Business Law, Legal

Reasons to Incorporate Your Business:Legal Reasons #71

Incorporating your company allows you to protect your personal assets from any actions that might affect your business. It also gives you the professionalism of an incorporated company, making it more likely that others will choose to work with you.

Business owners choose to incorporate outside their home state for many reasons. California is one of the most popular states for incorporation, because it has a thriving business community and offers important business benefits.

One major benefit of corporations in the state of California is management flexibility – the state only requires three officer positions in the filing: president, chief financial officer, and secretary. You can even fill all three of these with the same person. This allows you a lot of flexibility when it comes to filling out your corporation’s leadership team in the future.

Another reason forming a California professional corporation is a great choice is due to the anonymity of shareholders and management. The state only requires the director and resident agents to be disclosed, allowing stockholders to avoid having their names in the public record.

Finally, California corporation taxes are only 9%, with other significant advantages available depending on the type of corporation formed.

How to Incorporate in California

The process of registering a company is California is straightforward. Below is a brief overview of the steps to incorporating:

  1. Make sure your chosen business name is available under California rules and regulations.
  2. File California articles of incorporation.
  3. Have your organizational meeting and create your company bylaws.
  4. Get your Federal Employer Identification Number (FEIN) and open your incorporation’s bank account.
  5. Get business licenses from the county and/or city where you will do business.
  6. Submit your initial report, called a Statement of Information, within 90 days.
Food For Thought, Inpsiration, Journal

You Are What You Consume

This morning I got a chance to listen to a whole program of B. K Shivani that made a lot of sense to me. She pointed out that in today’s world, what we consume, from food to social media, news, music and conversations form a part of us even when we tell ourselves that we wish to avoid the negative. It hit me that there are things I consume that stay with me long after (namely news and negative conversations) that as much as I don’t want to affect me, become a part of me.  Not only that, those things get amplified and stronger and more likely as more and more of it is consumed by others.

Now I see a pattern that when I start my day on a positive note and a healthy morning routine, I Am much more able to stay on track in terms of my health, emotions and diet. When I allow worry and negativity to begin my day, I not only impact my day, but contribute negatively to others. I have to say it is a challenge because just like a lifestyle change, being present and positive is a daily and continuous process that takes patience, willingness and an openness without judgement that can be hard to maintain.

Yet more and more I am learning towards getting better at this because I am determined to live and be the best version of myself not just for my sake but for the sake of my loved ones.

Happy Monday!

family law, Legal

California Divorce 101: Legal Reasons #70

You must be a resident of California for six months and a county resident for three months to file for a divorce, called a “dissolution.”

Either spouse can get a divorce simply by stating in the divorce papers that “irreconcilable differences” have caused a breakdown in the marriage. If both spouses are in agreement that there should be a divorce, they can agree in writing (called a “stipulation”) that the marriage can be ended.

The legal divorce process begins when one of the spouses files a “Petition for Dissolution of Marriage” with the Superior Court. The other spouse is then served with the paperwork and given time to respond. If the parties are in agreement about property and debt division, as well as any child custody and support matters, the divorce can be finalized without a trial. If the parties can’t come to an agreement, the court will set a time for a hearing in the future.

After the Petition for Dissolution has been filed, either party can request temporary assistance from the court, for instance, in the form of temporary custody and child support orders, spousal support orders, or orders to determine who pays community debts on a temporary basis.

Dividing Your Property

California is a “community property” state, which means that assets and debts acquired during your marriage will be divided equally when you divorce.

But not all property is considered “community property”.

For example, any assets you had before you married will be considered “separate property” if you kept that property separated from property acquired during the marriage.

The income produced by a separate property investment is also separate property, as long as it hasn’t been “commingled;” meaning, that it wasn’t mixed together with community money.

Property you inherit from your family or otherwise gifted to you during your marriage will generally be considered your own separate property if it was willed exclusively to you and you did not commingle it with community assets during the marriage.

It’s important to collect all the information you can about all your property, including when you purchased it, approximately how much it is worth, and details such as account numbers, serial numbers, and so forth. Collecting this information before you see a divorce lawyer can save you a lot of time and money.

Alimony

A court can order alimony, which is called “spousal support” in California. A court will generally consider such factors as:

  • The standard of living established during the marriage
  • The duration of the marriage
  • The needs of each party
  • The financial resources and liabilities of each party
  • The impact on the children of having the care-giving spouse working
  • The contribution of each party to domestic duties and the education and career of the other party
  • Any tax consequences
  • All sources of income available to either party

A court can order temporary spousal support while the divorce is pending. Spousal support is usually ordered for a specific length of time. Once ordered, it can be modified only upon a showing of a “change in circumstances.”

Child Custody and Visitation

In California, the court can make custody decisions based on what is in the “best interest” of the child, but will do so only if the parents can’t come to an agreement between themselves. In deciding which parent should have primary custody, the court will consider:

  • Which parent is more likely to allow the child frequent and continuing contact with the non-custodial parent
  • The history of contact between the parents and the child
  • The health, safety, and welfare of the child
  • The mental and physical health of the parents, including any history of continual alcohol or drug usage
  • The preference of the child, if the child is intelligent, understanding, and experienced/mature enough to express a preference
  • Evidence of child abuse

After the custody order is signed by the judge and filed with the court clerk, both parents are bound by it. If a parent is denied court-ordered access to a child, he or she may bring the issue back before the court to enforce visitation. The judge may decide to modify the custody/visitation order, order makeup visitation for the time missed, or order counseling or mediation.

Child Support

In California, child support is based on factors, such as:

  • The incomes of both parents
  • How many children the parent is responsible for supporting
  • How much time the children spend with each parent

If necessary, a court can set aside a portion of joint or separate assets of the parties to be put into a separate trust or fund for the support and education of the parties’ children.

A California child support order can be modified if there has been a “change in circumstances.” Examples of this would include:

  • A big increase or decrease in either parent’s income
  • The child spending a lot more time with the other parent
  • The child being several years older or having special financial needs such as schooling or medical expenses
Family, Myself

Happy Birthday Papa

It’s strange to be in his house and not hear his voice or silliness fill the space around us. I also know that spending the day in sadness is not something he would stand for so I will focus instead on celebrating how he lived his life: full of joy, energy and silliness.

I admit it’s not always easy to pretend that it doesn’t hurt that he isn’t here, but spending every moment bemoaning that fact not only dishonors his memory, it neglects the fact that he lived a full life.

The past few days have been hard for me as I stayed home in bed due to the flu, and I just felt him everywhere. Yet it’s also been a great reminder of how much of a legacy he left. So today I celebrate as best I can, and remind myself that I was blessed for how long I had him in my life for, and I get accept it in gratitude.

Happy Birthday, Papa. Sanjay Misses You.

Business Law, Legal

What Every Good Partnership Agreement Should Contain: Legal Reasons #69

Although not required, I strongly recommend that partnerships have a partnership agreement in place to detail the business ownership and responsibilities of partners. The clearer and more complete the agreement, the less that is up for debate or disagreement when partners don’t quite see eye to eye.

1. Contributions

Make sure you clearly lay out each partner’s stake in the formation and ongoing finances of the business. How much will each partner contribute to start the business and what will each partner’s responsibilities be for future needs? In your agreement, define what each partner will put forth—not only in the amount of money, but also with regard to time, effort, customers, equipment, etc.

2. Distributions

You’re all in the business to make some money and create and sustain a comfortable life, right? Your partnership agreement should detail how the partners will split your business profits? How much will each partner get paid and who will get paid first? Outline not only how profits will be distributed, but also define if each partner will be paid a salary (and of course how much that salary will be).

3. Ownership

What if something changes with regard to ownership of the business? If you sell it, which partners will get what? What is your partnership’s position on taking on new partners? If one partner wants to withdraw from your business, what happens then? What are the options for buying out another partner? Your agreement should carefully describe how ownership interests would be handled in various scenarios like those and others, such as in the event of any partner’s death, a retirement, or bankruptcy. And to protect your business from a partner leaving, setting up a new company, and stealing your customers, you should also consider adding in a non-compete clause. Better safe than sorry!

4. Decision Making

I can’t emphasize enough how important this is! Trust me, you and your partner(s) will not agree wholeheartedly about everything. You need to define how day-to-day management and long-term decisions will be made. Who gets the last say? Identify what types of decisions require a unanimous vote by partners, and what decisions can be made by a single partner. By setting up a decision-making structure that everyone understands and has agreed to, you’ll have the foundation for a more friction-free business.

5. Dispute Resolution

Ugh! No one wants to think about this, but you should. If things get ugly between partners, how will disputes be handled? Your partnership agreement should define the resolution process. Should mediation be the initial step? Will you require arbitration to settle differences? Keep in mind that if a dispute goes to court, lawsuits become part of public record. Setting up how you’ll handle disputes will take the guesswork out of navigating dissention.

6. Critical Developments

Sometimes, the unexpected happens. It’s what makes business so exciting—and unnerving at times. Your partnership agreement should address possible scenarios and concerns, such as:

  • A partner getting sick or dying—What happens then?
  • A buyout—How will the business be evaluated (and what is the split) if an offer is laid on the table?
  • Retirement provisions.
  • Circumstances under which you can modify your partnership agreement—and the process for making changes.

These are the most common issues. And there are numerous others you should think about.

7. Dissolution

Your agreement should also include what steps should be taken to legally end your partnership. You might opt to do this if you and your partners can’t agree on the future of your business. Also research what your state requires to dissolve partnerships. State law governs dissolution and your state’s website should define the process and provide the forms you need to complete.

Food For Thought, Inpsiration, Journal

A Few Firsts

Today, I feel sorry for myself as I recover from the flu.I am beyond frustrated that within two weeks,  I have gotten sick twice. Yet, I can’t allow myself to wallow. Last week, I got my first pull up in and it felt amazing to know that something that was unattainable for so long was finally within reach. Then there were some very successful depositions that are leading to a mediation and a case that felt never-ending how has an end in sight. As I push myself to become comfortable being uncomfortable. it hits me that taking ownership and responsibility for my vision means never laying blame on others. It also means a hard look at myself when results are not there. And I have to say it sucks.

It is east to feel sorry and blame others, but when I live in responsibility and action, it means all roads come through me. No more excuses, justifications. and rationalizations. So I push through even on days  when I don’t feel a 100% or when I don’t want to do certain things. I know in order to grow, I get to stretch and remove all the reasons for why and focus on why not.