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Dana Howard Shultz

Dana Shultz’s Answers

4,098 total

  • General Business Partnership in Ca., Management & Authority:how do you clearly identify the % of and the clarity of management?

    We are a start up Online company that has 3 partners. Originally without any written agreement, it was perceived that the 3 partners acted equally. As we are formally creating a General Business Partnership Agreement, the area on "Management and A...

    Dana’s Answer

    1. As my colleagues have noted, a general partnership is a bad idea because (a) any partner can make commitments that bind all of the partners and (b) each partner has unlimited personal liability for all partnership obligations.

    2. Generally, I recommend that founders talk to an accountant / tax advisor to determine whether a corporation or a limited liability company (LLC) would be more tax-efficient given the founders' personal tax situations and the business's expected financial performance.

    3. However, I see that the Venture Capital practice area has been selected. if you expect to try to raise venture capital, then you should form a corporation, because that is what VCs expect.

    4. You should use Find a Lawyer at the top of the page to locate an experienced business lawyer in your geographic area. You cannot handle this matter properly without professional assistance.

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  • Business Attneys, please is it possible to get an attorney to act as my U.S. helper as I want to launch Kickstarter but no SSN

    Business Attorney, please is it possible to get an attorney to act as my U.S. helper who has a ssn as I want to start Kickstarter but I have no SSN. I will get my LLC registered and I already have a U.S. bank account. I don't mind if we need to us...

    Dana’s Answer

    • Selected as best answer

    I have helped dozens of international clients (without SSN) obtain EINs for their entities formed in the U.S.

    My SSN is *not* required. A detailed description of the process is described in the post at the link provided below.

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  • Foreign national's setting up an LLC here is not easy to obtain a bank account

    I am a foreign national and came here with B1/B2 visa. And I set up an LLC successfully ( I am the 100% member). But when it comes to bank account opening, the bank told me that I need to obtain ITIN from IRS in order to get EIN number from IRS fo...

    Dana’s Answer

    I have helped dozens of international clients (who lack social security numbers) obtain EINs for their businesses (either home-country entities, or newly-formed U.S. entities).

    There is a piece of misinformation that I keep trying to stamp out, but that banks and others who do not know what they are talking about keep spreading.

    As is explained in the blog post at the link provided below, you do NOT need an ITIN to obtain an EIN.

    If you read that post and the other posts to which it is linked, you will have the entire story.

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  • Shareholder and officer and employee in S-Corp, Can I quit employee role and still be compensated for any amount as officer?

    Our small S-Corp revolves around the service that I deliver but I am ready to leave. Many years are invested and I would like to retain shareholder/officer status but relinquish employee "job". All things point to fellow shareholders not being ...

    Dana’s Answer

    As my colleagues have noted, a business lawyer would need to examine all relevant facts and corporate documents to provide a definitive answer.

    That said:
    - Assuming there is no employment agreement, you may terminate your employment at any time for any reason.
    - Generally, officers serve at the pleasure of the board of directors. If you do not control the board, then you do not control whether you will remain as an officer.
    - This appears to be a situation where the parties should be able to negotiate a reasonable accommodation that is in the best interests of the corporation.
    - You should retain an experienced business lawyer to advise you.

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  • When must a California corporation publish notice of dissolution in a newspaper?

    Close corporation involved in the dissolution process. Two shareholders, not too many creditors. There is a pending court action for involuntary dissolution by shareholder and also claims for fraud and conversion of corporation funds against sha...

    Dana’s Answer

    Generally, in a voluntary dissolution *without* court approval, all creditors and claimants should be notified individually (rather than by publication) as soon as a majority the shares have approved winding up and dissolution.

    However, if voluntary dissolution is occurring under court supervision, the court presumably will order publication in accordance with the Corporations Code section at the link provided below and will order that a copy of the published notice be sent to each creditor and claimant.

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  • Does a Nevada corporation that is an internet based business have to register in CA as a foreign company if I live in CA?

    I am a resident of California. I am looking to start a new online internet based service for a virtual product. I was looking into starting the business as a Nevada corporation for the tax benefits and other benefits I have read about. The serve...

    Dana’s Answer

    As discussed in the post at the link provided below, whether a foreign entity must register in California depends on whether it is “entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce”.

    Given that you live in CA:
    - Your entity probably will enter into repeated and successive transactions within the state, thus
    - You might as well form the corporation in CA, because incorporating in NV will incur costs without likely providing any benefits.

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  • What is the best business structure for a small startup with several small investors?

    I am launching a new startup. It is a very small operation to start. I have a few people willing to provide some investment capital in exchange for some ownership stake in the company. I have one or two people that want to invest and actually b...

    Dana’s Answer

    This type of question comes up frequently.

    My typical recommendation: Discuss this issue first with your accountant / tax advisor, who can recommend whether a corporation or limited liability company (LLC) is better given your personal tax situation and the expected financial performance of the company.

    Then you can work with an experienced business lawyer to form that corporation or LLC completely and correctly - which is essential if you are going to have investors.

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  • 2 board members voted in until 2017, 3 assigned to fill vacancies till Jan 2016, how can we replace the assignees?

    Rogue assignee is President, along with VP and Sec - how can the other two remove them or replace them

    Dana’s Answer

    A lawyer would need need to analyze not just the corporation's bylaws, but also the document(s) recording how the three replacement directors were chosen and assigned those positions.

    The limited facts that have been presented suggest that the replacements may not have been done properly, thus those three individuals may not, in fact, be directors!

    You should retain an experienced business lawyer to advise you.

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  • I am considering the purchase of a biz and they require an "earnest money deposit" - it seems this is a non-refundable in CA?

    is an earnest money deposit in CA refundable?

    Dana’s Answer

    I agree with my colleagues:
    - Whether an earnest money deposit is refundable is determined by the relevant agreement, rather than California law.
    - A non-refundable deposit is a bad idea.
    - You should use Find a Lawyer at the top of the page to locate an experienced business lawyer who can help you with this transaction.

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  • When starting a single-person corporation, do I need to issue shares?

    I am starting a small corporate entity, and will be the sole owner and director. I realize there are issues with starting the business with proper capital. Is it necessary to issue shares? Or can I simply deposit funds into the corporate bank acco...

    Dana’s Answer

    If you want to complete the formation process properly then yes, your corporation needs to issue shares - if for no other reason than that the corporation needs to hold annual shareholder meetings (please see the post at the link provided below).

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