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Santa Cruz Business and Commercial Law Blog

How building code violations are handled in Santa Cruz

The Building Official is responsible for investigating and enforcing zoning, environmental and building code violations. In most cases, they will undertake an investigation in response to a citizen complaint about improper land use or other code violations. Following an investigation, a landowner may receive violation notices or warnings if they are warranted. These initial actions might be followed by additional legal actions, such as civil penalties, fines or recordation.

The most common type of code violation is the conversion of a structure not intended for habitation into a dwelling unit. For example, an individual might convert a barn into a studio apartment without getting the proper permits. The first step of the enforcement process is generally the filing of a complaint. Next, a letter is sent to the property owner, informing them of the complaint.

Determining equity division for a new business

When Californians are planning to open a business, many times, people choose to open it along with another person. One of the key decisions that will need to be made when more than one person will be opening a business is how the equity in the business will be divided between them.

When two people are contributing equally towards the business in terms of time and investment, it may make sense for the equity to be divided on a 50/50 basis. In the event that one person is responsible for the business idea on his or her own, an unequal split of interest may be appropriate.

Forming a LLC or a sole proprietorship

Entrepreneurs in California might be interested in learning more about the differences between forming a limited liability company and forming a sole proprietorship. For many people, sole proprietorships are appealing because the business structure is inexpensive and relatively simple to understand or manage. These formation structures are often the quickest way to get a fledging business up and running. Tax liability for sole proprietorships is bound to the business owner's individual tax return, and there is no need for to file a separate return.

One of the downsides of choosing a sole proprietorship is that there is no tax liability protection. Ownership and all personal assets may be subjected to a civil lawsuit if the sole proprietorship causes an economic or noneconomic injury to another party. Any enterprises that may have potential liabilities not covered by insurance are advised to consider other options aside from forming a sole proprietorship.

Facebook announces new policy for after-death profiles

California residents may have some questions what happens to digital media accounts after an owner passes away. Recently, Facebook announced that it will be changing its policies regarding a user's account in such a situation. The company will allow each user to designate a legacy contact who has access to photos and messages that the user may have shared. This contact will also be able to write to the account and handle friend requests.

However, the contact will only be able to access an archive where the messages and posts can be downloaded. Although a contact may be designated, users will still have the option to direct Facebook to delete their accounts after they pass away. To designate a contact, a user would go his or her home page, access security settings and then designate their contact.

Tending to details in estate planning

As California residents may know, when comedian and actor Robin Williams died, he left an estate plan. However, family members are disputing ownership of the comedian's personal possessions in what has become a public argument.

Williams' estate plan included a current will, prenuptial agreement and trusts that covered major assets, including his home, investments and bank accounts. However, the death of a loved one may be an emotional time, and not providing specific bequests for the personal effects, whether valuable or sentimental, may create problems among family members.

Income tax planning considerations are more important in 2015

Income taxes have become increasingly important during estate planning because of changing tax rates and the American Taxpayer Relief Act of 2012. Factoring income tax planning into estate planning in California might help individuals because income tax rates are catching up to estate tax rates.

Federal estate tax planning used to have more importance, but exemptions have made fewer taxpayers subject to this. ATRA raised the federal estate tax exemption, which includes gift taxes, to $5 million subject to inflation adjustments. In 2015, the exemption amount is $10.86 million for couples and $5.43 for individuals. A spouse can also utilize any unused exemption from a deceased spouse in addition to his or her own exemption to get the most benefit.

Determining property lines to resolve disputes

It is important that property owners have a clear idea of where their property begins and ends. Disputes between neighboring property owners can usually be avoided by knowing where the property lines are and refraining from building structures or planting plants that encroach upon the property line.

When property owners want to find out the boundaries of their property or just want to verify the accuracy of the lines, they can usually find tools online at the assessor's website. The available maps may show the location of fixed landmarks that can be used as starting points to measure property boundaries. In addition, property deeds are delivered when the property is purchased. The property description on the deed may be used as a guide to help measure and mark the property.

Lessons learned from celebrity estate plans

Mistakes in celebrity estate plans can provide a learning opportunity for California residents. Even though most people are not multi-millionaires, the lessons that are learned from poorly written celebrity estate plans can translate to many people's situations.

When James Gandolfini died in June 2013, his estate plan had not yet been completed. As a consequence, he left no trust for his spouse or two children, and estate taxes and fees swallowed up 55 percent of his net worth. To make matters worse, the Soprano actor's estate had to be settled in probate court, which left it open for public scrutiny. In the case of actor Heath Ledger, he created an estate plan but failed to update it after his daughter's birth. Consequently, the transfer of wealth to Ledger's siblings and parents ignited a legal dispute between different members of the family.

Targeting the right business audience in California

One of the many reasons to create a business plan is to provide enough information to attract outside investors. In the quest to find financial backing, an entrepreneur will run into different types of investors with different goals when investing. The first group is the venture capitalists who receive so many requests that many business plans only get a quick glance.

When catering to a venture capitalist, it is important to grab their attention quickly and make them want to keep reading. However, the opposite is true when dealing with banks that care almost exclusively about the company's financial strength. Businesses that are talking to customers or suppliers should focus on their relationships and record of accomplishment with other customers and suppliers.

Considerations for business owners contemplating sales

Planning for the sale of a California business often begins even before the company is founded. Though many do not consider it until later, it is increasingly common to plan for succession early on. Owners should include a discussion of exit strategy in the business plan. An owner who has an exit strategy in place has an advantage when opportunities to sell arise. He or she is more knowledgeable about the process and more confident about the value of the business.

A business owner considering a sale should seek to determine the value of the company as early on as possible. The proper method of valuation may vary by industry or based on other factors. For example, it may make sense to value a company based on recurring revenue if it is a service firm, but a valuation based on assets may be more appropriate for a manufacturer.

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