Small Businesses

Essential Legal Resources for California Small Businesses & Startups

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Here is our list of the essential legal resources every small business and startup in California should have. This is great information to start and grow your business. These legal resources can help with establishing, growing, and closing out a business as necessary. California Requirements For Forming Your Business California Secretary of State’s Guide to… Read More

Here is our list of the essential legal resources every small business and startup in California should have. This is great information to start and grow your business. These legal resources can help with establishing, growing, and closing out a business as necessary.

California Requirements For Forming Your Business

California Permits for Your Business

  • CalGOLD. Helps you determine what business permits, licenses, and registration requirements are required for your business.
  • California Seller’s Permit. You can read more here, but you need a California seller’s permit if you “[i]ntend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail.” If you do need a California seller’s permit, you can obtain a permit here.
  • California Resale Certificate. Information on why a business might need a California resale certificate can be found here. A form resale certificate can be found here.

SF Requirements For Registering Your Business

  • San Francisco Business Registration Certificate. If you are doing business in San Francisco for more than 7 days a year, you are required to complete an application to obtain a San Francisco Business Registration Certificate within 15 days.
  • San Francisco Fictitious Business Name Statement. If you will conduct business in San Francisco under a name other than your full legal name, the full legal name of a legal entity (such as a corporation), or any name that suggests additional owners, you must file a Fictitious Business Name Statement with the San Francisco County Clerk’s Office. Frequently asked questions about San Francisco Fictitious Business Name Statements can be found here.
  • License 123. License 123 is a free online tool that helps businesses navigate San Francisco’s permitting and licensing requirements.

California Tax Obligations For Your Business

Federal Tax Obligations For Your Business

  • EIN. The online application to obtain an Employer Identification Number (EIN) can be accessed here.

Planning Your Business

ADA Compliance

  • The San Francisco Office Of Small Business has some legal resources available here on ways to bring your business into compliance and to mitigate your risk of a lawsuit.

Financing Resources

Converting Your California Company

  • The California Secretary of State Office’s guide to convert from one type of entity to a different type of entity.

Obligations for Dissolving Your California Businesses

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Buying or Selling a Small Business? Here Are 5 Ways to Assess the Value

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When buying or selling a small business, you want to make sure to assess the value accurately. There are five ways to determine a fair purchase price: 1.  Look At Similar Businesses The least accurate option is to look at similar businesses that are for sale on the Internet. The advantage to this option is… Read More

When buying or selling a small business, you want to make sure to assess the value accurately. There are five ways to determine a fair purchase price:

1.  Look At Similar Businesses

The least accurate option is to look at similar businesses that are for sale on the Internet. The advantage to this option is you can look at similar listings from the convenience of your home whenever you would like.

This is, however, the least accurate option as there can be a wide variety of factors that might make the fair market value of the business you are buying or selling more or less than other listings online.

In addition, the asking price of an Internet listing is often not the ultimate selling price. If you work with a business broker or appraiser, they will have access to comps of the sale of similar businesses both in California and across the country.

2.  Back Of The Napkin Calculation

You can also use a multiplier times the revenue of the business. While this option is also free, it is often not accurate as it does not take into account a variety of factors, such as the projection that the future revenues of the business are moving in or net profits. For example, two businesses in the same industry could have the same sales but one business could net $200,000 a year whereas another business could net $59,000 a year because it has more expenses.

3.  Hire A Business Appraiser to Assess the Value

You can have a certified business appraiser do a very extensive valuation. This is often the most accurate valuation of the business because the business appraiser digs deep on your particular industry, market forces, anticipated future returns and other factors. The drawback is it is also the most expensive option and takes several weeks for the business appraiser to complete. However, at the end of the process you have a detailed report of the fair market value of the business.

4.  Hire A CPA

You can also hire a CPA who specializes in valuation work to review the financials of the business and provide a valuation. This is a less expensive and intrusive option than hiring a business appraiser, but the valuation is also not as detailed. You should ask the CPA how much experience they have doing valuation work and whether they have been certified by the AICPA or the CBV as most have no formal business valuation experience and are not certified to provide valuations.

5.  Work With A Business Broker to Assess the Value

If you are selling a business, you can have a business broker review your business and provide a suggested listing price.

If you are buying a business, a business broker can advise you on whether the listing price is fair or if there are better opportunities on the market.

The advantage: initially, working with a business broker is often free because they are typically only compensated if the sale of the business is completed.

The drawback: if you do not work with a trustworthy business broker who keeps your best interests in mind, they might suggest a listing price that is less than the full fair market value to encourage a quick sale and therefore a quick commission payment.

It is fair to ask the business broker how many sales they have completed and hire one who has completed at least fifty transactions. They are more likely to have the necessary experience and competency to set the value appropriately.

If the broker provides you with a suggested valuation, you should request that they provide you with comparable sales to make sure it is a logical sales price.

Some business brokers are willing to credit the cost of a business valuation by a certified appraiser from their commission if the seller agrees to list the business at the valuation price. For many business owners, this is the best of both worlds as you get a detailed, accurate valuation by a certified business appraiser, but the cost is paid by your business broker.

If you have any questions about buying, selling, or setting the value of a small business, or would like an introduction to a great CPA or business broker to help you value a business, please contact us at (415) 633-6841 or info@bendlawoffice.com.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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The Five Steps To Obtaining A Trademark

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Trademarks are often an important investment in protecting the intellectual property of your business. Obtaining a trademark involves five steps: 1.  Search For Conflicting Trademarks Your first step is to make sure there are no conflicting trademarks. You should search on the United States Patent & Trademark Office’s website to see if there are any… Read More

Trademarks are often an important investment in protecting the intellectual property of your business. Obtaining a trademark involves five steps:

1.  Search For Conflicting Trademarks

Your first step is to make sure there are no conflicting trademarks.

You should search on the United States Patent & Trademark Office’s website to see if there are any conflicting trademarks that have already been registered.

You should then work with an attorney to run a more comprehensive search. Even if a trademark has not been registered, it could still have superior intellectual property rights over your trademark if it was in use first.

Note: if the USPTO rejects your application due to a conflict with an existing mark, it will not refund filing fees.

2.  Date Of First Use

Once you have confirmed there are no conflicting trademarks, you will need to complete a trademark application.

You will need the following two dates to complete the application:

(i)                 Date of First Use of Trademark In Commerce Anywhere.

You will need to include the date you first used the trademark “in commerce anywhere.”

(ii)                Date of First Use in Interstate or Foreign Commerce.

You will also need to include the date you first used the trademark in interstate commerce or commerce with a foreign country.

3.  Trademark “Specimen”

The trademark application also requires a trademark “specimen” – an image showing the trademark being used in commerce in the class of goods or services for which you are applying for the trademark.

4.  Class Of Goods & Services

You will need to select the class of goods or services you would like to register the trademark.

You should be strategic in selecting the class of goods or services to register the trademark, as there is an additional filing fee for each class of goods or services in which you register the trademark.

5.  Contact Address

Finally, you will need to include a contact address for the trademark registration.

It is important to remember that anyone can view this address if they search for the trademark on the U.S. Patent and Trademark Office’s website once the trademark application has been filed.

If you have any questions or would like help obtaining a trademark for your business, please contact us at (415) 633-6841 or info@bendlawoffice.com.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Why We Love Helping Small Business Owners and Startups

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Rose Rose Productions did an amazing job of producing this video on why we love helping small business owners and startups. We are very fortunate to spend our days helping entrepreneurs start and grow their businesses.

Rose Rose Productions did an amazing job of producing this video on why we love helping small business owners and startups.

We are very fortunate to spend our days helping entrepreneurs start and grow their businesses.

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How To Change Your San Francisco Business Address

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If you change your business address in San Francisco, it is important to avoid potential issues. The following checklist is a good starting point for most businesses to make sure you update all of the necessary government agencies and service providers. 1.  California Secretary Of State’s Office You will need to file an updated Statement… Read More

If you change your business address in San Francisco, it is important to avoid potential issues. The following checklist is a good starting point for most businesses to make sure you update all of the necessary government agencies and service providers.

1.  California Secretary Of State’s Office

You will need to file an updated Statement Of Information with the California Secretary Of State’s Office. The filing fee for an LLC is $20 and for a corporation is $25. You can access the forms for online filing here.

2.  IRS Address Change

You will also need to update the IRS by filling out and mailing Form 8822-B or by calling the IRS business hotline at 1-800-829-4933. There is no filing fee.

3. California Franchise Tax Board

You will need to update the California Franchise Tax Board of your company’s new address, which you can do here. There is no filing fee.

4. San Francisco Business Registration Certificate

In addition, you need to update your business account with the city of San Francisco by clicking here. There is no filing fee.

5. Fictitious Business Name Statement

You are required to file a fictitious business name statement if you conduct business in San Francisco under a name other than your full legal name, the legal name of a legal entity, or any name that suggests additional owners. When you change your business address, you are required to file for an updated Fictitious Business Name Statement. The cost of publication varies depending on the newspaper, but the least expensive option we have found is The San Francisco Daily Journal. You can reach The San Francisco Daily Journal by e-mailing Tonya at tonya_peacock@dailyjournal.com.

6. California Department Of Tax And Fee Administration

If your business has a seller’s permit, you will need to update the California Department of Tax and Fee Administration of your company’s new address by filing Form CDTFA-345. If you do not have a seller’s permit, you can read about why you might need one here.

7. Employment Development Department

You will also need to update the Employment Development Department by logging into your account online or asking your payroll service provider to do so. There is no filing fee.

8. Business Service Providers

You should update all of the service providers for your business, such as your bank, insurance carrier, credit card companies, payment processing and other service providers.

9. Business Listings

You should update all of the online business listings for your business, such as Yelp, Facebook business page, and any other applicable listings. Once you think you have covered them all, Google the name of your business to make sure you have not missed any.

10. Registered Agent for Service of Process

If you hired a third party to be your registered agent for service of process, you should update them of your new business address.

11. Subscriptions

Does your business subscribe to any professional journals, magazines, or other subscription services? If so, be sure to update those as well.

12. U.S. Postal Service

Last but not least, you should file a change of address form with the United States’ Postal Service, which you can find here.

For many companies these are the steps necessary to change your business address in San Francisco, but please contact us at (415) 633-6841 or info@bendlawoffice.com to make sure no additional steps are required as each situation is unique.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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How To Dissolve A Delaware Corporation Registered In California

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So your company’s life has come to an end. What now? Merely closing your doors is not enough to officially dissolve your company.  You should consult with your attorney and tax professional as it varies from company to company, but there are typically fourteen steps to dissolve a Delaware corporation registered to do business in… Read More

So your company’s life has come to an end. What now? Merely closing your doors is not enough to officially dissolve your company.  You should consult with your attorney and tax professional as it varies from company to company, but there are typically fourteen steps to dissolve a Delaware corporation registered to do business in California.

  1.  Board Of Directors Approval

A majority of the board of directors must pass a written resolution approving the dissolution of the corporation.

  1.  Shareholder Approval

If shares have been issued, a majority of the outstanding shares must approve the company’s dissolution in written resolutions.

  1.  Notice of Dissolution To Creditors

If the company has any creditors, it should provide them with notice of when claims must be submitted for payment to be considered.

  1.  Final Delaware Franchise Tax Report

A final annual franchise tax report for Delaware needs to be filed and the company will need to pay any outstanding franchise taxes owed to Delaware.

  1.  Delaware Certificate Of Dissolution

Once all outstanding Delaware franchise taxes have been paid, a Delaware certificate of dissolution must be filed. If the entity has ceased transacting business and has no assets remaining then you may qualify for the short form certificate of dissolution.

  1.  Discontinue Registered Agent For Service Of Process

Notify whichever service provider your company is using as its registered agent for service of process in Delaware so you do not continue to get charged for the service.

  1. File Declaration Of Closed Business With The City

If the corporation is registered with a city, most cities require that the business registration be inactivated.  For example, if the corporation was registered to do business in San Francisco, a Declaration of Closed Business would need to be filed.

  1.  File An Abandonment Form For Your Fictitious Business Name

In addition, most jurisdictions require you to file a form notifying the government that you will no longer be using the fictitious business name. In San Francisco, for example, a company would need to file a Statement Of Abandonment Of Use Of Fictitious Business Name.

  1.  Cancel Any Other Licenses And Permits

Cancel any additional licenses or permits, such as your California Seller’s Permit and your registration with the Employment Development Department.

  1. California Certificate Of Surrender.

If the corporation is registered to do business in California, a California Certificate Of Surrender also needs to be filed.

    11. Corporate Transparency Act. 

You may need to file a final report with the U.S. Treasury Department’s Financial Crimes Enforcement Network to be in compliance with the Corporate Transparency Act.

    12. IRS Form 966

Within 30 days of the board of directors approving the dissolution, IRS Form 966 must also be filed

13. IRS Forms 8594 and 4797

If the dissolution involves the sale or exchange of corporate assets, IRS Forms 8594 and 4797 may also be necessary.

    14. Final State Tax Return

You will need to work with your CPA or other tax professional to file a final state tax return.  You will also need to file any delinquent tax returns and pay any owed taxes.

In California, the Franchise Tax Board will continue to assess an annual franchise tax until the corporation has filed a final tax return with the FTB.  You should indicate it is the final return by checking the box that it is the final return and writing “final” on the top of the return.

     15. Final Federal Tax Returns

Lastly, a final federal tax return needs to be filed for the corporation.  Like the state tax return, you should indicate on the form that it is the final return for the company.

For many companies these are the steps to officially dissolve a Delaware corporation registered to do business in California, but please contact us at (415) 633-6841 or info@bendlawoffice.com to make sure no additional steps are required. Each situation is unique!

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Should Your California Professional Corporation Elect To Be Taxed As An S Corporation?

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Should your company elect to be taxed as an S corporation? In California, certain professions that require a state license are prohibited from forming a limited liability company or a traditional corporation and instead must incorporate as a professional corporation. By default, California professional corporations are taxed as C corporations. As a C corporation, your… Read More

Should your company elect to be taxed as an S corporation? In California, certain professions that require a state license are prohibited from forming a limited liability company or a traditional corporation and instead must incorporate as a professional corporation. By default, California professional corporations are taxed as C corporations. As a C corporation, your professional corporation would pay federal taxes on its profits, and you would also pay individual taxes if you receive salary, bonuses, or dividends from the corporation.

  1.  Tax Advantages of the S Corporation

By electing to be taxed as an S corporation, your professional corporation would instead be a pass-through tax entity, like an LLC or a partnership.  Electing to be taxed as an S corporation may also allow you to pass losses from the business to your personal income tax return, where you can use the losses to offset income that you may have from other sources.

Finally, if the corporation pays you a “reasonable salary,” you may not be required to pay self-employment taxes on any shareholder dividends you receive in addition to your reasonable salary.

  1.  Disadvantages To Being Taxed as an S Corporation

A drawback of electing to have your professional corporation taxed as an S corporation rather than a C corporation is the cost of the premiums for shareholder benefits. In a C corporation, costs like insurance coverage are deductible as a business expense. Additionally, the shareholders may not be taxed on the value of the benefits.

Another drawback is the restrictions on who can be a shareholder of an S corporation. For example, S corporations may not have shareholders who are non-resident aliens.

Finally, S corporations may only issue one class of stock whereas C corporations can have different classes of stock that have different rights and liquidation priorities.

  1.  Conclusion

You should consult with your CPA or tax professional to make sure being taxed as an S corporation is the best fit for your professional corporation. However, for most California professional corporations, an S corporation election is likely to provide the most tax savings.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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