A fresh start can be exciting, especially when it comes to building a new home or renovating a current home. However, for homeowners inexperienced in working with contractors or design professionals, the undertaking of a major construction project can be a daunting task. The highest probability for success in a construction project relies upon the homeowner being educated in protecting themselves against any potential conflicts that may arise.
In this article are six important steps to take when hiring a contractor or design professional for a new build or renovation.
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.
SO, WHAT DOES IT CHANGE?
Corporate and Pass Through Entity Income Tax: Permanent
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.
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 →
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 →
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: http://bit.ly/1SWcyW8.) 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 →