There are three basic types of commercial real estate leases which are organized around two rent calculation methods: “net” and “gross.” With a gross lease, a tenant typically pays one lump sum for rent, from which the landlord pays his expenses. The net lease has a smaller base rent, and the tenant pays other expenses. The modified gross lease is a happy marriage between the two.
In real estate law, a “Periodic Tenancy” has no defined ending date — the “term” keeps rolling over and over. (ex: month-to-month or year-to year). The tenancy continues for successive periods until the tenant gives the landlord notification that he wants to end the tenancy. In other words, if the landlord or tenant do not give the other a sufficient notice, the tenancy repeats (weekly, monthly, etc…) depending on what its initial periodicity. The periodicity might be stated in the lease; otherwise, it generally matches the rent interval.
How do I end a periodic tenancy?
Well-drafted real estate purchase contracts in California should clearly delineate the terms of the deal – parties, price, escrow, closing date, time for inspections, etc… While it is not required that a real estate attorney look over your contract before closing, it is generally a wise idea. In some cases, the contracts do not contain all the necessary terms, or they contain language more favorable to one party. It may or may not be possible to claim that the contract is unenforceable once both parties have signed.
Indeed, in a 2008 Supreme Court decision, the court clarified that the only elements necessary for enforcing a real estate contract are the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred. If the case goes to court, the court can fill in based on what is usual and customary. The court also noted that if an essential element is reserved for the future agreement of both parties, there is no legal obligation until such future agreement.
The often-murky area of human resources generally consists of laws and regulations, which is probably part of the reason many small businesses often put off dealing with it. Avoidance is not the answer. Steer clear of legal hot water and potential employee claims with by keeping a close eye on these three HR areas.
1. Employee Files
Federal law clearly states that employers must keep three specific files for each employee in your business. These files are:
If you’re starting a small business in California, hats off to you! We encourage and support entrepreneurial, and, after years assisting small businesses handle legal issues, we understand that you may face some challenges and hope this blog post helps to prepare you.4 human resources-related laws to consider
With all the attention in the news about hacked emails, we thought it would be a good time to discuss the reality of hacking at a level many business owners can relate to: the small business.
As we have discussed before, small businesses are at risk of any of the threats a large corporation faces, including identity theft (read more on how to prevent ID theft at your business here). Do you have a plan for preventing and/or responding to an online security breach? Or, equally as important, trade secret theft?
Trade secret theft can bankrupt even the most successful business. What’s more, because a California trade secret plaintiff (such as a former employer suing its former employee) likely must identify its trade secrets with reasonable particularity before commencing discovery, it pays to invest in protecting your IP before it is stolen. Unfortunately, trade secrets are particularly susceptible to theft because of the secret economically valuable information they contain. Those on the inside may find that information too tempting to be leave behind when changing jobs. So how does a small business protect its intellectual property and confidential information from trade secret theft?
In California, obtaining protection is not all that simple. Absent limited exceptions, non-compete agreements are illegal under Business and Professions Code § 16600, meaning that is likely not an option.
So, what can California employers do?
A Spousal Lifetime Access Trust (SLAT) is similar to a bypass trust, providing somewhat limited access to income and/or principal for the needs of a surviving spouse. The difference is that a SLAT is funded via gift while the donor is still alive, whereas a bypass trust is funded by bequest when someone passes away.
A SLAT is often used by a married couple who desires to make lifetime gifts to descendants but are hesitant to permanently give away a large portion of their estate and their ability to maintain their current lifestyle. With a SLAT, one spouse (donor-spouse) makes a gift to an irrevocable trust using the donor-spouse’s gift tax exemption. More on an irrevocable trust, including its benefits, here. The SLAT then names the non-donor spouse (beneficiary-spouse) as a current beneficiary, allowing the trustee to make distribution of trust funds to the beneficiary-spouse during his or her life.
You’re starting a new business. Like many entrepreneurs, you probably need to be conscious about how, where, and when you spend your start up money. You’re not alone. Indeed, of the biggest challenges many new businesses face is ensuring they don’t burn through their startup piggy bank too fast.
How do you avoid burning through your find? To start, self-fund through cash flow as long as you can. If you must raise outside money, try to make each round of capital last at least eighteen months.
Read on for more some strategies…
If you watched the news over the last few years, you have probably heard about the oral contraceptive recalls and various birth control manufacturer lawsuits. What makes a birth control pill defective and/or dangerous in the eyes of the law? A dangerous prescription drug is any drug that has the potential to seriously harm its user. A dangerous drug may also be considered a defective drug if it does not provide the intended health benefits. Further, a drug may be considered both dangerous and defective if the sole source of its danger stems from a flaw in its manufacturing process. An experienced product liability can explain in further detail.
When a small business takes a turn for the worse, the outcome could be disastrous for your personal finances. Unless you’ve chosen a business structure to protect you.
As opposed to DBAs, or doing business as, the owners of limited liability companies, limited partnerships, and corporations are generally only liable up to the amount they invested in the business. Creditors and plaintiffs can’t go after the owners’ personal assets. This means that your home / car / art collection could be safe.
If protecting your personal finances is of interested to you, you will need to chose which legal structure is right for you. An experienced business attorney can help you decide and look at the various factors, including taxes. For example, are taxes paid before or after profits are distributed to owners? How does selling the business potentially affect them? Knowing the answers to these questions are important, as switching business structures down the road can be a challenge.
Limited and limited liability partnerships.
A limited partnership is a pass-through entity — all profits, losses, credits, and deductions flow through to each member’s individual tax return. With a limited partnership, only owners with active control of the business, known as general partners, are liable. Limited partners, those who have only put up capital and stay out of company affairs, have liability protection.
In a limited liability partnership, all partners generally share management responsibility and have liability protection. Many professional practices, such as doctors, lawyers, and accountants, form LLCs.
Often used with companies that intend to go public, with a C-Corp, there is no limit on the number of C-corp shareholders, each of whom can normally trade that stock freely.
An S-Corp is a pass-through entity and avoids the double tax bite, like the LLP. One S-Corp advantage is that it’s easier for owners to sell the business outright and yet the S-Corp retains some of the features that make a corporation attractive (liability protection, freely traded shares, and the distinction between profit and wages)..)
Limited liability company.
Like an S-corp, an LLC combines the pass-through nature of a partnership with the corporation’s liability protection. However, an LLC is much more flexible than an S-corp. An LLC can also set its own terms for distributing income among members–unlike a corporation, it doesn’t have to treat all investors equally.
For more information on which business structure is the ideal choice for your small business, contact the experienced attorneys at Hart, Watters & Carter today.