Monday, December 17, 2012

Why Business Owners Need A Buy-Sell Agreement


WHY BUSINESS OWNERS NEED A BUY-SELL AGREEMENT


What is a Buy-Sell Agreement?
A buy-sell agreement is a written agreement between joint business owners that addresses a wide range of issues that could result upon the death, disability, retirement, termination of employment, or desire to be bought out by a co-business owner. A buy-sell agreement stipulates that if one owner dies or is disabled for an extended period of time, the other owners may have the right to purchase the deceased/disabled person's share of the business at a predetermined price or according to a specified formula. Additionally, transfers of an owner’s interest to an third parties can be controlled.

Buy-Sell Agreement Benefits
  • Allows the surviving shareholders/partners to purchase the deceased owner's share of the business thus allowing the business to continue.
  • Provides each shareholder/partner with an available market for his or her interest in the business in the event of death, disability or other triggering event.
  • Guards against a shareholder/partner’s shares from falling into the hands of outsiders by offering a right of first refusal to the remaining owners when a shareholder/partner attempts to offer his interest for sale.
  • Enables the parties to mutually establish a method for determining the fair market value of the business and guarantees the parties of the transfer terms and conditions.
  • Transfer of shares to a former partner’s spouse can be prevented in the event of death or divorce.
  • Avoids costly litigation and infighting over the value of the company when transfers of interest occur.
  • Ensures funding so that the surviving family is financially compensated upon the death of a shareholder/partner.
  • Money is available to pay to a deceased owner’s estate when the agreement is funded with life insurance.
  • Provides a degree of certainty and a smooth transition in the disposition of the small or family business.
  • In non-family member situations, a buy-sell agreement can determine share value for estate tax purposes.
Get Started Now
The time to prevent disputes is before they occur. Our experience is that owners anxieties created in dealing with one another, are inversely proportional to the effort they spend addressing business problems in the event that they should happen. Dealing with these contingencies before they manifest themselves is the secret to a harmonious business relationship with other owners. Legal fees as well as sleepless nights will be minimized if you agree to the "What If's" now. Unfortunately, business owners in today’s hectic business environment often neglect or delay consulting with an attorney regarding the preparation of a Buy-Sell Agreement until it is often too late.
For more information on this topic or help with other legal concerns please email us or visit our website.

Friday, November 30, 2012

Corporate Veil


Can I Still be Liable For Business Debts Even After Incorporating?

Does incorporating your business eliminate personal liability for your activity in the business?  Sometimes, but not always.  Let me explain.

What is the “Corporate Veil”?  A corporation is a separate legal person.  So, just as you’re not responsible to pay my mortgage and I’m not responsible to make your car payment, the shareholders of a corporation are not responsible to pay the corporation’s obligations, because it is a separate entity from the owners of the corporation.  This concept is commonly referred to as the corporate veil.  But, it does not absolutely guaranty that officers, directors, and shareholders of a corporation may not be held liable for their activity involving the company.  Consider the following:

THE TOP 11 WAYS A THIRD PARTY MAY PIERCE YOUR CORPORATE VEIL:

1. Failure to Follow State Mandated Corporate Formalities.  Section 1500 of the California Corporations Code provides that each corporation shall keep adequate and correct books and records of account and shall keep minutes of the proceeding of its shareholders, board and committees of the board and shall keep at its principal executive office, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each.  Such minutes shall be kept in written form.  Such other books and records shall be kept in written form or any other form capable of being converted into written form.   Failure to comply with these requirements could cause your corporation to lose its corporate shield thereby exposing its shareholders and directors to personal liability exposure to tax agencies and other business creditors.  

2. Prior Activity.  Incorporating a business does not eliminate any personal liability that existed prior to the business being incorporated.   This makes sense because the prior activity was the conduct of the owner and/or his agents; while after a business is incorporated, the activity is conducted on behalf of the new legal person, the corporate entity.

3. Personal Guaranty.  Obviously, you are free to personally guaranty the debt of another person, so lenders and landlords often require individuals to personally guaranty the obligations of a corporation or limited liability company.  This creates a separate contractual obligation of the guarantor.  However, no one is automatically required to personally guaranty a corporate obligation, and the landlords and lenders often will consider other alternatives.

4. Alter Ego.  People often hear the term ‘alter ego’ and are confused as to what it means.  Simply stated, if the persons controlling a corporation fail to treat the corporation like a separate person, then the courts won’t either.  Instead, the courts will treat the corporation as an extension of these control persons, hence the term, ‘alter ego.’  That is why it is so important to follow corporate formalities, such as holding annual shareholder meetings, keeping minutes, and not commingling corporate and personal assets.

5. Fiduciary Duty.  Generally, officers and directors of a corporation owe a fiduciary duty of care and loyalty to its shareholders.  Consequently, officers and directors need to exercise due care in making business judgments and not engage in any unauthorized self-dealing.  Additionally, when a corporation is insolvent, the fiduciary duty shifts from the shareholders to the creditors.  This makes sense if you consider that the company is using the creditors’ money, and not the shareholders, to conduct its business.  Basically, a company is insolvent if it can’t pay its bills on time, or if the company’s liabilities exceed its assets, so this shift of duty may apply more often than people realize.  A recent California court decision held that officers and directors of an insolvent company do not owe a duty of care to creditors, but they do owe them a duty of loyalty so they may not engage in any self-dealing.  Various jurisdictions apply this principle differently.

6. Fraudulent Transfers.  No one, including a corporation, may transfer assets without receiving reasonably equivalent value if that person (including a corporation or LLC) is insolvent or becomes insolvent as a result of the transfer, or makes the transfer with the intent to hinder, delay, or defraud any creditor and the business would not have enough remaining assets to conduct its business or pay its obligations.  Every person involved in such a fraudulent transfer may be liable for any loss incurred by a creditor.  

7. Statutory Restrictions.  California Corporations Code §500 prohibits a corporation from making a distribution to its shareholders or redeeming their shares unless the cash comes from retained earnings or unless the value of the corporation’s assets are at least 125% of its liabilities immediately after the distribution or redemption and the corporation’s current assets equal or exceed its current liabilities.  In other words, the corporation can only distribute money it has earned or it has enough money left over to pay its obligations and still have a 25% buffer.    

8. Joint Tortfeasor.  A corporate entity does not insolate a person from liability for his own wrongful conduct done in conjunction with a corporation.  For example: if we decide to rob a bank we each are liable.  Likewise, just because your partner in crime or other wrongful conduct happens to be a corporation, you still are responsible for your own misconduct.  The corporate veil blocks liability for corporate contractual obligations and general negligence – because officers and directors owe a duty to shareholders and not third parties – but there are plenty of other ways a corporate officer, director, and even a shareholder can be held liable for their malfeasance.  As a consequence, corporate executives are often surprised when they are personally sued along with the corporation for trademark infringement when the executive authorized the corporation to engage in activity violating trademark laws.

9. Misrepresentations.  This is probably the most often litigated subset of the joint tortfeasor category mentioned above.  In essence, a person can be held liable for fraud if he knowingly makes a false statement to induce another person to rely on the false statement and then that person justifiably relied on the statement to their detriment.  In other words, a corporation does not give a person a license to lie.  These types of cases often involve various nuances of the law, so it is difficult to provide a comprehensive summary of the issues that may apply.  Regardless, it is always good policy to act in an upstanding ethical manner.  

10. Trust Fund Payments.  "Trust fund" amounts, such as employee withholding taxes or sales taxes not submitted by an employer to the proper taxing authorities carry with it personal liability exposure certain officers of the entity. This is a common occurrence in cash-strapped companies. 

11. Environmental Violations.  Environmental violations such as superfund sites, etc. may similarly impose business owners to personal liability beyond the protection of the corporate veil.

This article provides only general information and should not be construed as legal advice.  Each concept involves specific details that have not been addressed which may affect the outcome of various situations.  To discuss your particular situation, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com.

Friday, October 12, 2012

7 Benefits of Trademark Registration


TRADEMARKS 101


WHAT IS A TRADEMARK?

A trademark is a word, phrase, slogan, symbol or design, or combination of such which identifies the source of the goods or services of one party from those of all other parties.
Normally, a mark for goods appears on the products or on its packaging material while a service marks often appears in advertising. Over time, a trademark tends to establish customer goodwill for one’s products or services.

Trademark rights are usually acquired by use in commerce.  Generally, the prior user of a mark owns the mark in the geographic region in which the mark is in use. 


WHAT ARE THE 7 BENEFITS I RECEIVE IN REGISTERING MY TRADEMARK?

  • Your mark will be listed in the United States Patent and Trademark Office’s online data base.

  • Public notice of your claim of ownership of the mark is given.

  • You have the right to use the federal registration symbol of a circled “r”.

  • You have a legal presumption of owning your marks and the exclusive right to use it nationwide in connection with the sales of goods or services listed in the registration.

  • You have the ability to record your registration of the mark with the U.S. Customs and Border Protection Service to prevent the importation of any infringing goods.

  • A registered mark can substantially increase the vale of the trademark and business which owns it.

  • You gain the ability to bring an action concerning the mark in federal court

Don’t delay, valuable rights could be lost through waiting too long.  Let Klein Law Corporation help you today. Call (949) 453-7979.

The foregoing information is presented by KLEIN LAW CORPORATION as a news reporting service to clients and friends of the firm and is distributed with the understanding that  KLEIN LAW CORPORATION is not rendering legal advice and assumes no liability whatsoever in connection with its use.  If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com .

Monday, August 13, 2012

Top 10 Reasons Business Owners Must Have A Relationship With An Attorney


The Top 10 Reasons Business Owners Must Have A Relationship With An Attorney

  1. They do not realize that by incorporating their business they eliminate personal liability exposure in the event of a lawsuit and gain tremendous tax advantages.
  2. They are operating their business without properly drafted written agreements containing safeguards to maximize their protection in the event of a disputes.
  3. They remain unaware of the myriad of governmental regulations they are responsible for complying with and the consequences for failure to do so.
  4. They may have misclassified workers as independent contractors instead of employees which can result in exorbitant penalties and interest.
  5. No efforts have been made to prevent the theft or misappropriation of their company’s intellectual property (ideas, trademarks, trade secrets, copyrights, etc.)
  6. They are unaware of the vast number of employment laws they immediately become subject to upon hiring even one part-time employee.
  7. They have no contractual arrangements in force (e.g. mediation and arbitration) to avoid drawn out litigation with its costly attorneys fees and potential for large jury verdicts.
  8. No provisions are in place to address situations where a partner wants to leave the business or be bought out.
  9. They lack a cost effective plan to collect their state accounts receivables causing them to lose their hard-earned money.
  10. They are unaware of the hidden pitfalls included in their office space leases that could, if they arise, substantially increase their costs or lead them into bankruptcy.

The foregoing information is presented by KLEIN LAW CORPORATION as a news reporting service to clients and friends of the firm and is distributed with the understanding that  KLEIN LAW CORPORATION is not rendering legal advice and assumes no liability whatsoever in connection with its use.  If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com .

Monday, July 16, 2012

The Top 10 Things Employers Do To Get Sued

THE TOP 10 THINGS EMPLOYERS DO TO GET SUED

 Here are the top 10 things employers often do with the best intentions, along with the reasons employers are likely to get sued for doing them. (Note: Although this list applies in most situations, there may be exceptions to some of the following laws and regulations under collective bargaining agreements or in other very limited situations.)


 1. Save Money. Establish a “Use-It-or-Lose-It” Vacation Policy. Many employers are unaware use-it-or-lose-it vacation policies are illegal in California. A “use-it-or-lose-it” policy means employees lose accrued vacation days if the employee doesn't take the days by a specific deadline. According to the California Supreme Court, vacation is a vested benefit that can't be taken away once it is earned. Acceptable alternatives to use-it-or-lose-it policies are reasonable caps. Under a reasonable cap plan, once an employee has earned a set amount of vacation but has not taken it, the employee stops earning vacation until the employee uses some accrued vacation time. All accrued but unused vacation must be paid out at the end of the employment relationship, even if the employee wasn't yet eligible to take the vacation time. This is true regardless of whether the employee quits, is terminated or is laid off. Vacation pay is subject to the same time limits as other final pay. (See #2 for more information about final paycheck deadlines.) Disputes over vacation pay often stem from poorly drafted vacation policies. It is not uncommon for a policy to say something like, “Employees are eligible for one week of vacation after a year of employment.” While the employer may mean no vacation is earned until after a year of work, in a legal dispute the policy probably would be interpreted to mean the employee accrues vacation during the entire first year and is eligible to take that vacation during the second year. An employee who terminates during the first year would be entitled to a proportional amount of one week's vacation.


 2. Hold Your Employee's Final Paycheck Until He Turns in His Pager and Uniform. After All, He Agreed in Writing to Return Them. Holding a final paycheck seems like a reasonable, perfectly fair way to get an employee to return uniforms or other property, or complete required termination paperwork, especially since you have an agreement, signed by your former employee, promising to return your property. However, failing to provide a final paycheck within the legal time limits, regardless of what the employee still holds, can be a costly and time-consuming mistake. Final paycheck deadlines depend on whether the employee was terminated, laid off, quit without notice, or quit with at least 72 hours notice. A terminated employee is entitled to all final wages, including unused vacation, at the time of termination. The same applies to a layoff, unless there is a return-to-work date within the same pay period. An employee who quits with fewer than 72 hours notice must receive a final paycheck no later than 72 hours after notice is given. An employee who quits with more than 72 hours notice is entitled to a final paycheck on the last day of work. An employer may refuse to pay final wages only if the employee owes the employer money due to gross negligence, willful misconduct or dishonesty. These often are difficult and expensive to prove. Failure to meet a final paycheck deadline subjects an employer to waiting time penalties. This penalty is a continuation of the employee's wages on a day-to-day basis until the final paycheck is ready, up to a maximum of 30 days.


 3. Get Rid of Anyone Who Files a Workers' Compensation Claim but Wait Until They Come Back to Work So It Won't Look Bad. California's Labor Code Section 132(a) prohibits an employer from terminating, threatening to terminate, or discriminating in any way against an employee because s/he has received a workers' compensation award, or has filed or even intends to file a workers' compensation claim. Violation of this law increases the employee's workers' compensation benefits by one-half, up to $10,000, and requires payment of costs and expenses up to $250. The employee also becomes entitled to reinstatement and reimbursement for lost wages and benefits. An employer is not shielded from a lawsuit simply because the employee has returned to work for a period of time after a workers' compensation injury. Once the employee claims a termination (or other discrimination) was a result of filing a workers' compensation claim, the burden falls on the employer to show there was a legitimate business necessity for its actions.


 4. Let Everyone Work Four 10-Hour Days or, Better Yet, Whatever Schedule They Want. Wage and hour laws place many restrictions on the number of hours an employee may work each day and week without overtime pay. Allowing everyone to work four 10-hour days (or any schedule they choose) without first getting sound legal advice could end up being extremely costly. Even an employee who agrees in writing to this type of schedule is generally entitled to file a claim against the employer and receive back overtime with interest. California and federal laws require that non-exempt employees be paid time-and-a-half if they work more than eight hours in a workday or more than 40 hours in a workweek. Time-and-a-half also is required if an employee works seven consecutive days in a workweek, with double-time pay required after eight hours on the seventh consecutive day. (Of course, certain types of high-level employees are exempt from these wage and hour laws.) There are two ways an employee can work more than eight hours in a day without overtime pay: Make-up time. Make-up time allows an employee to request time off for a personal obligation and make up the time on another day without overtime pay. For each incident of make-up time: the employee must submit a signed, written request; the time must be made up within the same workweek; the employee may work no more than 11 hours on another workday, and no more than 40 hours in a workweek, to make up the time off; and the employer may not encourage or otherwise solicit an employee to request makeup time. Employers are not obligated to offer employees the option to use make-up time. Alternative workweek agreements. Alternative workweek agreements allow all employees in a work unit to put in more than eight hours in a day (but never more than 40 hours in a week) without overtime pay. The typical alternative workweek schedule is a four-day workweek of 10 hours per day, known as a 4/10 schedule. Also common is a two-week schedule of nine-hour days, allowing every other Friday off, known as a 9/80 schedule. Employers must follow certain steps to institute an alternative workweek agreement, including employee meetings, a secret ballot vote, a formal agreement and a filing with the state Labor Commissioner. Failure to comply with all the complex regulations for creating and carrying out alternative workweek schedules can result in enormous obligations for back overtime and fines. For more information on this topic or help with other legal concerns please email us or visit our website.


 5. Don't Waste Time Training Front-Line Managers about Labor Laws. After All, the Company Pays HR People to Handle Any Problems That Arise. Front-line managers—the people who interact with your employees most closely every day—are your best defense against being sued. Basic training on such topics as sexual harassment, discrimination, safety and wage and hour laws (such as exempt versus non-exempt status—see #7) are essential. Example: Ellie Employee tells Mike Manager that Carl Casanova has been making inappropriate sexual remarks to her. Since Mike never received training in handling sexual harassment complaints, he has the common misconception that Ellie can't sue unless she at least tells Carl she doesn't like the remarks. Mike doesn't think the remarks Ellie reported are that bad, so he tells Ellie to try to handle the problem on her own first by telling Carl to stop. Ellie sues for sexual harassment and wins a large award, since she reported the harassment but the company did not take immediate and appropriate corrective action. The law presumes that once Ellie's manager is aware of the harassment, the company is aware of the harassment and has a duty to correct the problem. Had Mike been properly trained, he would have reported the situation to human resources immediately rather than asking Ellie to try to handle it herself.


6. Congratulate Your New Employee for Passing Her 90-Day Probationary Period and Let Her Know She’s Now Eligible for “Permanent Employee” Benefits Such as Vacation and Health Insurance. Under California law the employment relationship is presumed to be at-will, meaning either party can terminate the employment relationship with or without a reason. Using the term “permanent” can imply the employer no longer has a right to terminate the employee without just cause. A better term is “regular employee.” Of course an employer should do more to ensure at-will employment relationships. At-will employment should be confirmed on employment applications and in employee handbooks. Managers should be trained to avoid creating oral contracts for permanent employment. For example, a manager may reassure an employee that “so long as she does a good job, she'll have a job.” That sets up the employer to be sued for breach of an oral contract if the company has to lay off employees for economic reasons.

 7. Pay Everyone a Salary. Payroll Is So Much Easier Without Having to Calculate Overtime. Who wants to deal with timecards and calculating overtime pay? If all employees agree to work for a straight salary, regardless of the hours they work, what's wrong with that? Under both state and federal law, certain employees are exempt from overtime requirements and can be paid a straight salary no matter how many hours a week they work. Employees who don't qualify for an exemption are entitled to overtime pay, and can't agree to forego overtime pay in exchange for receiving a salary. An exempt employee normally is a high-level executive, administrative or professional employee. Other types of exempt employees are certain artists or outside salespeople. All others generally are non-exempt. Titles are irrelevant to the determination of whether an employee is exempt or non-exempt. Merely placing an employee on a salary does not exempt that employee from wage and hour laws. While a non-exempt employee legally can be paid in the form of a “salary,” that employee earns overtime the same as hourly wage earners. For example, a non-exempt employee paid a salary of $400 a week must be paid overtime based on $10 per hour ($400 divided by 40 hours), which is $15 per hour for time-and-a-half and $20 an hour for double-time. For more information on this topic or help with other legal concerns please email us or visit our website.


 8. To Increase Productivity, Let Employees Work through Lunch Breaks on Busy Days and Make Up the Missed Time Off on a Slower Day. Non-exempt employees generally are entitled to a half-hour meal break for every work day of more than five hours. For each workday an employer doesn't give an employee a required meal break, the employer owes the employee one additional hour of pay. According to the state Labor Commissioner, to avoid this penalty the employer has an “affirmative obligation to ensure that workers are actually relieved of all duty, not performing any work, and free to leave the worksite.” On-duty meal periods, where employees are paid for their normal meal period and allowed to eat on the job, generally are permitted only in extremely limited situations where the nature of the work truly prevents an employee from leaving. For example, the night clerk at a small motel may be the only employee on the premises at 3 a.m, when she would normally take a meal break, and so may be given an on-duty meal period. Exempt employees are not subject to the meal break requirements and may work any number of hours without a meal break. 


9. Protect Business Secrets and Prevent Turnover by Requiring All Employees to Sign Non-compete Agreements. An employee who signs a non-compete agreement is consenting not to work for one of your competitors for a certain period of time after leaving your company. While this practice is legal in many other states, California law specifically prohibits non-compete agreements. In November 2001, a California Court of Appeal up-held a $1.26 million jury award for an account manager who was terminated by Aetna U.S. Healthcare when he refused to sign a non-compete agreement. The court held the termination for refusing to sign an illegal agreement was a willful and oppressive violation of California law, entitling the manager to punitive damages.


 10. Avoid Employment Law and Tax Hassles by Making Everyone an independent Contractor. Many employers operate under the myth that a worker is an independent contractor if s/he: wants to be treated as an independent contractor; signs a written contract; does assignments sporadically, inconsistently or on call; is paid commission only; has no supervision; or does assignments for more than one company. In fact, independent contractor status is determined primarily by the degree of control the worker has over the manner and means of performing the work. Some other important factors include: Who supplied the instruments, tools and place of work. For example, a worker who inputs sales data into the hiring firm's computer at the hiring firm's office is probably an employee. Whether the work performed is part of the regular business of the hiring firm. A worker hired to upgrade a computerized inventory control system at a heating and air conditioning company may be an independent contractor, while a worker hired to install air conditioners during the busy summer season is an employee. Whether the person performing services is engaged in a distinct occupational business. A bookkeeper who works from her home office running payroll for a dozen local businesses is more likely to be an independent contractor than a college student who runs the payroll for a single business working two afternoons a week. The consequences for misclassifying an employee as an independent contractor can be significant tax, wage and benefits liabilities, as well as massive fines that may be imposed by state and federal agencies.


The foregoing information is presented by KLEIN LAW CORPORATION as a news reporting service to clients and friends of the firm and is distributed with the understanding that  KLEIN LAW CORPORATION is not rendering legal advice and assumes no liability whatsoever in connection with its use.  If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com .

Wednesday, May 16, 2012

DISCOUNT

We are currently offering a 10% discount to all new clients!

Monday, May 7, 2012

Top 10 Contract Clauses to Minimize your Lawsuit Exposure

TOP 10 CONTRACT CLAUSES TO MINIMIZE YOUR LAWSUIT EXPOSURE

 Here are the top 10 clauses that business owners often neglect to include in their contracts. The failure to include these clauses can make a huge difference in both the outcome and well and as the ultimate dollar amount of litigation, should such ensue. While each and every one of these clauses may not be applicable to every agreement, a contracting party should seek to include as many of these as are applicable in their contracts. As you read these clauses, you should consider yourself to be party AA and the party you are contracting with as party BB.

 CLAUSE ONE. Arbitration. Mindful of the high cost of litigation, not only in dollars, but in time and energy as well, the parties intend to and do hereby establish final and binding out of court dispute resolution procedures to be followed in the event any controversy should arise out of or concerning the performance of this Agreement. Accordingly, the parties do hereby covenant and agree that any claim of controversy, dispute or claim of whatever nature, including, but not limited to, the issue of arbitration, arising out of or relating to this Agreement, or the breach thereof, shall be settled by either negotiation, mediation or final and binding arbitration in accordance with the commercial rules of arbitration of the American Arbitration Association.

 CLAUSE TWO. Waiver of Jury Trial. AA AND BB EACH ACKNOWLEDGE THAT THEY ARE AWARE OF AND HAVE HAD THE ADVICE OF COUNSEL OF THEIR OWN CHOICE WITH RESPECT TO THEIR RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CROSS CLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT AND/OR ANY CLAIM OF INJURY OR DAMAGE. FURTHERMORE, THIS WAIVER AND RELEASE OF ALL RIGHTS TO A JURY TRIAL IS DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER PROVISION, COVENANT, AND/OR CONDITION SET FORTH IN THIS AGREEMENT.

 CLAUSE THREE. Disclaimer of Warranties. AA GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, TO BB REGARDING THE [list item that is the subject matter of agreement], ITS FITNESS FOR ANY PURPOSE, ITS QUALITY, ITS MERCHANTABILITY, OR OTHERWISE. THE LIABILITY OF AA SHALL BE LIMITED TO THE AMOUNT PAID BY BB FOR THE [list subject matter of agreement].

 CLAUSE FOUR. Commencement of Action. Any claim, demand, right, or defense by BB which arises out of this Agreement or the negotiations that preceded this Agreement shall be barred unless BB commences an action thereon, or interposes a defense by reason thereof within six (6) months after the date of the inaction, omission, event, or action that gave rise to such claim, demand, right, or defense. This deadline for asserting such claims shall apply irrespective of when BB knew or, through the exercise of reasonable diligence could or should have known of the existence of such claim, demand, right, or defense. BB has had the opportunity to consult with BB=s own legal counsel about the scope and effect of this paragraph. BB acknowledges, understands, and agrees that the purpose and effect of this paragraph is to shorten the period BB would otherwise have within which to raise such claims, demands, rights, or defenses under applicable law. 

CLAUSE FIVE. Maximum Liability Amount. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, AA=S MAXIMUM AGGREGATE LIABILITY TO BB RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PROFESSIONAL ERRORS OR OMISSIONS, STRICT LIABILITY OR OTHERWISE, WILL BE LIMITED TO THE LESSER OF: (I) THE TOTAL AMOUNT PAID BY BB TO AA PURSUANT TO THIS AGREEMENT TO DATE, OR (II) $ [fill in].

 CLAUSE SIX. Limitation on Liability. IN NO EVENT WILL AA BE LIABLE TO BB, ANY REPRESENTATIVE, OR ANY THIRD PARTY FOR ANY LOST REVENUE, LOST PROFITS, INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PROFESSIONAL ERRORS OR OMISSIONS, STRICT LIABILITY OR OTHERWISE.

 CLAUSE SEVEN. Prior Insurance Resolution. BB agrees that it will not pursue any claims against AA for any liability AA may have under or relating to this Agreement until BB first makes claims against BB=s insurance providers and such insurance providers finally resolve such claims.

 CLAUSE EIGHT. No Third Party Reliance. The information furnished to BB by AA is delivered solely for BB=s benefit and may not be furnished to, quoted, relied upon or used by any other person or entity or filed with any governmental agency for any purpose without AA=s prior written consent.

 CLAUSE NINE. Transfer or Assignment of Interest. In the event of any transfer of AA=s interest in this Agreement or in the subject matter of this Agreement, AA shall be automatically relieved of all further obligations or liability to BB. It is intended that the covenants and obligations contained in this Agreement on the part of AA shall, subject to the foregoing, be binding on AA only during and with respect to its period of ownership.

 CLAUSE TEN. Bargained For Liability Limitations. The provisions of this Agreement pertaining to liability limitation were mutually negotiated and that, but for their inclusion, the fees charged by AA to BB would have been greater or AA would not have entered into the Agreement.

 The foregoing information is presented by KLEIN LAW CORPORATION as a news reporting service to clients and friends of the firm and is distributed with the understanding that KLEIN LAW CORPORATION is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com .

Wednesday, April 4, 2012

Organize Your Estate Planning Documents


ORGANIZE YOUR ESTATE PLANNING DOCUMENTS
If, like so many, you are prone to disorder in the keeping of important documents, assuming that you keep them at all, you may be well past due for a makeover of your estate plan and your end of life instructions. It is not just a matter of maintaining tidiness for its own sake: a lot of money and time could be saved by making your estate plan organized and accessible and then keeping it that way.

Yes, it is easier said than done, but consider a quick fact if you doubt the importance of this undertaking: According to some sources that study such things, state treasurers now hold over $32 billion (not million) dollars in unclaimed bank accounts and other such assets.

Then there is the prevalent problem of some large insurance companies failing to pay out unclaimed life insurance policies to beneficiaries, claiming that under the insurance contracts they are obligated to do so only when the beneficiaries come forward. When the beneficiaries are not even aware of the existence of the policies, obviously they do not come forward, and years of premiums may have been paid for nothing.

The take away lesson is that it is just as important to keep estate planning documents well organized and in a safe place, known to and accessible by your heirs, as it is to properly execute the documents in the first place. Any virtue can become a vice if taken to extremes, so this does not mean holding on to every scrap of paper that could conceivably be of interest to those you leave behind. Nonetheless, to possibly save your heirs a significant amount of money, time, and stress, at least the essential documents should be kept together, such as with your attorney, in a safe deposit box, and/or at home in a fireproof safe that someone can access when the time comes. Instructions on how to dispose of your estate will not mean much if you have not left instructions on how to find the controlling documents.

Essential Documents to Organize
So what are these essential documents that you should have well organized and accessible? Individual circumstances vary, but the first document for most people is an original will. Dying without a will means leaving the determination up to the state as to how your assets will be distributed, and if there is some writing, but not an original document, probate proceedings could become needlessly contentious and drawn out.
In addition to a will (and any trust documents), what follows is a nonexhaustive, but reasonably comprehensive, list of other important documents, the existence and location of which should be known to your heirs:
  • Marriage license—A surviving spouse is likely to need it to prove that he or she was married to the deceased before being able to claim anything based on the marriage;
  • Divorce papers;
  • Durable health care power of attorney (for health care decisions if you are incapacitated), a living will, any do not resuscitate order, and an authorization to release health care information;
  • Durable financial power of attorney (for financial decisions if you are incapacitated);
  • Documentation of ownership of property, including housing, land, cemetery plots, vehicles, stocks, bonds, etc.;
  • Proof of loans made and debts owed;
  • List of bank and brokerage accounts, with account numbers, and any safe deposit boxes with the location of corresponding keys;
  • Tax returns for the most recent three years;
  • Life insurance policies and 401(k), pension, annuity, and IRA documents; and
  • List of user names and passwords for Internet accounts.


The foregoing information is presented by KLEIN LAW CORPORATION as a news reporting service to clients and friends of the firm and is distributed with the understanding that  KLEIN LAW CORPORATION is not rendering legal advice and assumes no liability whatsoever in connection with its use.  If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (949) 453-7979 or email us at info@kleinlawcorp.com .

Frequently Asked Questions


FAQ's

How do you bill clients?
While we do maintain an hourly billing rate, our Firm offers several alternatives to the traditional hourly-based rate.  For example approximately 60% of our work is billed as a quoted price range or a flat fee project, such as our popular “General Counsel” program.  These alternatives serve to remove much of the uncertainty over costs out of the professional relationship. 

How long have you been practicing law? 
Our firm was founded by Mark D. Klein, Esq. who has over 25 years direct experience in serving the needs of business owners while our staff has ample experience in rendering assistance to our clients.

What makes your services cost-effective?
Cost-benefit analysis is done on all legal recommendations to ensure that the advice we render makes good economic, as well as legal, sense. Recommendations, that may otherwise not be implemented due to budgetary constraints of clients, can be altered or right sized for the client.  On many projects, we are able to offer several viable alternatives based upon the client’s budget.

What distinguishes your firm from other law firms?
Often times practical, yet results not yielding more money to us, our recommended to clients, reflecting our commitment to a long term relationship rather than a short term payday. At KLEIN LAW CORPORATION, we understand that our responsibilities are to be available to you, whatever the circumstances, and to produce cost-effective, high quality work in a timely manner.  We do so by adhering to certain fundamental principles which we call our Big 7 .

Do you specialize in any particular areas?  Corporate finance, intellectual property, business/commercial transactions, estate planning and dispute resolution.

With how many business owners have you worked?
We are proud to have professionally participated in the establishment and growth of over 300 businesses.

What if I have a problem that is outside your firm’s areas of practice? 
We maintain a finely tuned network of professionals, both attorneys and other service providers, who stand ready to bring their skills to bear to assist our clients.

Do you specialize in any industry segments? 
We routinely meet the demanding challenges of a diverse group of domestic and foreign clients from a broad spectrum of industries.  The Firm’s has assisted clients in the finance, manufacturing, distribution, computer/high-tech, construction, professional service providers, and service sector businesses.

What is your approach to litigation when such becomes necessary?  Initially it must be pointed out that our Firm’s up-front involvement in major business decisions and projects allows for early identification and minimization of potential problems.  Furthermore, we actively promote litigation alternatives such as negotiation and mediation when disputes can not be avoided given our Firm’s philosophy that traditional litigation, with its exorbitant costs and time delays, rarely makes good business sense.  However, should litigation become necessary, we partner up with seasoned litigation co-counsel to aggressively litigate your matter.

When are good times to consult with my attorney?
Prior to the formation of a new business enterprise, prior to a purchase or sale of a business, prior to entering into a contract, at the early stage of a business dispute.

What should I expect from my attorney?
Your attorney should be willing to wear several hats by serving as an educator, advisor, counselor,  communicator, representative and an advocate, depending on the situation.
                                                                                                                                   
Do you offer a complimentary initial consultation?
We routinely offer our BUSINESS RISK ASSESSMENT program on a complimentary basis which enables a business owner to receive an assessment along with concrete recommendation for his or her businesses.  For non-business owners we are please to offer a initial one-hour consultation. [Please see Contact Us to submit an inquiry or schedule an appointment to meet with one of our attorneys].

Thursday, March 1, 2012

Overview of Klein Law Corporation


KLEIN LAW CORPORATION provides clients with an extensive range of business-related legal services aimed at helping corporations, partnerships and individuals alike. The firm assists clients on the following matters: Corporation formation; trademark registrations, purchases and sales of businesses, contract drafting and estate planning.

KLEIN LAW CORPORATION serves as legal counsel to hundreds of companies, many of which it has formed. Our firm’s up-front involvement in major business decisions and projects allows for early identification and minimization of potential problems. Through tools, such as our “Business Risk Assessment”, we are able to provide a proactive audit free of charge to any business owner to help identify possible areas of risk.

Traditional approaches to the legal profession are often inadequate to the tasks as today’s clients demand value for their dollars. Clients want cost effective results - not a commitment to the past. Cost-benefit analysis is done on all legal recommendations

Wednesday, February 22, 2012

Welcome!


The Klein Law Corporation blog is offered as a legal watchtower to help you avoid costly legal risks. With value-added education for clients and friends of the firm, our aim is to give you powerful, timely, and relevant information to navigate successfully around the legal boobie traps you’d tend to miss.

The fast moving business environment today is so frenetic that we neglect the upkeep with new court rulings, new legislation and new administrative regulations.  If you’re like us, we would like to learn about potential legal hazards in advance so that corrective action may be taken rather than being caught off guard later on.

In addition, we’ll be sharing valuable insights into running your business from both a legal and business point of view.  If you ever want more in-depth information about a particular posting, please feel free to call or email us.