California law presumes that a person who performs work for a business is that business’s employee, and it places the burden of establishing otherwise on the business. A business that fails to carry that burden owes the wages, expenses, and payroll taxes it would have owed had the worker been classified as an employee from the outset. Some of that liability can reach an owner or officer personally. Consider a commercial cleaning company in Roseville with twenty-two employees

A litigation hold, also called a legal hold or document hold, is a directive given to employees in a business organization. It instructs them to preserve and not alter specific records and information (both paper and electronic) that may be relevant to an ongoing or expected lawsuit or investigation. The purpose is to comply with the duty of preserving information, including electronically stored data (ESI), to avoid tampering with evidence and be prepared for legal proceedin

Most often than not, having a partner in a business means having an additional source of ideas, capital and resources. However, this also means an increase in potential conflict between partners. Fortunately, there are various ways to resolve partnership disputes. But before doing so, it is essential to understand the root cause of the conflict because this will guide parties on how they can amicably sort out the issue. The sources of clashes There are many causes behind disp

Building a business starts with a relationship. Fundamentally, you have a buyer and a seller. As your business grows, so do the number of relationships you form. The more relationships you form and the bigger your business becomes, the more chances there are for disagreements. You cannot satisfy every client, employee, distributor, manufacturer, shareholder, member of the board or investor in your business. Disputes are bound to happen. Business litigation begins when a third

Corporate bylaws are internal rules and guidelines that dictate how to run a corporation. In California, these bylaws outline the duties and responsibilities of the corporation’s directors, officers, and shareholders. They also outline the procedures for holding meetings, voting on important matters, and making changes to the bylaws themselves. Why are corporate bylaws important? There are several reasons a corporation needs to have clear and comprehensive bylaws. These inclu

A 1099 form provides an end-of-the-year record of income paid to an independent contractor by the companies or individuals who used their services. Sole proprietors, self-employed business owners and sole LLC owners also file 1099 forms to report the income they earn throughout the year. Despite their widespread use, some taxpayers make common errors when filing their 1099 forms. Failing to report all income A common business law problem involves underreporting the income you

It might seem like a dispute is the end of a partnership, but it doesn’t always have to be so. Here are some key ways that real business partnership issues have been resolved in California. What leads to a partnership dispute? Human beings are complex animals, and the business realm tends to have high stakes. This leads to a highly reactive combination that may make it hard to maintain healthy, positive relationships. Everyone wants to be friends with the people they work wit

Both public and private companies conduct mergers and acquisitions. The status of a company influences whether a breakup fee will be part of the terms during negotiation of the deal. A breakup fee is paid when a seller chooses to halt a merger. The penalty usually amounts to between 1% and 3% of the deal’s value. The money compensates a buyer for the lost time and effort put into the failed deal. A privately held company in California is less likely to specify a breakup fee t

Did you sign a non-compete agreement when you left your former employer in California? Even if you did, your former employer could not enforce it under state law, even if company officials repeatedly say they can. Do you have a non-compete agreement in your employment contract? Many California employers are sneaky, burying non-compete agreements in the fine print of contracts or even adding them to the terms of employment after a worker has accepted a job. Employers do this,

Many business entities in California are formed with the expectation of generating a profit, but things do not necessarily go as planned. For various reasons, business tax returns are not always filed on time, the annual franchise tax is not always paid, and/or the business entity is not always formally dissolved with the Secretary of State. This may seem like a minor problem to some; however, it can quickly turn into a very large tax bill from the Franchise Tax Board (FTB).

Running your own business in California takes a lot of work but can be highly rewarding. Learning that the IRS plans to perform an audit of your company is intimidating, but it’s important to know how to prepare. Why do businesses get audited? The Internal Revenue Service announced in 2020 that it was going to start performing more small business tax audits. There are many reasons behind these audits, including misclassification of employees, above-average income, cash-based