How To Avoid Business Partnership Disputes

Many people, whether spurred on by the recession or government incentives, are looking at creating their own business. They will be starting on this venture with what they will believe to be a successful business plan.
Of course, there is no way of knowing how things will turn out; no-one saw the crash of 2009 coming.
Starting a business entails much more than just opening a shop and waiting for customers to flock to the door, or having an idea, however good, and thinking that an angel will take it worldwide. Creative and artistic people often don't have a clue about money and business procedures; on the other hand, there are many people who can only see the financial potential of their ideas. It seems to be a match made in heaven, while one partner designs and creates the product, while the other looks after the 'boring bits'.
This is fine in principle, but only if the partners stick to their respective areas of expertise, and roles are clearly defined. Any blurring of these roles could lead to conflict and partnership disputes. However rosy you may feel your future is going to be, it is essential to appoint experienced business solicitors and have a partnership agreement drawn up, an agreement which both parties are happy with. If one partner is investing the bulk of the capital, or all of it, example, the other partner may need to agree to an unequal share of profits. A partnership agreement redrafted by experience solicitors can address many things - not just financial issues. For example, it can deal with how much time each of the partners are expected to work - it could be that both partners are expected to work full-time, or sometimes, if one partner has put in more cash than the other, they may play a lesser role in day-to-day management. One partner who feels that they are doing the majority of the work may begin to feel aggrieved, and this could be the cause of a business partnership dispute.
Sticking to both the spirit and the wording of your agreement will help to avoid any partnership disputes. As your business, hopefully, grows, personal circumstances may change, and you and your partner may wish to have a look at your partnership agreement from time to time, to see if circumstances have changed and if the agreement is still accurate and relevant. All partners should keep in touch with both their solicitors and bank manager, as they will be of great help in advising you and helping to prevent any partnership disputes.

Bonallack & Bishop are a firm of Solicitors in Salisbury whom specialise in partnership disputes. If you want further information then contact their business partnership disputes Solicitors today. Senior Partner Tim Bishop is responsible for all major strategic decisions. The firm has grown by 1000% in 13 years.

 

Business Entity Forms - Part I: Sole Proprietorships and Partnerships

SOLE PROPRIETORSHIP
A sole proprietorship is owned and run by one individual (although a husband and wife can qualify as sole partnership) who is personally liable for all losses and debts. It is the most common form of starting a new business because it is the simplest and least expensive type of business to establish.
Pros:
- Can be established instantly without filing any paperwork.
- Profits or losses reported on a federal Schedule C. No separate tax filing required.
- No need to pay unemployment tax on oneself.
Cons:
- Unlimited personal liability. Purchasing insurance is highly advisable.
- Investors tend to disfavor SPs and prefer a more formal entity.
GENERAL PARTNERSHIP
General Partners share equally in management and profits of GP. Profits are taxed as personal income for the partners.
Pros:
- Easy to set up without filing with the state or formal agreement between the General Partners. Written formal agreement, however, is advised to prevent potential misunderstandings.
- Easy to dissolve. If the GP was created for a specific task, it is dissolved automatically upon completion of that task.
- No estimated tax requirements in California.
Cons:
- Each General Partner is jointly and severally liable for the debts of the partnership and other partners. Insurance advised.
- Investors may prefer a more formal entity.
LIMITED PARTNERSHIP
An LP has at least one General Partner and at least one limited Partner. GP has unlimited responsibility and is primarily responsible for business affairs of the entity, while LP's liability is limited to his/her capital contribution, unless the partners agree otherwise. To form an LP in California, a Certificate of Limited Partnership (Form LP-1) must be filed. A limited partnership formed in another state must register with the California Secretary of State prior to conducting business in California. A California LP must pay an annual tax of $800.
Pros:
- Relatively easy to set up.
- More flexible apportionment of risk and management responsibilities than GP.
- LP is not taxed as an entity. Instead, partners file their personal income tax returns and may offset losses against their income from other sources.
Cons:
- Limited Partner has limited decision-making authority within an LP.
- General Partner has unlimited personal liability.
LIMITED LIABILITY PARTNERSHIP (LLP)
All LLP partners enjoy limited liability protection but may participate in managing business affairs just like general partners. In California, LLPs are limited to individuals licensed to practice in the fields of public accountancy, law, architecture, engineering or land surveying. An LLP formed in another state must register with the California Secretary of State prior to conducting business in California.
Pros:
- Partners' personal assets are shielded from liability.
- Partners may be shielded from liability for actions of other partners, although they remain liable for own wrongdoing.
- All partners may actively participate in the management affairs.
- LLPs are not taxed on their income; partners file their own individual tax returns instead. (Note: in California, LLPs still pay $800 per year for the privilege of doing business in the state).
Cons:
- Limited to specific professional services in California.
- California, and a number of other states, require insurance.
LIMITED LIABILITY LIMITED PARTNERSHIP (LLLP)
An LLLP must have at least one general partner and at least one limited partner, just like a Limited Partnership. The main advantage of an LLLP is that it limits the general partners' personal liability for obligations of an LLLP. LLLPs cannot be formed in California, but an out of state LLLP will be allowed to do business in the state upon registering with the California Secretary of State and paying an annual tax of $800. Nevada allows formation of LLLPs.
 

Contact San Diego business lawyer Sergei Tokmakov now for a free case evaluation or more free business law resources. (858) 205-5665
 

Business Entity Forms, Part III: Professional Corporation, Non-Profit, B Corporation

PROFESSIONAL CORPORATION (PC)
PCs are organized by licensed professionals, such as accountants, lawyers and doctors. In California, a PC pay taxes on its net income, either at a rate of a corporation or an S Corp., with a minimum annual $800 franchise tax. PC must pay the estimated tax in four installments.
Pro:
- Owners are not liable for malpractice of other owners. However, each owner is personally liable for own malpractice.
Con:
- Many states require significant capitalization or insurance policies.
NON-PROFIT
Non-profit must be formed for a charitable, educational, religious, literary and similar public interest purposes. A non-profit can be registered on two levels: state and federal. When you hear "501(c)(3)," that refers to the section of the federal tax code and, thus, a federal level of registration. A federal level of registration is what you need in order to be eligible for federal tax exemptions and to attract donors by being able to tell them that their contributions will be tax deductible.
State level registration is a relatively quick, straightforward process, and usually only requires a simple filing of the articles of incorporation, stating the purpose of the organization, with the Secretary of State. Federal 501(c)(3) level registration requires filing a more complicated Form 1023, and takes longer to approve. In order to be eligible for federal tax exemptions, a nonprofit must first be registered at the state level. In California, most charities and non-profits must apply for and receive a letter of acknowledgement in order to receive a tax-exempt status. Small non-profits with ordinary gross receipts of less than $25,000 must electronically file an annual informational notice with the Secretary of State.
Pros:
- Tax exemptions.
- Donations to 501(c)(3) are tax-deductible.
- Eligibility for grants.
- Directors are shielded from personal liability.
Cons:
- May not be eligible to engage in certain business activities.
- Ongoing filing and reporting requirements.
B CORPORATION
"B" stands for "benefit," as in "public benefit." B Corps may harness the power of business and pursue public interest purposes at the same time. In discharging their duties, B Corp directors are not required by law to only pursue shareholder profit maximization; they may consider various socially important purposes and interests of stakeholders other than B Corp's shareholders.
Pros:
- May simultaneously pursue business and socially important purposes.
- Directors are shielded from personal liability.
Cons:
- A new and unknown to the public at large corporate form.
- Only available in a handful of states.
- Potential for abuse, if directors try to hide own business incompetence and try to justify losses with the pretense of pursuing social interests rather than profit.

San Diego business Lawyer Sergei Tokmakov.
Call now (858) 205-5665 with any questions regarding your case or visit his website for more  free legal articles.

Article Source: http://EzineArticles.com/6776436

What's a B Corporation?

B Corporation
"B" stands for "benefit," as in "public benefit." B Corps may harness the power of business to pursue either general or specific public interest purposes, as well as profit.
General public benefit is defined as a "material positive impact on society and the environment, taken as a whole, as assessed against a third-party standard." Third-party standard is basically an evaluator with no financial interest in the B Corps it evaluates. Enumerated specific public benefits are, without limitation, providing low-income or underserved individuals or communities with beneficial products or services, promoting economic opportunity for individuals or communities beyond the creation of jobs in the ordinary course of business, preserving the environment, and improving human health."
The new law permits an existing corporation or a non-profit to convert to a benefit corporation. This could be beneficial for a number of tax planning and funding reasons. For example, CouchSurfing (CS), a worldwide hospitality network that connects travelers, was registered as a New Hampshire non-profit organization with its headquarters in California. State-level non-profit status does not provide the tax advantages of the federal 501(c)(3) non-profit registration, and restricts the organization's ability to accept certain funding. For various reasons, CS was not able to obtain the federal 501(c)(3) non-profit status, while its overhead of maintaining a platform for 3.2 million participants continued to rise. However, by converting to a benefit corporation, CS was able to acquire $7.6 million of venture capital, on terms acceptable to both investors and the vast majority of socially-minded participants of the network.
The law requires the board of directors to prepare a specified statement of the public benefit purposes of the corporation. The law also requires the benefit corporation to prepare an annual benefit report with a statement indicating whether the benefit corporation failed to pursue its general or specific public benefit, a description of how the benefit corporation pursued those benefits, and the rationale for selecting the third-party evaluation standard.
Pros and Cons
Benefit Corporation is similar to a previously discussed Flexible Purpose Corporation. It is difficult to say at this point which new entity form is better for what purposes, because much of it is going to depend on how exactly those entities will be taxed and whether other states that currently do not have those forms will recognize them. Generally speaking, shareholders that are not comfortable having too broad of a social purpose to pursue, will probably prefer the possibility of a narrower focus of a flexible purpose corporation.
The general advantages and disadvantages of both flexible purpose and benefit corporations are similar:
Pros:
- May simultaneously pursue profit and socially important purposes.
- Directors are shielded from personal liability.
- Existing corporation may convert into a B Corp or Flexible Purpose Corporation by amendment to articles of organization, merger or reorganization.
Cons:
- Potential recognition problems in other states that currently do not have this corporate form.
- Potential for abuse, if directors try to hide own business incompetence and try to justify losses with the pretense of pursuing social interests rather than profit.

San Diego business attorney Sergei Tokmakov. Call now (858) 205-5665 for a free consultation or free business law info.

Understanding Privacy of Business Ownership

You may want privacy of your ownership interest in your business. This could be for a number of different reasons, including avoiding baseless lawsuits. Perhaps someone you know that owns a business got sued last month and you believe you can avoid the same fate if people can't find what you own. There are a number of Internet incorporation services touting certain privacy benefits, such as asset protection, by organizing your business under the laws of a certain state. Nevada and Wyoming (and even New Mexico and a few others) are usually the states being sold as "privacy and asset protection havens." These states do not require the disclosure of the identities of the shareholders of a corporation, or members of a manager-managed LLC in the required corporate filings (public records). Usually, these "privacy" states only require that the directors (sometimes only 1) and officers of the corporation, or the managers of the LLC, be disclosed on the Articles of Incorporation (or Articles of Organization) and all annual reports.
But, there are a ton of myths out there regarding privacy and asset protection. Many new entrepreneurs get lured into believing what often amounts to false hype. I will try to dispel a few of these myths. The bottom line is that privacy does not protect your assets by itself, it is only beneficial. The single greatest benefit of a state's privacy protections is that it can help prevent frivolous litigation. Preventing the average Joe from finding out what companies you may own by searching public records is a good thing. This can save a lot of baseless claims. If it takes longer for someone to figure out who the owners are, that is obviously beneficial. The plaintiff will have to spend more money and most lawsuits are a simple game of pure economics. So, privacy can sometimes make it very expensive for a potential plaintiff to find your assets.
Guaranteed asset protection simply through privacy of ownership is basically a myth. Specifically, whether your business should always organize under Nevada or Wyoming laws, or use nominees or even bearer shares are all common questions. The short answer is that Nevada, Wyoming (and a few other states) do offer privacy protections, but that is no guarantee you'll protect your assets or avoid any type of liability for your conduct.
Myth #1: You can Maintain Complete Privacy by Organizing in Nevada or Wyoming (or elsewhere)
The stated advantages to organizing under Nevada or Wyoming law for privacy purposes include:

• Privacy for stockholders by not requiring that their names become part of the public corporate records. Nevada or Wyoming do not require shareholders or the members of an LLC to be disclosed in the corporate filings, only the directors, officers and managers of the LLC need to be disclosed-I discuss this later in this article;
• Permits use of nominee stockholders, directors and officers of corporations and nominee members and managers of LLC's;
• Nevada and Wyoming do not share its data with the Internal Revenue Service and is one of a handful of states that do not have a sharing arrangement in place with the IRS (33 states have an "Information Sharing Agreement" in place with the IRS). But, just because Nevada does not share information with the I.R.S. does not mean your information will be kept private. You will need to provide the I.R.S. with the name and social security number of the person responsible for all tax issues involving the company in order to obtain an EIN. Also, the company will be required to prepare a tax return (informational returns for S-Corp's and most LLC's), on which the names and social security numbers of the owners will be provided. Thus, the I.R.S. will end up with this information regardless.

But, you can lose this privacy in a variety of ways. Business owners may be required to disclose their identity in the following instances: 1) Registering to do business in your home state; 2) Issuing stock; 3) Obtaining any required business licenses (which the State of Nevada requires for most activities and charges an additional fee to obtain); 4) Opening a bank account; 5) Being an employee or independent contractor to the corporation or LLC; or 6) Entering into other contracts or agreements where you sign individually, such as entering into any loans. Nevada now also requires a tax payer ID number of the company and personal guarantee by you on the state's business license.Thus, it may not make sense for the average business to organize in Nevada or Wyoming solely to take advantage of privacy for these reasons.
Also, keep in mind, you may have to personally guarantee any debt on behalf of your business and will likely enter into contracts on behalf of your business. This means providing your name and signature on certain documents. You will also need to provide a designated person along with their social security number to the IRS as the responsible party for tax matters when you obtain an FEIN for your business. These are all ways in which you could possibly disclose your identity. The average owner of an Internet business is going to operate his/her own business and really has no way to avoid these things.
Of course, if you don't take an active role in operating the business or sign any such contracts or guarantees, these concerns may not apply. Also, using nominees (discussed more below) or even shelf corporations will generally allow you to avoid disclosing your identity in public (corporate) records. Some shelf corporations can even be purchased with established bank accounts, credit histories and tax returns filed with the Internal Revenue Service.
Myth #2: Privacy Alone Protects Your Assets
The privacy afforded to those organizing in Nevada, Wyoming or any other state with similar privacy features simply will not protect your interest in a corporation or LLC from your creditors. For example, pursuant to Nevada Civil Code NRS 21.080, all real and personal property of a judgment debtor (not otherwise exempt by law) is liable to execution, including "shares and interests in any corporation or company." If a creditor obtains a judgment against you, your interest in a Nevada or Wyoming corporation/LLC is subject to attachment in order to satisfy the debt. You can either ignore the court order to testify regarding your assets (or refuse to answer questions after appearing) and face imprisonment for contempt of court, or commit perjury by lying about the extent of your assets. Obviously not appealing choices and why the notion of privacy does not protect your assets by itself. Do not be fooled by websites that tell you otherwise.
Myth #3: Using Nominees Is a Bullet Proof Strategy
Many online services tout the use of nominees as a bullet proof method of privacy and asset protection. Nevada and Wyoming law, for instance, allows for the use of nominee directors and officers and managers of an LLC, and nominee shareholders and members. The theory is that you can use a third party to conceal your identity as an owner and corporate officer or manager. Then, you can maintain control over the entity by using a proxy or some other instrument to control the corporation or LLC over the nominee. You should generally avoid using nominees or at least understand there are holes in this "bullet proof strategy."
While you will gain some layer of privacy from having a nominee officer, shareholder, director, etc. this privacy will be lost once the nominee is served a subpoena and asked to provide the contact information for the owners of the company. The nominee will then be legally required to provide this information and your privacy is gone. Nevada civil procedure law makes it clear that the failure to obey a subpoena shall be punished for contempt. The law leaves no room for discretion unless the records to be disclosed are privileged. I think you would be hard pressed to find a nominee who is going to want to spend some time in jail for the small fee you pay for the services.
But, some services out there do offer the use of an attorney to act as an intermediary between you and the incorporation service. That attorney can then invoke attorney-client privilege, adding a layer of privacy anytime there is an inquiry about your identity. Dealing directly with the incorporation service creates no such privilege. However, in some instances the attorney may be ordered by the court to divulge your identity in cases of fraud or criminal conduct. This practice does present some measure of privacy.
Myth #4: Using Bearer Shares Provides Asset Protection
There are many asset protection and incorporation websites touting the use of bearer shares in the state of Nevada and elsewhere. Bearer shares are now illegal under the laws of the State of Nevada as of 2007. Regardless, the bearer share strategy does not prevent creditors from recovering your stock if a judgment is obtained against you. There are far too many holes with the use of bearer shares as a way to maintain privacy and protect your assets. This "strategy" creates all kinds of fraudulent transfer issues in the first place, as well as possible income and/or gift tax ramifications. There is really no need to go into any more detail other than to say you should you avoid services/websites touting the use of bearer shares as an asset protection vehicle. Also, for most small businesses, the most negative aspect of bearer shares is the inability to make an S-election due to the limitations on the number and type of shareholders. Not to mention bearer shares are not permitted by most states.
Actually Understanding Privacy
If you feel strongly about privacy, at least on the surface, then you should understand what this really means. Privacy actually lies specifically with any initial corporate filings annual reporting requirements of the state. If you are truly concerned, you can use a state like Nevada or Wyoming that allows no disclosure of members in a manager-managed LLC or shareholders on the initial or annual corporate filings. Nevada's privacy protection protects members and shareholders from disclosure on corporate filings, but this privacy does not apply to certain officers, directors, and in the case of LLCs, managers. Nevada requires an incorporator or organizer to appoint by name at least one initial director in a corporation's articles or in the case of an LLC, at least one member or manager in the articles of organization. In both cases, the articles are a public record, and anyone can request copies by paying a small fee.
Nevada, as other states, requires that every corporation and LLC file an "Annual List of Officers and Directors" each year. This requires disclosure of the full names of at least some of the officers and the directors of a corporation, and the managers of an LLC. This information is then posted on the Nevada Secretary of State's Web site, which is a searchable public database and easy for anyone to figure out who is operating the corporation or LLC. Most states will allow you to designate a manager of your LLC and designate directors of a corporation and only list the information of those persons on the organizational documents.
But, depending on state law, the shareholders or members of an LLC are required to be listed on the annual reports go forward. This is where you may run into an issue with privacy if you are concerned. Regardless of state laws, it is very difficult for a small ongoing business to maintain the privacy of all owners. Also, it can be an administrative and financial burden to establish and maintain a corporation or LLC in another jurisdiction. The fees you pay to the state and these nominee type services will add up in a hurry. But, privacy is still a consideration in avoiding frivolous lawsuits, as I mentioned. Just understand the limitations and myths.

Philip A. Nicolosi, J. D. provides legal services to individuals and businesses through his law firm, Philip A. Nicolosi, Ltd. Mr. Nicolosi has over 9 years of experience representing individuals and businesses with virtually all maters relating to business and corporate law, and with general commercial transactions. Mr. Nicolosi assists businesses with virtually all matters outside of litigation, from organization to dissolution. His practice focuses on assisting start-ups and existing small to medium sized business clients and individual investors.
For more information about organizing a business entity or regarding general business and corporate law matters, please visit http://www.incorporatebusinessillinois.com/ or visit http://www.philnicolosilaw.com/.
You can contact Mr. Nicolosi directly by sending an email to phil@philnicolosilaw.com

 

Consumer Forum - An Online Assessment Of Consumer Complaints

If you feel cheated after purchasing a defective product or deficient service and are planning to go to the Consumer Court, know that instead of approaching the consumer courts directly, it is more effective to file a complaint with an Online Consumer Forum. Now, what basically Consumer Forum is? An Online Consumer Forum is for posting online consumer complaints against products and services of various companies. It is particularly an online consumer complaint website where a consumer can complain or query regarding the products and services of the different companies and the products can be related to any category. In this process the customer has to fill up an online complaint form mentioning a brief detail regarding the query or complaint to be made and for or against which company. Then the team of experts will look into the complaint and advises the legal action or step to be taken. This process not only saves enough time but also make people aware of many legal things and consumer rights which people are not aware of.
Every government of every country has given certain rights to each and every person and if these rights are not protected than the consumer can go for lodging a complaint against the respective organization or person. Many of the companies related to any of the services or products fool the customers by sometimes providing the expired or outdated products to them or sometimes providing inappropriate services or sometimes selling the products at a higher cost and many a times by the hidden terms and conditions. Many of the consumers living in villages or on the threshold of the cities don't know their rights and even don't know how to lodge a complaint. But the increasing awareness regarding Consumer Form made the consumers to complaint against such forge companies.
For this the consumer has to fill up a complaint letter on Consumer Forum Website online. This website teaches people their rights and educates customers how to take action against the Fraud firms. The main objective of the consumer forum is to increase awareness among the people regarding the forge things. The second objective of the forum is to provide fast and online support to the consumers so that they can get an easy solution online only. Third Objective is to sort out the unregistered companies and Firms so that people may also know that which company to be preferred which to be not. A complaint letter is a legal way of lodging a complaint.
Consumer Forum provides the legal options to the customers if the customers go for the legal advice than the person or the organization against which the complaint has been made are punishable under law. This illegal or forged action done by them is considered as a criminal offence by the Forum as well as by the Consumer Court.
Apart from Consumer Forum, customer should also remain aware and self update when investing in any product. For this he needs to follow some steps:
- First of all whenever you are buying any product, be sure that the company which you prefer should be a registered company.
- Check the expiry date of the product (if applicable).
- Check all the terms and conditions before investing in any financial firm.
- Take the help of the internet to check the background of the company i.e. When it was launched, what other products it offer, whether any complaints against it or not.
These steps will surely increase your awareness and make you choose the right thing always.

Jones Smith is an experienced legal advisor; he offers helpful tips on different Consumer Forum registering complaints related to legal issues and creates awareness among the people regarding the Consumer Court.

 

Moral Rights of an Author

The following article states some general information about the moral rights a copyright law provides to the author of a particular piece of copyrightable work. This is not legal or expert advice and for more specific information a professional copyright lawyer should be contacted.
Moral Rights
Moral rights are those of an author over his tangible piece of work; his authority over his creation. A copyrightable work may be in literature, art, design, music, or drama, its author gets the protection rights against any infringement. Copyright law accepts the originator to be the lawful owner of his work without disclosing his name and other details of his work.
The phrase moral right has its origins in the French language. This moral is not related to ethics or religious values but it refers to the rights of an author over his work and his control over the changes, exhibitions, results or any outcomes related to his copyrightable work. Such rights are also called connection rights. This refers to the connection and authority of the author to his work.
Why need these rights?
The rules defining the violation of this law are quite vague. Therefore, at times its hard to judge the intensity and possibility of an infringement. Besides, it also varies from country to country and culture to culture. For instance, copyright laws in South Africa are very different from those in the United States of America as the former follow the Copyright Act of 1978 and its amendments.
The author has complete rights to prevent any changes or alterations made to his work which may affect the reputation and integrity of the author or his work. He may also completely dissociate himself from any altered reproduction or a copy of his work with undesirable changes.
Legal Rights Holder
At times there are certain disputes between the author and publisher where the rights of the author are ignored. The author may not always be the copyright holder of his publication but the moral rights still reside with him. An attorney generally has to take care of such matters as he has more knowledge and information about the copyright law.
Even if the author transfers his rights to someone else, his moral rights will always be with him till he dies. Unless a written agreement is made in the presence of a lawyer, these rights cannot be transferred.
Plagiarism
As these rights are similar to copyrights, they can be infringed too. An example is when the publisher ignores the author's name without his consent. Of the author has requested this himself that's a different case but the publisher does not have this right on his own.

There are many ways to officially register your Copyright work with the Copyright UK Office. For More Info Visit Here: copyright.co.uk