Drake Goodman and Patty Palmer lease a studio apartment to Carter Haynes. But Haynes has not paid rent since last May, when the shelter-in-place orders caused his fledging restaurant to go out of business. While sympathetic to Haynes’s plight, the loss of rental income has severely damaged Goodman and Palmer’s own finances, and they are growing increasingly desperate. Can they evict Hayes? Should they? Continue Reading CDC’s Eviction Moratorium: Legal Limbo for Landlords and Tenants
Jack Bux and his high school sweetheart, Diane, have been married a few years, but the pandemic has taken its toll on their relationship, and they could soon be parting ways. Going into the marriage, Jack had a number of property interests – a home with a mortgage, a retirement account and a small part of the family business – and now he’s concerned that Diane will be able to walk away with half of what he’s been building over the years. Like most Texans, Jack is aware that when it comes to marital property, Texas is a “community property state.” What does this really mean for Jack’s home, retirement account and business? Continue Reading Texas Community Property Law: An Intro for Business Owners
Ernest “Big Daddy” Bux’s daughter Kathy “Kitten” was working for Approval Literary Agency in Blessing, Texas – that is until last month. Kitten, an associate literary agent with Approval Literary was sacked after her boss learned that she owned accounts on the politically charged social media sites Lobby and Blabber. The agency’s owner I.B. Cheef publicly announced on Twitter that the firm had dropped Kitten after making the “distressing” discovery. Kitten tweeted that she was fired because of her political views. Does Kitten have a case for wrongful termination? Continue Reading Falling Off the Fence: Can You Fire Those with Different Viewpoints?
Last month’s post explained how setting up a dummy company can help seal a deal. Unfortunately, dummy companies can be used for far more nefarious purposes, including money laundering, terrorism financing, and tax fraud. For example, the New York Times and 60 Minutes revealed how high-end real estate has been snatched up by dummy companies linked to foreigners with ties to organized crime, despotic regimes, or both.
They were able to use dummy companies to anonymously move money into the United States, because most States do not require organizers of corporations or LLCs to disclose their true owners. That’s the case in Texas. The certificate of formation for a Texas corporation must identify its initial directors but not its shareholders. And the organizer of a Texas LLC can conceal its members by setting the company up as a manager-managed LLC and then appointing a non-member as the manager. While the ability to conceal the company’s owners is good for a buyer seeking to obtain a lower price or discourage competitive bidding, it presents a significant challenge for law enforcement and intelligence agencies.
To combat the illicit use of dummy companies, Congress enacted the Corporate Transparency Act. It was tucked away in the National Defense Authorization Act, which became law on January 1, 2021, when Congress overrode President Trump’s veto.
The Corporate Transparency Act generally requires corporations, LLCs and other similar entities to file reports on their beneficial ownership with the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury beginning next year. While the Corporate Transparency Act was aimed at malign actors using dummy companies, its obligations, like the rain, fall on the just and unjust alike. Millions of companies will have to file new reports on their beneficial ownership with the federal government, regardless of whether they are dummy companies or engaged in any illegal activity. While the scope of those reporting obligations are not clear yet, here’s what your company needs to know now: Continue Reading The Corporate Transparency Act: What Your Company Needs to Know About the New Federal Reporting Requirements
Last month we focused on the legal considerations for moving your company to Texas. This month our focus is on your personal checklist – legal issues affecting you personally that will need your attention this year.
But first, a quick note about immigration. Together with his kind comments about our last Moving to Texas? article, my good friend and erstwhile immigration attorney Rick Gump urged me to remind both the company management and their employees to ensure that, when moving to Texas, legacy employees are treated as new employees for I-9 verification purposes. He advises that it is important to clean up the company files and take care of company employees by cleaning up their files as they might become subject to an I-9 audit.
After you settle in to your new Texas home and while you are unpacking, it’s time to make your own personal checklists. You might start with these. Continue Reading Moving to Texas? Your Personal Checklist for your Move to the Lone Star State
If you’re new to Texas, you’re not the first from California to sing about it. In their 1964 album, The Beach Boys sang about being a “Long Tall Texan.” Nowadays, there’s a lot more to moving to Texas than just singing a song. This is the first of a series addressing tips for moving the entirety of your business and you into the Lone Star State.
If you intend to continue to conduct business in your home state, you should strongly consider having two separate and distinct entities, books, employees and accounting systems. Generally speaking, it’s easier to start a business in Texas than it is to terminate your business ties in your departing state – together with the on-going payment of all of the departing state’s taxes and fees. You should strongly consider the following:
Uncle Pennybags plans to build a hotel on Marvin Gardens, but to do so, he needs to acquire adjacent properties on Atlantic Avenue, owned by Charles Darrow, and Ventnor Avenue, owned by George Parker. Pennybags knows that if Darrow or Parker knew of his plans, they would demand a higher price for their properties and a still higher price would be demanded by the last lot owner to sell. So Pennybags forms a dummy company called Acme Acquisitions, LLC and appoints his good friend, Lizzie Magie, as its president. Magie approaches Darrow and Parker, who both agree to sell their properties to Acme Acquisitions on favorable terms. After the contracts have been signed, Pennybags announces that he is the true purchaser and that he plans to build his hotel. Furious, Darrow and Parker refuse to consummate the transaction, so Pennybags sues. Are Darrow and Parker out of luck? Continue Reading Using a Dummy Company Can Be a Smart Business Decision
Eager to spark the socialist revolution, left-wing activists seized Ramsett Park and the surrounding area and declared an independent autonomous community dedicated to social and economic justice. The activists threw up barricades and excluded both the police and the “bourgeoisie” owners of businesses surrounding the park. Fearing a primary challenge, Mayor Gunderson ordered the police to withdraw from the area except for life-or-death situations. As days turned into weeks, the area reverted to a Hobbesian state, with violence increasing and refuge accumulating in the street. Mayor Gunderson belatedly ordered the area cleared. When the business owners returned, they found their buildings vandalized and their property stolen or destroyed. They look to hold someone responsible. But the activists have disappeared, and, in any event, hippies are notoriously judgment proof. Can Mayor Gunderson and the City be held liable for not enforcing the law? Continue Reading Dereliction of Duty: Can Local Governments Be Liable for Not Protecting Property from Protestors?
Ernest “Big Daddy” Bux’s great Auntie Heidi Loper moved to a retirement community when her husband Sam retired years go. A short time later, Sam died. Over the years Heidi’s handyman Don Meetdirts and his wife Ada befriended Heidi. They persuaded her to leave them millions of dollars in cash and other items. Prior Wills would have left Heidi’s property to her family of whom she was very proud – both of the Bux family name and of the assets she and Sam had acquired. When the Wills were changed, Heidi had failing eyesight, deteriorating health and a delicate mental condition. When Big Daddy and the Bux family learned at Auntie Loper’s death that the Meetdirts were the only beneficiaries under the last Will, they asked their favorite attorney if they have a claim of undue influence to deny the Meetdirts any inheritance. Do they? Continue Reading Grandma Left the Money to Whom? Legal Options for Undue Influence and Changing of Wills
Cookie Bux has two elementary age children, Kitten and Jeff who really want to go Trick-or-Treating this Halloween. In fact, Jeff has been wearing his Star Wars Stormtrooper costume around the house since September. Can Kitten and Jeff Trick-or-Treat this year?