hakimlawgroup
hakimlawgroup
Hakim Law Group
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Hakim Law Group is a corporate law boutique geared for entrepreneurs – from beginning to success. HLG was founded on the premise that experience matters – at every stage of representation of a company’s life cycle. To that end, all of our attorneys...
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hakimlawgroup · 1 month ago
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Permits, Licenses, and Zoning in Los Angeles: What Small Business Owners Should Know
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Starting a small business in Los Angeles is an exciting adventure that’s full of possibilities, passion, and big dreams. But before you welcome your first customer (online or in person), there’s one step that tends to catch even the most prepared entrepreneurs off guard: making sure all your permits, licenses, and zoning approvals are in place.
Let’s be real, LA is full of opportunity, but it’s also known for its layers of red tape. Whether you’re opening a trendy coffee shop in Silver Lake or starting a home-based consulting service in Culver City, understanding the local regulations is essential, not just for legal compliance, but for setting a strong foundation for your business to grow and thrive.
Why Permits and Licenses Matter
Permits and licenses are more than bureaucratic hoops, they’re proof that your business is operating legally and responsibly. Without them, you could face fines, legal trouble, or even be forced to shut down.
Depending on your business type and location in Los Angeles, you may need:
Business Tax Registration Certificate (BTRC) – Required for most businesses operating in the City of LA.
Special Permits – For food handling, health and safety, building occupancy, and signage.
State Licenses – For professions like cosmetology, real estate, or childcare.
Keep in mind: If your business operates in more than one city (say, west Los Angeles and Santa Monica), you may need licenses from each jurisdiction.
Zoning Laws: Where You Can Operate
Zoning laws determine where you can run your business. These regulations vary by neighborhood and property type and are enforced by the Los Angeles Department of City Planning.
For example, you can’t open a retail clothing store in a residential zone or convert a garage into a full-service restaurant without city approval. That’s where a Zoning Clearance comes in as it verifies that your business activity aligns with local land-use rules.
Tip: Use LA’s Zoning Information and Map Access System (ZIMAS) to look up your property’s zoning before signing a lease.
Home-Based Businesses Aren’t Exempt
If you're running a business out of your home, like a freelance graphic design studio or an online boutique, you may still need permits or zoning clearance. LA allows many home-based businesses, but there are limits on signage, parking, foot traffic, and inventory storage.
Don’t assume “small” means “simple.” Always double-check with the LA Office of Finance or the City Planning Department.
Navigating the Process: How to Get It Right
Getting the right permits and zoning clearance can feel overwhelming, especially if it’s your first time. Here’s how to stay on track:
Start early. Factor in 4–8 weeks (sometimes more) for approvals.
Do your research. The City of Los Angeles Business Portal is a great starting point.
Talk to professionals. Accountants, business attorneys, and licensing consultants can help you avoid costly mistakes.
Stay compliant. Permits and licenses often need to be renewed annually—don’t let them lapse.
The Smart Start Every LA Business Needs
Navigating permits, licenses, and zoning might not be the flashiest part of launching your business in Los Angeles, but it’s one of the most crucial. It’s not just about checking boxes, it’s also about protecting your investment, gaining customer trust, and setting yourself up for sustainable growth.
As a small business owner in LA, doing things the right way from day one isn’t just smart, it’s how you build something that lasts.
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hakimlawgroup · 6 months ago
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The Importance of Contracts for Social Media Influencers and Content Creators
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Social media influencers and content creators are key players in modern digital marketing. As brands continue to invest in influencer partnerships, it’s vital to have a clear and comprehensive contract in place to safeguard both parties and ensure a successful collaboration. Contracts outline expectations, payment terms, and legal rights, preventing misunderstandings and potential disputes.
Key Elements of an Influencer Contract
A strong contract should include the following key provisions:
Scope of Work
Clearly define deliverables, including the number of posts, platform(s), deadlines, and content format (video, images, stories, etc.). This ensures that both the influencer and the brand understand what is expected.
Compensation and Payment Terms
Outline payment amounts, structure (flat fee, commission, product exchange), and payment timeline to avoid delays or non-payment issues.
Usage Rights and Ownership
Specify who owns the content created and how it can be used. Brands often seek perpetual usage rights, but influencers should negotiate fair terms for content ownership and repurposing.
Exclusivity and Non-Compete Clauses
Some contracts include exclusivity clauses restricting influencers from promoting competitors for a specified period. It's crucial to negotiate fair limitations to maintain flexibility in brand partnerships.
Disclosure and FTC Compliance
Influencers must adhere to Federal Trade Commission (FTC) guidelines by disclosing paid partnerships. Contracts should outline compliance expectations to avoid legal repercussions.
Cancellation and Termination Policies
Define circumstances under which either party can cancel the agreement and the consequences, such as refund obligations or penalties for early termination.
Confidentiality and NDA Clauses
Brands may require influencers to keep specific campaign details private. A confidentiality clause helps protect sensitive information and ensures compliance with brand policies.
The Risks of Working Without a Contract
Without a contract, influencers risk non-payment, content misuse, last-minute campaign changes, and many other possible legal issues. Verbal agreements are unreliable and difficult to enforce, making written contracts a necessity.
How to Secure a Fair Contract
To secure a fair contract, below are the recommended steps to take when entering into an agreement or partnership.
Review terms carefully before signing any agreement.
Negotiate clauses that seem unfair or restrictive.
Seek legal advice if the contract contains complex legal language.
Use contract templates from reputable sources if working independently.
In conclusion, contracts play a crucial role in protecting social media influencers and content creators, ensuring they receive fair compensation and maintain positive partnerships with brands. By understanding and negotiating contract terms, influencers can establish a stable and legally secure career in the digital world.
If you're an influencer or content creator, always prioritize signing a contract before starting a collaboration to protect your rights and business interests and seek assistance from a reputable business attorney to make sure you are legally protected.
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hakimlawgroup · 1 year ago
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Common Legal Pitfalls for Startups and How to Avoid Them
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Creating a startup is an exciting and challenging endeavor, but it also entails a number of legal complexities that, if not properly managed, can derail even the most promising ventures. It is imperative to understand and avoid common legal pitfalls to protect your startup’s future. In this article, we'll discuss startups' most common legal issues and offer solutions.
Choosing the Wrong Business Structure
Pitfall: Many startups rush into business without giving enough thought to the most appropriate legal structure for their operations. Choosing the wrong structure, such as a sole proprietorship when an LLC or corporation would be more suitable, can lead to issues like personal liability, tax inefficiencies, and difficulties in raising capital.
Solution: Consult with a legal professional to determine the best business structure based on your specific needs, goals, and industry. An LLC or corporation can provide personal liability protection and may offer tax advantages besides greater flexibility in terms of ownership and management.
Failure to Protect Intellectual Property (IP)
Pitfall: Startups often overlook the importance of securing their intellectual property early on. This can lead to competitors copying your ideas, products, or brand, which can undermine your market position and lead to costly legal disputes.
Solution: Protect your IP by filing for trademarks, patents, and copyrights as soon as possible. Additionally, ensure that all employees and contractors sign confidentiality and IP assignment agreements to prevent any disputes over ownership.
Inadequate Contracts and Agreements
Pitfall: Relying on verbal agreements or poorly drafted contracts can lead to misunderstandings, disputes, and potential legal liabilities. This is especially risky when dealing with co-founders, investors, suppliers, and customers.
Solution: Work with a business attorney to draft clear, comprehensive contracts that outline the rights, responsibilities, and expectations of all parties involved. This includes founder agreements, employment contracts, vendor agreements, and customer terms of service.
Ignoring Employment Laws
Pitfall: Startups often fall into the trap of misclassifying employees as independent contractors, failing to comply with wage and hour laws, or overlooking anti-discrimination regulations. These violations can lead to lawsuits, fines, and damage to your reputation.
Solution: Familiarize yourself with relevant employment laws and ensure your hiring practices, payroll, and workplace policies are compliant. It’s wise to consult with an employment lawyer to avoid misclassification issues and ensure compliance with state and federal regulations.
Overlooking Regulatory Compliance
Pitfall: Depending on your industry, there may be specific regulations and licensing requirements that your startup must comply with. Failing to do so can result in fines, operational shutdowns, and legal action.
Solution: Identify all regulatory requirements relevant to your business, including local, state, and federal laws. This may include industry-specific regulations such as health and safety standards, environmental laws, or data protection rules. Consider hiring a compliance officer or working with a consultant to stay on top of these obligations.
Poorly Managed Equity Distribution
Pitfall: Many startups make the mistake of offering equity to early employees or advisors without properly structuring these arrangements. This can lead to disputes over ownership and control, especially as the company grows and seeks additional investment.
Solution: Carefully plan your equity distribution strategy with the help of legal and financial advisors. Implement vesting schedules for equity grants to ensure that recipients earn their shares over time and establish clear guidelines for equity buyback in the event of an employee leaves.
Neglecting Data Privacy and Security
Pitfall: Startups often underestimate the importance of data privacy and security, leading to breaches that can result in severe legal consequences, especially under laws like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA).
Solution: Implement robust data protection measures, including encryption, secure data storage, and regular security audits. Adopt clear privacy policies and obtain user consent for data collection and processing to ensure compliance with applicable data privacy laws.
Not Preparing for Future Funding Rounds
Pitfall: In the rush to secure initial funding, startups may agree to unfavorable terms or fail to consider the long-term implications of their fundraising agreements. This can lead to loss of control, dilution of ownership, and conflicts with investors.
Solution: Work with a legal and financial team to structure funding rounds in a way that aligns with your long-term business goals. Understand the implications of different funding options, such as convertible notes, SAFEs (Simple Agreement for Future Equity), and equity financing, and negotiate terms that protect your interests.
In conclusion, navigating the legal system is an essential aspect of building a successful startup. By proactively addressing these common legal pitfalls, you can minimize risks, safeguard your business, and create the conditions for long-term growth and success. Partnering with experienced startup law firm and staying informed about relevant laws and regulations will help you avoid costly mistakes and focus on what you do best—growing your startup.
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hakimlawgroup · 1 year ago
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Key Legal Considerations for Startups Seeking Venture Capital Funding
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For startups on the path to growth and expansion, securing venture capital (VC) funding can be a game-changer. However, the journey from pitch to investment involves navigating complex regulations, which range from shareholder agreements to intellectual property rights that can impact the future success and sustainability of the business in the cutthroat corporate world. In this article, we will explore some of the key legal aspects that every startup should address when pursuing venture capital funding. By understanding these considerations and taking appropriate steps, startups can ensure compliance with regulations, mitigate risks, and position themselves for long-term growth in partnership with venture capitalists.
Entity Structure:
Before seeking venture capital, startups must establish a legal entity structure that aligns with their long-term goals and objectives. Common options include limited liability companies (LLCs), C-corporations, and S-corporations, each with its own implications for ownership, taxation, and liability. Consulting with a qualified business attorney or accountant can help startups select the most suitable entity structure for their unique circumstances.
Intellectual Property Protection:
Intellectual property (IP) is often a startup's most valuable asset, and protecting it is essential for attracting investors and maintaining a competitive edge. Startups should identify and safeguard their IP assets through patents, trademarks, copyrights, and trade secrets. Additionally, startups should ensure that all employees, contractors, and partners sign appropriate confidentiality and IP assignment agreements to prevent unauthorized use or disclosure of proprietary information.
Due Diligence:
Venture capital investors conduct thorough due diligence before committing funds to a startup, assessing various legal, financial, and operational aspects of the business. Startups should be prepared to provide comprehensive documentation, including financial statements, corporate governance documents, customer contracts, regulatory compliance records, and any legal disputes or liabilities. Anticipating and addressing potential due diligence concerns proactively can help streamline the investment process and instil confidence in potential investors.
Term Sheets and Investment Agreements:
Once negotiations with venture capital investors progress, startups will receive a term sheet outlining the key terms and conditions of the proposed investment. It's crucial for startups to review term sheets carefully with legal counsel to understand the implications of each provision, including valuation, ownership dilution, board representation, voting rights, liquidation preferences, and exit strategies. Negotiating favourable terms and ensuring alignment with the startup's objectives are critical steps in securing a mutually beneficial investment agreement.
Regulatory Compliance:
Startups operating in regulated industries or targeting specific markets must navigate complex regulatory frameworks to ensure compliance with applicable laws and regulations. Regulatory compliance requirements may vary depending on factors such as the industry sector, geographic location, and business model. Startups should engage legal advisors with expertise in relevant regulatory matters to navigate compliance challenges effectively and mitigate regulatory risks.
Investor Relations and Reporting:
After securing venture capital funding, startups enter into a long-term partnership with investors, requiring ongoing communication, transparency, and accountability. Startups should establish clear investor relations processes and reporting mechanisms to keep investors informed of key developments, milestones, and performance metrics. Maintaining open and honest communication fosters trust and confidence among investors, paving the way for future funding rounds and strategic partnerships.
Venture capital funding presents exciting opportunities for startups to accelerate growth, expand market reach, and achieve their ambitious goals. However, success in securing VC funding hinges on careful navigation of legal considerations at every stage of the investment process. By proactively addressing entity structure, IP protection, investment agreements, regulatory compliance, and investor relations, startups can position themselves for success and maximize the value of their partnerships with venture capital investors. By fulfilling their legal obligations during due diligence and providing transparent disclosure of key information, startups can enhance their credibility among potential investors and increase their chances of securing much-needed funding for growth and success.
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hakimlawgroup · 2 years ago
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Understanding the Due Diligence Process: What to Expect When Raising Capital
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Raising capital for a business venture can be an exciting and daunting process. It often involves seeking investors willing to provide the necessary funds to bring your idea to life.
However, before investors decide to invest in your venture, they will conduct a thorough due diligence process to evaluate your business. In this blog post, we will explore what due diligence is, what to expect during the process, and how to prepare for it.
What is Due Diligence?
Due diligence is a comprehensive investigation and evaluation process that investors undertake to assess the potential risks and rewards of investing in a business. It typically involves thoroughly reviewing a company's financial records, legal documents, operations, and management team. The purpose of due diligence is to ensure that the business is a viable investment opportunity and to identify any potential issues or red flags that impact the investment decision.
What to Expect During the Due Diligence Process
The due diligence process can vary depending on the investor and the type of investment considered. However, here are some common aspects that you can expect during the process:
Financial Analysis
Investors will review your company's financial records, including financial statements, tax returns, and projections. They will assess your business's financial health and stability, including revenue, expenses, profit margins, and cash flow. They can also scrutinize your financial assumptions and forecasts to validate their accuracy.
Legal and Regulatory Review:
Investors will evaluate your company's legal and regulatory compliance, including reviewing contracts, licenses, permits, intellectual property rights, and any pending legal or regulatory issues. In addition, they will assess your company's compliance with industry regulations and standards.
Operational Assessment
Investors will assess your company's operations, including its supply chain, production processes, and quality control measures. They should also evaluate your company's key operational risks and contingencies to ensure the business runs efficiently and effectively.
Market Analysis
Investors will assess the market opportunity and competition for your business. They will analyze market trends, customer demographics, competitive landscape, and your company's competitive advantage. They also evaluate your marketing and sales strategies to determine if they effectively capture market share.
Management Team Evaluation
Investors will evaluate your management team's skills, experience, and track record. They can review resumes, conduct interviews, and assess the team's ability to execute the business plan. Strong leadership and a competent management team are essential for investors to consider when evaluating an investment opportunity.
Risk Assessment
Investors will identify and assess the risks associated with your business. This includes financial, operational, legal, regulatory, market, and management risks. They will evaluate the potential impact of these risks on the investment and request additional information or mitigation plans.
How to Prepare for the Due Diligence Process
Preparing for the due diligence process is crucial to ensure a smooth evaluation of your business by potential investors. Here are some steps you can take to be well-prepared:
Organize Your Financial Records
Ensure that your financial records, including financial statements, tax returns, and financial projections, are well-organized and up-to-date. Be ready to explain and provide supporting documentation for any financial assumptions or forecasts.
Review Legal and Regulatory Compliance
Review your contracts, licenses, permits, and other legal and regulatory documents to ensure they are in order. Identify any pending legal or regulatory issues and be prepared to explain them to investors.
Prepare Operational Information
Have a thorough understanding of your company's operations, including its supply chain, production processes, and quality control measures. Be prepared to explain your operational strategy and contingencies.
Understand Your Market
Conduct a comprehensive analysis of your target market and understand the competitive landscape. Be prepared to provide data and insights on market trends, customer demographics, and your company's competitive advantage. Then, have a well-thought-out marketing and sales strategy demonstrating your understanding of the market and your plans for capturing market share.
Highlight Your Management Team
Showcase your management team's skills, experience, and track record. Prepare resumes and bios of key team members, highlighting their expertise and accomplishments. Be ready to provide information on how your team is qualified to execute the business plan and achieve the company's goals.
Identify and Address Risks
Conduct a thorough risk assessment of your business and develop mitigation plans. Be prepared to discuss potential risks and their impact on the investment. Proactively address any red flags or concerns that arise during the due diligence process and demonstrate your plans to mitigate those risks.
Be Transparent and Responsive
During the due diligence process, it's essential to be transparent and responsive to investors' requests for information. Be prepared to provide timely and accurate information and answer any questions or concerns. Being transparent and responsive demonstrates your professionalism and builds trust with potential investors.
The due diligence process is critical when raising capital for your business. It helps investors evaluate the risks and rewards of investing in your venture. It can seem overwhelming, but with proper preparation, it can be a smooth and successful experience.
By demonstrating your business's financial stability, legal compliance, operational efficiency, market opportunity, competent management team, risk mitigation plans, and transparency, you can instill confidence in potential investors and increase your chances of securing the capital needed to fuel your business growth.
If you're considering raising capital for your business, it's important to understand the due diligence process and be well-prepared to navigate it successfully. Remember to work closely with legal and financial professionals to ensure compliance with relevant laws and regulations.
To learn more about the due diligence process and how the attorneys at Hakim Law Group can assist you with your legal needs, call us at (310) 993-2203 or visit our website at www.HakimLawGroup.com/.
Contact us today to schedule a consultation and take the first step toward securing the capital you need to achieve your business goals.
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hakimlawgroup · 2 years ago
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How to Add a Member to Your LLC
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/how-to-add-a-member-to-your-llc/]
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If you own a limited liability company in California and are considering adding a new member, there are multiple factors that need to be considered. Adding a new member to an existing LLC is more complicated than it may seem at first glance. It is also important to be aware of the potential benefits, drawbacks, and pitfalls that may arise from the addition. With the arrival of a new member, you are adding an unknown element to the already existing business relationship. This could be great, but it could also create chaos. For example, adding a new member to an LLC will most likely result in existing members having their percentage interest in the LLC diluted, thereby potentially resulting in less profit per member.
The Impact On Taxes and the Company Operating Agreement Two notable issues to consider when contemplating adding a new member to your LLC are (i) the tax ramifications and (ii) necessary modifications to the LLC operating agreement.
Regarding taxes, it is important to be aware of that fact that they cannot operate as a sole proprietorship, when there are at least two different owners or partners operating an LLC. If, for example, you have a single-member LLC and decide to add a new member, you must file taxes as a partnership or a corporation.
Regarding the operating agreement, the addition of a new member to your LLC often necessitates a level of revision to this important legal document. Why? Because an LLC operating agreement usually explains the different aspects of corporate governance, obligations, responsibilities, and what to do in the event of a member or manager deadlock. As a result, the addition of a new member will require editing the operating agreement to include how much of an interest the new member will have, their role, and their obligations.
Specific Requirements for Adding a New Member To formally add a new member to your LLC, you need to be clear about what percentage of ownership the new member will have with the company, along with their voting rights and decision-making authority. Profits and losses attributed to their responsibilities should be detailed within the terms of the agreement. The corporate formalities contained within your operating agreement, such as voting the new member in and recording the minutes of the meeting, should be followed rigorously.
Have Questions or Seeking Advice About How to Properly Add a Member to Your LLC? Contact an Experienced Business Lawyer in Los Angeles Today When it comes to drafting, editing and modifying important operational documents for a business, it is imperative to have a knowledgeable business lawyer in Los Angeles provide guidance to ensure the documents are compliant with all relevant state and federal laws. The Hakim Law Group is ready and able to assist. For further information or to schedule an appointment with an expert business attorney in Los Angeles, please contact The Hakim Law Group at 310-993-2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/how-to-add-a-member-to-your-llc/]
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hakimlawgroup · 2 years ago
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Protections Afforded to Limited Liability Companies and Partnerships
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If you are looking to start a business in Los Angeles, California, you may be wondering what type of business entity is best. Many business owners opt to form a limited liability company, which offer certain protections against the individual owner. Why? Because limited liability protection helps protect your personal assets from business debts and legal judgments. Essentially, limited liability protection provides a shield for your personal assets, meaning your personal assets are protected and cannot be accessed to pay for compensatory damages resulting from legal liability. Without such limited liability protection, your personal assets (e.g., liquid assets, savings, properties, investments, etc.) may be at risk.
Types of Business Entities Offering Limited Liability Protection When establishing a business, it is important to engage in rigorous research to ensure your corporate formation is proper and provides the necessary level of legal protection. This is where the guidance of an experienced business lawyer in Los Angeles could pay dividends. Conducting sufficient research is important because not every business entity provides the same level of legal protection.
For example, corporations and limited liability companies provide liability protection. In contrast, a general partnership and sole proprietorship offers no such legal protection. Similarly, limited partnerships offer little liability protection to the general partner.
How to Maintain Limited Liability Protection As a business owner there are important actions you need to take to maintain your limited liability protections, including:
Do Not Commingle Assets – While it may be convenient to use business funds for personal expenses, it should be avoided. Why? Because using business funds for personal expenses, or maintaining business funds within a personal checking account, is known as “commingling assets.” If a court were to rule on that business and personal assets were commingled, it could expose all of your personal assets to be liable, in the event of an adverse judgment in a civil lawsuit. Create and Maintain an Operating Agreement – When forming your business, make sure to draft and maintain a detailed operating agreement if you form a limited liability company. This legal document helps define the rights and responsibilities of members, even if you created a single-member LLC. Once created, make sure to follow the operating agreement and observe any formalities contained within the document. Properly Complete All Necessary Administrative Filings – Make sure to complete all necessary filings with the California Secretary of State. This helps ensure your company remains in good standing with business regulators. Please note, this is not an exhaustive list of all of the things that must be done to maintain limited liability protection. Instead, it is an overview of key principles.
Limited Liability Protection Does Not Protect Everything It is important to understand there are limits associated with limited liability protection. For example, limited liability protection does not confer to any criminal or fraudulent activities associated with your business. Basically, this means if you or your employees decide to engage in illegal actions, you could be held personally liable.
Have Questions or Need Advice on How to Set Up a Business with Limited Liability Protection? Contact an Experienced Business Lawyer in Los Angeles Today
If you have questions or need advice about setting up a business with sufficient limited liability protection, contact the highly reputable Hakim Law Group today. Our team of highly experienced business lawyers in Los Angeles stand ready to help your business establish a sound foundation for your business. For further information or to schedule an appointment with an expert business attorney in Los Angeles, please contact The Hakim Law Group at 310-993-2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/protections-afforded-to-limited-liability-companies-and-partnerships/]
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hakimlawgroup · 3 years ago
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Prerequisites for Opening a Bank Account for an LLC
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One of the benefits associated with establishing a limited liability company (LLC) is the ability to open an independent bank account designated for the LLC as a standalone legal entity. Opening a bank account for your LLC is also a good business practice since it reduces the risk of coming ling business funds with personal funds.
Below are some preliminary considerations and prerequisites that need to be met in order to open a bank account for your LLC.
Bank Selection
There are an array of different financial institutions available to LLC owners where you can open a business checking account. Each bank offers accounts with unique features, benefits, and even rewards (e.g., a bank-funded deposit after opening an LLC account and depositing a specific amount of funds).When making your bank selection, it is important to consider any fixed monthly costs associated with maintaining the account. You should also confirm whether there is a minimum balance requirement to keep the account open and active.
Prerequisites
After selecting your preferred banking institution, determine what the bank requires in terms of paperwork necessary to open the account. In most instances, you will need to provide the bank two legal documents:
the Articles of Organization for your LLC; and
the employer identification number for your LLC
Let’s discuss each document in more detail…
Articles of Organization
The bank will likely require you to provide a copy of the signed Articles of Organization that you filed with the California Secretary of State (CA SOS). The California Revised Uniform Limited Liability Company Act (LLC Act) sets forth the components of Articles of Organization, which include:
a statement of purpose declaring that the LLCwill be used for a lawful act or activity under the LLC Act;
the legal name associated with the LLC;
the address of the LLC’s designated office and/or mailing address,
the name and address of the agent for service; and
a statement of whether the LLC will be manager-managed or managed by a single member.
Employer Identification Number
An employer identification number (EIN) is necessary before an LLC can open a bank account. You can obtain your LLC’s EIN by filling out an online form with the Internal Revenue Service at https://sa.www4.irs.gov/modiein/individual/index.jsp.
Using the LLC Bank Account Properly
Once your LLC bank account is up and running, it is imperative that it is used exclusively for business transactions. The benefit of having an LLC bank account separate from your personal accounts is to protect yourself from potential personal liability for the debts and obligations of the LLC.
Have Questions or Need Advice on How to Open an LLC Bank Account? Contact an Experienced Business Attorney in Los Angeles Today
If you have questions or need assistance with opening a bank account for your LLC, contact the Hakim Law Group today. Our team of highly experienced and reputable business attorneys in Los Angeles stand ready to help your business get up and running. For further information or to schedule an appointment with an expert business attorney in Los Angeles, please contact The Hakim Law Group at 310-993-2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/prerequisites-for-opening-a-bank-account-for-an-llc/]
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hakimlawgroup · 3 years ago
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The California Privacy Rights Act is in Full Effect– Is Your Business Ready?
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If you conduct business in California, it is important to take steps necessary to ensure compliance with the California Privacy Rights Act (CPRA). Why? Because the CPRA went into full effect on January 1, 2023. At that point, all covered businesses will be subject to a set of rigorous requirements related to the collection, retention and use of consumer information. In addition, covered companies will be required to do the following:
publish privacy policies applicable to consumer data;
provide certain notices; and
be prepared to respond to data access requests
California Businesses Subject to the CPRA
It is important to note that the CPRA only applies to a “covered” businesses in California. The CPRA defines a “covered” business as the following:
A company or other legal entity that collects consumers’ personal information;
does business in California; and
the California business had (i) annual gross revenues for the preceding calendar year of at least $25 million, (ii) annually buys, sells or shares the personal information of at least 100,000 consumers, or (iii) derives at least 50 percent of its revenue from selling or sharing consumers’ personal information.
The CPRA defines “consumer” as any person who is a resident of California.
Personal Information Defined
The CPRA defines what constitutes “personal information” and provides a separate legal category for “sensitive” personal information. The CPRA defines personal information as any “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.” Examples of personal information include:
Individual’s name
Biometric information (e.g., facial image, fingerprint, etc.)
postal address
any unique personal identifier
Internet Protocol (IP) address
email address
geolocation data
Sensitive Personal Information Defined
The CPRA provides a separate definition for “sensitive personal information” which includes any information that reveals an individual’s Social Security, driver’s license, state identification card or passport number, precise geolocation, the contents of the individual’s mail, email and text messages (unless the business is the recipient of the communication), and racial or ethnic origin, religious or philosophical beliefs, or union membership, among others.
Individual Rights Under the CPRA
Under the CPRA, individuals are afforded a set of specific legal rights when it comes to the collection, processing and use of their personal data. For example, the CPRA affords individuals the right to request the deletion of their personal data. This right means that a covered business will be required to delete any personal information about the individual that the business collected concerning the individual. In addition, covered businesses are obligated to notify individuals of this right.
Another right afforded to individuals is the right to request a covered business correct any information concerning the individual that is inaccurate. Just like the right to deletion, a business is obligated to notify individuals of the right to correct. In addition, businesses are obligated to utilize“commercially reasonable efforts” to correct the inaccurate personal information.
The CPRA also affords individuals the right to direct a business involved in the collection of sensitive personal information to limit the use of such information to only such uses that are necessary to perform the services or provide the goods reasonably expected by an average consumer who requests those goods or services.
Have Questions About What Needs to Be Done to Comply with the CPRA? Contact an Experienced Business Attorney in Los Angeles
If you have questions about the steps necessary for your business to achieve compliance with the CPRA, contact the Hakim Law Group. Our team of business attorneys in Los Angeles stand ready to help your small business meet the administrative and regulatory requirements associated with the CPRA that went into effect January 1, 2023. For further information or to schedule an appointment with a leading business attorney, please contact Hakim Law Group at 310-993-2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/the-california-privacy-rights-act-is-in-full-effect-is-your-business-ready/]
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hakimlawgroup · 3 years ago
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Are Non-Compete Agreements Enforceable?
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Have you ever entered into a non-compete agreement as a boss or an employee, or are you currently considering doing so? If so, you may be worried about the standard business contract, and whether yours is completely valid or legally enforceable. We have you covered. Here we will address your concerns and answer your questions regarding non-compete agreements:
What is a Non-Compete Contract?
A non-compete contract is an agreement that will prohibit employees, contractors, or equity holders (owners)from competing in business, now, or in the future, with the company that they are currently working for or in which they hold or held an equity interest. They may be restricted from doing so while employed or for a particular time period after selling their equity ownership.
Many times, a non-compete clause within a standard employment contract is insufficient. They are often combined with non-disclosure and non-solicitation provisions, as well. Non-disclosure contracts keep confidential company information and trade secrets from being leaked. Non-solicitation provisions prohibit an employee from soliciting other employees, customers, or clients of the business for a period of time after termination of employment.
How to Determine if the Agreement is Legally Binding?
In California, non-compete agreements that apply to employees after they resign or are terminated are not enforceable as a matter of public policy. California Business and Professions Code Section 16600 sets out the general rule in California – covenants not to compete are void.
Section 16601 provides one of the narrow exceptions to Section 16600. Pursuant to Section 16601, in certain defined circumstances, persons who sell the goodwill of a business or any shareholder of a corporation selling or otherwise disposing of all his shares in said corporation may agree to refrain from carrying on a similar business within a specified county or counties, city or cities, or part thereof, in which the business so sold, or that of said corporation has been carried on, so long as the buyer, or any person deriving title to the goodwill or shares from him, carries on a like business therein.
How to Draft a Non-Compete Agreement?
While there are commonalities across different companies, it would be erroneous to state that there is a non-compete agreement template that works perfectly for everyone. Every business is unique in how it operates and the products or services it sells.
Hence, in order to create a document that covers all your bases, it is best to consult with a reputable business attorney in Los Angeles who will take stock of your organization and draft an agreement that reflects your needs while simultaneously protecting your interests.
That said, any non-compete agreement worth its salt will address each of the following key points:
Market or niche – the particular product or service a company offers or the specific line of business;
Geographic area – the physical space limitations placed on the undersigned; and
Duration – the overall amount of time that the undersigned is restricted from directly competing with the company.
Have Questions About Drafting a Professional Business Contract?Contact an Experienced Business Lawyer in Los Angeles Today
Hakim Law Group stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/are-non-compete-agreements-enforceable/]
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hakimlawgroup · 3 years ago
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Essential Elements of Employment Contracts
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An employee contract is a binding document that clearly defines the expectations of an employee and the nature of the employment relationship.The agreement should be written for the benefit both parties and outline all the terms and conditions of the employment offer, prior to applicant’s start date, so there are no surprises. Once the offer is accepted, and the agreement is signed, an employee/employer relationship has been consummated.
While such contracts may cover criteria and minutia that are specific to a particular company or work environment, nearly all of them share the following universal clauses:
1. Responsibilities of the Employee
This portion will be different for not only each company, but for every single hire. That said, there should be a formal job description for every position, and it should be similar to what was indicated in the company’s employment description in the recent past.
2.Employment Term
This, in layman’s terms, simply refers to how long the hire will be employed. In California, all employment is presumed to be on an “at-will” basis unless there is contract that otherwise provides for a required duration of employment. Accordingly, most situations are usually noted as “employment at will.” This means employment may be terminated by either party at any time with or without cause.
3.Time Off
This part will include what the employee is entitled to for sick days and vacation time, and how each is accrued. It may also cover family leave and bereavement, as well as penalties for missed days from work that are unexcused.While under California law, an employer is not required to provide vacation time, there are various laws and regulations that apply to certain employers with respect to sick time and family leave.
4.Assignment and Ownership of Work Product
This provision expressly provides that any intellectual property created for the benefit of or related to the employer’s business by an employee, while working for the employer, are the sole property of the employer.
5.Non-disclosure
A non-disclosure clause is included to keep employees from sharing confidential information, such as trade secrets, client lists, and other proprieties, at the present time, or in the future.
6.Benefits
This section will break down health insurance, retirement accounts, disability pay, life insurance, stock options, profit sharing, and the like. It will explain what is offered and how to apply for specific perks.
7.Termination
This is a clause that is necessary for pointing out all possible grounds for dismissal if the employer is going to make a distinction between cause and on-cause termination.
8.Dispute Resolution
This should list all possible avenues to follow, including proven methods like arbitration or mediation, which can be effective without involving litigation.
There are many other options for clauses that can be included in a standard employee contract. The ones listed above are some of the most common and important elements. They are of importance because they work to the advantage and protection of both parties, leading to a productive and stable partnership.
Have Questions About Drafting a Professional Business Contract?Contact an Experienced Business Lawyer in Los Angeles Today
Hakim Law Group stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/essential-elements-of-employment-contracts/]
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hakimlawgroup · 3 years ago
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Should you Form an LLC in the Current Economic Climate?
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With the current competitive economic climate, it is pertinent that all businesses are operating under the best legal structure for their purposes. Forming a limited liability company may be the best idea for your business. After all, a limited liability company, or LLC, is a specific business entity that blends the best parts of both partnership and corporate structures.
There are actually several reasons to select an LLC as your business’s structure. However, it should be noted that the option is not always the best in every situation. As your trusted business lawyer in Los Angeles, we will discuss when it is best to form an LLC:
Benefits
There are several benefits and advantages to operating as a limited liability company in California.For one thing, with the help of a professional, they are relatively easy to set up and get the ball rolling.
When you structure your business as a California LLC, you must first choose a name and be sure that no other business in the state is using it. Then, you will fill out a form “LLC-1,” and you can submit it online with the California Secretary of State. Then, each year you will need to pay compliance costs and LLC taxes.
LLCs are also very flexible when it comes to structuring, so you are able to split voting rights, profits, and financial obligations in any way the members prefer.And, of course, LLCs are best known for their protection against the personal liability of their members, similar to corporations. Subject to certain exceptions, members will not have to worry about personal liability for the company’s liabilities or debts.
Downsides
It is not always best for all businesses to be formed as LLCs, however. There certainly are advantages, but the limitations and other restrictions may outweigh them for some companies.
For example, active members of an LLC may not be deemed employees are receive W-2’s; instead, they will need to receive “guaranteed payments” through from the LLC, which may be subject to self-employment taxes.
In California, not all businesses can operate as LLCs. Most businesses requiring licensure, for example, cannot structure themselves as an LLC.For professionals such as physicians, attorneys, and accountants, a limited liability partnership is a better alternative business option.
Have Questions About Forming a Legal Business Structure?Contact an Experienced Business Lawyer in Los Angeles Today
Hakim Law Group stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/should-you-form-an-llc-in-the-current-economic-climate/]
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hakimlawgroup · 3 years ago
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Three Mistakes to Avoid When Drafting a Business Contract
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/launching-a-business-in-california-what-you-need-to-know/]
Despite contracts and business agreements being a pillar of economic activity in Los Angeles and elsewhere throughout California and the rest of the country, it is fairly common for business owners and managers to make glaring mistakes when drafting, considering, or approving a business contract. The result? Serious legal and financial ramifications that could effectively ruin the business.
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Below are three mistakes routinely committed by business owners and managers when creating a business contract and advice on how to prevent such oversights.
1.Relying on Cookie Cutter Contract Forms
Relying on a cookie cutter business contract you found online is a recipe for disaster. Why? Because business contracts need to be tailored to meet the specific needs and requirements of your venture or situation. In addition, a business contract needs to adhere to the rules and regulations of your respective locality. State laws are not uniform and actually vary quite dramatically from state to state. Customizing a business contract is extremely important to ensure it is valid and will hold up in court in your respective jurisdiction.
2.Failing to Include the Recitals You may be asking yourself, “what are recitals?” Well, legally speaking, it is a preamble to a contractual agreement. The recitals provide a general overview of the following:
Who the parties are;
What the contract is about; and
why the parties are signing the contract.
Often overlooked during the contract drafting and negotiation phases, when a dispute arises over contractual interpretation, the court or arbitrator may use the recitals as an aid to interpret the contract.
An important tip is to ensure you invest the time to focus on the operative provisions of the commercial contract, but do not forget to set the scene and provide the reader of the contract with background information.
3.Using Clauses Improperly or Incorrectly Many people, including business owners, often overlook or outright ignore so-called“boilerplate” language (i.e., generic, fairly standard contractual provisions) contained within a business contract. This is a big mistake because ignoring the boilerplate provisions can really be problematic when a dispute arises. These include governing law and venue, arbitration provisions, how the contract can be amended, and whether a prevailing party should be entitled to attorneys’ fee in the event of dispute. Have Questions Contact an Experienced Business Lawyer in Los Angeles with the Hakim Law Group If you need help drafting a business contract or agreement, the Hakim Law Group is here to help.When you hire a business lawyer in Los Angeles with our firm,you are getting a knowledgeable and skilled advisor who can help throughout the drafting process. Our goal is to help you meet your goals in the most efficient, responsive, and effective way possible. We make it a priority to understand our client’s business and interests and work to achieve the desired results as expeditiously as possible. With many years of experience as lawyers and former executives, we bring an insider’s perspective and a sophisticated approach to create nimble, innovative solutions for our clients. Contact us today.
Have Questions About Drafting a Professional Business Contract? Contact an Experienced Business Lawyer in Los Angeles Today Hakim Law Group stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/launching-a-business-in-california-what-you-need-to-know/]
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hakimlawgroup · 3 years ago
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5 Common Contract Drafting Mistakes Business Owners Make
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As a business owner, you likely have to enter into contracts with other businesses on a regular basis.
This can be a difficult process, as it is important to make sure that your contract accurately reflects the agreement between the two parties. If you make any of the following mistakes when drafting your contracts, you could end up in legal trouble.
1. Using Ready-Made Contract Templates
One of the most common mistakes businesses make when drafting contracts is using ready-made contract templates.
While these templates can be helpful in some situations, they often do not take into account the specific needs of your business. This can lead to problems down the road if there are any discrepancies between what the template says and what you actually agreed to.
It is always best to have a lawyer look over your contract before you sign it, even if you used a template. This way, you can be sure that everything is in order and that you understand all of the terms of the agreement.
2. Getting Legal Advice After Signing a Contract
Another mistake businesses make is getting legal advice after they have already signed a contract.
This can be a problem because, by then, it may be too late to change anything. If you have any questions about the contract before you sign it, be sure to ask your lawyer beforehand.
3. Ignoring the Recitals
The recitals are the introductory section of a contract that usually sets forth the background of the agreement.
Many businesses make the mistake of ignoring this section, but it can actually be very important. The recitals can provide helpful information about the parties involved and their relationships with each other.
They can also help to explain the purpose of the contract and what each party is trying to achieve. Be sure to read over the recitals carefully before you sign any contract.
4. Not Understanding Which Clauses to Include and Which to Leave Out
Another common mistake businesses make is not understanding which clauses to include in their contracts.
This can lead to problems later on if there is a dispute and one of the parties tries to enforce a clause that was not included in the contract. Before you sign any contract, be sure that you understand all of the clauses and what they mean.
If you are unsure about anything, ask your lawyer for clarification.
5. Not Knowing the Meaning of Words and Phrases
Finally, another mistake businesses make is not knowing the meaning of words and phrases used in contracts.
Many times, these words and phrases are legal terms that have specific meanings. If you do not know what a word or phrase means, be sure to ask your lawyer before you sign the contract.
Need Legal Assistance?
By avoiding these common mistakes, you can help to ensure that your business is protected when entering into contracts with other businesses.
If you have any questions about drafting or reviewing a contract, be sure to consult with one of our attorneys at Hakim Law Group beforehand. Call us today at (310) 993-2203 or visit www.HakimLawGroup.com to learn more.
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hakimlawgroup · 4 years ago
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California Legislature Debating the Passage of Yet Another Major Privacy Law
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/california-legislature-debating-the-passage-of-yet-another-major-privacy-law/]
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The California legislature is continuing its focus on amending, enacting, and overhauling various privacy laws. This effort began with the passage of the California Consumer Privacy Act followed shortly thereafter by the passage of the California Privacy Rights Act. Both laws have significantly expanded the administrative obligations for many California employers who receive and/or access consumer data and personally identifying information.
The newest effort is to overhaul the laws that are designed to protect children, and the data of minors, while they are online. The legislation would require web products to protect the personal data of children and limit their online exposure. In addition, the legislation seeks to modify default settings for websites and services that would include high privacy settings with geolocation switched off and a ban on any “nudging” techniques to convince children to weaken their settings. For example, Google decided to set “SafeSearch” as the default for children under 18 browsing the web. Similarly, TikTok and Instagram barred adults from directly messaging children who do not follow them. Furthermore, TikTok stopped late-night push notifications for children. YouTube meanwhile has shut off video auto-play for kids and has set automatic break and bedtime reminders.
The bipartisan legislation was introduced by Assembly members Buffy Wicks (D-Oakland) and Jordan Cunningham (R-Templeton).
Following U.K.’s Lead
The proposed legislation is modeled after a 2020 U.K. law that requires online products that children will likely use to modify their design and operations in order to improve overall privacy and safety for kids.The U.K. is the only nation that authorized enforcement of online safeguards designed to protect children.
Ramifications
If a new children’s privacy law is enacted in California, the most populous state in the country, it could have a major influence on various sectors of the economy, particularly tech start-ups and web companies.For example, the U.K. privacy lawbecame fully enforceable in September 2021 and has already triggered significant changes for various tech companies.
Federal Privacy Legislation
The proposed children’s privacy law in California comes as Congress started to eye similar reforms and overhauls of privacy laws and debate continues on enacting a sweeping federal privacy law that would impact all 50 states.
Have Questions About the New California Privacy Laws? Contact an Experienced Business Attorney in Los Angeles Today
If you need help navigating the various privacy rules and regulations recently enacted in California, contact the highly reputable and experienced Hakim Law Group. Our law firm stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/california-legislature-debating-the-passage-of-yet-another-major-privacy-law/]
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hakimlawgroup · 4 years ago
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Why So Many People Decide to Incorporate Their Business in Delaware
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Delaware is, by far, the most popular state for incorporating a business. In fact, Delaware is the home of more than half of all businesses currently in the Fortune 500, according to Reason.com. This routinely leads many people to ask…why? Well, the answer is multi-faceted and includes different factors such as tax benefits, legal benefits, and practical benefits.
Let’s take a look at just a few of the most common reasons why business owners opt to incorporate in Delaware.
Legal Treatment of Business Managers and Owners
The Delaware General Corporation Law (DGCL) is often interpreted as being quite friendly to the management side of the corporate structure. Specifically, there are many specific statutory provisions that help corporations run more efficiently. Those provisions include the following:
Delaware corporations have the option of using cumulative voting, while other states make it compulsory for corporations that are not publicly traded.
The DGCL also allows for shareholder approval of mergers without separate votes in each class of outstanding stock.
Special meetings can be limited to a call by the Board of Directors, which prevents the complications associated with shareholders calling special meetings.
The DGCL embraces new technologies and now allows corporations to use distributed ledgers or blockchains to create and maintain the corporate records required by law.
Tax Benefits for Businesses
Another big reason why business owners decide to incorporate in Delaware is due to favorable tax laws. For example, Delaware currently does not impose a sales tax. In addition, there is no corporate income tax on revenue earned outside of Delaware. Finally, there is no corporate income tax levied on investment earnings.
Unique Legal System Designed to Help Resolve Business Disputes
Another attractive aspect of Delaware for business owners is the unique court system specifically designed to help businesses litigate and resolve disputes. Delaware has specifically created courts that help arbitrate corporate disputes. These “Courts of Chancery” have no juries and are administered by judges with experience in corporate matters. The access Delaware offers to an efficient arbitration process is quite beneficial for businesses since it can help mitigate both the time and cost of internal disputes. The arbitration process can also help reduce legal fees, lost business opportunities, and the bad publicity that can come with a public disagreement between managers, owners, and shareholders.
The Courts of Chancery have become well known due to their involvement in resolving high-profile business disputes with large corporations such as Wal-Mart, Apple, Coca-Cola, and so forth.
Have Questions About Incorporating Your Business? Contact an Experienced Business Attorney in Los Angeles Today
If you are looking for professional guidance and legal advice on where to incorporate your business, which may ultimately wind-up being Delaware, then contact the Hakim Law Group to directly consult with an experienced business attorney in Los Angeles. Our law firm stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/why-so-many-people-decide-to-incorporate-their-business-in-delaware/]
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hakimlawgroup · 4 years ago
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Is Your Startup Subject to the California Consumer Privacy Act?
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If you have a startup business headquartered in California, or even simply has a“presence” in California, then you need to be prepared to comply with the California Consumer Privacy Act (CCPA). The CCPA was fully enacted into law in 2020 and applies to a variety of business entities (including startups) that collect the personal information of California consumers.
The Objective
The CCPA was designed to make businesses in California more transparent in how they collect and use consumer data. The Act requires qualifying businesses to implement policies and procedures to protect the personal information of their consumers.
Under the CCPA, businesses must disclose the categories of personal information that they will collect at or before the point of collection of consumer data.
The CCPA, which is intended to protect the privacy rights of consumers within the State of California, may require your business to make significant changes to your data privacy and collection practices.
How to Navigate the Rules and Regulations of the California Consumer Privacy Act
Commencing in 2023, the CCPA will begin applying to startups and other companies that derive at least 50 percent of revenue from selling or sharing the personal information of California consumers.
For other business owners, the statutory test for determining whether your business is subject to the CCPA includes the following prerequisites:
Your business’ annual revenue is at least $25 million;
Your business purchases, sells, or discloses the personal information of over 50,000 California residents, households, or devices in the state within the same year; and
Your business derives at least 50 percent of your annual revenue from selling the personal information of your California-based consumers.
It is also important to point out that if your business purchases, sells, or collects the personal information of California residents, you may be subject to the CCPA even if your business is headquartered in a completely different state.
Personal Information Under the CCPA
If your business is subject to the CCPA, you will need to organize consumer data using the following categories of “personal information” which are set forth in California Civil Code Section 1798.140:
Identifiers
Information about protected characteristics
Any information that falls under the description of “personal information” in Civil Code Section 1798.80
Geolocation information
Biometric information
Commercial information
Internet-related information, including search history
Audio, visual, electronic, olfactory, or thermal information
Education information that is not available to the public
Employment information
Any information used for profiling
Have Questions About the CCPA? Speak to an Experienced Business Attorney in Los Angeles Today
If you have questions about how to effectively navigate and comply with the rules and regulations codified within the California Consumer Protection Act, contact the highly reputable and experienced Hakim Law Group.Our law firm stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
This was originally published on our website. To check out more of our content, visit [https://hakimlawgroup.com/is-your-startup-subject-to-the-california-consumer-privacy-act/]
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