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Dana Howard Shultz

Dana Shultz’s Answers

4,055 total


  • Can I cancel shares in a S Corp because shareholders never paid for those shares?

    I set up a S Corp with 3 friends last year. Each of us were "issued" 250/1000 shares. However, none of us paid for these shares. My friends decided to pull out from this business and I will take over everything. In terms of the shares, how sho...

    Dana’s Answer

    The facts that you have presented and applicable law appear not to be meshing properly.

    The process by which corporate shares are issued is described in the post at the link provided below. Simplifying for the purposes of this answer:
    - The board authorizes issuance of shares for specified consideration.
    - The consideration is paid.
    - The shares are issued.

    Based on the facts provided, I suspect that none of the foregoing steps was taken - i.e., the shares were never issued, thus there is nothing to cancel.

    You probably can issue shares, now, at a lower per-share price, but a lawyer would need to examine the corporation's formation-related documents to answer with certainty.

    You should retain an experienced business lawyer to help you do things correctly this time.

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  • Hello I have a question about paypal and them holding my funds for 180 days.

    Recently I've been making a bit of money selling items on ebay only to see a week later that paypal has limitied my account and is asking for more personal info such as my ssn and a picture of my passport and many other things. If I don't provide ...

    Dana’s Answer

    It appears that eBay has seen some suspicious activity in your account.

    I suspect that eBay's terms of service permit it to take the actions it is taking, and I doubt that eBay is taking such action merely to abuse you.

    If you want to keep your account, you should cooperate; if you don't cooperate, you will lose your account.

    I don't see that there is much you can do to change the foregoing.

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  • I have started an IT company recently and for now, focusing placement services. When I submit resumes

    (they are not really yet my employees) to vendors who send them to their end clients, how do I ensure they don't steal away the candidates I submit? I recently lost a candidate (that I submitted) when the vendor offered him a better rate.

    Dana’s Answer

    As Attorney Doland noted, this type of issue comes up with some frequency.

    Depending on the context, the relevant business requires a non-solicitation or a non-circumvention provision in its agreements.

    You need to retain an experienced business lawyer to help you address this issue (and others) in your placement agreements.

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  • San Francisco Business License transfer or renewal?

    I am purchasing an existing business in San Francisco. Their business license was recently renewed. Do I need to 1) file for a renewal upon my acquisition of the business (the name of the business stays the same)?; 2) apply for a transfer (which...

    Dana’s Answer

    When the business is sold, the old owner should complete the form at the link provided below, which will deactivate the existing business license.

    That form will identify you as the new owner. You will be required to obtain a new business license.

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  • If the bylaws and the shareholder agreement are in conflict, (CA close corporation) which one takes precedence?

    The bylaws were written and signed in 1978 and the shareholders agreement was prepared and signed in 1985. Not sure if that is relevant.

    Dana’s Answer

    • Selected as best answer

    The answer depends on the subject matter of the conflict.

    For example, it may be possible for the shareholders to amend the bylaws, but a shareholder agreement provision that is in conflict with the bylaws probably would not constitute an amendment and, thus, may be of no force or effect.

    A business lawyer would need to examine the bylaws and the agreement, and all other relevant documents and facts, before rendering an opinion.

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  • What paper needs to be filled out when a person sells his shares of LLC to another member. Who has to be notified?

    If it is a duplex do we have to change deed and how is that done?

    Dana’s Answer

    I worked on a similar matter this morning. I prepared a membership assignment agreement and updated exhibit to the Operating Agreement. Other LLC record-keeping documents must be updated, as well. Typically, no governmental entity need be notified.

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  • Can I register an LLC using my personal DBA in California?

    I have a Registered personal DBA with an EIN, I want to use the DBA to registrant of a new LLC; the reason is that the DBA is known already as a Person doing business. Thanks

    Dana’s Answer

    If I understand correctly, you will be the organizer of the LLC, and you wish to use your fictitious business name, rather than your real name, as the organizer's name.

    I am not aware of any authority that has addressed this issue directly. However:
    - A fictitious business name is registered in, and exists for the purpose of conducting business in, a given county. An LLC is registered with the state, rather than a county, so there would be no reasonable way for anyone reading the Article of Organization to determine that the name of the organizer was fictitious and find out who owns the FBN.
    - Furthermore, the applicable statutes provide a broad definition of a "person" who may be an organizer, but that definition makes no reference to FBNs.

    Accordingly, I believe that it would be inappropriate for an organizer to use his or her fictitious business name in the Articles.

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  • Is it legal for a bank to charge me NSF fee if it was their "monthly service fee" that caused my account to go negative?

    Bank is Citibank and they refuse to refund me for these fees

    Dana’s Answer

    Yes.

    The monthly service fee is owed pursuant to your agreement with the bank. It is your responsibility to ensure that the account has funds sufficient to pay all amounts legitimately charged against the account.

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  • Can a registed trademark owner take the domain name away from another if it is the pural form?

    A friend stole my business model I have been running and launched a website directly competing with me. For example sake: he had upcentsratings.com. I created upcentsrating.com and cloned his website, clearly infringing. upcentsratings.com registe...

    Dana’s Answer

    The facts are a bit confusing, so I will jump to the question at the end.

    It appears the more likely (because it is less expensive) response would be an action under the Uniform Domain Name Dispute Resolution Policy (UDRP) to take the domain from you.

    The UDRP is described in the post at the link provided below. Under the UDRP, the Complainant would be required to prove all of the following:
    (i) The domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights.
    (ii) You have no rights or legitimate interests in respect of the domain name.
    (iii) The domain name has been registered and is being used in bad faith.

    Based on the facts provided, I expect that the Complainant would have a reasonable likelihood of proving the foregoing.

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  • My mother & I started a business in 1999 as "Co Partners". What IS a co partner, and how does Mom retire from the business?

    This is in California. Mom is 91 and would like her name off the business and all accounts. Our bank will not remove her name until we have the correct FBN ( we are structured as co partners) We have been dividing the income and expenses evenly o...

    Dana’s Answer

    By agreeing to share profits, you and your mother formed a partnership.

    If your mother's interest is conveyed to you, either prior to or at her death, then you will, indeed, be a sole proprietor, because a partnership cannot have one partner. (Please see the post at the link below.)

    However, that does not mean you will "have to start all over again". The sole proprietorship simply will be the successor to the partnership and will carry on its business.

    It may be necessary to notify some entities with which you do business about the change once it has occurred. For example, you mentioned a fictitious business name. Once the partnership is about to end, it should file a statement of abandonment for the FBN, and you should apply for the FBN on behalf of your sole proprietorship.

    An experienced business lawyer should be able to help you carry out these tasks properly,

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