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Huntington Beach Business And Real Estate Law Blog

Avoiding missteps during the business formation process

Starting a business is an exciting and sometimes overwhelming step for a California entrepreneur. There are many important decisions a person will have to make, and it's critical for a person to be cautious and careful to avoid missteps. Problems during the business formation period, even small ones, can lead to significant complications down the road. 

It is easier to start a business now than ever before. There are many resources available online, but this can also increase the likelihood of a mistake. It's beneficial to understand the legal ramifications of every choice made, including the type of business entity. Poorly formed partnerships or other types of businesses can lead to legal complications and disputes that can threaten the success of a business. 

Making smart decisions during the business formation process

Starting a business is an exciting venture for a California entrepreneur, but there is much more involved with this process than just finding a storefront or launching a website. The business formation process involves many complex and important choices, including deciding on the type of structure a company will have. Before a founder makes any important decision that can affect the finances of his or her business, it is smart to know all of the options available. 

There are two main types of business structures available, including limited liability companies and corporations. The choice a business owner makes will affect taxes, personal liability for business debts and more. Limited liabilities companies, or LLCs, are popular choices because this type of entity can protect an owner's personal assets if the company ever gets into financial trouble and owes a significant amount of debt.

Tenants' rights issues could lead to real estate litigation

When a Californian rents residential property, he or she has certain rights. There are laws in place that protect the interests of tenants, and they provide protections against things like invasion of privacy and other types of mistreatment from landlords. In some areas of California, however, provisions intended to help renters may actually not be helping them at all. In one town, this led to many disgruntled renters and the potential for real estate litigation.

Lawmakers passed certain measures actually intended to protect the interests of renters. Landlords are now required to provide tenants with one-year leases, but there is no provision that keeps them from raising the rent each year as well. As a result, many people are facing rent amounts that are more than they can afford. Landlords can also evict tenants or refuse to renew the lease at the end of one year if they choose to do so.

Avoiding business litigation due to violation of privacy laws

Recently, the state of California passed new laws regarding how companies and businesses of all sizes and types treat the information and data they collect from consumers. It is in the interests of business owners to understand what these new laws mean for their company. A disregard of legal changes or lack of understanding over how the law is applied could expose a company to business litigation in the future.

These new privacy laws are among the strongest and strictest in the country. Essentially, California consumers have more rights than ever before regarding how companies treat their information. This includes the gathering and selling of data. At the beginning of next year, when the law goes into full effect, consumers will be able to request that companies provide them with all of the personal data they have collected going back 12 months. 

Business formation and how that choice impacts taxes

Starting a California business is an exciting time, but there are important financial and legal issues to consider before moving forward. The choices an entrepreneur makes in the initial stages of his or her company will have significant impact on various factors down the road, including taxes. During the business formation stage, it is prudent to think about how the choice of entity will determine taxes as well.

The legal structure of a business determines how a business owner will be taxed and his or her personal financial liability for business-related taxes. As an example, a sole proprietorship is a common choice for a structure of a small business, and all business losses and income are on the owner's personal tax returns. In partnerships, the partners will share responsibility for debts, and income or losses are on all parties' personal tax returns.

Business litigation involving well-known candy companies

California district attorneys recently won a significant case brought against a few well-known chocolate companies. Chocolate makers Russell Stover and Ghirardelli recently came under fire and faced business litigation due to certain packaging issues that led to consumers receiving much less product than they actually paid for. The two companies are facing fines that amount to $750,000, and they have to adjust some of their packaging techniques as well.  

The prosecution accused the two successful candy companies of knowingly and deliberately packing some of their products in a way that deceived consumers. One specific issue is the selling of containers that were essentially empty, containing much less chocolate than expected. Consumers who brought the complaint believe the company was intentionally trying to mislead them.

Adjusting to trends in ecommerce

One area that has seen a lot of growth in recent years is online retail. Estimates point to ecommerce having hit $2.8 trillion in global sales revenues in 2018. And continued growth is expected.

The opportunities ecommerce can provide may draw entrepreneurs here in California to consider starting an online retail business.

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