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Why You Should Open A Commercial Bank Account For Your Business

Why You Should Open A Commercial Bank Account For Your Business published on

Essentially, one of the most basic steps in starting up a business is opening a bank account. Opening a bank account for the business separate from the individual bank account of the owner has many benefits. For instance, it makes it easier to organize the business’ expenses, pay taxes and maintain financial records.

If your business is an entity such as a limited liability company or a corporation, a separate bank account is necessary as the company is a legal entity separate from its members or owners, respectively.

In order to set up the business account, the bank will require certain documentation including the incorporation records for the entity, which will show the structure of the company and what authority you have in the company. These documents are generally the articles of incorporation or organization.

Some banks may require a certificate from the State to make sure that the company is active and in good standing.

Additionally, Banks will require you provide the Employer Identification Number (EIN), you were assigned by IRS.

Notwithstanding that the company’s corporate records, your authority within the company and the EIN number is the only basic information banks need. Other documentation required depends on the internal policy of the bank you choose, not the law.

Do not delay; call us or visit our website today for more details!

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Still Making Money When Your Company Is Losing

Still Making Money When Your Company Is Losing published on

Under section 1244, shareholders of domestic small business corporations can deduct a loss on the disposal of 1244 stock as ordinary loss rather than capital loss. A deduction for capital loss is limited to $3,000 annually. Any excess capital loss has to be carried over to the next year. Nevertheless, ordinary loss under Section 1244 is deductible up to $50,000 for the individuals and $100,000 for joint returns.

How to qualify for Section 1244 stock?

To receive a tax benefit under Section 1244, a business must meet specific requirements for the insurance of small business stock, the stock itself, and the shareholders. To qualify the corporation’s equity may not exceed $1,000,000 at the time the stock was issued, the stock must be issued for money or property, and for five years preceding the loss the corporation generally must have derived more than half of its gross recipients from business operations and not from passive income.

To understand if you qualify for Section 1244 stock, speak to one of our attorneys by calling our toll free number (800) 603 – 3900

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Benefits Of Alternative Dispute Resolution

Benefits Of Alternative Dispute Resolution published on

The alternative dispute resolution techniques are generally less formal, less expensive, and less time-consuming than fighting in court. This can give businesses more opportunity to determine when and how their dispute will be resolved. By including alternative dispute resolution provisions in agreements with customers and vendors, businesses can avoid costly litigation expenses and attempt to resolve disputes through mediations and arbitrations.

Mediation allows an impartial person called a “mediator” to help the parties try to reach a mutually acceptable resolution of the dispute. In arbitration, a neutral person called an “arbitrator” hears arguments and evidence from each side and then decides the outcome of the dispute. Arbitration is less formal than a trial, and the rules of evidence are often relaxed. Arbitration may be either “binding” or “nonbinding,” depending on the terms of the agreement entered between the parties. Furthermore, in the case of arbitration the parties have far more flexibility in choosing what rules will be applied to their dispute. For instance, parties can choose to apply relevant industry standards, domestic law, the law of a foreign country, a unique set of rules used by the arbitration service, or even religious law, in some cases.

Call us or visit our website   for more information and to make sure your interests are protected!

(800) 603 – 3900

www.AmeriLawyer.com

 

 

Personnel Background Checks

Personnel Background Checks published on

When making personnel decisions, including hiring, retention, promotion, and reassignment, employers sometimes do background checks on applicants and employees. Any time you use an applicant’s or employee’s background information to make an employment decision, you must comply with federal laws that protect applicants and employees from discrimination based on race, color, national origin, sex, or religion; disability; genetic information; and age. These laws are enforced by the Equal Employment Opportunity Commission (EEOC).

Recently, the EEOC and the Federal Trade Commission (FTC) issued joint informal guidance regarding issues employers may face when consulting background checks. Here are some key points for employers:

 

  1. An employer may ask about a person’s background except for certain restrictions on medical and genetic information.
  2. If using a background check, the employer must be in compliance with laws prohibiting discrimination.
  3. When an employer gets a background report from an outside agency it must comply with the Fair Credit Reporting Act. In California, it must also comply with the Investigative Consumer Reporting Act.
  4. Employers should seek the same background information from all individuals.
  5. Employers should not request a person’s genetic information which includes family medical history. If the employer has that information, it should not use it to make an employment decision.
  6. Employers cannot ask medical questions before a conditional job offer has been made, and can only ask current employees medical questions if there is objective evidence that the employee is unable to do the job or poses a safety risk because of a medical condition.
  7. Employers must preserve records for one year.

 

It is critical that employers be compliant with federal, state and local laws regarding background information.

 

Employee, Intern, Trainee, Volunteer: Which Should You Choose?

Employee, Intern, Trainee, Volunteer: Which Should You Choose? published on

Designating the term “Intern”, “Trainee”, or “Volunteer” to individuals does not automatically exempt the employer from federal and state minimum wage and overtime requirements. Unless the positions meet certain statutory and regulatory criteria, these individuals will be subject to the same wage-hour requirements as other employees. The liabilities for failing to compensate an employee properly include back wages, overtime, and liquidated and punitive damages, and attorney fees may also be available. Employers must therefore become familiar with the criteria set forth by the Federal Fair Labor Standards Act (“FLSA”) and applicable state laws then they pursue workers as unpaid interns, trainees, and volunteers.

Unpaid Interns: Whether an intern may properly be considered a “trainee” and not an “employee” under the FLSA (and a number of state laws) often requires a fact-specific analysis, and will depend on certain factors. The U.S. Department of Labor (“USDOL”) has established the six criteria listed below to guide courts and employers in determining whether trainees, students, interns and the like are considered employees under the FLSA:

  1. The individual receives training similar to what would be given in a vocational school or academic educational instruction; 2. The training is for the benefit of the intern or trainee; 3. The interns or trainees do not displace regular employees, but work under close observation; 4. The employer that provides the training derives no immediate advantage from the activities of the individuals and on occasion the employer’s operations may actually be impeded; 5. The interns or trainees are not necessarily entitled to a job at the conclusion of the training period; and 6. The employer and the individual understand that no wages are paid for the time spent in the internship.

The USDOL requires that all six of these criteria must be satisfied for an individual to be deemed an “intern” under the FLSA.

Volunteers: Under the FLSA, “volunteers” are treated somewhat differently than interns or trainees. For public sector employees to volunteer with their employing public agency and maintain “volunteer” status for their “volunteer” activities, the individuals must:

  1. Perform hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of compensation for services rendered – although a volunteer can be paid expenses, reasonable benefits, or nominal fee to perform services;
  2. Offer services freely and without pressure of coercion; and
  3. Not otherwise be employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer. This volunteer exemption, however, is limited to public sector employers. Under no circumstance will an individual be deemed a “volunteer” when providing services private, for-profit employers. Any individual providing services for such an employer may do so only as an intern/trainee (provided the necessary criteria are met) or an employee.

The USDOL’s enforcement position has generally been that volunteer work for a private, not-for-profit employer is not considered compensable under the FLSA so long as certain criteria are met.

Averting “Intern” and “Volunteer” Mislabeling. The exclusion from the definition of employment by the FLSA is restrictive and individuals who are “suffered or permitted” to work, in most cases, must be compensated by the employer. However, there are practices that employers can initiate which could reduce the risk of FLSA and/or state mislabeling violations such as possessing an agreement detailing the parties’ mutual intent that: (1)their relationship will not be one of employment, (2)the intern/trainee does not expect employment or compensation, and (3)the relationship is to provide the intern/trainee with skills that can be used in various settings.

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