Published on October 3
Owners of companies are always looking for creative ways to compensate and retain essential employees, while simultaneously retaining complete control and ownership.
Phantom stock, sometimes referred to as “shadow stock”, is a fairly popular mechanism to tie compensation for employees to the financial performance of a company. It is a company’s promise to pay an employee an amount equal to the value or increase in value of a certain number of shares of the company’s stock without actually giving the employee any company stock.
By allowing employees to participate in the …
Added in Featured, Helpful Business Info, Hot News
Published on January 11
Expenses incurred entertaining customers, clients, and employees are often deductible under 26 U.S.C. § 274. Because the rules are quite detailed and contain a collection of exceptions and specific treatments of specific forms of entertainment, including foreign travel, conventions, and cruises, it is particularly important that taxpayers consult with a reputable lawyer or accountant to insure compliance.
Deductible Entertainment
Entertainment is defined by the IRS as any activity that provides amusement or recreation. Entertainment can also include meals. Expenses related to the entertainment such as taxes, tip, cover charge, parking, or room rental fees also qualify as part of the cost of …
Added in Employment, Helpful Business Info, Taxation
Published on January 11
A fraudulent conveyance, also called a fraudulent transfer, is a transaction where one party (“Transferor”) gives or sells for less than full value an asset to another party (“Transferee”), leaving the Transferor without sufficient assets to pay his obligations. An example of a fraudulent transfer is an individual gift all his assets to a close friend in order not to pay his debts. Although historically a fraudulent transfer required a transfer to be made in bad faith, under modern law a good-faith transfer can still constitute a fraudulent conveyance. Simply put, a transaction …
Added in Business Disputes, Helpful Business Info, Real Estate
Published on January 11
What is Insider Trading?
Insider trading is the trading of a corporation’s securities, such as stock, bonds, or stock options, by people who have access to non-public information about the company. Although generally thought of as criminal, certain types of insider trading are completely legal and in fact common. The Securities and Exchange Commission (“SEC”) is the government entity in charge of policing and prosecuting illegal acts of insider trading as well as creating rules to clarify what conduct is prohibited.
An “insider” is a person with access to “material” inside information – information that might affect the company’s stock price and/or …
Added in Banking & Finance, Helpful Business Info, US Laws
Published on January 7
What is the Sarbanes-Oxley Act?
The Sarbanes-Oxley Act of 2002, also known as “SOA” or “SOX” is a congressional act with established a series of laws aimed at improving corporate governance, reducing corporate fraud, and eliminating deceptive accounting practice. The main provisions of Sarbanes-Oxley can be divided into three categories:
Accounting Oversight: One of the primary reforms of Sarbanes-Oxley was the creation of the Public Company Accounting Oversight Board.
Corporate Governance Reforms: Sarbanes-Oxley includes a series of reforms …
Added in Corporations, Large Corporation, US Laws
Published on January 7
Any business that owns real estate of any kind can be faced with the issue of whether or not the business is liable for injuries a person receives while on the business’ property. Although most business owners think of premises liability primarily in the context of a “slip and fall” injury to a potential customer, premises liability is much broader. Understanding what injuries a business will be held liable for is a crucial step in not only determining how much to spend protecting against possible injuries, but in determining the appropriate amount of liability insurance.
What Injuries Can a Business Be …
Added in Business Insurance, Helpful Business Info, Real Estate
Published on January 7
Any business that produces a physical product faces potential liability if the product turns out to be defective. Additionally, any business that uses a defective product may have a cause of action against the producer and/or seller of the defective product. Suits to recover damages resulting from defective products are collectively referred to as “products liability lawsuits.” Although products liability is governed by state law, state law in this area is fairly uniform, so whether or not liability exists is unlikely to vary from state to state.
In order for a manufacturer to be held liable for damages, a plaintiff must …
Added in Business Disputes, Helpful Business Info
Published on January 7
Sales warranties are guarantees that sellers make to people who purchase goods from them. The sales warranty rules apply only to the sale of “goods,” that is, tangible items. Sales warranties do not apply to sales of services or property. Although most people think of warranties as explicitly stated promises, which the law calls “express warranties,” there are also a collection of “implied warranties” which the law assumes are part of all agreements.
A seller who breaches a sales warranty is considered to be in breach of the sales contract. This is the case even if no formal sales contract is …
Added in Helpful Business Info
Published on January 7
In certain situations, shareholders may find it advantageous to enter into agreements with other shareholders regarding how the company should be run or who will run the company. These agreements, known as “shareholder agreements” or sometimes “vote pooling agreements” or “block voting arrangements” are generally permissible and can pertain to a variety of topics. The specific rules governing shareholder agreements varies from state to state, however most states follow some version of the Revised Model Business Corporation Act (“RMBCA”). Section 7 of the RMBCA states the rules regarding shareholder agreements.
The most common types of shareholder agreements are:
Voting …
Added in Business Entities, Corporations, Helpful Business Info, Large Corporation
Published on January 7
Generally Arbitration Agreements Are Enforceable
When faced with the question of whether or not to enforce an agreement to arbitrate, American courts routinely uphold the vast majority of arbitration clauses. The legal basis for upholding contractual arbitration clauses is the Federal Arbitration Act, which mandates that arbitration agreements “shall be valid, irrevocable, and enforceable.” In Southland Corp. v. Keating, the Supreme Court of the United States held that if the agreement involves any element of interstate commerce, the Federal Arbitration Act applies to both federal and state courts.
If an arbitration agreement deals purely with an issue of intrastate …
Added in Business Disputes, Helpful Business Info
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