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What is California’s Business Property Statement?

By: Doug Bend Businesses in California are required to file a business property statement (Form 571-L) with their County Assessor by August 31st of each year if: (1) the County Assessor’s Office sends the business a notice to file the statement or (2) The business has taxable business property with a total cost of $100,000… Read More

By: Doug Bend

Businesses in California are required to file a business property statement (Form 571-L) with their County Assessor by August 31st of each year if:

(1) the County Assessor’s Office sends the business a notice to file the statement or

(2) The business has taxable business property with a total cost of $100,000 or more.

The business property statement includes details of the cost of the company’s equipment, supplies, improvements and fixtures.

We recommend you contact your CPA if you need help filing the business property statement. 

If you are not already working with a great CPA, please contact us at info@bendlawoffice.com and we would be happy to make a recommendation.

Disclaimer: This article discusses general legal issues, but it does not constitute legal advice in any respect.  No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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The Contractual Language of Love: Ensuring Compliance for Dating Service Contracts

By: Brandon Shelton Several years ago, before everyone from third graders to your grandparents had the world wide web at their fingertips, the single mingling population had but one option to search for a mate: walk out into the world and find that person. That’s not to say there weren’t other modified versions of that… Read More

By: Brandon Shelton

Several years ago, before everyone from third graders to your grandparents had the world wide web at their fingertips, the single mingling population had but one option to search for a mate: walk out into the world and find that person. That’s not to say there weren’t other modified versions of that option, such as blind dates set up by a friend or socialite matchmakers, but the vast majority of our quests for companionship relied upon chance and fate that you would run into someone that complimented you in just the right way.

The modern world is quite different. The birth of the internet became an opportunity for companies to create technology to bridge the gap between you and that person. Indeed, the emergence of the dating app culture has all but eliminated the reliance upon meeting via happenstance. In this world, perhaps you have had the foresight to see a specific gap in the dating world, and you are certain that your idea for an online dating service will be one that substantially disrupts the dating services market. If so, by all means, you should pursue that endeavor. However, in doing so, you should be aware of a lesser known law in California governing dating services.

In particular, California Civil Code Sections 1694-1694.4 provide rules around how dating services may engage with its customers. Assuming your business engages with its customers through a “dating service contract,” which could be interpreted by a court rather broadly, several subsections of these statutes relate to what must be included in the contract itself. Under Section 1694.1(b), such dating service contracts must include “in close proximity to the space reserved for the signature of the buyer, a conspicuous statement in a size equal to at least 10-point boldface type, as follows:

“You, the buyer, may cancel this agreement, without any penalty or obligation, at any time prior to midnight of the original contract seller’s third business day following the date of this contract, excluding Sundays and holidays. To cancel this agreement, mail or deliver a signed and dated notice, or send a telegram which states that you, the buyer, are canceling this agreement, or words of similar effect. This notice shall be sent to: (Name of the business that sold you the contract) (Address of the business that sold you the contract).””

Cal. Civ. Code § 1694.1(b).

This language relates to a mandatory three-day “cooling off” period that would allow your customers to cancel their dating services contracts. The idea is that customers of dating service providers should have the ability to rethink whether or not they feel the need to pay for such services (even if that is the cultural norm at this point).

Additionally, you must also include language that a buyer or their estate should also have the ability to be relieved of any payment obligations in the event of death or disability, and further must have the right to be reimbursed for any unused prepaid services in such an event. Cal. Civ. Code § 1694.3(a). You must also give the customer a right to cancel if they move when the move renders the services unfeasible. Cal. Civ. Code § 1694.3(b). In addition, you must include your company’s address conspicuously on the first page of the contract. Cal. Civ. Code § 1694.2(c).

While there is some caselaw out there that suggests a court may expect a customer to actually benefit from these provisions in order to bring a successful claim, the statutes are written in such a way that could very well invalidate your entire contract if you fail to include that language. Under Section 1694.4(a), “[a]ny contract for dating services which does not comply with this chapter is void and unenforceable.” These statutory requirements are also not available to any waiver. Cal. Civ. Cod § 1694.4(e). You should be very careful and deliberate in writing any contract for dating services, whether they be in person or provided online. In the case of online dating services, you will likely want to make sure that you specifically direct your users’ attention to your Terms of Service, perhaps by a click through screen at the time of engagement, and include the language and terms required by Sections 1694-1694.4. There are several other limitations imposed by these chapters, for which you should seek an attorney’s assistance in interpreting to ensure full compliance, as a failure to do so could completely void your contract, leaving you without any recourse in anticipated payments.

Disclaimer: This article discusses general legal issues, but it does not constitute legal advice in any respect.  No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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How To Dissolve A California Corporation

By: Doug Bend So you need to dissolve your California corporation?  You should consult with your attorney and CPA as the steps can vary from company to company, but there are typically twelve steps to dissolve a California corporation. 1.  Approval Of The Board Of Directors. A majority of the board of directors needs to… Read More

By: Doug Bend

So you need to dissolve your California corporation?  You should consult with your attorney and CPA as the steps can vary from company to company, but there are typically twelve steps to dissolve a California corporation.

1.  Approval Of The Board Of Directors.

A majority of the board of directors needs to pass a written resolution approving the dissolution of the corporation.  

2.  Approval Of The Shareholders.

If shares have been issued, a majority of the outstanding shares will also need to approve the company’s dissolution in written resolutions.

3.  Notice of Dissolution To Creditors.

If the company has any creditors, it should provide them with notice of when claims must be submitted for payment to be considered.

4.  Certificate Of Dissolution.

A certificate of dissolution will then need to be filed with the California Secretary of State’s Office. 

5.  Discontinued Registered Agent For Service Of Process Services.

If you are using a third party service provider as the corporation’s registered agent for service of process, you should notify them of the dissolution so you do not continue to get charged for the service.

6. File Declaration Of Closed Business With The City.

If the corporation is registered with a city, most cities require that the business registration be inactivated.  For example, if your corporation is registered to do business in San Francisco, a Declaration of Closed Business would need to be filed.

7.  File An Abandonment Form For Your Fictitious Business Name Statement.

In addition, most jurisdictions require you to file a form notifying the county that you will no longer be using any fictitious business names that you registered. For example, in San Francisco you would need to file a Statement Of Abandonment Of Use Of Fictitious Business Name Statement.

8.  Cancel Any Other Licenses And Permits.

You will also need to cancel any additional licenses or permits, such as your California Seller’s Permit and your registration with  the Employment Development Department.

9.  IRS Form 966.

Within 30 days of the board of directors approving the dissolution, IRS Form 966 must be filed.

10.  IRS Forms 8594 and 4797.

If the dissolution involves the sale or exchange of corporate assets, IRS Forms 8594 and 4797 may also be necessary.

11.  Final State Tax Return.

You will need to work with your CPA or other tax professional to file a final state tax return.  You will also need to file any delinquent tax returns and pay any owed taxes.

In California, the Franchise Tax Board will continue to assess an annual franchise tax until the corporation has filed a final tax return with the FTB.  You should indicate it is the final return by checking the box that it is the final return and writing “final” on the top of the return.

12.  Final Federal Tax Returns.

Lastly, a final federal tax return needs to be filed for the corporation.  Like the state tax return, you should indicate on the form that it is the final return for the company.

For many companies these are the steps to officially close down a California corporation, but please contact us at (415) 633-6841 or info@bendlawoffice.com to make sure no additional steps are required as each situation is unique.

Disclaimer: This article discusses general legal issues, but it does not constitute legal advice in any respect.  No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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How Do You Dissolve A California LLC?

By: Doug Bend There are typically ten steps to dissolve a California LLC: 1. Review The LLC’s Operating Agreement. You should first review your LLC’s Operating Agreement to see what steps it requires for dissolution. 2. Member’s Resolution Approving The Dissolution. Most likely you will need a written Member’s resolution approving the dissolution of the LLC…. Read More

By: Doug Bend

There are typically ten steps to dissolve a California LLC:

1. Review The LLC’s Operating Agreement.

You should first review your LLC’s Operating Agreement to see what steps it requires for dissolution.

2. Member’s Resolution Approving The Dissolution.

Most likely you will need a written Member’s resolution approving the dissolution of the LLC.

3. Secretary of State’s Office.

Next, you will file a dissolution form with the California Secretary of State’s Office.  Which form you file will depend on when the LLC was formed and whether you have the unanimous consent of the Member’s to dissolve.

4. Notice of Dissolution To Creditors.

If the company has any creditors, you should provide them with notice of when claims must be submitted for payment to be considered.

5.  Discontinued Registered Agent For Service Of Process Services.

Once you get the endorsed dissolution filing back from the Secretary of State’s Office, if you are using a third party provider for your company’s registered agent you should notify them of the dissolution so they do not continue to charge you for the service.

6. File Declaration Of Closed Business With The City.

If the LLC is registered with a city, most cities require that the business registration be inactivated.  For example, if your LLC is registered to do business in San Francisco, a Declaration of Closed Business would need to be filed.

7.  File An Abandonment Form For Your Fictitious Business Name Statement.

In addition, most jurisdictions require you to file a form notifying the county that you will no longer be using any of the fictitious business names that you registered for the LLC. For example, in San Francisco a company would need to file a Statement Of Abandonment Of Use Of Fictitious Business Name Statement.

8.  Cancel Any Other Licenses And Permits.

You should cancel any additional licenses or permits, such as your California Seller’s Permit and your LLC’s registration with  the Employment Development Department.

9.  Final State Tax Return.

If you elected to have the LLC taxed as an S corporation, you will need to work with your CPA or other tax professional to file a final state tax return.  You will also need to file any delinquent tax returns and pay any owed taxes.

In California, the Franchise Tax Board will continue to assess an annual franchise tax until the LLC has filed a final tax return with the FTB.  You should indicate it is the final return by checking the box that it is the final return and writing “final” on the top of the return.

10.  Final Federal Tax Returns.

Lastly, if the LLC elected to be taxed as an S corporation a final federal tax return will also need to be filed.  Like the state tax return, you should indicate on the form that it is the final return for the company.

Please do not hesitate to contact us at info@BendLawOffice.com if you would like our help to dissolve your California LLC.

The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.

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Should I Have A Separate LLC for Each Of My California Locations?

By: Doug Bend If you are planning to open up more than one location of your business in California, you have two options to consider. (1) Only Have One Legal Entity For Multiple Locations. You could update the city business license for your existing legal entity to operate the additional locations. The advantage to this approach… Read More

By: Doug Bend

If you are planning to open up more than one location of your business in California, you have two options to consider.

(1) Only Have One Legal Entity For Multiple Locations.

You could update the city business license for your existing legal entity to operate the additional locations.

The advantage to this approach is you would save $3,000 to $4,000 a year by not having to pay duplicative costs for a separate legal entity. For example, you would not have to pay your CPA to file a separate tax return or pay California the annual franchise tax for multiple entities.

The disadvantage to this approach is if you operate multiple locations under the same legal entity if something happens at one location it could put in jeopardy all of the assets that are in the same legal entity from your other locations.

(2) Have a Separate Legal Entity for Each Location.

The second option is to have a separate legal entity for each location.

The drawback to having a separate legal entity for each location is you would have the expense of maintaining each entity.

The advantage is the assets from each location would be held in separate and distinct entities. As such, it might be more difficult for a successful plaintiff to get at the assets of all of your locations if something were to happen at one location.

In addition, you could give key employees and advisors equity in the location they are adding the most value too instead of equity in your entire company. For example, you may want to give your store manager in San Francisco equity in an entity for that location and not equity in one entity that runs locations in other parts of California as that manager has very little to do with those other locations.

Please feel free to contact us at info@BendLawOffice.com if you would like to chat through the advantages and disadvantages of having multiple legal entities as you grow your business.

The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.

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Essential Legal Tips For Small Business Owners Today

This articles was originally published in Forbes. By: Doug Bend Many business owners are struggling to keep their businesses afloat and are currently making tough decisions about layoffs. My law firm has been advising dozens of small business owners and startups on how to navigate the ongoing fallout from COVID-19. Here are six tips that… Read More

This articles was originally published in Forbes.

By: Doug Bend

Many business owners are struggling to keep their businesses afloat and are currently making tough decisions about layoffs. My law firm has been advising dozens of small business owners and startups on how to navigate the ongoing fallout from COVID-19.

Here are six tips that have helped some of our clients weather the storm and may be beneficial to your business:

1. Check in with your insurance broker.

Check in with your insurance broker to see if your policy includes business interruption coverage or other provisions to help your business during this difficult time. In addition, your insurance broker may have recommendations on what type of insurance you should have moving forward.

Your insurance should be customized to your business, which has likely changed dramatically. For example, if you recently laid off employees, you may not need as much worker’s compensation coverage. However, you may need new types of coverage because your business has likely changed how it provides its products and services.

2. Ask visitors to sign a COVID-19 waiver.

If your business has a physical location, consider asking visitors to sign a COVID-19 waiver. The waiver can include provisions such as:

• The guest acknowledges that visiting your business carries with it the risk of exposing themselves to COVID-19, which they voluntarily assume.

• The guest agrees to indemnify and hold your business harmless from any damages that may be incurred from their visit.

3. Consider signage displays.

Check in with your business attorney to see if any new signage might be recommended for your business to display, on the interior and/or exterior of your physical location, to advise guests of new risks and safety precautions that they should take.

4. Check your retainer balance.

While you’re checking in with your attorneys, ask if you have a retainer balance in their trust account. Your attorney is required to return the balance to you, which could be a helpful infusion of cash.

5. Find out if you qualify for PPP loans and tax credits.

If you have not already done so, reach out to your CPA and business banker to see if you might qualify for an SBA grant or loan. At least some of the new SBA loans may be forgiven if they are used for certain purposes, which includes paying your employees’ wages under certain conditions.

Your CPA can also advise you on important tax law changes that could help your business, such as deferring FICA taxes and the employee retention tax credit.

6. Apply for grants.

Check to see if your company might qualify for a grant from another company. For example, Facebook is offering $100 million in grants and ad credits, and Salesforce is offering $10,000 grants to small businesses.

By following these tips, you can not only protect your business moving forward, but also provide your customers with important guidance on how to stay healthy and safe.

The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.

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What Does It Mean To Vest Your Shares?

By: Doug Bend Vesting of shares means that the shareholder has to earn their shares over time by staying with the company in some capacity. If a shareholder leaves the company and owns unvested shares, then the corporation has the option to repurchase the unvested shares typically at the original purchase price. For example, founders… Read More

By: Doug Bend

Vesting of shares means that the shareholder has to earn their shares over time by staying with the company in some capacity.

If a shareholder leaves the company and owns unvested shares, then the corporation has the option to repurchase the unvested shares typically at the original purchase price.

For example, founders of start-ups typically vest their shares over four years with a one year “cliff.”

If a founder leaves the company before they hit the first year anniversary of their stock purchase agreement, the company has the option to repurchase 100% of their shares.

On the first anniversary of the stock purchase agreement, the founder hits the “cliff” and vests 25% of their shares.

Each month thereafter the founder vests 1/48 of their shares until they are fully vested on the fourth anniversary of their stock purchase agreement.

Issuing shares on a vesting schedule is optional, but it is often a good idea so you have a game plan in place if the shareholder leaves the company in the first few years of purchasing their stock.

This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.  

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