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Markus May
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Markus May’s Answers

94 total


  • Does he need a trademark/business attorney?

    My father has started his own business and I want to make sure he is protected legally. He has a partner that I feel may be taking advantage of him since he has not shown him any type of business papers or contracts between them. My father was the...

    Markus’s Answer

    If it truly is a partnership and not a corporation or LLC, that should also be fixed. Suggest your father sit down and explain the entire situation and what he thinks it should be like. He should also bring all supporting documentation to the meeting. Then the attorney can recommend a course of action. Possibly setting up a new entity and having an ownership agreement with the other "partner" in addition to the other things noted above.

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  • Refund for garage sale item?

    I sold a car dvd player for $25 at garage sale. The gentleman who bought it came back 3 days later wanting his money back saying it didn't work. It was used 3 times for 3 trips and worked beautifully, last trip being 2 years ago. Am I required ...

    Markus’s Answer

    Legally, possibly not as it was probably sold "as is" at a garage sale and you may not qualify as a merchant dealing in those good so an implied warranty of fitness for a particular purpose probably doesn't apply. But 2 things. (1) if someone sold you something that didn't work, would you want your money back? Of course you would and you have returned things to the store for this reason. So morally, just take it back and pay the $25; and (2) he knows where you live - if he eggs your car or puts a stone through the window, it will cost more than $25. Him suing? Doubtful....

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  • Help in filing a S Corp in Illinois regarding "Stock" section.

    I am creating a S corp with my husband. We don't know what to enter in the section "Stock", Number of shares authorized, share proposed, consideration to be received. We won't have any employee, so it will be only the two of us.

    Markus’s Answer

    If you create an S corp you will need to meet the corporate formalities to avoid possibly losing any liability protection. You clearly don't know what these are and would be unlikely to actually issue the stock, create bylaws, hold annual meetings etc. So why not set up an LLC that doesn't need to do all those things? The LLC can elect to be taxed as an S corp if you are doing this in order to try to save on FICA and medicare tax by paying a "reasonable" salary and taking the rest out as an owner distribution. Note you will need to file an extra tax return for the entity and will be limited on your own retirement contributions to 25% of that "reasonable" salary. . For S corps there is an Illinois replacement tax. And don't just start this with $1,000 of initial capitalization. That is a "flimsy" amount and may lead to losing your personal liability protection as well if the company is ever sued. Probably would be worth your time to pay an attorney for an hour of time to explain all these sorts of things to you.

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  • How can I get a lawyer's opinion on a two page written business contract?

    I would like to share a business address with someone who has already got one. So, I drafted a two page contract for her to sign as a proof of her agreement to let me use her business address as well.

    Markus’s Answer

    Sounds like a lease or sub-lease to me. If a sub-lease, make sure the original lease allows it. If a lease, make sure you have good tenant lease protections including length of lease and amount owed.

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  • If I convert an LLC from the state of IL to The state of CA what procedure do I have to get done in the state of IL?

    I am moving my IL LLC and convert it to the State of California. I have sent in the application forms requested by the state of CA, however they do not mention anything about IL. 1) What should I do with IL , can you be specifi...

    Markus’s Answer

    If you are really trying to "convert" it into a CA entity as opposed to just doing business in CA, then you will likely need to do a merger of your current entity into the CA entity. Not sure that is what you are really interested in doing. Suggest you hire a CA attorney if you want to do that. If you are just doing business in CA and keeping the IL LLC as the entity that is doing that business, you can do that. Note if you are moving to CA and are the registered agent, you will need a new registered agent in IL. Of course you will also be paying fees to both states.

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  • Open a new business in Illinois

    I want to start a business in Illinois, and I want to open a company for this purpose. Can I put my Business activity more than one activity? or it has to be one business activity regarding to the NAICS?

    Markus’s Answer

    Most businesses are formed with the standard general purpose clause that appears on the Articles of Incorporation or Articles of Organization. Under a general purpose clause, you can engage in multiple types of business activities. It does not need to be a single business activity. Note there are times when you will want to limit the purpose.

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  • I want to know where to incorporate my LLC

    Hi! I'm incorporating an LLC and wish to know which state to incorporate in. This is a purely online retail business in the USA. Products will be sold in all states. The CoOwner and I live in Illinois. We are consider...

    Markus’s Answer

    I would like to know of the tax benefits you mention. I can't think of any. The Delaware and Illinois LLC statutes are pretty similar - Delaware you can waive more fiduciary duties among owners, but I am not sure you want to do that in your situation. You may get better charging order protection in Delaware and that is the main factor you probably would want to look at. You would need to register the LLC in Illinois also as you would be doing business here.

    As to whether you have sufficient contact with the other states to require registration will be fact dependent and the law is constantly changing in that area. Under the Supreme Court's Quill case, merely selling into a state is not enough. But if you do service/support, have in field sales agents, etc. then things get muddy quickly.

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  • Do I need two EIN numbers?

    I am starting a mobile app development company. I know I will need an EIN for the corp, but do I need an EIN for each app developed after that? The apps will collect income through advertisements. Will one EIN number cover all of the apps we ma...

    Markus’s Answer

    The EIN is the tax ID number for the company you are forming. Unless you create a separate company for a separate app, you won't need a new EIN. It might make sense to sit down with a good business attorney for an hour or two to learn how to properly operate the company. You indicated it is a corporation, so it will need bylaws, shareholder meetings, board of director meetings, and stock issued. You will need to do annual meetings. If you have more than one owner you will likely want a shareholders' agreement. And you will want to make sure you run the company separately from the owners to avoid piercing the corporate veil liability.

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  • How to Calculate Fair Market Value of Shares?

    Due to other commitments, I am planning to step-down as shareholder of two corporations which I co-founded. I have 24.5% and 33.3% of Class A shares in the two corporations. Is there a formula as to how to calculate the value of my shares when I r...

    Markus’s Answer

    • Selected as best answer

    You may be able to resign as a director, but not as a shareholder. You may or may not have a right to demand you get bought out. Get a copy of your shareholders' agreement if there is one. It may specify the valuation technique to be used. It may also address whether you have the right to be bought out If you don't have a shareholder's agreement, then review the corporate code of the state where you are formed to determine if you have any rights to demand a buy-out. If the other owners or the corporation are willing to buy you out, then getting a decent valuation and biting the bullet yourself may make a lot of sense depending on the value of the company. Assuming your co-owners/company are as hesitant as yourself to spend money, they may just accept the valuation report you provide. Then the amount you spent could be well worth it. If you are getting a valuator involved, try to get a number of quotes and find out what they will do. Note you will need to provide them with probably the last 3 years of financials and YTD and tax returns.

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  • I am a partner in an S corporation. I receive a K-1 every year but I have not received any cash for the last three years.

    I have three partners, one of whom is the President, and they both take out the K-1 incomes in cash, but because we had a dispute, they are punishing me by only sending K-1's but no cash. This is hurting me because I have to pay taxes on the K-1 i...

    Markus’s Answer

    As this is an S-corporation, if you have a Shareholder's Agreement, see what it provides. In any event, it sounds like you are pretty far down the road as far as the relationship is concerned. I suggest hiring a business litigation attorney that has experience in shareholder disputes. I think you will likely need to threaten or pursue litigation in order to get things changed. If the company isn't (and won't be) worth much, consider just giving the stock back. Not sure if you are performing services for the company, but if so there may be some rights related to that.

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