Question: I formed a new corporation for which I am sole shareholder and would like to know what happens at my required annual meetings?
Answer: We understand that you would like to understand what issues should come before your Shareholder and Directors meetings. Many topics may need to be addressed under exceptional circumstances, but let us address single shareholder companies and yours in particular.
As the sole Shareholder, you must meet at least annually and vote for the Director, that is you too! This is the main job usually. You may also discuss the condition of the company and any outstanding issues that relate to the value or operations of the company generally. Sometimes, you will need to ratify the actions of the Board of Directors when Florida Statutes require it, such as when you wish to wind up the affairs of the company.
You, as the sole Director, must meet annually, usually right after the shareholder meeting and at such other times as are required to carry on the business of the company. Annually you must elect the officers. You serve in every capacity: President, Treasurer, and Secretary. Most times, there are Special Meetings during the year to do such things as approve the actions of the officers, to authorize the officers to obtain loans, sign leases and the like. Generally, the Board should approve all banking resolutions, say to open a bank account, or apply for a credit card or other loans. It should also vote on any issue related to the purchase or lease of real estate – pretty much anything to do with real estate commitments.
As to the content of the actual minutes of the meetings, we represent companies whose minutes include the menu for lunch, agendas written on a restaurant’s paper napkins, favorite brownie recipes, and such that go on for pages, and also companies that present very terse, only absolutely necessary verbiage. You get to choose the character and culture of your company minutes as long as they include the necessary topics stated above.
Knellinger & Associates participated in the effort of the Gerald R. Bennett Inn of Court to thank the emergency care workers at UF Health at Kanapaha. Pictured is Associate Attorney Chris Hopkins delivering lunch for all.
Avoiding conflict and representing either party in DV proceedings
Domestic Violence has been described as a “pattern of interaction” in which one partner is forced to change his or her behavior in response to threats or abuse by the other partner1. The fact of domestic violence rarely takes into consideration the surrounding circumstances that cause it to happen short of the provocation by other domestic violence. Domestic Violence may be related to financial, physical, sexual or psychological acts which are intended to force the victim to “toe the line”. The negative consequences of Domestic Violence are both immediate and long term for all family members who experience it, but especially children.
Domestic violence is growing in wake of coronavirus outbreak in Gainesville
The “stay at home” orders currently in place related to the Coronavirus mean that a family can be cooped up together for long periods of time causing additional strains on each family member. Reports of domestic violence to law enforcement have arisen recently and are projected to increase near term. It is important to develop intelligent strategies to relieve pressures before they erupt into domestic violence. If you sense that your conduct or that of your partner is becoming hostile or even passive aggressive, it is time to explore options to avoid conflict. There are counseling and legal options which can help to avoid actions which lead to irreversible negative consequences.
Domestic violence help and alternatives
The Clerk of the Circuit Court is tasked with assisting victims of domestic violence to prepare pleadings to be presented to the court for and injunction to be entered against the accused perpetrator. At times, both parties have committed domestic violence and are both entitled to an injunction against the other party restraining the perpetrator from coming around or contacting the victim. The proceedings may be criminal or civil, or both. Already strained financial circumstances can be further strained in litigating in both forums. Frequently, parties exhaust their financial wellbeing as both enlist the services of attorneys. It has come to my attention that one victim advocate organization actually advises their potentially victimized clients to return to a hostile environment with the expectation that some triggering violent event will take place to ensure the entry of a domestic violence order against the opposing party. This advice is both short sighted and dangerous. There are better alternatives for all concerned.
We stand prepared to assist parties in avoiding conflict and finding constructive alternatives in preventing domestic violence and representing parties aggrieved by such unfortunate circumstances.
References:
1 Dutton, The Dynamics of Domestic Violence: Understanding the Response from Battered Women, 68 Fla. Bar J. 24 (Oct. 1994) https://books.google.com/books
You would think that if you pay someone to create advertising material for your business, you would have a right to the advertising that was created for your use.
Surprisingly, Copyright law does not work that way.
The Copyright of creative works does not require any formal registration like an application for a trademark or a patent. As soon as a person creates a creative work, that work is copyrighted. However, creators can register their copyrights with the United States government, which provides more protections to creative works.
Filing Suit
Attorney’s Fees and statutory damages
Automatic validity
If you think that someone is infringing on your copyrighted work, you can get an injunction, the impoundment of the infringing work, damages, and attorney’s fees.
If you do not have your copyright registered with the United States Copyright Office, you must be able to prove when you created your copyrighted work to establish the validity of your copyright. Only after you establish your ownership of the copyrighted work will you be able to ask a Court to prevent others from infringing that work or award you monetary damages for infringement of your copyright.
The copyright owner of a creative work, like advertising material, has the following exclusive rights:
to reproduce the copyrighted work;
to prepare derivative works based on the original copyrighted work;
to distribute copies of the copyrighted work;
to perform the work publicly;
to display the work publicly; and
in the case of sound recordings, to perform the work publicly through digital audio transmission.
These copyright law implications touch on all aspects of advertising material for businesses in Florida, including the display of business logos, advertising with on a business’s website, or preparing brochures to then provide to customers. Without thorough consideration of the copyright infringement, it is possible to get sued for using your own advertising material!
The attorneys at Knellinger & Associates in Gainesville, Florida can help advise your business on your intellectual property rights in advertising. We can help you develop a business strategy that combines the protections of both copyright and trademark law.
A marriage is one of the most memorable days in a person’s life. Couples generally plan for months in advance and invite their closest of friends and relatives to share this momentous day together.
As part of the planning process, couples should discuss the legal and financial effects of making this life-long commitment. Oftentimes, couples fail to plan in advance for some important aspects related to the legal consequences of marriage. This is likely due in large part to the fact that it may be tough to get past the butterflies and excitement to consider planning for the future financially, but it may be something that could be necessary and in one’s best interest.
Prenuptial Agreement
A prenuptial agreement is a contract between two people who intend to marry. It typically covers a variety of financially related topics and sets forth the right, if any, that each party has to the other’s property in the event of a divorce or death. It is very important that a party seeking a prenuptial agreement provides an attorney with all relevant information relating to financial assets and debts and with his or her goals for the development of the prenuptial agreement. A prenuptial agreement is effective upon marriage and any subsequent changes to the agreement can only be made when both parties agree in writing to a postnuptial agreement.
Over the years, there has been some uncertainty in Florida as to the effect of mistakenly omitting certain prenuptial clauses and whether broadly drafted prenuptial agreements would actually make such omissions immaterial.
The Florida Supreme Court’s Decision
In Hahamovitch v. Hahamovitch, 133 So. 3d 1008 (Fla. 4th DCA 2014), a husband and wife divorced after 22 years of marriage.1 Prior to their marriage, the couple signed a broadly drafted prenuptial agreement that protected the husband’s property prior to marriage and any property owned solely by one of the spouses during marriage.2 In a divorce proceeding, property purchased prior to and during the marriage is generally subject to 50-50 equitable distribution, unless subject to some agreement.
The Hahamovitch’s prenuptial agreement failed to address whether the increased value of assets solely owned by one spouse prior to the marriage should be considered marital property for the purposes of distribution.3 Prior to this case, there was conflict among different district courts about whether such an omission acted as a waiver of rights.4
In 2015, the Florida Supreme Court accepted review of the Hahamovitch case to resolve the conflicting decisions by district courts. The issue revolved around whether a broadly drafted prenuptial agreement that omitted certain provisions such as a spouse’s claim to the other spouse’s earnings, assets acquired with those earnings, and the enhanced value of the other spouse’s property resulting from marital labor or funds, would waive a spouse’s right to seek equitable distribution.5
The Court held that when a prenuptial agreement includes such broad provisions but does not specifically waive a spouse’s claims to marital property, the prenuptial agreement’s actual language that expressly includes all of the property solely owned by one spouse does waive the other spouse’s right to such property.6
In the Hahamovitch case, the well-drafted prenuptial agreement protected the husband from a windfall of benefits for his wife. This exemplifies the value of a seasoned family law attorney to draft a prenuptial agreement. It is very important that a family law attorney has experience in drafting complex prenuptial agreements and in determining the current and future needs of a client. An attorney without such experience may leave out important clauses that may detrimentally affect a client in the long run.
Contact Prenuptial Agreement Attorney
The experienced family law attorneys at The Law Office of Knellinger & Associates in Gainesville, Florida can assist you with preparing this agreement in the most efficient and beneficial way possible. We have over 40 years of experience dealing with family law matters.
1Hahamovitch v. Hahamovitch, 133 So. 3d 1008 (Fla. 4th DCA 2014). 1Id. at 1012. 1Id. at 1013. 1See Irwin v. Irwin, 857 So. 2d 247 (Fla. 2d DCA 2003); Valdes v. Valdes, 894 So. 2d 264 (Fla. 3d DCA 2004). 1Hahamovitch v. Hahamovitch, 174 So. 3d 983 (Fla. 2015). 1Id. at 987.
Attorney Richard Knellinger attending the United States Supreme Court reception
Mr. Knellinger attended the United States Supreme Court reception for the American Inns of Court in November 2016 on behalf of the Gerald T. Bennett Inn of Court in Gainesville, Florida associated with the Levin College of Law. The Inn has met the highest Platinum status for its performance for several years in a row.
Before you bring a lawsuit before any court, whether it be a Florida state court or a United States federal court, the court has to have jurisdiction over the issues of your case. Jurisdiction is the power of a court to make a decision concerning your case and to issue orders that the parties to the case must follow.
Florida state courts have general jurisdiction, and may hear a wide variety of cases from landlord-tenant disputes to family law cases. Florida state courts will have jurisdiction over cases where the actions that gave rise to the case occurred in Florida, the property that is the subject of the case is located in Florida, or one of the parties directed actions, such as a business venture, to occur in the state of Florida.
In addition to state courts, all states also have Federal District Courts where parties can brings cases over which the Federal court has jurisdiction. Cases brought in Federal District Courts can be appealed to the United States Circuit Courts, which may be then appealed to the United States Supreme Court.
What kinds of cases can come before Federal Courts?
There are different ways Federal Courts can have jurisdiction over a case based on the subject matter of the issues of the case. This is called “Federal Subject Matter Jurisdiction.” While state courts have subject matter jurisdiction to hear cases to probate a will, for example, Federal Courts have been provided jurisdiction over certain topics set forth in the Constitution of the United States.
Federal Courts have exclusive subject matter jurisdiction, as provided by the Constitution of the United States, over the following subjects:
Admiralty and other cases regarding the law of the open seas;
Military lawsuits;
Cases involving immigration;
Criminal cases involving violations of Federal Laws; and
Bankruptcy.
There are additional ways to have your case heard by a Federal Court.
Federal Question Jurisdiction
If your case involves issues that touch on the Constitution or other federal laws, your case can be brought in Federal Court under Federal question jurisdiction. For example, a dispute between a landlord and a tenant would normally fall under state law; however, if the tenant alleges that she was being discriminated on the basis of race, it would be appropriate to bring those claims in a Federal Court for a violation of the Fair Housing Act, a Federal law. All cases alleging the violation of a person’s civil rights or other constitutional rights fall under “Federal Question Jurisdiction.”
Other federal laws that would trigger federal question jurisdiction are environmental laws such as the Clean Water Act, the Clean Air Act, and other acts regulating the transportation or pollution of hazardous materials.
Diversity Jurisdiction
Federal law also authorizes federal courts to hear cases where the opposing parties reside in two different states. This is called diversity jurisdiction, and it provides a fair forum for citizens of two different states to have their cases heard. Additionally, for a case to be brought under federal diversity jurisdiction, the amount in controversy must for $75,000 or more before the federal court can hear the case.
Supplemental Jurisdiction
A federal court can hear a claim that would normally come under the jurisdiction of a state court if it is related to claim already before the federal court. If the federal court has jurisdiction because of federal question jurisdiction or diversity jurisdiction, the court has the discretion to hear claims related to the same course of events for that case, even though those claims would not normally be heard by a federal court.
An attorney at The Law Office of Knellinger & Associates in Gainesville, Florida is licensed to represent you in federal courts, and can advise you on whether your case may be properly brought in the appropriate federal court, and is licensed to represent you in federal courts.
1. Look for an original Last Will and Testament, and if one is found, put it on deposit with the Clerk of Court in the county where the loved one was a resident;
2. Record a short form (no cause) death certificate in each county in Florida where your loved one owned real estate. If your loved one died in another state but owned real estate in Florida, then the same information applies; however, the out of state death certificate will likely include cause of death. That is okay, because the recording clerk in Florida will redact (block out) the cause of death when recording the death certificate. This puts the death certificate into the “chain of title” and alerts the property appraiser and any potential buyers someday that the property may be “heirs property” waiting to be taken through the probate process to be transferred to the heirs or may be owned by the surviving spouse or other joint owner whose name appears on a deed with the loved one.
3. Identify whether the loved one had “POD” or “payable on death” beneficiary designations on bank accounts or investment accounts, and if so, present a death certificate to the bank or broker to take ownership of the account without a court proceeding.
4. Identify whether there is life insurance or a retirement account with a beneficiary designation, and if you are the beneficiary, then request the claim forms for claiming the death benefit or to receive the retirement account. You should seek the advice of an attorney or certified public accountant if you have any questions about how to best plan for receipt of an inherited retirement account, as there are different options all with different income tax consequences.
5. Make an appointment with a probate attorney to review the assets (property) and liabilities (debts and mortgages) of the loved one to determine whether a probate proceeding will be required to notify creditors and transfer property to the heirs (if there is no will) or to the devisees or named beneficiaries (if there is a will). Probate is required any time there is property in a deceased person’s individual name and there is no death beneficiary. Essentially the real property or bank account ($1,000.00 or less exception) or other account will be stuck or frozen until an estate is opened and court orders are entered by a judge to transfer the property to the heirs or devisees. There are several different types of probate depending on the size of the estate. Formal administration is for larger estates and involves appointment of a personal representative or executor. Summary administration is available for smaller estates and does not involve appointment of a personal representative. If you are named as Personal Representative of the estate, you must take immediate steps to protect known assets of the estate, even before you receive Court appointment.
The attorneys at Knellinger & Associates are available to talk with you about the death of your loved one and help determine if a probate estate is required. We can help you with any of the steps to take care of the loved one’s legal affairs whether a probate estate is required or not.
How much would it cost someone to setup a new LLC or Corporation, including drafting an operating agreement, buy/sell agreements or bylaws, etc.? Additionally, what is the charge for handling contract review, handling employment matters, including, without limitation, hiring, firing, FLSA (Fair Labor Standards Act), exempt v. non-exempt, overtime, and others.
Attorney Response:
Thank you for your inquiry. I have no flat fees for the tasks you mention because quoting them may be unfair to the potential client when complicating factors arise, as they frequently do. If a potential client is knowledgeable and experienced in business matters, they are able to explain to me the nuances of the situation which they know may impact the work that I do and the expense associated with it. I can usually provide a pretty close estimate of fees and costs in that situation. If a potential client is not familiar with the options available to her or the consequences of some “minor” fact which she may have omitted in our initial conversation, she might feel that the attorney should have anticipated that minor fact and feel that she has been taken advantage of when she is charged to address the omission. The easiest example is the most common. A flat fee is quoted for an LLC and then the attorney discovers that there are other members who thought they were lenders or vice versa. The operating agreement will be greatly complicated as a result of buy/sell, and other exit scenarios. Negotiating an operating agreement may be easy or very complicated depending on a variety of factors that the parties may not have even considered.
We offer our clients questionnaires which are designed to uncover undiscussed or undisclosed issues. Sometimes when those issues are openly discussed, the parties are not willing to go forward with the venture. For example, when I ask what each party expects of the other party in terms of money, time, and effort, frequently their expectations of each other do not match their own expectations for themselves. Another example is three persons join to form an LLC. One brings money, the other experience in the industry, and the third the labor for day to day operations. When do their interests vest? The money person wants immediate vesting when she puts in her money. The experienced person and the day-to-day person are going to be providing their experience and labor over time. Should they get equal shares immediately or should it vest as they provide the consideration they promised? Most frequently, they have come to the table expecting equal shares immediately. That discussion could change the result.
I hope that this helps you to understand why I feel that flat fees are misleading. Flat fees tend to result in the tendency and economic reality that an attorney will not ask the difficult questions because resolving them will require much more time than the flat fee will accommodate. For example, I noticed on a web site recently an attorney here in Gainesville advertising a flat fee for a prenuptial agreement for $175.00. If one understands the complicated and integrated issues that must be analyzed and addressed in such an agreement, such a flat fee is utterly ridiculous unless you consider your time worth a cent per hour. I am sure that the client could walk out with a document titled “Prenuptial Agreement”, but I am equally sure the client has been grossly short changed. If potential clients depend on the lowest common denominator in advertised legal fees, they can expect the lowest common denominator in the result as well.
I think the best course of action is to hire the attorney for a first conference at their hourly rate and exchange information, goals, and options and costs for achieving them. The client can then make an informed decision about how to go forward or whether to do so at all.
I have clients that I have continuously represented for decades even though there are attorneys that advertise much lower hourly rates. I trust that their good judgment and my fair services to them are the reason they remain. Best wishes to you in your endeavor.
Buying an Existing Business: Part 2
This article will address what a purchaser should consider before purchasing an existing business. Part 1 of this article addressed why a person should consider buying an existing business. Part 3 will address the legal impact of buying an existing business.
What to consider when purchasing an existing business?
Buying an existing business is a major commitment and investment. It is not something that an individual should take lightly, even if the existing business appears on its face to be profitable. Indeed, an individual must be cautious about purchasing an existing business and conduct extensive due diligence before buying the company, firm, or business. Below is a list of some questions, but not all, that a potential buyer should consider before any purchase occurs.
What is your skill set?
Many new business owners that purchase existing businesses may actually do it for the wrong reason. Although the existing business may be profitable at the time of purchase, it will still require strong leadership and organizational skills to keep the business afloat. The prior owner laid the foundation for success, but it will be the new owner’s task to remain profitable. You must realize certain businesses require a business owner to possess certain skills.
For instance, if you purchase a catering business, you must understand it will require some culinary skills and to work irregular and long hours in preparing the food for an event. A catering business owner also manages staff and works directly with its customers.
Another example is a person who buys a pool maintenance company. It will likely already have existing customers and therefore the business owner must possess the skill set to actually maintain and clean customer pools from day one. A business owner must understand what chemicals and equipment are necessary to complete these tasks.
What are your interests?
A potential business owner should realize that becoming a business owner is a major responsibility. Some businesses require long and irregular hours and thus a potential buyer must think hard about what specific jobs would interest them on a day-to-day basis. Although a business may be profitable to start, a new owner must maintain the same level of customer satisfaction and standards set by the previous owner. If you are not passionate about the type of work, the business may falter as a result.
Why is the existing business on the market?
This may seem like an irrelevant question, but it is actually one of the most important inquiries one must make. This question too often gets overlooked after a potential purchaser reviews a business’s positive revenue and profit streams. A purchaser must step back from the purchasing process and realize the person selling the business may or may not be doing it for personal reasons, such as retirement. For example, the market may have become more competitive than in previous years and it may make sense for the owner to get out before the market becomes saturated. Whatever the owner’s reason may be, it is in your best interest to determine why the business is being sold. You must not take a seller’s reason at face value.
How do you determine the right price?
This process requires expertise. A potential purchaser must realize that the seller wants to get the highest price for the business. An experienced business law attorney can help you with the process of analyzing the purchase of an existing business, perhaps in concert with a qualified business appraiser and a certified public accountant. The CPA would inspect the financial records of the company and report to the appraiser figures on which the appraiser would rely in formulating the fair market value and, perhaps, the purchase price. Further, that lawyer can help you negotiate and contract for the best price for the business. There are numerous market factors that go into a proper purchase price and you want to make sure you get the best possible deal to start your ownership on the right foot. Further, an attorney can provide you with sound and independent counsel and will not hesitate to advise you that a deal is bad.
How are you going to finance the business?
An existing business unlike a new business may have a higher upfront purchase price. However, financing the purchase of an existing business is generally easier because of its track record of previous success. It is important to understand the legal consequences of your financing options. Unfortunately, many business owners enter unfavorable agreements because they are in a hurry to buy a business. It is important that you determine the best financing route for your personal situation. A competent business law attorney can provide you with guidance and information about your financial options.
In sum, a purchaser must do his or her due diligence before purchasing an existing business entity. A purchaser must also understand the legal ramifications of purchasing the business (see part 3). Throughout this process it is important that you consult an experienced business law attorney to help you each step of the way. The Office of Knellinger & Associates can help you with this process. We have been serving business owners in North Central Florida and the Gainesville community for over 40 years.
The Law Office of Knellinger & Associates provides legal advice and representation for individuals, entrepreneurs, and business owners in Gainesville, Florida, and communities throughout north central Florida, including cities such as Ocala, Starke, Palatka, Lake City, Middleburg, Trenton, Bronson, Lake Butler, Cross City, Williston, Chiefland, Alachua, Jasper, Live Oak, and Jacksonville, Florida.
Alachua County ● Putnam County ● Clay County ● Bradford County ● Union County ● Columbia County ● Gilchrist County ● Levy County ● Marion County ● Hamilton County ● St. Johns County ● Dixie County
