Purchased a New Property In Florida? Beware of Solicitations!

blog1

As many of you know, the process of purchasing a new home, or commercial property involves quite a few important documents that you need to be familiar with. Title and Deed documents are given to you by your attorney. Usually, these documents are also accessible online via your county’s property appraiser’s website FOR FREE. In instances where you have purchased a new property, you may receive a letters in the mail that might look like an official county or state document which states that you will need to take additional steps to finalize documentation, or that you will need to order vital documentation that shows ownership of your property.

blog2

This mailing will have your name, parcel number, and property address on it. What Record Transfer Services is doing might not be illegal; however, these services are usually already performed either before or at closing by a title company or real estate attorney. A title search is usually performed by a title company or an attorney, who researches the vested owner, the liens or other judgments on the property, the loans on the property and the property taxes due before the closing is done. If duplicates are needed or documents are misplaced from your records, these documents can usually be found via your county property appraiser’s website or you may contact your real estate attorney.

blog3

Given that the letter includes a deadline for which to request for these documents, it appears to be an official document, however, make special note of the disclaimer in fine print at the bottom of the letter: “This product or service has not been approved, or endorsed by any government…” Generally, if you receive a solicitation asking for more money after your closing, it is not necessary and is rarely legitimate. If you are not sure or you would like more information, contact your Florida Real Estate attorney or title company as soon as possible.

Broward County’s New Recording Procedures

journalsBroward County, Florida, has released a recent update on their new record keeping procedures. Effective January 1, 2015, Broward County will no longer assign Book and Page numbers to the documents being recorded. The new record keeping procedures will be done through an “Instrument Number” which is how the documents will be found if searched in their database. They do make an exception for large format documents. See Broward County’s Memo for further information.

Source: RTT Instrument Number Memo

ATTENTION: NEW FLORIDA SMALL BUSINESSES- BEWARE OF SCAMS!


scam1

A Florida company based out of Tallahassee, Florida, has been attempting to convince new business owners who have recently formed a new corporation or LLC, to send money by exaggerating to be involved in a vital step in the business formation process. This “company” has gone by other aliases such as the “Florida Center of Corporation,” and now currently operates under “United Business Services”

scam3

In the letter it states: “You have one step left to receive your Florida Certificate of Status”, they are instructed to complete their filing by filling out a stub and to “mail back to the corporations center with your payment of $47.00 (some recent mailings have said $47.99 or a similar amount) to complete your articles of organization certificate.” We urge caution because the correspondence is made deceptively like it is coming from a government agency. And note in the image here, that in very fine print, it states that “This is not a government agency.”

 

scam2

We classify this as an inappropriate deception of the Florida Department of State services because the only service United Business Services is providing is to obtain a Certificate of Status (or good standing) from the Secretary of State of Florida.  The state only charges either $8.75 (for an INC) or $5 (for an LLC) for this.  Furthermore, when we checked the address for the company, it came up as an empty office space which is available for rent. The company came up in no searches affiliated with that address, or any other.

 

If you have any questions as to the legitimacy of these letters, do not hesitate to contact your Florida Business Law Attorney as soon as possible.

Maintaining Accurate Records

files

Regardless of the size of a company, whether a small business or a large one, it should comply with its state law record-keeping requirements.

Here is a list of some of the important corporate documents to maintain:

– A copy of the corporation’s articles of incorporation or organization;

– Corporate bylaws or operating agreement;

– Organizational minutes;

– Annual reports;

-Minutes from any shareholder meetings;

-Maintain an updated list of all executives, employees, etc;

-Accurate accounting records; and

-Important Financial statements.

 

For a year-end business check-up, contact your Business Law Attorney today!

Real Estate Investment Tips on Tax-Deferred Exchanges (1031 Exchange)

A tax-deferred exchange is a where property owner trades one or more relinquished properties for one or more replacement properties of “like-kind”. The payment of federal income taxes and some state taxes on the transaction is deferred until a later date, instead of a typical transaction where the property owner pays the taxes on any gain realized from the sale.  The exchange, however, is not tax-free.  When the replacement property is ultimately sold, the deferred gain as well as any additional gain realized is subject to tax.

Section 1031 of the Internal Revenue Code states “that no gain or loss is recognized on the exchange of property held for productive use where the property owner has reinvested the sale proceeds into another property.  For example, if vacant land is exchanged for an apartment building, the taxpayer could not be forced to pay taxes on “paper gain”.  The general guidelines to be met in order to allow the taxpayer to defer all taxable gain are that the value of, equity in, and debt on the replacement property must be equal or greater than the value of the relinquished property.  Also, all of the net proceeds from the sale of relinquished property must be used to acquire the replacement.”

The main reason to exchange property instead of selling is the ability to postpone taxes or potentially eliminate them all together.  That way you are able to use the money saved towards investing in another property, and you receive an interest free loan from the federal government in the amount you would have paid in taxes.

Before considering a tax-deferred exchange, there are a few requirements that allow for this replacement.  First, your property must qualify.  Properties that are specifically excluded are: inventories, stocks, bonds, or notes, properties held primarily for sale, interests in a partnership, certificates of trusts, and choses in action.  Also, both the relinquished and replacement property must be held for productive use in a trade or business investment.  Immediate resales or the taxpayer’s personal residence do not qualify.

Tax Deferred Exchange

For a deferred exchange, the properties must be of “like-kind”.  This means they must both be located in the U.S. and must qualify.  Personal properties must be of like-class.  It is also a basic requirement that the relinquished property must be directly exchanged for the other property and cannot be sold for cash to be used in purchasing the replacement property.

Tax-deferred exchanges can be very beneficial for the taxpayer planning to sell an investment or property.  As long as the IRS guidelines are strictly followed, this method can be used as a wise investment strategy. Avoiding losses potentially as high as 30% due to state and federal taxes means allowing the proceeds to go towards future investments or make improvements to the replacement property. If you are considering a tax-deferred exchange for your property, contact us if you are interested in this type of transaction!

For more information see: http://www.irs.gov/uac/Like-Kind-Exchanges-Under-IRC-Code-Section-1031

A Few Things to Consider When Applying for Small Business Loan

For developing entrepreneurs, one of the most pertinent obstacles encountered when starting a small business is obtaining the funds. Money is always a major concern for those who desire to be successful throughout the ups and downs of business.  When applying for a business loan, there are a few things to consider:

Fitting the Criteria

Depending on which bank you are using to apply for a loan, there are several staple criterion they may consider.  Here are a few things they may look for when reviewing your application for a small business loan:

  1. The purpose behind it.  For a loan guaranteed by the Small Business Administration (“SBA”), this could include how you will use the loan proceeds, the size of the business, and the type of business dealings you will be associated with.  Unsound business practices such as lending, pyramid sales, and gambling will not qualify for a loan in almost all cases.
  2. How able you are to pay back the loan.  Banks strongly prefer that the loan be fully secured, however this may not be a make-or-break factor.  Providing strong collateral through personal and business assets as well as holding personal investments in the business may prove your capacity to return on investment.
  3. Character and experience.  Providing a favorable and stable credit history both personally and within your business may reflect a responsible and accountable attitude.

Providing the Proper Information

There are going to be a least a few necessary documents when going in for a loan.  Although this may vary depending on the bank, obtain these basic documents to be the most prepared:

  1. A clear and detailed business plan.  This may include personal information such as past education, employment, experience, and all other information relevant to your business.
  2. A credit history of all present and previous businesses as well as personal history of all partners.
  3. Financial statements (past, present, and projected). Includes both personal and those of owned and shared businesses.
  4. Projections of income for 1 to up to 5 years.
  5. Personal guarantee of all business owners.
  6. All legal documents pertaining to your business (copies of contracts with third parties, franchise agreements, commercial leases). Gulati Law can help you through this process. 

Begin the Process Wisely

Before going into the bank and asking for a loan, there are a few basic steps to take to educate you on how to go about the process.  This means doing your research.

  1. Choosing which lending institution benefits you the most.  The smaller the business (especially in start-up phase), the less likely a large bank will grant your loan request.  Small businesses tend to be less profitable for them, yet require the same amount of servicing and underwriting.
  2. Speak with other small business owners that you trust.  Chances are many people starting out with their own businesses have gone through the same steps you are now preparing for.  Getting honest advice could prepare you for any unexpected obstacles and lead you in the right direction.
  3. Approach your current lending institution or ones you have worked with in the past.  They may be more willing to work with you one on one and provide helpful tips and information.
  4. Look into local community banks and credit unions.  These smaller lending institutions frequently get overlooked and may offer a better option for your business.
  5. Speak with your legal counsel, they may be able to connect you with resources you were unaware of.

If you have any questions or concerns regarding your start-up business or obtaining a business loan, contact us today we would be happy to help.

Source: Small Business Administration

 

Valuable Tips When Closing on the Sale of Your Business!

Whether you are planning to retire or venture out into a new business project, the sale of your business is a very important stage, just as is the purchase. There are items you must take care of before handing over the keys to your business.

Now that you have decided to take action and proceed with your business closing, it is important that you and your partners decided how you will dissolve the organization.

Here are some simple steps to take and follow when preparing for your business closing:

1. Get Expert Advice.

This sale of your business is a delicate process and it is a good idea to have a knowledgeable attorney and certified public accountant handy. They know the caveats to look for when drafting all closing documents and filing follow up tax forms.

2. File Your Dissolution Documents.

Failing to dissolve your company may cause potential liabilities in the future as far as taxes and filings.

3. Cancel all Registrations, Permits, Licenses and Business Names,

This will protect things like your finances and reputation. This will also depend on whether you, as the Seller, and the Buyer decide to sell the trade name and transfer licenses, etc.

4. Comply with Employment and Labor Laws.

Ensure that you have paid all of employees by their last day of work. Other requirements may require you to pay for unused leave time.

5. Fulfill All Financial Obligations.

Taxes, Yes!! The department of revenue requires proper documentation, when filling tax returns and upon the dissolution of your business.

6. Keep All Of Your Records.

Keep all of your closing documents in a safe place. It is advisable to keep your records for at least three to seven years, depending on your profession.

At Gulati Law, we have handled numerous business closings from restaurants, gas stations, convenience stores, medical centers and much more. If you have any questions or are in need of a Business Closing Attorney we would be happy to help!

Source:

 

Source: SBA Gov

Tampa Business Start-Up Weekend

Attorney Gulati will be serving as a business coach for the Tampa Start-Up weekend. If you have a start-up business idea and are interested in pitching it, we highly recommend you attend this event.

Start-up Weekend is a global grassroots movement of active and empowered entrepreneurs who are learning the basics of founding start-ups and launching successful ventures. It is the largest community of passionate entrepreneurs with over 400 past events in 100 countries around the world in 2011.

All Start-up Weekend events follow the same basic model: anyone is welcome to pitch their start-up idea and receive feedback from their peers. Teams organically form around the top ideas (as determined by popular vote) and then it’s a 54 hour frenzy of business model creation, coding, designing, and market validation. The weekends culminate with presentations in front of local entrepreneurial leaders with another opportunity for critical feedback.

Whether entrepreneurs found companies, find a co-founder, meet someone new, or learn a skill far outside their usual 9-to-5, everyone is guaranteed to leave the event better prepared to navigate the chaotic but fun world of start-ups.

For more information visit: http://tampabay.startupweekend.org/

Florida’s Annual Report Deadline Fast Approaching!

An annual report of a Florida Company is used to update or confirm the Company’s records to the Florida Department of State, Division of Corporations’ records. The data displayed on the entity’s online annual report form is the most current data on file with the Division of Corporations. An annual report must be filed each year for your business entity to maintain an “active status” with the Department of State. The annual report is required whether you need to make changes or not.

The annual report is due by May 1st of each year. A $400 late fee will be imposed on all profit corporations, limited liability companies, limited partnerships, and limited liability limited partnerships which fail to file their annual reports on or before May 1st. Not for profit corporations are not subject to the $400 late fee.

flag

Further, your Company in Florida requires you have a registered agent, which must comply with certain Florida laws. A registered agent can be a person or business entity.  However, a business entity cannot serve as its own registered agent, but an individual or principal associated with the business (i.e., owner, officer, director, member, manager, director, etc.) can serve as the registered agent. Any business entity serving as a registered agent must have an active filing/registration on the records.

If you need help with filing your annual report or are looking for a registered agent for your company, contact us today, we would be happy to help.

Source: Florida Department of State a/k/a Sunbiz

 

Investigating a Franchise Opportunity

Franchise opportunities are a great tool for start-up businesses. For example:

  • Franchises offer industrial growth;
  • You have strong support from the Franchise when problems may arise; and
  • Franchises offer major marketing and advertising within the community.

franchise

Another great thing about a franchise is that they are regulated by the government. Under current federal law franchises have to be registered with the Federal Trade Commission.  A franchise owner has to provide the buyer with detailed information about the business, so the new owner can make a detailed decision about buying the business. Some information in this document may include:

  • A financial statement with relevant information;
  • The costs for starting-up the franchise and the costs of maintaining the franchise;
  • An outline of the franchise opportunities.

However, it usually is the franchisee’s responsibility to do their due diligence on the business.  If you have any questions regarding investing, start-up, due diligence, or termination of a franchise agreement, please contact us today, we will be happy to help.

Please follow this link to read more……

Contact Us Today!

    Gulati Law