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Kenneth Allyn Sprang
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Kenneth Sprang’s Answers

778 total


  • Amending incorporation document to increase shares from 1000 to 15M, how to issue to founders?

    We are two co-founders, formed a Delaware C-Corp in Feb 2015, established with 1000 shares at no par value, Ownership is divided 60-40 between the co-founders, we then filed an amendment & increased the shares to 15M at 0.0001 par value (we didn...

    Kenneth’s Answer

    You may be putting the cart before the horse here. Why have you gone to 15 million shares with no investors on hand. If you get outside investors they will be clear what they want. If your shares are truly worth $0, you might be able to do a rather exotic stock split and give yourselves the 12 million shares. I am also wondering whether you have proper bylaws, etc. and whether directors have been properly elected and shares properly issued.

    My partner and I do a good deal of this kind of work and much of it in Delaware. To be helpful I would want a great deal more information, including the nature of your business, the product or service to be sold, and whether you have the requisite business plan and financials for outside investors. I am also wondering why you have chosen a C corp rather than making an S corp election, unless you know you are going to have institutional investors in short order.

    You are in an arena where you could shoot yourselves in the foot and raise questions in the minds of investors absent your retaining counsel to make sure all is in order.

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  • Sole Proprietorship which visa could you request

    I would like to open my own business via a Sole Proprietorship and therefore being able to stay in the USA. Which visa can I apply for ? E1 E2? Would the Sole Proprietorship be enough to have the visa granted? Thank you

    Kenneth’s Answer

    I fear you are going to find it much more difficult than you anticipate. If you establish a U.S. company you would not automatically get a visa. I suggest that you contact the U.S. UCSIS, the immigration office to inquire about the requirements for a U.S. visa.

    Good luck.

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  • I'm passionate and highly driven to start a business. No clue where to start.

    I'm divorced and he stole my assets. I'm broke but, my eagerness to learn, passion and drive keep me going.

    Kenneth’s Answer

    There are innumerable ways to answer this question. Of course, it is best to have an idea of what you want to do and what you think you can do to start. Then I would explore whether Houston has one or more business incubators. Also consider calling the federal Small Business Administration (SBA). One could discuss LLC's, corporations and the like, but I think that is putting the cart before the horse. Franchises are often an option but they usually require a lot of money up front. I would suggest that you start by reaching out to free local or government resources.

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  • Moving LLC from one state to another - NY to NC.

    I own a LLC in new york state (singe owner, and no employees). I work out of home, and provide IT services consulting to clients. I am relocating to North Carolina. I will not be continuiing to do any business in NY anymore, so i need to move the ...

    Kenneth’s Answer

    In some states redomiciling your company is easy, but New York does not make it as easy as other states to make the move. In order to dissolve your NY company you will have to get consent from tax authority to confirm all taxes are paid. Then you an dissolve. If the same EIN does not matter, it might be easiest to have the NC company purchase assets of the NY company. I suspect NC regulation may be simpler as well--New York is not always the easiest place to be organized.

    As others have said, you can keep your NY LLC, but would then you would still have to register as a foreign company in NC and pay NC fees.

    You do not have to create an enterprise in NC--the question is both the cost of registration in both state

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  • 2 year non competitive agreement while employed. Could be dismiss if the employee is no longer employed?

    The contract reads: "The Client agrees not to solicit or hire any of (company name) employees for a period of two years after termination regardless of cause" If I am not longer employed by this company and the Client decides to hire me after thei...

    Kenneth’s Answer

    If I understand correctly, you were employed by Company ABC. It has a contract with Client, and the contract between the two companies contains the clause your wrote her. Your question is whether Client can hire you after the contract runs out. The answer is "it depends." Non compete agreements are not favored by courts. If you create your own company and Client hires your company, you are more likely than not safe, as the clause will be interpreted very narrowly, and companies owned by employes are not included. Further there is some doubt in my mind whether the clause is enforceable.

    The clause required consideration, e.g., payment to be valid. If the contract between Client and Company ABC provided consideration, then the clause may be enforceable against Client, if Company ABC wants to do that. On the other hand, you have no prohibition against working for Client, and I question whether the courts will enforce the clause when it disadvantages you.

    In sum, I think if Client engages your LLC or the like (and I suggest you use a name far removed from your own) you may be reasonably insulated from Company ABC. If Client hires you directly the question is (1) is the clause enforceable and (2) will Company ABC spend the money to enforce.

    Of course, Client and Company ABC could agree to allow Client to hire you.

    One final note. Florida has recently often treated single member LLCs as if they were individuals and not LLCs. Usually this has had to do with debt and not hiring, so it may not be a problem for you. However, if a Florida court said your LLC was really just you, you might run into problems. Of course, if you are married, your spouse could control the LLC for a time or a trusted relative. That is if your relative owns the new LLC or at least controls it and you are employed by the LLC, I don't think the non compete gets to you because it is not specific and the clauses are disfavored.

    Good luck,

    Ken

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  • Giving percentage of my LLC but not the income generated by the rental.

    I have three rental properties owned by my LLCs. Can I give interest of my LLCs to my family, but not the income generated by the rentals? I want my family to become members of my LLCs but not receive any economic interest until I die. I need my ...

    Kenneth’s Answer

    My first question would be why do you want an owner to have equity and no income--is that the best way to accomplish your goal. Assuming it is, you can do what you wish. One of the unique things about an LLC is that earnings do not have to be distributed equally to members. However, remember that this member will be taxed on his share of the income, whether he gets any money or not. In light of that I would urge you to distribute to him at least enough to pay the tax that will be assessed.

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  • A French business owes money to my American business in DC, a French local court lets him get away with it, can I sue in the US?

    I'm wondering if I can sue in the USA based on additional documents, proof that he didn't do what he was supposed to do and off course, similar documents that were used in France in the first court day. I can appeal in France and I'll do it, but I...

    Kenneth’s Answer

    The question in my mind is whether a U.S. court is bound by the French judgment. If you could provide more information off line, e.g., the issue, the amount involved, the local court in France, etc., I can contact my French colleague and perhaps get insight from there. Beyond that, unless someone on the list knows for certain, I would want to take a look at the standing of French judgments here. I highly doubt that they can simply be ignored. Of course the bottom line as well is whether there is enough money involved to merit all the litigation.

    Best regards,

    Ken
    ksprang@wibclaw.com

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  • Peer Review

    Is there an attorney "peer review" website?

    Kenneth’s Answer

    Historical Martindale Hubbell has been the primary source for ratings, though now there is AVVO and a few others. Martindale Hubbell is strictly peer review, whereas Avvo and others include client reviews as well.

    Do not hesitate to Google an attorney name. If he or she has been involved in something inappropriate you might find information on Google.

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  • I am starting a court reporting business with one partner. Would it be wise to form this as a corporation or LLC

    One partner with 50/51 so we can get women's business owner status. Not sure if we should form a corp or LLC

    Kenneth’s Answer

    If you are going to remain a two person company you will likely find the LLC the better choice. In New York you will have to publish the creation of the LLC which can be costly, but there is a mechanism for reducing costs exponentially. If you opt on the LLC you should probably consider electing taxation as an S corp, barring any impediment. That creates some tax advantages.

    You could also operate an S corp--definitely not a "C" corp. The S passes profits and losses to the owners while the C pays taxes then distributes to the owners who pay taxes again.

    I like corporations for governance purposes, but with just two owners you are likely well served by the LLC. Of course if expansion is your goal, you may need to consider corporate status.

    Best regards,

    Ken Sprang

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  • Preparing to complete my first deal as an international trade broker. Is there an AFFORDABLE attorney in Michigan?

    Can someone recommend an AFFORDABLE Import/Export attorney in the Metro Detroit area?

    Kenneth’s Answer

    • Selected as best answer

    As others have indicated, legal services are not cheap. We are based in Washington, DC, and serve clients all over the U.S. and abroad. Rates at large firms here run from $300 to $1000 or more per hour. However, there are many of us who have left large firms to form smaller ones so we can provide individualized service at lower costs.

    I know starting a business can be costly, but you need to build legal fees into your budget. With attorneys by and large you really do get what you pay for, That investment now will prevent headaches in the future. Not to be rude, but if you cannot afford the legal costs you no t quite read to settle.

    Depending on your needs, I suspect you are looking at $2500 to $10,000. If you can do some investment ow in the legal costs, it will pay dividends in the future. As others have said, though, do seek an attorney who has experience in the araea you need.

    Best of luck,

    Ken

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