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California Business, Insurance And Environmental Law Blog

New corporate tax rates and limited liability companies.

With the recent reduction of the corporate tax rate, will small business owners in San Diego, California change the structure of their businesses? In some cases, the change from a limited liability company (LLC) or a Subchapter S corporation (S Corp.) to a C corporation may be in the works.

Many small businesses are organized as an LLC or an S Corp. to obtain tax advantages. With these companies, the owners receive the benefits of a corporation, such as liability limitations and corporate structure, but also avoid paying a corporate tax on profits. In these organizations, profits flow through to the shareholders or members, who then pay tax at their individual rate.

Helpful tips for tech industry startups

Proper business formation and planning in California allows entrepreneurs to take advantage of the state's status as the world's fifth-biggest economy. While the Golden State is home to many types of industries, tech startups are particularly popular among young entrepreneurs. Since there is so much competition, however, startups should take steps to maximize the possibility of success.

A Silicon Valley startup is no different from any other business when it comes to launching. For starters, money is key to getting off the ground. Whether the entity form is a joint venture or limited partnership, attracting the eye of venture capital is of prime importance. Experts stress that who owns what piece is not as important as just getting the money to get the startup off the ground.

Golf charity might have avoided trap

Golf lovers in San Diego know that a hole-in-one is an event to be celebrated. Unfortunately, the for-charity 2015 Greenbrier PGA Classic showed that it's best to read the fine print before getting too excited. Its apparent oversight led to insurance litigation over bad faith claims, ultimately leaving the tournament's charitable partners in the rough.

To raise interest in the charity tournament, those partners promised that all attendees would receive $100 if any player got a hole-in-one on the course's 18th hole. Furthermore, if another player got a hole-in-one on that same hole, that day's attendees would receive an additional $500. It was a highly unusual occurrence, but one regarding which officials believed they had properly insured the charity.

Mergers and acquisitions continue at a fierce pace

As the economy around the world has grown, an increasing number of businesses in California and elsewhere have turned to mergers and acquisitions. The year 2017 showed the third-highest rate of mergers and acquisitions since the 2008 financial crisis.

An increasing number of chief executive officers have grown bolder with the buoyancy of the markets and have actively pursued their targets for mergers and acquisitions. In 2017, a key characteristic of the mergers and acquisitions landscape was that more buyers were willing to approach their target companies without solicitation. In some cases, the targets resisted, such as when Qualcomm refused to engage in talks over Broadcom's $103 billion offer to take over the company.

What to avoid when growing a business

California small business owners who are looking to be successful may try to employ a variety of shortcuts. However, these actions could do more harm than good for a business. For instance, hiring executives or other key employees from large companies may not be as great of an idea as it sounds like. This is because they may not have the mindset that it takes to thrive in a startup or small company.

It may also be a bad idea to hire anyone without taking the time to analyze whether that person is a good fit for the organization. In addition to hiring the right workers, it is critical that a smaller company finds the right investors to help it realize its potential. Ideally, an investor will be willing to provide financial and other support beyond the initial financial contribution.

New tax rules may help startup employees earn more

Owners of California startup companies might want to look to provide stock options to their employees on a broader basis. This is because it may be possible to delay the tax consequences that come with having them if such options are offered to at least 80 percent of employees. In most cases, employee stock options need to be exercised within 10 years if their recipients stay with the company.

However, they may need to be exercised sooner if a person chooses to leave the company. Typically, they must be exercised within three months of exiting the startup. As employee stock options are taxed as ordinary income, it could mean hundreds of thousands of dollars paid to the government. However, if the company is still private at that time, it may not be possible to sell the shares to get the cash needed to pay the tax bill.

Disney announces $52.4 billion deal with 21st Century Fox

Media outlets reported on Dec. 14 that the California-based Walt Disney Company has entered into an all-stock deal worth approximately $52.4 billion with 21st Century Fox. Industry experts say that Fox will separate many of its broadcasting assets, including the Fox News Channel and the Big Ten Network, into a new media company while Disney will acquire some of the most valuable intellectual properties in the entertainment business.

While some analysts are praising Disney for adding franchises like Marvel's X-Men, Deadpool and Fantastic Four to a lineup that already includes Star Wars and a litany of beloved animated characters, others say that the deal reflects changes in the entertainment sector and the different ways that consumers now choose to access media. An industry once dominated by traditional broadcasters and film producers has been revolutionized in recent years by companies like Netflix that allow customers far more control over their entertainment choices. Even more disconcerting for Disney and other traditional media organizations is the interest that technology giants like Google, Amazon and Apple have shown in producing and distributing films and television shows.

5 duties your insurance carrier has to you and your business

You pay for insurance, and like anyone else, you expect your carrier to provide you with the requisite benefits. Bad faith insurance is when your insurer is unreasonable or refuses to pay claims or protect you from claims. Essentially, the insurer isn't doing his or her job.

There are a few duties each insurance carrier owes to its clients. These include things like investigating accidents or protecting their clients against lawsuits. Here are five to remember.

3 critical factors every business merger needs to manage

At some point, rival businesses in California might consider merging as a way to dominate market share. The process could allow the joined companies to apply resources toward attaining greater success, but it requires great attention to detail, especially in regard to infrastructure, finances and human resources.

Infrastructure refers to things like the IT systems, existing products or services and the technical demands of data security and privacy. The joining of two systems will entail a transition period. Merging companies should strive to combine their systems as smoothly as possible without interruption in function or customer support.

Foreign investors sue company after not receiving green cards

Californians who are interested in business immigration issues might want to learn about a lawsuit that was recently filed by a group of Chinese investors. The investors are suing because they did not receive the green cards that they believe they were promised for investing in a Las Vegas hotel.

According to news sources, the ">60 investors paid $545,000 each for the project. The hotel opened in 2014 but has never turned a profit. The investors claim that their money was used for the project in a conspiracy to take their money without the promised green cards.

Contact us now to begin a confidential case evaluation:

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