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Should You Get an LLC for Your Business?

Should you get an LLC for your business? Well, that depends. Here are a few things to think about as you explore your options. 

Reason #1 to Get an LLC: Legal Protection

The main reason why businesses choose to file for an LLC is for legal protection. In the law’s eyes, an LLC is a separate entity from you. That means if something happens and your business gets sued, you are protected from losing personal assets. 

To illustrate, consider two examples. 

Bob is running a small business as a plumber. He decides against setting up an LLC because he doesn’t want to deal with the paperwork and fees required. One day he accidentally leaves a pipe cutter at a client’s house, and their three year old cuts himself with it. The hospital gets him patched up, but now Bob faces a big lawsuit and loses everything including his personal house, car, mutual funds, etc. 

Jack also runs a plumbing company, but doesn’t want to risk his personal assets. He sets up an LLC to give him legal protection. A similar event happens, where his negligence on the job ends up in a lawsuit. His business is in trouble and loses its assets, but Jack’s personal belongings and bank accounts aren’t taken away. 

While this incident may not pertain to your business, keep in mind that accidents happen. Patrons of your restaurant may slip and fall. That widget you made might not have warnings on the label and get swallowed by a baby. Your software might have a huge loophole that lets in tons of viruses or hackers. 

If you feel like your business is relatively risk-free and you don’t need an LLC, that’s up to you. But you’re missing out on important protection that millions of business owners won’t go without. 

Reason #2 to Get an LLC: It’s Easier to Raise Money

Most businesses require some form of capital. They don’t handle everything with cash, because they can often leverage cash to make more money. 

For example, let’s say you only have $1,000 in the bank but you know if you spent $5,000 on materials and labor, you can make $10,000 worth of product. Will you let your $4,000 shortfall hold you back? Probably not, assuming you have access to credit. You’ll borrow cash now to make more money later.

It’s generally easier to raise money as an LLC versus a sole proprietor or partnership. The extra structure and corporate entity give banks and investors more confidence that your business is here to stay. 

Pass-through Federal Taxation on Profits

For some business entities, taxes can get a little messy and complicated. Not so with an LLC, as the company’s profits go straight to the members’ personal tax returns. This means it’s easier to file your company’s taxes, because they just ride along with your personal taxes. 

This also means if you suffer a loss, the taxes you personally owe the federal government goes down. That’s something we always like to hear, right? 

Is an LLC the right entity for every business? No, definitely not. Sometimes it makes more sense to file for a C Corporation or S Corporation. But in general, the people asking us about LLCs are business owners currently operating as sole proprietorships and partnerships. In that case, we definitely recommend considering an LLC for the reasons described above. 

To get the process stated, just send us an email at Info@voneschlaw.com. We look forward to working with you. 

What is the Americans with Disabilities Act?

What is the Americans with Disabilities Act? There’s a lot we can say about it, but this article will keep things brief and high level. We’ll talk about three main things: what the act is, who enforces it, and what it means to you. 

What is the American Disabilities Act?

Often referred to as ADA, the American Disabilities Act was put in place to help protect the rights of people with disabilities. These protections fall under several areas:

  • Jobs
  • Transportation
  • Communications
  • Public Accommodations
  • Access to state and local government programs and services

The act is divided into five titles, and each of the five titles is enforced by a different agency.

Who Enforces the American Disabilities Act?

Title I refers to employment, and thus is protected by the U.S. Equal Employment Opportunity Commission. As you would expect, the purpose of this title is to prevent employers from discriminating against someone just because they have a disability. Part of this comes into play with having employers restructure jobs or make changes to a job site to accommodate the person’s needs. 

Title II refers to state and local governments. An example of the type of protection involved is transportation systems such as bus or rail. The system must be able to accommodate for the needs of people with disabilities. It is enforced and regulated by the U.S. Department of Justice. 

Title III is public accommodations such as restaurants, hotels, bars, golf courses, movie theaters, etc. The idea is these places should have the facilities necessary to allow people with disabilities to access these sites. Like Title II, it is also regulated by the U.S. Department of Justice.

Title IV refers to telecommunications. Telecommunications companies must be able to offer specific services to accommodate people with disabilities. For example, those with hearing or speech disabilities should still be able to communicate via telephone.  Title IV is regulated by the Federal Communication Commission. 

Title V is for miscellaneous provisions for the ADA as a whole.  

What Does the American Disabilities Act Mean for You?

The short answer is – it depends. 

Do you manage a restaurant? That falls under Title III, so it would be good to make sure your facility is accommodating to people with disabilities. The most common ones that people think of are wheelchair ramps and having big enough bathroom stalls that a wheelchair can fit. 

Did you have someone with disabilities apply for a job? If so, Title I may be more of what you’re interested in. Be aware that if they are the best candidate and you hire them, you may need to make changes to your job site or restructure the job to accommodate their needs. 

At a high level, the American with Disabilities Act isn’t too difficult to comprehend. However, as you get into the details of what qualifies as a disability and what rights people have, it gets more convoluted. If you need a defense for the ADA or have questions call us at 714.456.9118 or send us an email at info@voneschlaw.com. We look forward to hearing from you. 

Courtesy of Cuselleration

Is a Purchase Order a Legal Contract?

Is a Purchase Order a Legal Contract?

The world of purchase orders and contracts can be a bit confusing sometimes. We’ve put together a short article outlining the similarities and differences between the two to help you sort them out. 

Purchase Order and Contracts Basics

Let’s start by talking about each of these documents. A purchase order is a document from a buyer to a seller that orders a product. It should include everything the seller would need to know including quantity, price, a description and a delivery date. 

When a purchase order is accepted by the seller, it does become a legal contract. The seller is acknowledging they will sell the items on the purchase order for the prices listed, and abide by the terms and conditions. 

Note that the seller does not have to accept the purchase order. It isn’t considered a legal contract until it’s accepted by the seller. 

A contract is a document that outlines descriptions and costs of goods. It also contains terms and conditions. 

This gets confusing, because it means a purchase order can be a contract. However, that doesn’t mean all contracts are purchase orders. One way that might help is to think about the timeframe. 

Short Term vs. Long Term

A purchase order usually refers to something that has a short duration. The terms may be to deliver in a couple of hours or in 2 years. Either way, the duration is relatively short compared to how long some contracts can go. 

A contract can often be a long term document. For example, it may specify that the buyer will purchase items from a seller for up to 3 years, without going to the market for competitive bids. Or it might outline how the buyer and seller manage freight and transportation of the goods. 

Another way to think about it is guidance. A contract gives guidance to how purchase orders should be executed. 

Terms and Conditions in Legal Contracts

Another example to explain the differences between purchase orders and contracts can be seen in the terms and conditions. 

A purchase order will usually have some kind of terms. For example, there will be a delivery date, address, and payment terms – such as Net 30 (meaning the buyer needs to pay for the goods within 30 days.) 

A contract will usually be more specific, thus making them useful for complex transactions and relationships. For example, it makes sense to have a contract when a company is offering marketing services to another one. It might break down the expected results, how the marketing agency will be paid, how long the two parties will work together, reporting methods and more. 

For physical goods, a contract might be used to specify certain aspects of the product such as size, weight, performance, cost or lead time. This makes sense if the buyer is paying the seller to develop a new product. 

Is a purchase order a contract? Once it becomes accepted by the seller, yes. However, the world of contracts and POs is a convoluted one, so if you have questions call us at 714.456.9118 or send us an email at info@voneschlaw.com. We look forward to hearing from you.

Courtesy of Cuselleration

Do You Need a Lawyer to Review Contracts?

Do You Need a Lawyer to Review Contracts?

Do you really need a lawyer to review contracts? After all, you’re a smart person and can read it yourself, right? Why spend the money to have an attorney double-check it to make sure everything is aligned? 

The short answer is this: by hiring a lawyer, you spend a small amount of money now to prevent losing a lot of money later. Here are a few reasons why you should have a lawyer review business contracts. 

Lawyer Contract Review Reason #1: Avoid Pitfalls

The main reason to have an attorney look at your documents is to help you avoid potential pitfalls later on. For example, an attorney can identify if there is unclear language in the document which could lead to an issue later. A business contract is no place for gray areas. 

You want a contract to be very clear. Any kind of ambiguity opens a door for issues to walkthrough later on. But what seems clear to you or the other party may not necessarily be clear in the legal world. That’s why you need a set of eyes looking for these types of litigation gray areas. 

Lawyer Contract Review Reason #2: You Aren’t an Expert

You’re an expert in your field. That’s why other people or companies pay for your products and services. They trust in your skills and knowledge, which is how you’re able to produce something valuable enough to sell.

Are you an expert in contracts? No. Just because you’ve signed contracts in the past doesn’t make you an expert. It does give you an idea of what to look for, but it doesn’t mean you can rely completely on yourself in this matter. 

This is different than trying to do a basic maintenance task around your house, or learning how to use a new piece of software. Those things don’t have the potential to cause massive damage to your company and reputation. 

Contract lawyers, on the other hand, are experts. Let them do what they do best so you can do what you do best. 

Lawyer Contract Review Reason #3: Fight Fire with Fire

Contracts are usually a bit one-sided when they are first drafted. Whoever creates the first draft has their (or their client’s) interests in mind. That’s fair and makes sense, but it doesn’t mean you can’t do something about it. 

Hiring a contract attorney to review the document helps you balance the document so both sides win. The lawyer will be able to identify things that seem out of place and can recommend a change. They may also come up with ideas on what to add so the document is more reflective of your interests. 

Can you try to do these things without help? Sure. However, a fresh set of eyes from your attorney can make all the difference. It’s the same reason why authors hire editors, companies hire 3rd parties to perform market research, etc. 

So do you really need a lawyer to review business contracts? Yes – we protect your interests and help you avoid major problems down the road. 

Do you have a document you need to be reviewed? We’re here for you, click here to contact Von Esch Law today.

The Most Important Parts of a Business Plan

The Most Important Parts of a Business Plan

After working with a lot of clients over the years, we’ve determined the most important parts of a business plan. Even though it’s important the whole thing is done well, here are the areas we recommend spending a little extra time on. 

Executive Summary

This is commonly accepted as the most important part of a business plan. If you don’t have a good executive summary, you won’t draw the reader in. They won’t won’t be interested in reading the rest of the document, so you would’ve wasted a lot of time and effort drafting it. 

Your executive summary should include a few key things:

  • Purpose of the plan
  • Business name
  • Location
  • The services or products you offer

The balance here is having a short summary that also communicates what you need to. Get them excited about the opportunity they’re learning about. 

Company Description

This part of the business plan is where you can dive a bit deeper into your company. This helps the reader understand the business as a whole.

A few key elements here include:

Legal Entity – How is your business legally structured? Is it a sole proprietorship, partnership, LLC, S Corp or C Corp? 

Brief History – The reader doesn’t need to know every single thing your business has done over the last few months. But when was it started? What need was it created to fill?

Stakeholders – A stakeholder is anyone involved in the company. Suppliers, customers, employees, owners – they’re all considered stakeholders.

High-Level Goals – How big is the company going to grow over the next few years? How are you going to achieve that goal? 

Marketing Plan – You’ll get in more detail with this later. But what’s your overall marketing plan? How will you get new leads and reach new potential customers?

Again, this is all at a high level. You’re still warming up the reader and giving them an understanding of what you’re trying to do. 

Products and Services

This section may sound simplistic, but there’s more to it than you might expect. Yes, the point of this section is to explain what products and services you sell. But you also need to explain why they fill a need. 

For example, let’s say you offer a lawn mowing service. Why does your area need another one? How is your company different/better than the others? You need to be specific here. If you just say something generic like “we have the best people” or “we do the best job,” that’s not enough. 

The best way to do this is to get very specific. So instead of having a lawn mowing service that does anything and everything, maybe you just maintain the yards around office buildings. Or instead of doing landscaping for any residential home, you only do it for a certain high-end neighborhood. 

Other things to include in this section are your costs, suppliers, and prices. You need to prove that you’re able to actually make a decent profit. 

Financial Projections

Everything leads up to this section. This can make or break your business plan, as it needs to be appealing to investors. 

Don’t be unrealistic, but don’t be too conservative either. It takes time to get a business off the ground – investors understand that. But you still need to have something exciting enough that they’ll consider funding you. 

Need help with your business plan? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

Here Are the Laws in California for Time Off During the Holidays

Thanksgiving will be here before we know it and it is important that we get the time we need with our family. This would be a great time to look over what your boss is obligated to as far as being accommodating to requests for vacation time during the holiday season. You should also look at the pay responsibilities if you do end up working on a holiday. Here are some things to think about when looking forward into the holidays.

1. Business owners in California are not mandated to let their employees get vacation time during the holiday season. There are no laws that state that employers need to provide time off. When employees go to work on Saturdays, Sundays, and the holiday season, they should be treated the same as regular business hours. Business owners don’t need to provide paid holidays and their business is able to close out on any holiday. 

2. Employers in California are not required by law to pay their employees vacation time on a holiday. They are also not mandated to pay additional money to employees who labor on a holiday. Business owners are also not required to pay their workers additional or holiday money for their labor that is worked on a holiday. It is the employer’s choice to pay their employees the extra money for the labor that is needed on a holiday. It needs to be in the company policy for this to take effect.

3. Business owners need to accommodate their employees who are not able to perform labor on specific holidays because of their religion. Business owners should be accommodating to their workers in regards to religion. The evaluation of this usually comes in a case by case basis and is based on the type of company and the request made by the worker. If the business owner’s way of doing things needs workers to be at work during a holiday, such as a movie theater, this needs to be written in the employee handbook. 

Click here to learn everything you need to know about disrimination in the workplace!

4. When the business owner pays for time off on a holiday, they don’t need to allow his or her employees to collect time off for the holiday. When or if the worker quits his or her job prior to the holidays, the business owner does not need to pay him or her for the time taken off. The business owner’s rules in regards to compensation needs to be stated in the handbook that the holiday pay benefit doesn’t become collected and that they need to be still employed with the business to receive it.

Do you have a question about holiday pay? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

4 Ways to Protect Yourself From Business Fraud

Every company is susceptible to fraud. This is largely because there are so many different kinds of fraud.

Cybercriminals adapt their ways almost as quickly as cyber security firms make new products and services. It is almost impossible to protect against every type of attack.

1. Secure Your Accounts

Have you not made a different credit card or bank account for your personal life and business? You need to do this as soon as possible. If a hacker gets hold of a single account, he or she will gain entrance to other account. You need to evaluate your security systems when it comes to banking online and make sure that you are able to automatically log out. You need to create a monitored reimbursement expense policy for your team members and hold on to it. Make sure that your credit card provider is fraud protected since you are giving your credit card numbers to your employees.

2. Safeguard your computers

Computer hackers are trying to get in to your computer. You will need a firewall to secure the information that your business has. Software that blocks viruses can assist you in helping detect breach of information as well. Look for cyber security vendors that fit all of your needs. Your team members also need to create passwords that are difficult to hack into. Your employees will need to switch up their login information every sixty to ninety days.

Click here to learn pregnancy protection laws in California!

3. Do an employee background check

While you are increasing your employee count, you will need to find people who you can trust. You shouldn’t rely on references on their resume. You need to do a deep background check on everyone you let in. Some businesses could bring this service to you. It costs only thirty to fifty dollar for one report. You can filter out your candidates and run a background check right before you decide who to bring on your team. You will also need to ask permission before doing the background check.

4. Make a protected entrance

A protected entrance system could prevent people who you don’t want to give access to. Some key-card systems bring out clock-in and clock-out records of a worker’s entrance and exit from your office.

Management can also limit access to specific areas to certain people. For example, you could use a key card system to only let the tech managers inside the server room. Limiting the access to sensitive areas will keep you and your business safer.

Do you have a question about business fraud in California? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

Learn 7 Steps to Avoid Business Fraud

All businesses should take the time to mitigate any risks of fraud. Smaller and mid-sized operations are vulnerable to business fraud, and the after effects can be devastating for everyone involved.

Business fraud usually falls into three different categories: theft, financial statement fraud, and asset misuse. The vast majority of business fraud schemes are related to outright theft, such as stealing cash or claiming fraudulent expenses, and asset misuse, like granting kickbacks.

Business fraud can be tough to tackle, especially for smaller businesses who might be tight-knit and incorporate many family members. Considering your employees as friends or family can make it hard to confront cases of business fraud and theft. Plus, smaller businesses usually have less financial oversight, less knowledge on fraud schemes, and remain vulnerable to even small instances of fraud (since they can completely derail operations).

If you are looking to avoid business fraud, keep these seven steps in mind as you operate your enterprise.

Separate Accounting: Smaller businesses usually have one person who works on everything pertaining to finance. This system makes it easy for people to skim the company and misdirect money to other places. All businesses should have at least two people working on the finance side, or develop a relationship with an accounting firm on the outside.

Learn About Employees: Most business fraud is carried out by an employee on the inside. Take the time to really understand an employee’s background and knowledge before hire. Background checks should be a necessity, along with occasional time off, since this could expose a scheme in place.

Run A Tight Ship: All businesses need to be very careful about who has financial knowledge. This means restricting access to account information, building a verification system for reimbursements, and carrying out audits on accounting books.

Watch Your Bank Accounts: Online banking makes it easy to check out accounts and statements at any time. Be sure to compare the online data with your paper copies to make sure everything is on the same page. Watch out for checks that are not in order and strange payment recipients, who could be the benefactors of a scam.

Properly Train Employees: One of the best ways to avoid business fraud is to train workers on how to spot it. Encourage them to report strange behavior through an anonymous system and craft a business code of ethics to keep everyone accountable.

Click here to learn why you have a lawyer review your contracts!

Protect All Credit Card Numbers: Credit card fraud is becoming a popular way for people to steal money from businesses. A good way to ward this off is to separate all business and personal accounts. This keeps funds safe on both sides if the other accounts are breached by credit card fraud. All businesses should be very careful about who they give out credit card numbers too and use online payment services to mitigate any risks.

Audit Regularly: Businesses should subject themselves to regular audits on all financial activity to stay accountable. Non-scheduled audits, especially if they are from an outside source, can help detect fraud that might have gone unnoticed otherwise. Many companies are experienced at carrying out audits for businesses of all sizes and will give valuable advice about warding off business fraud in the future.

Keep the above seven steps in mind to fight against business fraud. It can strike a business of any size, but good due diligence will keep your operations safe and protected.

Do you have a question about business fraud? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

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Facts About the Right to Repair Act

You probably hear a lot about ‘damages’ when it comes to attorneys and litigation. But what do damages really mean? There are two types of damages, actual and economic. Actual damages encompass physical injuries and property damage, while economic damages centralize around the cost of a repair that did not encompass a physical injury or lead to property damage.

A good example to think about both has to do with construction. Actual damages would consist of things like a bad roof that leads to water damage, or even a collapse that injures someone inside of the building. Economic damages would have to do with the actual cost of repairing or replacing the bad roof, aside form any other property damage or injury claims.

Background

In 1998, the California Supreme Court said economic damages from construction defects are not able to be recovered in instances of negligence or strict liability. They made this ruling in Aas vs. Superior Court.

In response, the Right to Repair Act came into effect. The Act says homeowners in newly constructed housing can sue for economic damages if the residence did not meet certain construction standards.

The Act came into existence thanks to the work of legislators in California through SB 800. The intention of SB 800 was to mitigate the effects of the Aas decision.

Here’s a few facts about the Right to Repair Act to keep in mind.

It applies to all claims relating to construction defects

Homeowners also have the ability to file a claims related to personal injury, breach of contract, strict liability, and fraud, without having to adhere to the pre litigation stipulations spelled out in the Act.

It now covers more than just economic loss

A California Supreme Court Case in 2018 said the Act can now cover cases relating to property damage that arise out of defects related to construction.

Click here to learn about financial fraud laws in California!

It is now the exclusive way to recover property damages that are related to construction defects

However, personal injury damages are still outside the scope of the Act and are not listed as a recoverable category.

Homeowners must still comply with the pre litigation procedures spelled out in the Act even if their construction defect is not specifically listed in the Act

The California Supreme Court, when taking on this question, said homeowners are not able to bypass the pre litigation procedures because the Act has a ‘catchall standard’ in addition to the specific construction standards that were listed.

The decision by the California Supreme Court was seen as a big win for builders, contractors, manufactures, and design professionals

This was because of a couple of reasons. First, the vast majority of claims still had to go through the pre litigation procedures as spelled out in the Act. It also substantiated that the Act still applied to construction defects that were not specifically laid out in the jargon and wording of the Act itself.

The Right to Repair Act might seem like a complicated piece of legislation. There’s an extensive amount of background that corresponds with how it’s interpreted and seen today. Overall, homeowners do reserve the right to bring claims, but usually still have to go through a pre litigation process, except in certain instances.

Do you have a question about the Right to Repair Act? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

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3 Reasons You Should Have a Lawyer Review Your Contracts

It can be tricky as an entrepreneur to call up a lawyer to review a contract. But failing to do so can have devastating consequences for your business.

A lot of things can go wrong thanks with a bad contract. You could end up forking over a lot more money than you should. You could lose your rights to valuable property, and even expose yourself to risky (and costly) lawsuits.

Therefore, it is important to spend the money on having a lawyer review contracts. It will be a lot more expensive for an individual to come in at the end of the day to revise and fix a bad one.

Here are three reasons why you should have a lawyer review your contracts.

1. Courts Find Them Easier to Enforce
A good contract means that it holds weight in court. But a generic contract or one you wrote yourself, thanks to the internet might not be able to actually be enforced in your area.

If you’ve chosen to broker an oral agreement, it might not even be valid for certain types of transactions.

On the other hand, contracts that have been reviewed and edited by a lawyer ensures that important jargon and terms are included so the contract is valid. Plus, a good lawyer will make sure the agreement is up-to-date based on state laws.

This is particularly important when it comes to non-compete agreements. They can be a variable way for you to keep talent from working with a competitor, but a non-compete you crafted yourself probably will have some sort of error that could make the whole agreement non-enforceable.

2. Contracts Reviewed or Written by an Attorney Are Thorough
Poorly written contracts, or one with glaring gaps, could open you up to disputes or expensive lawsuits. Lawyers are experts when it comes to contracts. They understand how to write them in a clear manner and how to mitigate any potential problems on the horizon.

A good attorney who reviews a contract will be able to fill in the gaps that someone might have missed and will have the legal know-how to suggest additional clauses.

Lawyers know that a good contract includes stipulations about what happens if one party does not hold up their end of the bargain.

Well-written contracts also take steps to limit your liability in a scenario that is beyond your control. Additionally, they will incorporate so-called “boilerplate” clauses that will minimize frivolous disputes.

With the help of a good lawyer, a contract becomes a document that helps resolve problems. It becomes something that can help shorten the length of any disputes, and make sure you stand a better chance of
winning the case.

Click here to learn the 5 ways for your business to avoid legal issues!

3. Attorneys Can Help Craft Contracts That Save You Money
An experienced attorney in your industry will know about the types of standard language and terms. As a result, their expertise will translate in a contract that favors you, their client.

Having an attorney look over a contract, or taking the steps to revise one, can be a useful way for you to potentially save a lot of money. An attorney on your side can give advice about how to push the boundaries in your favor, or at least advise you about reasonable terms and negotiation standards.

If you are writing a contract on your own, and the other side has an experienced attorney working on theirs, you might be subject to unfair terms or be put at a bad negotiating vantage point.

Overall, getting good legal advice when it comes to contracts can make or break your business.

Do you have a contract that needs to be carefully reviewed by an attorney? Click here to contact Von Esch Law today!

Courtesy of Cuselleration