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Snehal B Patil
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Snehal Patil’s Answers

6 total

  • When buying a small business can I be held liable for a previous owner if I'm just purchasing the assets?

    Unincorporated business no property name of business will be changed

    Snehal’s Answer

    Typically in an 'asset purchase', most agreements will specifically exclude all liabilities except for specific liabilities that the buyer expressly assumes and are listed in the agreement. The agreement needs to be clearly drafted by experienced counsel which is typically done after due diligence on the target company (i.e., the company being purchased). Please consult an attorney for further guidance.

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  • Non resident Indian whether can open Company in NY and start trading business?

    Whether to open LLC or "Corp" for doing business in NY. Also whether this company can imports goods and make sale in NY? Is their any member or partner has to be a US citizen or resident to open the company?

    Snehal’s Answer

    Generally, non-resident Indians may open companies but whether or not they could earn any income from such companies is primarily driven by immigration and residency status of the individuals associated with it and, of course, tax consequences if you plan to engage in cross-border activities. LLC may be a better fit than a corporation. U.S. citizenship is not necessary unless you are trading in specific goods but it is useful to have a resident individual as a partner who could serve as your U.S. head of operations, particularly if you plan to handle the operations remotely from outside of the U.S. You will need to speak with an attorney to discuss further. Feel free to reach out if we could be of assistance.

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  • Multiple businesses under one sole proprietorship registration in Contra Costa County - is it possible?

    Greetings to all, I am interested in setting up a sole proprietorship in Contra Costa County (using a DBA registration) and within that registration, have two separate businesses (using DBA registrations for each as well). While different...

    Snehal’s Answer

    As pointed by my fellow lawyers, while you can register two separate DBAs for doing businesses, they are nothing but an extension of your 'personal' self, i.e., instead of choosing to do business in your personal name, you coined a 'fictitious name' (e.g., a brand name) to do business. By doing so, you are not creating any new 'structure' or entity. Note that, a sole proprietorship per se does not need to be 'set up' or 'registered'. Also, generally, an LLC would be a better fit than a sole proprietorship for liability reasons, but it is hard to say in a vacuum without knowing all facts. It is best you consult a lawyer to discuss further.

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  • Can a DBA under a corporation have its own bank account and accounting?

    I'm trying to find a way to use a liquor license that is held by a corporation with a DBA that I will run and the President of the corporation will have no role in. I just want to be able have a separate bank account and accounting so as to not be...

    Snehal’s Answer

    Yes, it is possible to open a separate bank account for a DBA so long as you register the DBA with the local county and provide that paperwork to the bank. Your accountant should be able to set up separate books for the DBA. However, please note that a DBA does not have separate legal existence and the corporation's president and board will have control and would be able to direct the activities of the DBA. You should think through the practical issues in running and operating the liquor license/store separately from the corporation, which should all be agreed upon by the corporation's management and preferably documented in writing. Do consult with an attorney as there are several issues to be considered.

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  • I'm interested in starting an annual film festival in WA. Would it be better to start a non-profit or an LLC?

    I've read the general overview of non-profits vs. LLC and it appears a film festival could go either way since it would be an arts program that would be available to public. I'm concerned with how complicated start-up and maintenance is, especiall...

    Snehal’s Answer

    Generally, LLCs are easier and less costly to form and maintain than corporations. However, a non-profit may be more useful as you may derive some financial and logistical benefits; for instance, some locations/theaters may be more keen to allow a newly set up organization to display films if it is a non-profit than an LLC; also, patrons, volunteers and artists may enthusiastically support non-profits more than LLCs. That said, you should first take some time to think through the long-term scenarios, including how you plan to grow the organization, and also see if there are any local concessions for non-profits that you may not be aware. This should all be captured in at least a rough business plan. You should then consult an attorney and/or accountant to understand the legal and tax pros and cons based on your specific situation. It is important to choose the correct corporate structure at the outset as any restructuring at a later stage is time-consuming and expensive, and in some cases, may not be possible. I represent both an LLC and another non-profit in the Bay Area in a similar space, and both structures are generally fine from a long term perspective. Selection of one entity type over another is mostly driven by facts and issues that are unique to each client.

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  • What corporate records do I need to maintain when running a C corporation?

    Such records need to be in physical folder or can be electronic?

    Snehal’s Answer

    • Selected as best answer

    At a minimum, you should maintain filed/signed copies of your Certificate/Articles of Incorporation, Bylaws, incorporator action (if any), all Board and shareholder meeting minutes to date, stock ledger, other state qualification documentation, EIN application and allotment, and copies of all annual corporate filings. It is also a good corporate practice to maintain copies of all stock purchase agreements, equity and debt round documentation (if any), financial and tax documents and other corporate agreements. Electronic copies are typically fine and often times helpful, particularly if investors or other third parties want to undertake due diligence of your corporate documents. That said, you should maintain a complete physical set at the principal executive office, which must be available for inspection during normal business hours.

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