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California Business, Insurance And Environmental Law Blog

Fintech WePay will be acquired by JPMorgan Chase & Co.

Californians might be interested in learning that JPMorgan Chase & Co. has agreed to purchase WePay, a financial technology startup. The bank decided to acquire WePay in order to help small businesses with the faster collection of payments.

JPMorgan business customers will be able to use WePay with the bank's software. The bank has 4 million small business customers for whom the acquisition is targeted. WePay was founded in 2008 and currently works with FreshBooks and GoFundMe. JP Morgan has formed other partnerships with financial technology firms, including On Deck Capital Inc. and Bill.com.

Accountant malpractice and E&O insurance

California business owners and entrepreneurs should have peace of mind regarding the ability and professionalism of their accountants. Some of that peace of mind may come in the form of the accountant's malpractice insurance. Also referred to as errors and omissions insurance, or E&O insurance, malpractice policies apply to cover harm to clients resulting from misinterpreted or misleading statements, errors, breaches of professional duty, performance-related claims or professional negligence.

Clients have cause to place a high degree of trust in their accountants. For example, an accountant may have a fiduciary duty as the trustee or administrator of an estate or as an ERISA plan advisor, stockbroker or investment advisor. In many cases, the accountant's duty is to maintain a reasonable professional standard of care.

Leveraging rural areas as a business advantage

Those who are starting new companies may believe that they have to relocate to California or New York City to be competitive. While there are many resources in those parts of the country, a new trend has seen businesses move away from those areas. This is partially because it may be too expensive to operate there.

For some companies, operating in a more rural area could actually be a competitive advantage. By listening to what others in a certain town or state are saying, it may be possible to create a business that fills a need locally. That may create an opportunity to find local people who do not want to move to a big city to find work. Companies in smaller states or cities can use resources like LinkedIn to find talent and spread the word about job openings.

Lean operations aid startups

California giants Google and Facebook emerged at the outset as startups. Although entrepreneurs have found much success in the state, the creation of new companies has slowed. The launch of Facebook represents that last big success story. Leading companies have become adept at recognizing rising stars and buying them before they create substantial competition, as illustrated by PayPal's purchase of Venmo. In this climate, entrepreneurs hoping to raise their big ideas to prominence need to stretch every dollar and find innovative methods for hiring talent.

Managers of startup companies should avoid overspending on equipment, supplies, and software. A study from CB Insights warns that nearly 30 percent of new businesses deplete their funds before generating enough income to go forward. To keep operations lean, entrepreneurs could have supplies delivered instead of paying employees to run errands. A coffee machine easily replaces a pricey coffee service, and free or inexpensive software often meets needs just as well as expensive software subscriptions.

Not all new businesses should be called startups

Startup is a popular term in the California business world, so much so that many entrepreneurs and business owners use it to describe almost any new enterprise. But the definition of the term includes factors that are not applicable to all new businesses. A startup is a venture that aims to meet a demand in the marketplace by the development of an innovative service, product, platform or process. Additionally, startups typically have different goals that most small businesses.

Startups are about growing rapidly and getting to the exit. Indeed, one of the biggest parts of any startup is its exit strategy. Startups need a big market, one that will be targeted for market share. When enough market share has been captured, or at some point earlier, the startup will be exited by its owners. The most common exit strategies are acquisitions and IPOs.

How to manage consumer expectations in a merger

Consumers in California may be concerned that they will lose the connection that they have with a brand if it merges with another company. The CEO of QVC has said that combining companies may actually lead to greater value for customers as well as add value for customers. L'Oreal says that it lets each brand that it owns be authentic and transparent.

When a merger occurs, brand managers need to reassure customers that their decision to become loyal to a brand was the right one. If this emotional connection is severed, it could bring about negative consequences for that brand. As a general rule, brands should work to develop and strengthen emotional connections between themselves and their customers. This means going beyond simply creating positive interactions between the two sides. Ideally, companies will strive to create personal relationships with customers to make them feel valued.

Trump waiving environmental protections to build border wall

The Department of Homeland Security is planning to replace part of the California border wall with Mexico following a waiver of governmental reviews and environmental laws by the Trump administration. The waiver is the second of its kind exercised by the administration in under two months. Critics of the move call it an environmental threat and an overreach of executive authority.

According to a notice published in the Federal Register, the waiver begins at the border crossing in downtown Calexico, California, and extends 3 miles west from there. The plan is to replace the existing 14-foot-high corrugated steel wall with a 25-foot-high bollard wall. A bollard wall consists of posts set near one another with small spaces between them.

Tips for starting your first company

The day has finally come when you are ready to take the first step to becoming your own boss. Starting your own business has been the goal since you took your first college course. However, opening a business in San Diego can be difficult and even stressful. You have to balance your ideas for operations with legal requirements and the other nitty-gritty while working toward making a profit.

After jumping through various hoops to get a start-up off the ground, many young entrepreneurs think back and say, "I wish someone had told me this" or "I wish someone had told me that."

Avoiding violations of the anti-inversion regulations

California corporations that are considering acquisitions and mergers need to take care that they avoid violating the IRS regulations that cracked down on corporate inversions. This may require adjusting the ownership percentages so that the acquisition or merger will not effectively be an inversion.

A corporate inversion occurs when a corporation moves its legal domicile to an overseas location that has lower taxes while maintaining most of its business in the U.S. Under the Obama administration, regulations were passed providing penalties for stripping taxes away from the U.S. The anti-inversion rules have caused a new calculus for companies when they are trying to determine whether or not to move forward with a merger or acquisition of a cross-border company.

Starting a business with little money

Money can be a significant factor for California entrepreneurs who want to start a business. They may believe that they don't have the money to spare or are worried about the risks of spending money to start a company. However, it is important to understand that there are many tasks that a business owner can do him or herself. For instance, it may not be necessary to hire a marketing expert when there are ways to market without help.

It is also possible to create a website for free or at little cost. From there, a business owner may be able to find customers or otherwise build an audience for free through social media. Sites like Craigslist or other online classified sites are generally free to use and can be leveraged to advertise products or upcoming business events.

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