Articles Posted in Business Law

underwood-primer-corporate-transparency-300x300The Corporate Transparency Act of 2020 (the “CTA”) is a Federal law set to go into effect on January 1, 2024. It forces certain members of businesses (those who formed them and those who own large portions of the entity) to report sensitive information to the Federal Government. 

Congress’ justification is that more than two million corporations and LLCs are formed in the United States each year. Yet, most or all of the States do not require information about the beneficial owners of the corporations and LLCs. 

This allows bad actors to conceal their identities while using their entities to facilitate illegal activity, including money laundering and the financing of terrorism. The CTA seeks to shine a light on these bad actors, thereby protecting interstate commerce and protecting vital national security interests. (P.L. 116-283, Div F, Title LXIV, § 6402, 134 Stat. 4604.) 

underwood-llc-buyout-procedure-300x300The statutory LLC buyout is a special remedy designed for lawsuits seeking to dissolve LLCs. After members of the entity sue to dissolve the business, the other members (all of them or some of them) have the statutory ability to avoid dissolution by buying out the membership interests of these “moving parties.” 

However, problems can arise, especially when it comes to setting the buyout value. Additionally, there are some situations where the buyout can actually be terminated altogether. At Underwood Law Firm, our attorneys are knowledgeable in the fields of pass-through entities and real property. If you’re looking to proceed with dissolution, then we may be able to help. 

When Can an LLC Buyout Occur?

underwood-corporate-llc-buyout-300x300When business entities become subject to internal dissension, it’s not uncommon for several members to approach the court system and seek to dissolve the entity. Often, this is in the best interest of all involved. 

Sometimes, however, the other members, shareholders, or partners, do not want to let the business go. They feel it can continue to operate. As such, they may invoke a special mandatory buyout to keep the business running. The buyout allows those who want the business to continue to purchase the interests or stocks of those who wish to leave. 

For LLCs and Partnerships, the buyout price is determined by the same standard: Fair Market Value. Corporations, on the other hand, conduct buyouts based on “Fair Value.” While this difference may seem minimal, they are ultimately quite different from each other.  

underwood-how-to-dissolve-llc-california-300x300LLC’s are perhaps the most common form of business entity in the country on account of their approachability. But their large number means that plenty will and do fail. When this occurs, members of the LLC can file a lawsuit for “involuntary dissolution.” 

That said, the non-dissolving members have a way of fighting back: the mandatory buyout. Litigation over buyouts can be fierce, as each member attempts to maximize the value of their interest to secure the largest possible payout. In these instances, the right attorney can make all the difference. 

At Underwood Law Firm, our attorneys are knowledgeable in the fields of pass-through entities and real property. If you’re looking to proceed with dissolution, then we’re here to help. 

underwood-penal-code-496-business-disputes-300x300Recently, the California Supreme Court clarified that California Penal Code section 496 applies to business disputes. This is significant as Section 496 outlines penalties for someone who buys or receives stolen property, or property obtained through theft or extortion. (Penal Code § 496.) Of particular concern is 496, subdivision (c), which allows triple damages and attorneys’ fees as available remedies for someone who converts stolen property. (Id.) Over the years, there has been a longstanding debate in California on whether Penal Code section 496 applies to business disputes. 

On the one hand, California appellate courts held that section 496 did apply to business disputes according to the wording of the statute. On the other hand, California appellate courts also held that section 496 did not apply to business disputes involving theft through fraud or misrepresentation. A recent California Supreme Court case finally resolved the split.

The California Appellate Court Split

4212023-300x300Anytime a litigant wants to file a lawsuit, a threshold question is where the lawsuit should be filed. Specifically, the question is what county should get to hear the action. This process is called determining “venue,” and it can become quite a complicated endeavor. This is because the “correct” county for action will depend on a number of factors. 

One such factor is the “nature” of the action. If it concerns the “internal affairs” of a trust, then specific venue rules come into play. But making this determination isn’t easy. And filing suit in the wrong county could result in both a transfer and sanctions for the plaintiff who didn’t do their homework. 

What is Venue?

332023-300x300A Civil Harassment Restraining Order is a type of restraining order used in California to stop a person from harassing or threatening another. However, the requirements for a civil harassment restraining order are slightly different than a typical restraining order. Essentially, a civil harassment restraining order is for the purpose of providing protection to a person that is the subject of harassment from someone they do or do not have a relationship with. Therefore, a civil harassment restraining order provides a legal intervention that restrains the harasser. 

However, that a special relationship does not need to be shown to obtain a civil harassment restraining order does not mean that a person can get such a restraining order against anyone. A litigant seeking a civil harassment restraining order is required to show proof of behavior that constitutes harassment. At Underwood Law Firm, our attorneys are more than familiar with civil harassment restraining orders. 

Code of Civil Procedure 527.6

312023-1-300x300Partnerships are incredibly common business entities that many Californians enter on a regular basis, often to acquire and develop real estate over many years. Unfortunately, many fail to get off the ground, as mismanagement, poor spending, and bickering derail what may have been promising ventures. 

In these instances, a single partner can apply to have a court dissolve the partnership, effectively ending the entity by triggering wind-up procedures. At Underwood Law firm, our attorneys know how tough this situation can be. Thankfully, our attorneys are well-versed in partnership law, and we know the best ways to tackle the disputes that accompany dissolution and winding up. Our team has the legal acumen and skills necessary to help you achieve your litigation goals. 

When can a partnership be dissolved? 

2172023-300x300Partnerships are incredibly common business entities that many Californians enter on a regular basis, often to acquire and develop real estate over many years. But even the most successful arrangements must come to an end. Unfortunately, more often than not, the dissolution procedures “unwind” what may have been a series of cordial and respectful relationships between all involved. 

At Underwood Law firm, our attorneys know how tough this situation can be. Thankfully, our attorneys are well-versed in partnership law, and we know the best ways to tackle the disputes that accompany dissolution and winding up. Our team has the legal acumen and skills necessary to help you achieve your litigation goals. 

When can a partnership be dissolved? 

Underwood-Blog-Images-5-300x300Attorney’s fees are those fees owed by a client to an attorney who performed legal services on behalf of the client. In some cases, a court may order the losing party to pay the attorney’s fees of the other party. Whether attorney’s fees are available as damages depends on the nature of the action. In cases involving a breach of contract, whether attorney’s fees are available generally depends on the terms of the contract. 

What is a Breach of Contract?

A breached contract occurs when a party fails to fully perform its obligations under a valid contract. Generally, to prove a breach of contract, a litigant must prove that a valid contract existed and that the valid contract was breached by the party in some way, causing damages to the litigant.

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