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Q:

I will be hiring a General Contractor to build a one family home on a piece of land that my wife and I own. The property was deeded to an LLC that my wife and I are 50% members of. This was done to minimize potential liability risk. I would like to know if we are included in the one and two family homeowner New York labor law exception, since we are hiring a contractor to build a one family home and we are not directing the work?

A:

Yes, as long as (1) the dwelling is one or two family, and (2), that you did not direct or control the work performed by the laborer. To satisfy the first prong of the exemption, you must contract for work that directly relates to your one of two-family dwelling. To satisfy the second prong of the exemption, you must not control or supervise the work performed. The courts allow for some minimal supervision, such as picking a paint color. Regardless, I would highly recommend that you have the GC give you Certificate of Insurance naming the LLC and you and your wife as additional insured on their policy.

Q:

We are starting a clothing line (both e-commerce and retail sales in multiple US states). We don’t plan on directly employing anyone for the foreseeable future. We’re trying to decide between setting up an LLC, C-corp, or S-corp? Any advice on what’s best for the business and for our own personal tax situation?

A:

I almost recommend establishing an LLC. An LLC has the tax benefits of an individual but the liability protection of a Corporation. In other words, LLCs are taxed once (simply on you individual tax return, if you have a profit) and C-Corporations are taxed twice (as an individual and a Corporation). S-Corps are taxed like an LLC, but there is more paperwork at the initial stages and going forward. After the initial establishment of the LLC, there are no reporting requirements. I recommend an S-Corp for people looking for outside investors, as that structure is easier to offer shares in the company.

Q:

I have a customer that wants to buy my business (LLC) as is. They are ready to buy my inventory & A/R as is. What is the best document for me to use? All that I need is a doc that says that they are buying everything “as is” with no recourse.

A:

There several documents that New York state requires: Assests Purchase Agreement, Bill of Sale and Assignment, AU-196.10 notification, DTF-95 for taxation, TP-153, and providing TSB-M-83(6)S. These must be filed with New York State. Also, I would recommend a non-disclosure agreement.

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Q:

I recently bought a property in Nassau Country through auction (not foreclosure). It was addressed to the building department that it could have been sold through a bank auction also. How can we insure that we bought the land free of any liens or being sold to someone else?

A:

In order to see if there are any liens/judgments against the property, you will need to search the Nassau County Clerk’s records. If there is more than one parcel that make up the property, you need to be sure to search all parcels. For a through search, I would also recommend having a title company pull an abstract of the title, which would show any easements or other encumbrances or gaps in title. I would also recommend getting a commitment for title insurance, so you know that the property is insurable.

Q:

I’m based in New York and looking to establish an LLC. I will be the only member for the entire duration of its existence and I plan to do business with companies all over the company. I was reading about the idea of establishing an LLC in Nevada where there seem to be many benefits for small businesses. Is it legal to do this and is it a good idea?

A:

It is legal to do this; you can form an LLC in any state, and then register the LLC to do business in which ever state(s) you are doing business in. However, if you are only single-member LLC, there is no real benefit to forming in Nevada. As a single-member LLC, you are a “disregarded entity” for taxation purposes. In other words, you file your taxes as an individual just as you normally would; the LLC itself isn’t taxed. All LLCs offer the same limited-liability protection. As long as you are doing business in the LLC’s name, your liability is limited to what you put into the LLC. There are some exceptions to this, which I would be happy to discuss with you.

Q:

I will be selling hedge fund investments to US high net worth investors and need to know what kinds of advertising I can do legally, where, and what needs to be on the ad to comply with regulators. I will be selling dodd frank compliant private asian hedge fund investments to US high net worth investors and need to know what kinds of advertising I can do legally and what needs to be on the ad to comply with regulators.

A:

The ban on advertising hedge funds has been lifted. However, for private investment funds, you can only raise money from “accredited investors,” that make more than $200,000 per year or have over $1M in assets, excluding property. For details, the regulation is 17 CFR 230.501.

Q:

How do I register a trademark as a Canadian citizen?

A:

You do not need to be a US citizen in order to register a US trademark. What you need to apply for a tradmark: 1. A .jpg or .pdf of the logo in use (brochure, etc.). 2. Description of the colors used in the mark (very specific) and how used. If possible, the specific names of the colors. This is IF you consider the colors to be an essential part of the logo. The standard for both infringement and registration is “likelihood of confusion.” So, if you register the logo in black and white – without claiming color – no one can register or use a confusingly similar logo in any color (or no color) without infringing. However, the law is not quite so clear if you DO claim color, because claiming color means that you consider the colors to be an essential part of the trademark. 3. If using words, do the words have any significance? Is the word pattern something that you specifically want to protect? 4. The date the mark was first used, (a) anywhere and (b) in interstate commerce (outside of your province) 5. A digital image of the actual logo. 6. If we do this via the online application and can give complete information, the filing fee is $275. This is per trademark.

Q:

We had built a house in 2004, at the time there were no homes to the right or left of our house. A house was built on one side and the owner put a retaining wall between the properties. This owner sold and a new owner moved in. This owner in 2015 put up a fence 3 feet into what was originally believed to be my property. The property in q>uestion had been maintained by us continually since 2004. Can I claim squatters rights to the land?

A:

Do you have a survey that shows the property boundary? Did you ever have an easement agreement with the previous owner? If so, these generally run with the land. You may be able to claim the land by adverse possession: Possession of the property of another that is (a) exclusive (b) open and notorious, (c) continuous and (d) under claim of right. An adverse possession claim can result in you acquiring title to the property if neighbor (if he truly owns the property) does not move to evict you within ten years.

Q:

I just filed for an LLC in New York County, but I believe that I’m a single member LLC. Are my personal assets safe if someone comes after my business?

A:

The members of an LLC have the benefit of limited liability in regard to the debts and obligations of the company. As such, the LLC members are not held legally liable for the tortuous actions and contractual breaches that may occur during the lifetime of the business. However, members and managers may be held legally liable if they act in bad faith or their conduct fails to satisfy the ordinary “prudent-person” standard. There other additional situations in which members may be held personally liable for their fraudulent misrepresentations under the Limited Liability Company Law. The first situation occurs where one party in negotiations or conducting business with an LLC party is not made aware of the other (LLC) party?s status as such. The second situation arises where the LLC is not sufficiently capitalized in order to adeq>uately support the activities that it intends to carry out as part of its business. Also, you should be aware of “piercing the corporate veil,” which also applies to LLCs. What this means is that when an individual and a company are so closely linked that they should not be viewed as separate entities for legal purposes, the shield against personal liability will not be applied. Courts have enumerated dozens of factors that should be considered in making this determination. Some of those examples: (1) commingling of funds and other assets, (2) the treatment by an individual of the assets of the corporation as his own, (3) the failure to maintain minutes or adequate corporate records, (4) the use of the same office or business location, employment of the same employees and/or attorney, (5) the failure to adequately capitalize a corporation, and (6) the use of a corporation for a single venture.