Sunday, March 22, 2020
Federal, state, and local governments are announcing economic aid and loan programs to assist small businesses impacted by COVID-19 (coronavirus). These include:
U.S. Federal government (IRS): https://www.irs.gov/coronavirus?utm_source=Summit+CPA%2C+Inc.&utm_campaign=f247223cfa-EMAIL_CAMPAIGN_2020_03_22_02_30&utm_medium=email&utm_term=0_c3b50b8184-f247223cfa-356485491
IRS tax filing and payment deadlines extended to July 15, 2020: https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020
Federal government (SBA loans): https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
State of California: https://oewd.org/covid-19-small-business-resiliency-fund
New 4/2/2020: Gov. Newsom announces additional small business loans for those that may not be eligible for federal SBA loans: https://www.gov.ca.gov/2020/04/02/governor-newsom-announces-new-help-for-small-businesses-workers-displaced-by-covid-19/
State of California Franchise Tax Board (FTB) tax filing and payment deadlines extended: https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/index.html
State of California Employment Development Department (EDD): https://www.edd.ca.gov/about_edd/coronavirus-2019.htm
City of Los Angeles: https://www.lamayor.org/mayor-garcetti-announces-economic-relief-package-small-businesses-impacted-novel-coronavirus
City and County of San Francisco: https://oewd.org/assistance-guidance-businesses-and-workers-impacted-covid-19
Facebook Small Business Assistance Program: https://www.facebook.com/business/boost/grants
For businesses that are permitted to remain open by state and local authorities, guidance from the U.S. Center for Disease Control has best practices to avoid spreading coronavirus.
Posted March 22, 2020, updated April 2, 2020.
Monday, September 16, 2019
Sole proprietor: 2.40%
Tuesday, January 8, 2019
Other states are also rolling out similar requirements, so California businesses selling tangible goods to consumers in others states will need to be aware of any out-of-state filing requirements.
Monday, December 10, 2018
With this and other decisions, the OTA has shown that it will not rubber stamp positions taken by the FTB or other California tax agencies, especially when they make little sense, like the FTB's position in this case. Nonetheless, the FTB is anticipated to continue to apply the prior Swart case narrowly, and continue to maintain that passive members of LLCs organized or doing business in California are themselves also doing business in the state.
Monday, June 4, 2018
The new "ABC" standard is simpler but more strict than the prior classification scheme. In order for the company to properly classify a worker as an independent contractor, the company must prove the following (note that the burden is on company seeking IC treatment and if the burden is not met, the worker is an employee, the criminal law equivalent of "guilty until proven innocent"):
A - that the worker controls his or her work,
B - that the duties go beyond what the business normally does, and
C - that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
Any of these can derail a would-be independent contractor relationship, but it is the second of these prongs - the "B" in "ABC" - that will be perhaps the most difficult for many California companies including ride-sharing services that claim all drivers are independent contractors.
Whether Uber and Lyft, who have just received subpoenas for more information from the California Attorney General, will be able to argue they are in the business of providing a mobile app, rather than actual transportation, remains to be seen. If not, their business model will need to change dramatically, at least in California.
Companies whose consulting arrangements with ICs previously may have passed muster may find themselves unable to show that the pre-existing relationship still qualifies under the new ABC standard and are well advised to have a business and employment law attorney review the circumstances and agreement and then implement any needed changes.
The case is Dynamex Operations West, Inc. v. Superior Court, County of Los Angeles, Supreme Court of California, No. BC332016, April 30, 2018.
In 2012, a California law went into effect providing for additional civil penalties for wilfully misclassifying workers as independent contractors of $5,000 to $15,000 per violation.
Update: On January 1, 2020, AB 5 became law, which essentially codified Dynamex into statutory law.
Tuesday, May 22, 2018
Despite the favorable ruling for employers that was opposed by the Obama Administration and supported by the Trump Administration, California employers need to ensure their arbitration clauses are carefully drafted and be aware of the trade-offs in selecting arbitration over litigation in the first place.
The cases are Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; and National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018).
Saturday, December 2, 2017
[The] corporation ... continues to conduct business even though the state of California suspended its registration over two months ago. Operating without a valid registration is illegal under California law, legal experts said. ...Inside Mercer Vine: A suspended brokerage, a potential fraudster at the helm, and $260M in dead deals by Natalie Hoberman and Will Parker, The Real Deal, December 1, 2017.
Jonas Grant, an L.A.-based attorney who practices corporate entities law, said as a business without a valid corporation registration, “you’re basically dead in the water until you fix the problem.” ...
Suspension temporarily strips corporations of a number of rights ... including being able to defend itself in court or bring a lawsuit. Such corporations could also have contracts voided by a court, according to California law.
“If you don’t have the right to conduct business that would include the right to contract,” said Grant.
A suspended corporation cannot conduct any business in the State of California until it is revived to active, good standing, a process called revivor. This is generally accomplished by filing any past due annual reports or tax returns, and by paying any past due taxes, interest, and penalties with the Franchise Tax Board.
Recommended steps to avoid a suspension include engaging an accountant to assist with tax preparation and filing and to keep track of associated deadlines, and enrolling the LLC or corporation in a lawyer's corporate maintenance program to ensure legal compliance.