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James Crescent MacGillis

James MacGillis’s Answers

8 total

  • I've been misclassified as an independent contractor...

    I work for an LLC company the year of 2013 and every winter season for the past 16years and was always paid in cash because they did not want to do the paperwork. Last year I worked full time and was given a 10-99 and was told I was supposed to pa...

    James’s Answer

    Our law firm is located in Minneapolis, Minnesota and routinely advises employees and employers on independent contractor relationship.

    Your description raises multiple questions, including (i) were you properly classified as an independent contractor? (ii) Should you have previously received a Form 1099? (iii) Did you previously report earned income and pay self-employment tax? "Clearing this matter up," as you write above, would require a careful examination of what has gone on, and why. If you were properly characterized as an independent contractor, then you do, indeed, need to report your income and pay self employment tax. If you were misclassified, the company may have liability. This is a matter for which you should definitely consult an employment attorney.

    James C. MacGillis, Attorney
    8000 Flour Exchange Building
    310 Fourth Avenue South
    Minneapolis, MN 55415
    Direct: 612.455.0503
    Fax: 612.455.0501
    Cell: 612.702.3665

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  • I am interested in legal help when I buy a franchise.

    Typical how many hours of attorney time is needed to review documents? I understand FDDs varies from one company to another.

    James’s Answer

    I don't think any attorney can provide a solid estimate without understanding the type of franchise you are purchasing, and the scope of documentation. For example, are their real estate leasing issues? That will add time to the project. Is the franchise "new" or something like McDonalds that has been around for a long time? This will likely impact review time.

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  • Questing regarding a business loan and collateral.

    Assuming the cost of business is 500K, I have half that as cash and need a loan for the other half. Can I use the business I buy as collateral and get the loan? I am trying to avoid using my 401K or house as collateral to protect myself in case ...

    James’s Answer

    The answer is "yes," though it depends on the type of business. Lenders vary on whether they will be sufficiently secure. An equipment-heavy business, or one in which "the business" consists of real estate, will be more secure for a lender than one in which you are purchasing and pledging good will. Bottom line: it is the lender that will accept or decline to fund your purchase based on your financials, collateral, and other considerations. Find a lender you can work with that understands your business.

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  • Is there anyway to get out of a non compete agreement?

    I am a hairstylist leaving my current salon for another salon. Upon accepting employment at my current salon I signed a no compete agreement saying I could not work in another salon with in 5 miles for 6 months after leaving my current job. Is the...

    James’s Answer

    Non-compete agreements are frequently enforced by Minnesota courts. A reviewing court will enforce a non-compete (assuming entered into lawfully) that serves a legitimate employer interest, and is limited in duration and scope. One can "get out" of a non-compete by having a valid defense, based on the standard I just described. Alternately, it is possible at times to buy-out the non-compete, or otherwise negotiate a release. Most employers, however, are very unwilling to do so unless there is a question about the non-compete's enforceability. If you violate the non-compete, the former employer could initiate a lawsuit, and might seek a temporary injunction to restrict you from working for the new employer. You should carefully review your agreement, as many agreements contain provisions requiring you to pay your employer's fees and costs in such case.

    This reply does not establish an attorney-client relationship, and is for educational purposes only.

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  • I am an employee of company "A" and currently work for end client "C" through a middle vendor/company "B". Can I join the C ?

    Here is my non-compete clause. NON-COMPETE CLAUSE : During the period of two years following the termination of your employment for whatever reason(which time period shall be extended by the length of time during which you are in violation of t...

    James’s Answer

    Based only on the non-compete language you provided, I think you have a strong argument that company A cannot enforce the non-compete against you if you join Company C. This assumes that Company C is not a customer of Company A. But, only by analyzing the complete document, and making a broader inquiry about your work, the relationship between A and B, and any agreements you have with B, would any lawyer be able to give a more definite opinion. I recommend you confer with an attorney before making the jump from A to C.

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  • Mn non compete

    if i did not sign a non compete on my first day of employment is it still valid?

    James’s Answer

    Perhaps. In Minnesota, a non-compete passes one initial test of enforceability if provided to a job applicant as part of the job offer, and if executed on or before the first day of employment. If you did not sign on or before the first day, it may still be enforceable under a number of theories. First, if the employer offered you real consideration (something of value) for your agreement, then the non-compete may be enforceable. Second, if after signing the non-compete you received real value for doing so (e.g., a raise, access to confidential information, a promotion dependent on execution of agreement), then it also may be enforceable.

    There are many nuances to the enforceability of non-compete agreements. I recommend you contact a Minnesota lawyer.

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  • I filed an LLC w/ state of MN with a partner but we have not opened the business yet. Can I remove her?

    We have articles of Corp. and a Tax ID. The business is a retail store that hasn't opened yet and has no assets. I have done all the work so far and today she informed me that she would not be doing much in the future. I would like to pursue fina...

    James’s Answer

    Not likely if you were both involved in creating LLC. If you and your "partner" are both organizers of the LLC, but no Board of Governors has been named (or other managerial structure), then you and she would need to agree that she would not become a member. If the organizers named a Board of Governors, but no membership units have been sold, the Board may elect not to sell any units to the prospective partner (note, however, this may breach a contract you have if agreement was reached on this point). If membership units have been issued, you cannot simply remove the member in the absence of a buy-sell agreement or other contractual basis to do so. Since you have not even opened the business, I recommend you seek to document in writing that you and this person do not wish to associate together in business.

    I recommend you speak to an attorney regarding this matter.

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  • What is the procedure to going out of business? Do we have to bankrupt the LLC?

    We have an LLC that has gone out of business. We never made a profit and have no assets. What is the lawful process we have to go through? Is bankruptcy a must ? Our main concern is our business bank account, the merchant service whom we have ...

    James’s Answer

    You have asked multiple questions, and your questions raise a number of issues. While I cannot opine as to Washington law, and recommend you contact a Washington-licensed attorney to finalize your dissolution, I advise as follows:

    First, a business bankruptcy is certainly not a "must." Unless you intend to reorganize the business such that creditors will all receive some portion of the obligations owed to them, it is unlikely there is any great advantage to a business bankruptcy.

    Second, if you have personal liability on account of guarantees (letter of credit, loan, real estate lease, etc.), then you my find personal bankruptcy an appropriate option. With hope, you have no or limited personal guarantees.

    Third, you ought formally dissolve your LLC by following state statute. Typically a notice of some type is published and/or provided to all creditors. Depending on the state, you often file Articles of Dissolution after some waiting period. As state law varies on how and when the dissolution is complete, you should consult with a local attorney.

    Fourth, you will need to follow state law in distributing any assets. You indicate there are none. If assets were available, they MUST be used to satisfy creditors before being distributed to members.

    Fifth, you should file a file tax return. Discuss this step with an accountant familiar with business and LLC tax matters.

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