New Law Helps Combat Corporate Minutes Scams

A 2012 law is helping small businesses (corporations and LLCs) avoid getting scammed by the corporate minutes solicitations that were the subject of one of this blog's earliest, and by far its most popular and commented on, post. The law requires more notices on such mailings, the idea presumably to help these stand out from official mailings from the Secretary of State regarding Statement of Information filings. The jury is still out on effectiveness.

Secretary of State: Stronger Laws to Prevent Fraudulent Solicitations

California Employers Not Liable for Employees' Work During Meal and Rest Breaks

California employers are hailing a rare labor law victory in California courts. Brinker International, Inc., which operates chain restaurants such as Chili's and Maggiano's Little Italy, successfully defended a claim by employees relating to work performed during meal and rest breaks. The court ruled that employers are obliged to provide meal and rest breaks mandated by California law, but are not required to monitor empoyees to ensure they do not perform any work during these breaks. If employees do voluntarily work during their breaks, the employer is not liable to these employees for such work. Employers continue to be liable for monetary penalties if meal and rest breaks are not provided.

Working Through Lunch? Not the Boss' Problem, Court Rules, Los Angeles Times, April 12, 2012.

Small Estates Probate Limit Increased

Effective 1/1/2012, Califorina's small estate limit is increased from $100,000 to $150,000, meaning that, where the decedent has a will or died intestate (without a will), and the gross value of the estate is $150,000 or less, and does not include real property (real estate), a simplified affadavit procedure may be utilized instead of a full probate.

The limit for transferring real property withour probate increases to $50,000 - likely making little difference in most instances in Los Angeles County, but possiby of some occasional application with regard to unimproved land and timeshares.

Under the new law, a surviving spouse may also collect up to $15,000 in wages owed to his or her deceased spouse without a formal probate proceeding.

Note that assets held in a living trust avoid the time and expense of probate, and that the value of the estate is calculated without regard to any mortgages or other indebtedness. For example, a $450,000 market value house with a $400,000 mortgage counts as $450,000 of estate value, and therefore would not qualify for the small estate procedure.

California Flexible Purpose and Benefit Corporations

Enacted in October 2011 and effective today, January 1, 2012, Corporations Code Section 2500 et seq. and Section 14600 et seq. create two new types of business entities, the flexible purpose corporation and the benefit corporation. Both allow the organization of corporations which are, while not non-profit, encompass both economic profit, as well as social welfare, objectives. In short, these are hybrids between traditional for-profit corporations, and traditional nonprofits. Or, if you prefer, socially conscious stock corporations.

Flexible purpose corporations may pursue social welfare objectives without liability to directors for not maximixing profit; one or more "special purposes" must be specified in the Articles of Incorporation. Benefit corporations must pursue social welfare objectives and have more transparency requirements that traditional stock corporations.

Benefit corporations permit corporate directors to take into consideration and to pursue general or more specific social welfare goals, in addition to the tradtional profit motive, and will not be liable on account of pursuing these objectives for not maximizing shareholder return.

These are new and untested entities in California, and therefore are obviously not right for all incorporations, but benefit corporations are already in existence in other states, and more states still have bills proposed and pending. Neither form will offer tax exemption.

See also Berkley Law: New Corporate Forms
Q&A on Flexible purpose corporations

Update: California businesses seeks new 'benefit corporation' status, Marc Lifsher, Los Angeles Times, January 3, 2012

New California Laws for 2012

Ringing in a new year means news laws, and this year, new California laws include:

• Perhaps most controversial, the Dream Act allows in-state tuition rates for qualifying illegal immigrants.
• Public schools must include lessons about historical achievements of gays/lesbians and the disabled
• Cough syrup and other products containing dextromethorphan, e.g., Robitissin DM and Nyquil, will now require a prescription for purchase by minors.
• Sale and distribution of shark fins is prohibited. This law targeted a Chinese delicacy, shark fin soup.
• Beer with caffeine is also outlawed.
• Parents must keep children in a car seat until the earlier of the age of eight, or the child reaches the height of four feet, nine inches.
• Crossing double white lines on the highway is now illegal.
• Open carry of unloaded firearms is now prohibited.
• Tanning bed use by those under the age of 18 is now prohibited.
• Internet retailers must collect California sales tax on transactions if the retailer has a presence in the state.
• Contractors are now allowed to do business with LLCs instead of only corporations

See also -

New California Employment Laws for 2012;
New Probate Laws for 2012;
Jery Brown Signs California Dream Act, Patrick McGreevy and Anthony York, Los Angeles Times, October 9, 2011;
Dream Act is a nightmare for California tax payers, Jose Gizzardi, Lodi News Sentinel, December 31, 2011;
CHP List of New Traffic Laws