass away, they have a piece of real property out of their trust that requires a probate action to put it back in the trust.

Problems like this can be avoided by many easy steps. The most obvious and least expensive way to do this is to be sure all of your assets are funded in your trust and to have an annual trust review. Another important step really goes back to the formation of your estate plan and having the proper contingencies in place. This is in the drafting language in the living trust and all the supporting documentation to your living trust. With proper planning and evidence, there are ways to petition the court to transfer assets back into your living trust, even after your death, without a formal, lengthy, and expensive probate proceeding. To find out more about how you can ensure your living trust will avoid probate, call Amy Alvis at Alvis Frantz and Associates, A PC at (925) 516-1617.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Thursday, September 16, 2010

Corporations, Partnerships, LLC’s Oh My!

New business owners these days have enough to be concerned with besides their “legal entity”. Should I incorporate?...Can I be an LLC?...Just what is an LLC?.. Do I need a Partnership agreement if I have a partner? Do I need a shareholders’ agreement if there is more than one shareholder?...These questions are the most common when someone wants to make sure they are legally protected.

First, what do you need to protect? Unless you have more than $75,000 equity in your primary residence or if you have other investment property (including other businesses), you may not need to incorporate or form an LLC. You could be a sole proprietorship.
Here are the possible forms of doing business: sole proprietorship, general partnership, joint venture, limited partnership, limited liability partnership, limited liability company (LLC), S- Corporation, C-Corporation , Non-Profit Corporation, Professional Corporation.
In this short space, it is not possible to give all of the details, but generally speaking you should either incorporate or file an LLC if you want protection of your personal assets separate from your business. Both a corporation and an LLC require filings with the Secretary of State, payment of minimum taxes of $800 per year, keeping funds segregated (no paying your house payment out of your corporate bank account), and signing documents .
The difference between a corporation and an LLC is that an LLC does not require annual minutes, although you can opt to do them, and you can choose to treat your LLC like a partnership from a tax perspective while still providing protection from personal liability just like a Corporation does. Certain professions that are licensed by the State of California, such as Contractors, Cosmetologists, Auto Repair Shops, eg. cannot be LLC’s and must incorporate. You can be a single member LLC.
If you do not have a partnership or shareholders’ agreement in California, your partnership or corporation will be subject to the California Partnership Act, and the laws related to Shareholders’ agreements in the Corporations Code.
Alvis Frantz and Associates, A PC, located in East Contra Costa County emphasizes business, real estate and construction law as wells as trusts, estates and probate. You can reach us at info@alvisfrantzlaw.com or visit our website http://www.alvisfrantzlaw.com/ .

The information above is for general information only. It is not a substitute for seeking legal advice. Alvis Frantz and Associates A Professional Law Corporation - 2010 All Rights Reserved

Thursday, August 19, 2010

LIVING TRUSTS AND ESTATE PLANNING: A MUST FOR EVERY BUSINESS OWNER

Business owners survive many challenges and for family businesses, there are some unique challenges to protect and preserve your business… and your family. A living trust is an estate planning tool business owners can use to help their business continue to run after their death.

LIVING TRUSTS CAN:

• Avoid probate. Probate is the legal process where the court validates your will, sees that your debts are paid, and interprets your will to determine how and to whom your assets are distributed. The major problems with probate are that it is expensive, lengthy, public, and it places all the control in the hands of the probate courts.

Having a living trust will ensure that your estate will be settled quickly, privately, and inexpensively as it keeps your estate out of probate and allows you to maintain full control over the distribution of your assets and your business.

• Minimize or Eliminate Estate Taxes. A living trust can provide a means to reduce, or even eliminate estate taxes. With fewer tax burdens, there are fewer debts to satisfy and a better outlook for the continued health of the business as well as your families’ future.

• Create a Business Succession Plan. Establishing a system within your business will create a plan for someone to succeed you so that your business can continue to run smoothly without you. The death of a business owner causes a number of problems which can be addressed with proper planning, one of which is that the value of your business may be drastically reduce without you there to run the show unless you plan ahead. Ask yourself:

       • Should the business remain in the family?
       • Are there capable successors/owners?
       • Should the business be sold? If so, to whom and at what price.

ESTATE PLANNING CAN:

• Minimize loss of business assets: What people may not consider is that often, assets from a business may have to be used to satisfy the personal debts of a business owner. When there are not enough personal assets to satisfy personal debts, the creditors/government will go after business assets to satisfy these debts. This may leave a business strapped or even insolvent. However, with proper estate planning, you can protect your business and allow it to continue and grow after you die.

• Plan for the financial needs of your estate. Take a look at your personal assets and debts. Can your family continue to survive based on your financial picture as it is today? If you do not have enough personal assets to cover your personal debts, start to put more money aside to cover those debts. Another option is to purchase life insurance. For many, life insurance can be a quick and less costly solution. Life insurance will provide you and your heirs with an immediate guarantee that when you die, the proceeds from the life insurance can be used to satisfy the personal debts, thereby, allowing your business to continue unharmed.
For many small business owners, it can be difficult to separate business and estate planning as they are each contingent on the other. With proper planning and advice, you can ensure that your family and your business will continue to survive when you are no longer there to hold the reins.

The purpose of this article is to provide information. Nothing stated herein should be construed as legal, tax, or financial advice. Consult an attorney, CPA or financial advisor for advice specific to your individuals needs.

Wednesday, August 11, 2010

SO WHAT'S IN A BUSINESS NAME?

When clients come to ALVIS FRANTZ AND ASSOCIATES to start a business, the last thing on their mind is protecting their name. Often, it is presumed that when you incorporate it is covered. But that is far from the truth. Here are some of the ways most businesses address naming their company:

Fictitious Business Name (aka DBA - or "doing business as"). You can not always just start doing business tomorrow under any name you chose. You must first determine if a FBN is even required and then, if you determine it is, a Fictitious Business Name Statement (FBNS) must be filed in each county you conduct business. How do you know if your business name will require a FBN and how do you get one, have one of our attorneys contact you or call (925) 516-1617 to speak with an attorney or schedule a consultation today.

Corporate Name: When you incorporate, you must give your company a unique corporate name. Did you know though that you do NOT have to use that same name to market your business? You can actually do business under a FBN as well. It is important however to know where and when to use each name. Additionally, once you are incorporated, when you as an individual sign documents on behalf of your corporation, it is EXTREMELY important HOW you sign your name. If you sign documents incorrectly, you could be opening yourself up to personally liability of claims against the corporation.

Trade Name: A trade name is your company name as it is most commonly used. So for example, if you use your name as a return address on a purchase order, that does not constitute a trademark, only your trade name.

Trademark or Service mark: A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others. A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product. Trade Marks may or may not be registered. If a person has a federally registered mark, you can be stopped from using your name even if it is your corporate name, or your FBNS. To fin out what is right for your business, have one of our attorneys contact you or call (925) 516-1617 to speak with an attorney or schedule a consultation today.

Friday, July 30, 2010

IS YOUR BUSINESS ON TRACK?

Have you achieved what you set out to do with your business? Has your business grown according to your plan? Did you even have a plan when you started? It is not unusual to see many business owners start up without a plan for the where and how they want their business to go. Most people simply believe that with hard work and determination alone, their business will succeed.

The ugly truth (as evidenced by the many "out of business" signs) is that this is rarely the case. You work from sun up to sun down, and still don't see a profit or maybe have a "profit" on paper but have yet to start paying yourself a salary. After time, you could end up resenting the business of your dreams and question if this is where you really want to be. You want your business to work for you, not vice versa.

There are four important steps to help make lasting changes in the way you operate your business:

1) Have S.M.A.R.T. goals. Most peoples' "goals" are so vaguely defined that they're really just dreams. S.M.A.R.T. goals are:

Specific: your goals should be specific

Measureable: your goals should be measurable

Achieveable: your goals should be realistically achievable

Relevant: your goals should be relevant to helping your business succeed

Tell someone: verbalize your goals to someone else, the more the better.

Examples:

"I want to be the top shoe seller in the county" is vague and hard to measure, whereas "I want my business to earn $375,000.00 in gross revenue within nine months" is both specific and measurable"

"I want everyone to come to my store!" is a great and positive attitude but obviously unrealistic and really not that relevant if what you sell if high fashion shoes for women. A more achievable and relevant goal would be "I want to earn the exclusive business of 5 top stylists in San Francisco."

2) Have a system for regularly measuring your progress against those measurable goals. This way you can keep on track and readjust accordingly.

3) Find an accountability partner. This is where the "Tell" portion of your "SMART" goals comes in. When you verbalize your goals to an employee, a colleague, a business coach or even a friend or family member, this person can help follow up with you, see if you are on track. Furthermore, no one like to say they are going to do something, and then never follow through. If you know someone is keeping tabs on you, you are more likely to work harder to meet what it is you said you would do. This is one of the most important steps in goal setting. It's like the scale at a weight loss group meeting. Find someone you can trust and who will hold you accountable

4) Make a business and marketing plan. Once you have your S.M.A.R.T. goals, how are you going to get there? What do you need to do and how are you going to do it? Before you even spend the first dollar to start your business (or this weekend if you are already in business), sit down and develop a business plan. This should reflect your goals, establish how your will measure your progress and most importantly, all the steps you will need to make to reach those goals.

By following these steps you will be able to put your business in perspective, understand where it is you want to go, how your are going to get there. By doing this at least once a year, you will be able to track your journey, see what has worked, what hasn't worked, revise and readjust both your goals and your plan to achieve them.

Thursday, March 25, 2010

Hey, That’s My Stuff!

My client wants to hire an expert consultant to make part of a product that my client is manufacturing. Both parties are very talented with respect to their particular areas of expertise, but they need each other in order to have a successful product. My client wants to make sure that he has all the rights to the finished product, and that the consultant can’t re-sell his part of the technology to someone else. The consultant feels that his contribution will revolutionize the industry that they are in, and wants money at the back end of the transaction based on the success of the product. For this, he is willing to charge a lower hourly fee up front.

How does this all get sorted out? First, I am grateful that my client came to me before having the Consultant start working. I can work through the details with my client, and document whose bringing what to the table. Another client didn’t, and now no one knows who owns what, with both parties claiming that they have full rights to the product. One issue that comes up most often is that the “concept” originator believes that there would be no product without his creativity. But there is a big difference between saying, “I have a concept for a restaurant where people can eat in their car” and actually creating a McDonalds® franchise. While everyone is friends, there are usually no issues, but when the money starts rolling in, if these matters are not sorted out in advance, disputes arise often leading to litigation.

There are several types of agreements associated with the process of creating “Intellectual Property.” There’s a Confidentiality or Non-Disclosure Agreement, a Work for Hire Agreement for high-level project managers/engineers, an Independent Contractors’ Agreement for the more common activities associated with work to be done, a Certificate of Originality, a Co-development agreement, a cross-licensing agreement a joint venture agreement and more. All of these agreements cover different aspects of the creation process, and have different remedies for a breach.

Call me for a consultation at 925-516-1617 to come see me if you are creating something that will have lasting value, whether it’s an invention, software technology, video games, artwork, music, or just an idea whose time will come. We’ll sort it out together. http://www.alvisfrantzlaw.com/

The information above is not a substitute for seeking legal advice. Barbara Frantz, local resident for 17 years, has 34 years of legal experience, offering proven solutions for business owners to increase revenues and achieve their long range goals. Barbara is a lawyer with Alvis Frantz and Associates, your law firm providing confidence and security, because your business and your family are your highest priority in life. All Rights Reserved

Thursday, February 18, 2010

WHEN DO ENTREPRENEURS NEED A LAWYER?

by Barbara A. Frantz, Attorney at Law

Some entrepreneurs wait until they have a legal problem before consulting an attorney. Others make an attorney part of their business team, just like their accountant, banker and marketing and sales force. Analyzing the legal costs over a five year period for companies who use attorneys preventively, shows a dramatic savings. The faster your business grows, the more likely you will need legal counsel to protect the wealth that you are building through your business.

Here are some guidelines for when you should hire an attorney:

• A regulatory agency (such as the Health Department) contacts you.

• You are going to sign your first big contract.

• You buy or lease your first office space.

• Someone wants to invest in your company.

• You're not sure about your insurance needs.

• You want to standardize your contracts.

• You are sued or are thinking of suing someone.

• You want to patent, trademark or copyright something.

• You're designing your employee policies and procedures manual.

• You plan to export products or set up offices outside your home state.

• New legislation is adopted that you think might have an effect on your business.

Look for an attorney that you feel comfortable with who emphasizes "business transactional law" or who calls him or herself a business and corporate lawyer. Some attorneys who call themselves corporate lawyers only specialize in "securities" (stock investments in corporations). For the most part, you will be paying an unnecessary premium for their expertise on your simple business matters. Do not be afraid to have several attorneys for different needs.

Whether you make an attorney part of your team or wait until you have a specific legal problem, you must set aside money for legal fees from every item you sell, or service you provide. That money may ultimately be used for your company's expansion, or to pay a small claims court judgment instead of lawyers' fees, but it should be budgeted. The type of business that you have and where you are located (Large city attorneys charge more than in suburban or rural areas) determines how much you set aside. A good rule of thumb is 1-1.5% of the retail price or hourly rate that you charge.

Finally, if you develop a relationship with an attorney before you need one, you will have the opportunity to share your business goals, your philosophy, and some company information that will allow them to do a better job for you.

So, when you are faced with a situation that fits the need for an attorney call Barbara A. Frantz of Alvis Frantz and Associates PLC

(925) 516-1617 email: info@alvisfrantzlaw.com or for more information visit: http://www.alvisfrantzlaw.com/

Thursday, January 28, 2010

Do Business Owners Need Their Own David Horowitz?

by Barbara A. Frantz

In the process of melding Amy’s law practice and mine together, we needed to get a new merchant card account. This is the account that manages credit card charges from our clients. A client comes in, pays with a credit card, it gets deposited into our Client Trust Account, and after the work is done and our client is billed, we write ourselves a check from the Client Trust Account to our General Account. At that time, the money becomes ours. In the meantime, any fees that the merchant card company charges for the credit card transaction comes out of our General Account. There are several merchant card companies that offer this service, Elavon took over for Nova and is offered through Costco.

Each bank has services associated with a business owner’s bank account. Some services are on the computer only and others are through a “swipe” processor. The experience of comparing a new company with my old one was horrific. Every company starts out with about the same rate that they advertise: 1.99% of the charge on the computer, or 1.69% if you swipe the card plus 27 cents per transaction. But then when we dug deeper, the quagmire of variable rates begins.

If a client uses a card with no spending limit, such as Master Card World or Visa Signature, the card is considered “Not Qualified”, and the charge for the transaction can be as much as 7%. If the card is qualified, that is, it is a straight credit card with no rewards attached, you will get the 1.99%, but if the card includes rewards like the Southwest Chase Visa, you will pay at least 2.96% plus 33cents per transaction. If we don’t add the security code or the address on the charge we will pay 3.8% plus 33 cents per transaction. So the average probate avoidance living trust package could cost our firm as much as $105.

Business credit cards cost more to process than personal cards. Retail stores that have many transactions can pay even more. American Express cards cost the most to process. So the credit card companies make money on both ends of the transaction. The business is charged a premium for taking credit cards with rewards, and the consumer is charged a premium interest rate for using a credit card with rewards. This is a perfect project for David Horowitz as far as I am concerned.

The information above is not a substitute for seeking legal advice. Barbara Frantz, local resident for 16 years, has 34 years of legal experience, offering proven solutions for business owners to increase revenues and achieve their long range goals. Barbara has recently joined forces with Amy Alvis to form Alvis Frantz and Associates, a Professional Law Corporation.