Category: Small Business

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Small Business

Legal Steps for Starting an Airbnb Business in Joshua Tree (with COVID-19 Update)

People from all over the world flock to Joshua Tree to enjoy its picturesque landscape and bask in the tranquility of the high-desert. Because of this, in recent years, those offering short-term rentals have been able to earn extra cash through sites like Airbnb, FlipKey, and VRBO. 

However, there are certain steps that all property owners need to take before opening the doors to potential guests. Part of this process involves complying with local regulations, which are always subject to change. For that reason, it’s important to stay on top of these rules in order to help ensure that your Joshua Tree rental business flourishes for years to come. 

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Small Business

What is a Pass-Through Entity?

Selecting a business type is a lot like buying a car. There are pros and cons to consider with every vehicle and some will be more suited to your individual needs than others. The same is true when setting up a business. That said, tax treatment is one of the major issues that could lead you to choose one type over another. 

With that in mind, the term “pass-through” entity comes up a lot in the literature on business formation. Simply put, a pass-through entity is a company that does not pay corporate tax. Instead, the income “passes through” to the owner, meaning the tax obligation is paid only once on his or her personal return. As you can imagine, this feature can be a major advantage.

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Small Business

How to Keep Your California LLC in Good Standing

Creating a California LLC is an effective way to help you avoid personal liability for your company’s debts and other obligations. However, bear in mind that forming the business is only the first step in the process. There are ongoing requirements that you must follow. 

Now, failing to follow these rules may lead to your LLC being suspended or even dissolved by the state. This means that you would no longer be considered in “good standing”, which can have negative consequences for your business.

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Small Business

Piercing the Corporate Veil

Whether you are new to owning a company or are a seasoned entrepreneur, entering into contracts is a fundamental part of being in business. These agreements will vary in size and scope and can result in some obligation or debt being incurred by the company.

Now, in most cases, if you choose the appropriate structure for your organization (such as a corporation or LLC) you, as the owner, are shielded from liability in the event that the company cannot carry out its responsibilities. In other words, you would not ordinarily be on the hook for the resulting debts and legal obligations. 

However, it’s important to note that there are times when this protection can be stripped away. This is referred to as “piercing the corporate veil” and means that owners will be held personally financially liable for the debts of the business. 

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Small Business

Do I Need an Operating Agreement for My California LLC?

If you’ve recently formed an LLC, you should congratulate yourself on completing the important first step of choosing a business structure. However, keep in mind that there are additional items that should be on your checklist as part of the formation process. One of these is the operating agreement.

Note that California is one of the few states that legally requires LLCs to have an operating agreement. But, there are a number of benefits these documents provide even if you live in a location where they are not mandated by law. 

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Small Business

What California Employers Should Know about Employment Contracts

Like many things in life, business relationships are full of uncertainty. If you hire an employee, there is always the chance that he or she will quit or go to work for a competitor business. By the same token, from an employee’s standpoint, market conditions can always change and you may be forced to terminate the worker’s employment. Further, you may have expectations for how you want the work to be performed, and an employee may come in with expectations about how they wish to be managed.

To help clear up some of this confusion, companies often enter into employment contracts with their employees. However, as a business owner, you should be aware that the state is considered “employee friendly.” As business lawyers in California know and will advise you on, there are many restrictions on what can be contained in employment contracts.

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Small Business

Why Should I Care About Limiting Liability?

As a business owner, your focus is likely on how to make sure things go right. However, sometimes the unexpected happens, so it can be helpful to have certain protections in place to make sure that your organization not only survives but thrives.

That said, you may have come across the term “limiting liability” and wondered how this relates to your business. Generally speaking, liability refers to the person or entity that is responsible for a debt. 

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