Posts Tagged ‘Texas business law’
What is an organizational meeting?
Posted by: David Leon in Business law on July 5th, 2009
After forming a new corporation, an organizational meeting is to be held by the directors. At this meeting, the officers and directors of the corporation are elected, the bylaws adopted, and the stock is issued to the shareholders. (Texas Business & Corp. Act, Sec. 3.06)
What is usury?
Posted by: David Leon in Business law, Contract law on July 5th, 2009
Usury is the charging of excessive interest rates. The default maximum interest rates are 10% with a written contract, and 6% without a contract, pursuant to Article 16, Sec. 11 of the Texas Constitution. Other Texas statutes govern maximum interest rates for financial institutions, mortgage companies, etc.
I want to start a new business. In order to attract customers, can I call my business a “wholesaler” even though I sell to the public?
Posted by: David Leon in Business law on May 25th, 2009
No. If you are not a wholesaler, you cannot advertise your business as a ‘wholesale’ business. Sec. 17.11 of the Texas Business and Commerce Code specifically prohibits this, as this would be a deceptive trade practice. This type of behavior is a misdemeanor. The statute provides:
DECEPTIVE WHOLESALE AND GOING-OUT-OF-BUSINESS ADVERTISING. (a) In Subsection (b) of this section, unless the context requires a different definition, “wholesaler” means a person who sells for the purpose of resale and not directly to a consuming purchaser.
(b) No person may wilfully misrepresent the nature of his business by using in selling or advertising the word manufacturer, wholesaler, retailer, or other word of similar meaning.
…
(d) A person who violates a provision of Subsection (b) or (c) of this section is guilty of a misdemeanor and upon conviction is punishable by a fine of not less than $100 nor more than $500.
I am an internet service or email provider. May I block emails that I believe are in violation of the Texas anti-spam laws?
Posted by: David Leon in Business law, Intellectual Property on May 25th, 2009
Yes, Texas Business and Commerce Code Sec. 321.114 gives internet service providers and email service providers the authority to block emails that the ISP or email provider reasonably believes are in violation of 321.052 (the Texas anti-Spam laws). The provider must have in place a reasonably accessible mechanism to unblock the emails, should the sender believe s/he is in compliance with the law. The statute is listed below.
AUTHORITY TO BLOCK CERTAIN COMMERCIAL ELECTRONIC MAIL MESSAGES; QUALIFIED IMMUNITY. (a) An electronic mail service provider may on its own initiative block the receipt or transmission through its service of any commercial electronic mail message that the service provider reasonably believes is or will be transmitted in violation of this chapter, if the service provider:
(1) provides a process for the prompt, good faith resolution of a dispute related to the blocking with the sender of the commercial electronic mail message; and
(2) makes contact information for the resolution of the dispute accessible to the public on the service provider’s Internet website.
(b) An electronic mail service provider who complies with Subsection (a) may not be held liable for blocking the receipt or transmission through its service of any commercial electronic mail message that the service provider reasonably believes is or will be transmitted in violation of this chapter.
I run an electronic mail service or internet service provider. Can I be sued if one of my clients sends unsolicited commercial email (spam) without my knowledge?
Posted by: David Leon in Business law, Contract law, Litigation and judgments on May 25th, 2009
Although you can be sued, you may have a defense under Texas Business and Commerce Code Sec. 321.112. The defense is very specific, and only applies to relay, store and forward servers
IMMUNITY FROM LIABILITY: TELECOMMUNICATIONS UTILITIES AND ELECTRONIC MAIL SERVICE PROVIDERS.
(c) A person injured by a violation of this chapter does not have a cause of action against a telecommunications utility or an electronic mail service provider under this chapter solely because the utility or service provider:
(1) is an intermediary between the sender, or a person acting on behalf of the sender, and the recipient in the transmission of electronic mail that violates this chapter;
(2) provides transmission, routing, relaying, handling, or storing, through an automatic technical process, of an unsolicited commercial electronic mail message through the utility’s or service provider’s computer network or facilities; or
(3) provides telecommunications services, information services, or other services used in the transmission of an electronic mail message that violates this chapter.
I want to send an unsolicited commercial email in Texas. How do I comply?
Posted by: David Leon in Business law, Contract law, Intellectual Property on May 25th, 2009
Texas provides a limited safe harbor for unsolicited commercial email (a/k/a bulk email or SPAM) Please note, that other states may have different laws that would apply to email sent to residents of that state.
See 321.051 of the Texas Business and Commerce Code. Sec. 321.052.
REQUIREMENT FOR TRANSMISSION OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL MESSAGES.
(a) A person may not intentionally take an action to transmit an unsolicited commercial electronic mail message unless:
(1) “ADV:” appears first in the subject line of the message or, if the message contains obscene material or material depicting sexual conduct, “ADV: ADULT ADVERTISEMENT” appears first in the subject line; and
(2) the sender or a person acting on behalf of the sender provides a functioning return electronic mail address to which a recipient of the message may, at no cost to the recipient, send a reply requesting the removal of the recipient’s electronic mail address from the sender’s electronic mail list.
(b) A sender shall remove a person’s electronic mail address from the sender’s electronic mail list not later than the third day after the date the sender receives a request for removal of that address under Subsection (a)(2).
What is business succession planning?
Posted by: David Leon in Business law, Estate planning and probate on March 12th, 2009
In some cases, a family business is the most important asset in a family’s financial well being. Business succession planning is a type of estate plan for people with family owned businesses. The specific planning includes who takes care and runs the family business after the passing of the principal owner or operator. The business succession planning typically includes life insurance planning, estate planning and contract law. The cost and complexity of a business succession plan vary with the type of business, and the objective of the plan. Contact Us for more information.
My corporation dissolved, but there is still unfinished business. What can it do after the dissolution?
Posted by: David Leon in Business law, Litigation and judgments on March 8th, 2009
A dissolved corporation in Texas shall continue its corporate existence for a period of three years from the date of dissolution, for the following purposes:
(1) prosecuting or defending in its corporate name any action or proceeding by or against the dissolved corporation;
(2) permitting the survival of any existing claim by or against the dissolved corporation;
(3) holding title to and liquidating any properties or assets that remained in the dissolved corporation at the time of, or are collected by the dissolved corporation after, dissolution, and applying or distributing those properties or assets, or the proceeds thereof.
Contact Us for more information.
I formed a corporation online. What do I do next?
Posted by: David Leon in Business law on March 8th, 2009
Our office receives this inquiry quite often. In many cases, a person incorporates using online forms. They then receive their charter, thinking they are ready to transact business. This is not necessarily the case. The next step should be for the board of directors to call and hold an initial organizational meeting. During the organizational meeting, the board should adopt bylaws, elect officers, issue stock and transact any other business as necessary. The directors calling the meeting shall give at least three (3) days notice thereof by mail to each director, stating the time and place of the meeting. If you plan to invest time and money into your new business, you should consider ensuring that it is properly set up. Our office has assisted people with the completion of the organizational meeting. Please Contact Us for an appointment to have your new business reviewed, and to have us assist you with the completion of the organizational meeting.
How long do I have to sue for breach of contract?
Posted by: David Leon in Business law, Contract law, Litigation and judgments on March 8th, 2009
Under most circumstances, the statute of limitations for a breach of contract in Texas is four years. (See Sec. 2-275 of the Business & Commerce Code)
However, many contracts may have limiting language altering your right to sue, and some contracts have pre-requisites to your right to sue. Because every contract is different, you should have an attorney review your contract to see if there are any exceptions to the general rule. Additionally, there may be other causes of action that may have shorter limitations periods. Contact Us for more information, or to have your contract review.
I’m selling my restaurant or bar. It has a mixed beverage permit. Is the mixed beverage permit transferable?
Posted by: David Leon in Business law on March 8th, 2009
No. Section 28.04 of the Texas Alcoholic Beverage Code states: A mixed beverage permit held by a corporation may not be renewed if the commission or administrator finds that legal or beneficial ownership of over 50 percent of the stock of the corporation has changed since the time the original permit was issued.
What is a “work for hire”?
Posted by: David Leon in Employment law, Intellectual Property on March 6th, 2009
A “work for hire” (also known as a “work made for hire”) is doctrine of intellectual property law governing ownership of material. The premise is that if a person or company hires another to create something under a work for hire arrangement, the person who hired the creator is the owner of the work. For example, let’s suppose Company A hires Joe Programmer to write a piece of software under a work for hire arrangement. The end result is that Company A owns the software, Joe does not.
What is business insurance planning?
Posted by: David Leon in Business law, Estate planning and probate, Insurance Law on March 6th, 2009
Business insurance planning includes insurance against the loss of a key person who is vital to the survival of a business. This type of policy can be used to inject cash into a business in order to survive while you replace the lost person. It can also cover buy/sell agreements, allowing the surviving member of the business to buy out the deceased member’s interest. Other types of insurance planning include wholly owned or captive insurance companies, umbrella insurance policy planning and commercial liability. Contact Us for more information.
What is sexual harassment?
Posted by: David Leon in Employment law on March 6th, 2009
Sexual harassment may involve different things. The two most common types of sexual harassment cases involve quid pro quo (exchanging a sexual favor for employment perks) and hostile working environment.
Can a business entity use a fictitious name?
Posted by: David Leon in Business law, Intellectual Property on February 27th, 2009
Yes. An entity may use a fictitious in most instances. The company must have permission to file the dba and the dba must be available. The company is still subject to other Texas laws regarding the use of trade names, and comply with trademark laws. Fictitious names allow a company to use a name other than its corporate name. We can help your business with the appropriate filings. Contact Us for more information.
What is a fictitious name?
Posted by: David Leon in Business law on February 27th, 2009
A fictitious name (also called a d/b/a or “doing business as”) is the least expensive method for conducting business. Under this scenario, there is no distinction between the individual and the business. From a tax standpoint, there is no difference between the individual’s income and expenses, and those of the business. The business owner is personally liable for the obligations and debts of the business. Taken literally, a d/b/a is just a nickname of the individual that created it. In this case, the name is a business name. For example, Joe wants to create a business to do computer repairs from his home. Joe can file a dba as “Fix It Quick”. Joe can now receive checks made out to Fix It Quick. For individuals, a dba does not have a separate tax identification number in most instances. Contact Us for more information.
Can an officer or director of a company be liable to the shareholders for actions taken on behalf of the company?
Posted by: David Leon in Business law, Litigation and judgments on February 15th, 2009
There are times the officers and directors may be personally liable for their actions taken on behalf of a company. Additionally, directors and officers owe specific duties of loyalty to the company. Breaches of these duties (some of which may be fiduciary duties) are actionable. Also, problems may arise when minority shareholders are treated unfairly. A common issue is when a director of a company “self deals” at the expense of the company. Contact Us for more information.
Another company owes me for a past due invoice. Can you file suit to collect?
Posted by: David Leon in Business law, Litigation and judgments on February 15th, 2009
This tends to be one fo the more common types of litigation. Essentially, a business will offer good and services on a revolving account basis to another. When those invoices remain unpaid, litigation may be necessary. The typical first step is to assemble all written documents exchnaged between the parties. Next, a demand letter stating that the other party is in breach of the arrangement would be sent, detailing what the other side needs to do in order to rectify the situation. Should the sides fail to reach a settlement, then the side owed money can file a suit in which a representative the company that issued the invoices swear to the truthfulness of the invoices. This is called a “sworn account suit” This forces the other side to have to file a sworn answer stating that they do not owe the invoices. If you have one of these issues, please Contact Us to discuss your issue.
I entered into a contract over the Internet. I’m in Texas and the other party is not, whose law applies?
Posted by: David Leon in Business law, Contract law, Litigation and judgments on February 15th, 2009
As a general rule, if a contract made solely over the Internet between a person located in this state and a person located outside this state who does not maintain an office or agent in this state for transacting business in this state, then Texas law applies unless each Texas party:
(1) is given notice that the law of the state in which another party to the contract is located applies to the contract; and
(2) agrees to the application of that state’s law.
(Texas Bus & Commerce Code Sec. 271 & 274)
If you have an issue you would like to discuss with us, please Contact Us.
I’m still confused about this independent contractor vs. employee determination. Can I ask the IRS for a determination?
Posted by: David Leon in Business law, Contract law, Employment law on January 18th, 2009
Yes! The IRS has Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
What does the IRS consider when determining whether or not a person is an independent contractor?
Posted by: David Leon in Business law, Contract law, Employment law on January 18th, 2009
The IRS uses three main criteria when determining whether or not someone is an employee or independent contractor.
From the IRS.gov website:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Is there a magic test to determine if a person is an employee or independent contractor?
Posted by: David Leon in Business law, Contract law, Employment law on January 18th, 2009
No, there is no “bright line” test determine whether or not a person is an employee or an independent contractor. The IRS will look at the entire relationship between the parties.
How can I tell if the person I hire is going to be classified as an independent contractor or an employee? Can I just say a person is an independent contractor in a contract?
Posted by: David Leon in Business law, Contract law, Employment law on January 18th, 2009
No. From the perspective of the IRS, the IRS doesn’t care if you label a person an employee, independent contractor or anything else. The IRS will look at the entire relationship between the parties. If you incorrectly label someone an independent contractor when they are in fact an employee, you could face serious liability. The IRS has its own criteria for determining a person’s status as employee vs. independent contractor.
I want to hire someone for my small business. Can I hire them as an independent contractor and not have to deal with taxes?
Posted by: David Leon in Business law, Contract law, Employment law on January 18th, 2009
This is a common question. Many small business owners want help, but don’t want the added hassle (or taxes) of hiring employees. Many business owners believe that they can just simply classify someone as an independent contractor by contract and be done with it. The problem is that the IRS may not agree with your assessment as to whether a person is an employee or independent contractor (even if your agreement specifically states such.) The IRS has its own criteria for determining a person’s status. The contract is only a factor, but it is not determinative. The IRS will look at the entire relationship. Further, if you incorrectly classify someone as an independent contractor, you can face some serious fines from the IRS.
I am the sole owner of my business. Do I still need to have annual meetings?
Posted by: David Leon in Business law, Franchise Law on December 21st, 2008
It’s still a great idea to document what has transpired over the past year with your business, even if you are the only owner. This puts you in the habit of observing company formalities, and it makes it easier for you to recall what happened in a given year, should an issue later arise.
What sort of forms do I need to complete for my business before the end of the year?
Posted by: David Leon in Business law, Franchise Law on December 21st, 2008
This is a common question. Most companies and partnerships in Texas should complete some end of year meetings. The notes from these meetings, called “minutes” should be placed with the company’s records. The minutes should contain signatures of all owners of the company, and a list of any important business that has been transacted since the past meeting. You can also take this opportunity to have your board of managers / board of director elections for the upcoming year, double check that the registered agent and public information reports (PIR) are up to date. Contact Us for more information.
I have a contract and the other side did not perform as promised. What can I do?
Posted by: David Leon in Contract law, Litigation and judgments on November 24th, 2007
Breach of contract cases are very common. The first step is to document everything possible. You should keep track of who you spoke with, what you discussed, the dates and the times. When possible, you should also follow up any communications with written letters.
I have a simple transaction that I need to complete for my business. Do I need a contract?
Posted by: David Leon in Business law, Contract law on November 24th, 2007
The purpose of the contract is to ensure that both sides of an agreement are fully aware of their respective obligations. This is referred to as a “meeting of the minds.” In some cases, one or both parties may have had a different expectation of a transaction, even if the transaction was supposed to be simple. Also, sometimes there is a situation that prevents one side or the other from performing as promised. This is where you need to have a well drafted contract. If done properly, contracts can help avoid litigation, and can protect you and your business if an unexpected event occurs. Contact Us for more information.
I have an out of state business. How can I conduct business in Texas?
Posted by: David Leon in Business law on November 24th, 2007
If you have more than an insolated transaction occuring in Texas, then you will need to either set up a Texas subsidiary or qualify your foriegn company to transact business within the State of Texas. If you are qualifying an out of state entity, then you need to petition the Texas Secretary of State’s office for a Certificate of Authority to transact business within the state. This also requires obtaining a Certificate of Good Standing in your company’s home state, as well as a company meeting to ratify this process. Contact Us for more information
What can I do if a director of my company is acting unfairly?
Posted by: David Leon in Business law, Litigation and judgments on November 24th, 2007
Directors of a company have a duty of loyalty to the company. If you believe that one of your corporate directors is self-dealing or not acting in the company’s best interest, you should Contact Us immediately, as this may be a breach of a fiduciary duty.
Do I need to use an attorney if I am buying or selling a business using a broker?
Posted by: David Leon in Business law on November 24th, 2007
Our firm has experience in handling the buying and selling of businesses. Even if you are using a broker, you can still have your own attorney to assist with the negotiation and closing of the transaction. Transfering ownership of a business can occur in several different ways, and it takes a trained professional to determine which methods of ownership transfer will best benefit the client while minimizing the risk. Also, many companies, such as restaraunts and retail, have specific legal requirements. These tend to be complex transactions and our firm can assist you with each step of the transaction. Contact Us for more information.
I want to start a business in Texas. Do I need a lawyer?
Posted by: David Leon in Business law on November 24th, 2007
Although there are several ways you can form a business yourself without an attorney, there are several different types of entities to choose from when you form a business in Texas. Depending on what your plans are, and what your business model is, there are several choices. An attorney can assist you with selecting the appropriate type of entity to choose. After you have selected the type of entity, our firm can set up the company and assist you with the stock or unit issuance and organizational meetings. Contact Us for more information.
