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San Diego Business Organizations Law Blog

Collection cases: myriad types, special considerations

As we note on our website at the San Diego-based law firm of Gallagher / Krich, APC, "Collections cases can arise from a number of scenarios."

In the business world, that is essentially nothing more than a truism. Perhaps a company or business principal has a signed promissory note from a debtor and is having difficulty collecting the promised amount owed. Perhaps money was loaned to a third party and simply never paid back. Perhaps an investment turned out be misrepresented or even illusory, and efforts to get back funds that were committed in good faith have been unavailing.

Does less vertical integration impact business organizations?

Is a company’s size relevant to the choice of business organization? A recent article underscores the importance of planning for growth and adaptability.

Unlike previous models, the article suggests that business competitiveness is increasingly focused on leanness and maneuverability, rather than vertical integration. Instead of owning a vast network, today’s companies might not feel compelled to control every stage of production and/or distribution. In fact, they might grow without acquiring real estate or infrastructure.

How does legal counsel help fulfill a company's plans?

There are many companies out there, and for the most part, they have some type of legal counsel. Some companies have a bevy of lawyers in house; others look to attorneys outsides of their walls to help them in case of legal issues. Other companies still use a combination of these two approaches. But what benefit do these attorneys provide these companies, besides the obvious?

Well, in addition to helping with any class action lawsuits that a company could deal with in it's existence, legal counsel can provide crucial strategic advice that allows a company to overcome some significant hurdles. Two processes immediately come to mind: foreign investments and government oversight.

Is an LLC a true hybrid between partnerships and corporations?

Although it may not be appropriate for all startups, a limited liability company has become a popular option in California. Certain industries, in particular, have embraced the LLC option, including real estate, joint ventures between corporations or with foreign partners, venture capital, petroleum production, as well as theatrical investors. Let’s take a closer look at this business formation choice.

Some might characterize an LLC as a hybrid between a partnership and a corporation. For example, an LLC does not have to be taxed twice, like a corporation. Instead, its owners can elect for the income from the LLC to be taxed like a partnership. In terms of liability, however, an LLC offers the protections more traditionally associated with a corporation. 

If a bad fit, can the wrong entity selection be a costly mistake?

For many, experience is one of the best teachers. Yet can a startup business afford the luxury of a trial-and-error approach? Chances are that funds are tight when starting a new business. For that reason, it is extremely important to select a legal structure, or business organizational type, that suits the needs of the owners and their unique business model.

Entity formation may also affect tax obligations, paperwork duties, fundraising parameters and the individual liability of owners. Let’s compare four common choices: sole proprietorship, partnership, corporation and limited liability company.

Do state officials recommend that start-ups seek legal advice?

Is it a good idea to consult with legal counsel when forming a small business? Our law firm focuses on business entities and formation needs, and we know that up-front legal advice can save time and money later on.

Notably, we’re not the only ones who share that opinion. The website of the California Secretary of State includes a section on business formation issues. That webpage recommends that business start-ups seek legal counsel before filing their formation documents. The webpage also notes that many filings are returned for corrections, sometimes for simple omissions or misstatements. 

What factors affect the health of a small California business?

According to a recent ranking, one of California’s metro areas may be the best in the country for small businesses. Admittedly, Silicon Valley has a national reputation for tech startups. However, it can also be expensive to do business there. Perhaps for that reason, the Riverside-San Bernardino area east of Lost Angeles emerged at the top of the list. San Jose also made the top 20.

What factors contribute to a favorable environment for small businesses? The ranking examined tax data, local costs, the skill level of the local workforce, average annual revenues and credit scores, as well as the median age of existing small businesses. 

Is corporate structure easier for interstate commerce?

In our last post, we questioned whether e-commerce might change the business organizational models for new startups. Today’s discussion highlights the challenges facing a new player in that arena.

Specifically, the business is PillPack, an online medication delivery service. The company originated in New Hampshire but is now available in 47 American states. California is the most recent state to allow consumers to order their products from the startup. Notably, availability may include both over-the-counter and prescription medications, as well as vitamins. 

Will e-commerce change business organizations?

As consumers and businesses increasingly conduct their commerce online, will new startups pursue new business organization structures? A recent article provides context.

The startup in this case is called OhmConnect, and its product is an app that may help consumers conserve energy and save on their utility bills. The startup claims that its customers might see a reduction in their bills by as much as $50 to $150 in a year. They’ve also received a notable endorsement: the “killer idea” app distinction at an energy data competition put on by the U.S. Department of Energy.

What Structure Is Best For A Foreigner Starting A U.S. Business?

Taking advantage of the investment and business opportunities that exist in the United States is a tempting prospect for many entrepreneurs and business owners from other countries. Making the most of any money that you put into the United States requires careful planning and thoughtful analysis of the most effective means for achieving your goals.

In many instances, starting a business in the United States may be the best answer to maximize and protect your investment. Dealing with the Internal Revenue Service as a foreign company has potential disadvantages such as delayed communications and a higher likelihood of drawing unnecessary attention to your business's activities in the United States. Advantages of establishing a subsidiary in the United States include the possibility that you may have some degree of control regarding the timing of tax payments among other issues.

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Gallagher | Krich, APC
964 5th Avenue, Suite 202
San Diego, CA 92101
Phone: 858-777-2037
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