Tax Reform Highlights


By Sasha A. Klein

The most significant change to the U.S. tax code in 30 years was approved by Congress and signed by the President just in time for Christmas 2017.  Many of the provisions became effective January 1, 2018, only a few days after being enacted.


Corporate and Pass Through Entity Income TaxPermanent

Corporate Tax Rates are reduced from 35% to 21%.

Business Income from Pass Through Entities: provides for a 20% deduction for individuals and trust and estates on domestic qualified business income from pass-through entities.

  • Effectively reduces the top tax rate for those eligible to 29.6% (from 37%)
  • Wages paid to owners and certain income from specified services business (i.e. attorney and accounting firms) are excluded from the deduction.

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What Can Happen When a Commercial Lease Defaults?


By Labeed Choudhry

Modern commercial leases can be dozens of pages long and contain a vast number of provisions spread over many paragraphs.  Some of these provisions, such as those relating to the amount of rent and operations of the premises, are looked at and negotiated quite thoroughly by the parties.  Most of the other provisions however are routinely ignored as dense legalese and the parties, especially the tenant, pay little attention to what they say.

One often overlooked provision relates to the acceleration of rent upon default in payment by the tenant.  While language can vary according to the specifics of a lease, the general function of an acceleration provision is to allow the landlord to make a claim for the entire rent due under the remaining life of a lease if the tenant defaults during the middle of lease term rather than having to wait for rent as it comes due before making a claim for it.  For example, if a tenant defaults after one year of a five-year lease where the rent was $1,000 a month, the landlord can demand $48,000 (the amount to be paid under the remaining term of the lease) immediately without having to demand an additional $1,000 every month for the remainder of the lease term. While the accelerated rent is usually reduced to its present value, it can still be a hefty sum. Continue reading

How To Protect Smartphone Apps & Digital Work for Hire Projects


by Philip H. Ward III, Partner 

For many years, companies have required that employees and independent contractors hired to conduct work execute agreements which include “work for hire” provisions.  These provisions simply mean that the work for which the employee or independent contractor has been engaged belongs to the Employer, not the Employee.  Documents and work product would include engineering drawings, manuals, websites, architectural drawings, and other works.

Software development and smartphone app designs have created new issues for companies.  Recently, we negotiated a contract for a client who is developing a smart phone app.  An independent contractor was hired to design and develop the app.  In most cases, the independent contractor seeks to retain as much ownership as possible.  On the other hand, the owner needs to know that the app is theirs and won’t be copied. Continue reading

You, Me, and the LLC – How to Determine the Best Fit for Your Business Pursuits


By Cathleen Ward, Esq.

I have found that asking a client or potential client who is starting a business of their own for the first time what type of entity they would like formed is like asking a not-so-frequent visitor to Starbucks what kind of coffee they want; certain words sound nice, others sound familiar, and more often than not you end up getting what your friend is having.

The current popular trend in entity formation is forming a limited liability company (it is the Caramel Macchiato for us Starbucks frequenters). The LLC provides the flexibility of a partnership, as well as the potential tax benefits, with the liability protection of a corporation.

Most non-attorneys I speak to about entity formations get the general concept of a corporation; it creates a separation between the business and the person running it, and it is meant to limit the owner’s potential liability. The actual term “limited liability company” seems to confuse the novice, because it is a relatively new entity formation, and the law is continuously being developed. Florida just recently revised the Florida Limited Liability Company Act in 2013, creating the Florida Revised Limited Liability Company Act (“Revised LLC Act”) in Chapter 605 of the Florida Statutes. (For more information on the Revised LLC Act, click here: The basic concepts however, can be quite similar. For instance, instead of shareholders, you have members, and instead of shares, you have membership interests. Continue reading



On June 14, 2013, Governor Rick Scott signed the Florida Revised Limited Liability Company Act (the “New Act”) into law. The New Act is a complete rewrite of the existing LLC Act in Chapter 608 of the Florida Statutes. The New Act went into effect on January 1, 2014 for all LLCs formed on or after that date.

 LLCs formed prior to January 1, 2014, may continue to operate under the existing LLC Act until January 1, 2015. On that date, the current LLC Act is repealed and the New Act will apply to all Florida LLCs. Members and managers of existing LLCs should use this transition period to review their existing LLC Operating Agreements and determine whether the changes made by the New Act require any amendments.

Key provisions of the New Act include the following:

Electronic Signatures. Electronic signatures are now expressly permitted. Section 605.0102(62)(b).

Non-Waivable Provisions. Like the existing LLC act, the New Act is a “default” statute, meaning that in most cases, the members of an LLC can agree in their operating agreement to an alternative framework which supersedes specific statutory provisions. The New Act expands the list of non-waivable provisions that may not be altered or overridden by the operating agreement. These new non-waivable provisions include, but are not limited to (a) the power of a member to dissociate; (b) the right of a member to approve a merger, interest exchange or conversion; and (c) any restrictions on the rights of any person other than a manager or a member. Accordingly, it will be important to update existing operating agreements to address these non-waivable provisions. Section 605.0105(3).

Binding Effect on Non-Signatories. All LLC members are bound by the Operating Agreement whether or not it is signed by them. Section 605.0106(2).

Need a Member. An LLC must have at least one (1) member upon formation. Section 605.0201(4).

Dissociation. A member will now have the non-waivable right to dissociate from an LLC, but the dissociation does not trigger a buy-out right. Instead, the dissociated member only will have the rights of an unadmitted transferee (with certain exceptions). Section 605.0216.

 Statements of Authority. LLCs can now file “Statements of Authority” which are public records that can identify or limit the people having the power to act for or bind an LLC. The filing is valid for five (5) years and will (a) provide protection for an LLC against unauthorized acts and (b) provide certainty for those doing business with an LLC. Section 605.0302.

Creditor-Enforced Capital Contributions. Creditors will now have the right to enforce judgments against capital contributions by members. Section 605.0403(4).

Elimination of Manager-Members. The existing act allowed for the confusing term of “manager-members”. This term has now been eliminated in the New Act, such that an LLC must now be either managed by its members or managers. If neither management structure is stated in the articles of organization or the operating agreement then the default shall be a member-managed LLC. Section 605.0407.

 Non-Competition. Under the New Act, managers of manager-managed LLCs, and all members of member-managed LLCs, will be subject to a non-competition covenant. This is a waivable provision, and LLC managers and members will need to take due care to ensure it is properly addressed or waived in operating agreements. Section 605.04091(2)(c).

 Appraisal Rights. In certain circumstances, members can require an LLC to pay them a “fair price” for their LLC interests. Under the New Act, appraisal rights have been expanded by providing additional events which would trigger an appraisal, but such rights may be waived or eliminated in an operating agreement so long as such waiver or elimination is approved by the affected member or group of members. Section 605.1006.

 All new LLCs should be formed in compliance with the New Act. In addition, members of existing LLCs should consult with counsel in order to evaluate whether existing operating agreements should be revised in order to address the changes in the New Act.