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Thread: Send Lawyers, Guns, And Money

  1. #1
    Banned thelastgreatman's Avatar
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    Default Send Lawyers, Guns, And Money

    A thread for advice of a legal or corporate nature. Looking for responses from Tom-like figures--elder statesmen who actually know a thing or two about finance, law, or run their own businesses, or know a lot about doing so. PlayaDelWes would also be welcome as he either knows or at least does a good job of pretending to know what he's talking about in these situations. BMack as well, get your ass in here.

    So I can't get into any details, but my company needs to incorporate and incorporate quickly. Meeting with a lawyer who specializes in our particular sub-section of the business world (IP, tech shit, etc.) on Friday--he comes highly recommend from a bunch of rich people who own their own tech company so I'm sure he'll know what he's talking about, but I was hoping I might pry the board for a little bit of advice on questions to ask, stuff like that. Here's the basic scenario:

    We're a three man company, two of us being general partners who own the majority of the equity of the company, the third holds a non-voting stake but if the two of us absolutely cannot come to an agreement about something, he would become the tie-breaker vote. The language of how that will play out interests me.

    One big question I have is how long does it take to actually officially incorporate and be able to start receiving money as your business entity, because if it's longer than a week or two, we need to find some kind of way around this in the short term. My other partner is going to have to quit his day job like ASAP as soon as all the documents are finalized and they're being pushed through extremely quickly due to the urgency of what we're being tasked with. Is there some way that a company who's still in the process of filing as an LLC (I assume that's where we're going to go) can receive payments in the interim made out to a single person, or what else can we do to deal with this?

    Thirdly, is it worth incorporating in Delaware or Texas or whatever at this stage? We're not taking in huge piles of money or investors quite yet, but might be soon. Is there any advantage to filing in California in terms of turnaround time/ease of setup or whatever rather than going to those two states, or should we hit up the tax-friendly states from the get-go?

    Thank you for your help. In return, here is a different Warren Zevon song than the one in the title:

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  2. #2
    Coachella Junkie PlayaDelWes's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Best of luck with this, but I have zero experience with incorporation and LLC formation. I defer to legal.
    Quote Originally Posted by dj12inches View Post
    What makes me qualified? I've watched EVERY fucking episode of American Idol, and every single episode of The Voice...Forget that I won departmental music awards when I was in the 8th grade choir.

  3. #3
    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Lawyers, get your useless, blood-sucking asses in here. I already asked MJA who proved to be just as useless at law as he is at everything else. It was probably one of my favorite phone calls in recent memory. It literally left me sitting there wondering, "... so like... when you talk to your clients... how the fuck do they take you seriously with that voice? You sound like you're perpetually on the verge of farting and giggling yourself to death."
    Quote Originally Posted by schoolofruckus View Post
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    Coachella Junkie jackstraw94086's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    as far as I know the only advantage to incorporating in Delaware is that they have generally the most progressive laws and experienced judges with respect to corporate law, it doesn't necessarily save you any taxes.

    But that's just some quick comment I heard from a lawyer, the guys who spend at least a couple years and tens of thousands of dollars only to have everyone they know ask them for free advice.

  5. #5
    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Ha. Yeah my father used to complain about that. He had to institute a strict policy at the bar, anyone who tried to ask him a question he would just go, "you can come to my office, I will under no circumstances discuss any of that here."
    Quote Originally Posted by schoolofruckus View Post
    Look, your parenting is yours and Randy's business alone.
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    Default Re: Send Lawyers, Guns, And Money

    Processing times for California incorporation applications http://www.sos.ca.gov/business/be/processing-times.htm
    Quote Originally Posted by ruetheday View Post
    I don't fucking care. I don't even know who the hell Dave Wang is.
    Quote Originally Posted by Devin the Dude View Post
    you used to be that guy that just Dave Wang's everybody. that guy. he's gone now, and whoever you really are showed up, and that was utter disappointment.

  7. #7
    Coachella Junkie malcolmjamalawesome's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Delaware’s business law is one of the most flexible in the country.
    The Court of Chancery focuses solely on business law and uses judges instead of juries.
    For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).
    Taxation requirements are often favorable to companies with complex capitalization structures and/or a large number of authorized shares of stock.
    There is no personal income tax for non-residents.
    Shareholders, directors and officers of a corporation or members or managers of an LLC don’t need to be residents of Delaware.
    Stock shares owned by persons outside Delaware are not subject to Delaware taxes.
    Some potential advantages to forming a corporation or LLC in Nevada include:

    Nevada has no state corporate income tax and imposes no fees on corporate shares.
    There is no personal income tax or any franchise tax for corporations or LLCs (but initial and annual statement fees and business license fees apply).
    Shareholders, directors and officers of a corporation or members or managers of an LLC don’t need to be residents of Nevada.
    Remember, if you form in Delaware or Nevada but you transact business in another state, it is likely that you will have to foreign qualify your business in that state.
    . ..
    Quote Originally Posted by ruetheday View Post
    I don't fucking care. I don't even know who the hell Dave Wang is.
    Quote Originally Posted by Devin the Dude View Post
    you used to be that guy that just Dave Wang's everybody. that guy. he's gone now, and whoever you really are showed up, and that was utter disappointment.

  8. #8
    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Bruce Campbell in The Rural Juror.
    Quote Originally Posted by schoolofruckus View Post
    Look, your parenting is yours and Randy's business alone.
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    Coachella Junkie malcolmjamalawesome's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    GBC
    Quote Originally Posted by ruetheday View Post
    I don't fucking care. I don't even know who the hell Dave Wang is.
    Quote Originally Posted by Devin the Dude View Post
    you used to be that guy that just Dave Wang's everybody. that guy. he's gone now, and whoever you really are showed up, and that was utter disappointment.

  10. #10
    Coachella Junkie malcolmjamalawesome's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    You can receive payments to the individual now and then the individual can make a contribution to the entity after it's formed.
    Quote Originally Posted by ruetheday View Post
    I don't fucking care. I don't even know who the hell Dave Wang is.
    Quote Originally Posted by Devin the Dude View Post
    you used to be that guy that just Dave Wang's everybody. that guy. he's gone now, and whoever you really are showed up, and that was utter disappointment.

  11. #11
    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Hmm... so if we incorporate in another state then we have to get permission to do work in California? The fucking government is a load of horseshit.
    Quote Originally Posted by schoolofruckus View Post
    Look, your parenting is yours and Randy's business alone.
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    Coachella Junkie SoulDischarge's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    All the fucking hours of Comedy Bang Bang I've listened to has ingrained this goddamned site in my head, apparently you can consult with a lawyer for free. I don't know, maybe it'll help, maybe it'll be useless for your particular issue. http://www.legalzoom.com/
    Quote Originally Posted by guedita View Post
    Thanks for giving us the opportunity to not give a fuck again.

  13. #13
    The Encyclopedia bmack86's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    You can incorporate in two states: the place where you have your primary place of business and then the state of legal incorporation. So you'll probably want to incorporate in California and Delaware, for the reasons MJA posted above.

    As far as making money prior to incorporating, you can still operate as a pre-corporate entity as long as you represent that you are operating on behalf of the corporation-to-be, and it will presumptively tie any business transactions to your corporation rather than to yourself. Pre-corporate entities happen frequently so banks would probably be very understanding and would know exactly what to do. You shouldn't have any issues there.

    I did an LLC doc that we filed last Friday. It was approved on Monday. The office is working really quickly apparently.
    Quote Originally Posted by canexplain View Post
    Remember Hitler? I don't but here we are again .. cr****

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    Peaceful Oasis TomAz's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by PlayaDelWes View Post
    Best of luck with this, but I have zero experience with incorporation and LLC formation. I defer to legal.
    Yep, me too.

    I do know a little bit about managing lawyers.. meaning, ask for a budget, ask them to explain/justify their budget, and hold them accountable to their budget. But if you are doing a deal that is complex and/or potentially contentious (and outside capital always has the potential to be contentious), scrimping on legal advice will just bite you in the ass.

  15. #15
    The Encyclopedia bmack86's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Also, the minority member issue is something that is done frequently when forming a corporation. There's pretty standardized language to cover that situation, so on your side it won't be anything of an issue.
    Quote Originally Posted by canexplain View Post
    Remember Hitler? I don't but here we are again .. cr****

  16. #16

    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by bmack86 View Post
    You can incorporate in two states: the place where you have your primary place of business and then the state of legal incorporation. So you'll probably want to incorporate in California and Delaware, for the reasons MJA posted above.

    As far as making money prior to incorporating, you can still operate as a pre-corporate entity as long as you represent that you are operating on behalf of the corporation-to-be, and it will presumptively tie any business transactions to your corporation rather than to yourself. Pre-corporate entities happen frequently so banks would probably be very understanding and would know exactly what to do. You shouldn't have any issues there.

    I did an LLC doc that we filed last Friday. It was approved on Monday. The office is working really quickly apparently.
    LGM- You'd need to explain in more details about what your company is doing and why this is so urgent to get the best answer, but BMack is right that it's a quick process, and writing shareholder arrangements is easy.

    However, my understanding is that Nevada is better than Deleware for tech companies in many cases.

  17. #17
    The Encyclopedia bmack86's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by thelastgreatman View Post
    Hmm... so if we incorporate in another state then we have to get permission to do work in California? The fucking government is a load of horseshit.
    Foreign qualifying is incredibly simple though. Otherwise you'd never fly on most airlines, eat Papa John's fantastically flavorful food, watch the BBC, etc. etc. etc.
    Quote Originally Posted by canexplain View Post
    Remember Hitler? I don't but here we are again .. cr****

  18. #18
    Peaceful Oasis TomAz's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    They must have different Papa John's in California.

  19. #19

    Default Re: Send Lawyers, Guns, And Money

    I just expedited an LLC through Legal Zoom and it took about a week and a half.

    They have lawyers on staff who can probably help you with the special language to describe the voting structure you need. I'm not sure if I would use a Legal Zoom for legal advice but it is certainly cheep enough to try.

    Edit: the actual LLC only took a 3 days to create but it took a week and a half to get all the paperwork and corporate seal etc.
    Last edited by Packer; 06-27-2014 at 01:33 PM.

  20. #20
    The Encyclopedia bmack86's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by TomAz View Post
    They must have different Papa John's in California.
    Nope, I've had it in three different states and it's always been terrible.
    Quote Originally Posted by canexplain View Post
    Remember Hitler? I don't but here we are again .. cr****

  21. #21
    Member TomServo's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    No, you can't avoid paying California taxes and whatnot by incorporating elsewhere. You just get double-fisted by Delaware and California for operating in Cali. And it sucks.

    I dunno about the week and a half thing, my incorporation experiences in Cali were a nightmare of backed up desks and months of waiting. Granted, these were for medical corporations that required some state qualifications, so that probably complicated matters. Legalzoom is useful and usable, but meeting with an attorney (as you said) is the way to go.

    My experience with LLCs/etc. is limited, as I'm a criminal law attorney who just does some civil stuff on occasion.

  22. #22
    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by TomServo View Post
    No, you can't avoid paying California taxes and whatnot by incorporating elsewhere. You just get double-fisted by Delaware and California for operating in Cali. And it sucks.

    I dunno about the week and a half thing, my incorporation experiences in Cali were a nightmare of backed up desks and months of waiting. Granted, these were for medical corporations that required some state qualifications, so that probably complicated matters. Legalzoom is useful and usable, but meeting with an attorney (as you said) is the way to go.

    My experience with LLCs/etc. is limited, as I'm a criminal law attorney who just does some civil stuff on occasion.
    Oh I'm sorry, I forgot to stipulate this at the beginning of the thread:

    You are an insanely dumb person and I have absolutely ZERO care to here your thoughts about this or anything. Thank you.
    Quote Originally Posted by schoolofruckus View Post
    Look, your parenting is yours and Randy's business alone.
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    Default Re: Send Lawyers, Guns, And Money

    not sure how it works in 'Murica, but up here I can get my clients incorporated in 24 hours or less...we have online filing systems, I would assume you have the same

    keep your articles of incorporation simple, add in any shareholder's agreements, etc after the fact...KISS principle
    I'm a reasonable man, get off my case.

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    Banned thelastgreatman's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    The meeting with what are my new attorneys was nice. Apparently if needed they could get the LLC stuff processed within a day. Now, let's see how many hours they rape us for during negotiations... Cool guys though, they seemed to get it, and definitely appeared thoroughly comfortable in this arena. Relieving.

    Now, to find a fucking accountant... OH GOD I HATE BUSINESS.
    Quote Originally Posted by schoolofruckus View Post
    Look, your parenting is yours and Randy's business alone.
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by thelastgreatman View Post
    OH GOD I HATE BUSINESS.
    You haven't barely started your business and now you hate business. Because you're paranoid about accountants.

    I've got a better way to integrate software with video, btw. I hope you know what you're doing.

    Quote Originally Posted by bartelby View Post
    not sure how it works in 'Murica
    Go eat some potash.

  26. #26
    Peaceful Oasis TomAz's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by thelastgreatman View Post
    OH GOD I HATE BUSINESS.
    Let's see what your attitude is once the millions come rolling in.

  27. #27

    Default Re: Send Lawyers, Guns, And Money

    Question for Bryan or Tom,

    I'm in a legal battle with my parents former HOA over a lot split we are trying to accomplish with our former neighbor.

    I just got finished with a mediation. Although the HOA wont budge, the judge was pretty confidant that our case is solid and that the law is on our side.

    So the next step is either binding arbitration or Superior Court. I'm going forward with this no matter what because It's too much money to just leave on the table, but I'm a little worried about the possibility of loosing and having to pay the legal fees of the HOA's insurance company.

    My attorney advised me about a new kind of insurance which covers the cost of those legal fees if you loose the case. He said that the cost of that insurance is only 8% or so of what the underwriter projects the other sides legal fees might be.

    How can my premium only be 8% of the projected fees If I might only have a 70% chance of winning the case?

    Do you guys know of a good insurance company to work with for this kind of thing?

  28. #28
    Coachella Junkie algunz's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    I hope you don't loose.

  29. #29

    Default Re: Send Lawyers, Guns, And Money

    Thanks Gunz.

    And i've been trying to wrap my mind around this whole Ackman/Herbalife thing.

    The financial news is still saying that the law is on Herbalife's side.

    How can someone in Ackman's position be so confidant with so much money and such risk on something which might not end up working out for him. Is he on tilt?

    A few days ago he announced that he will be releasing the death blow to Herbalife and the stock plummeted. Then the next day he came out and gave a presentation which was more or less the same bullshit he was saying before and the stock went up.
    It was clearly not the death blow. What is stranger is that he still has much more evidence/videos/interviews ect. which he says will prove Herbalife is a fraudulent pyramid scheme. Why hasn't he released any of it yet? Whats he waiting for?

    I think I know. I think he is trading the stock on a daily basis. I think he came out with new short positions on Tuesday, made his announcement that he will be releasing his death blow on Wednesday, covered his short when the stock plummeted, and got out of it before the public knew his death blow wasn't anything much at all. And I think he is going to string this thing along as long as he can and trade it over and over again until he finally has to show his hand, which might be very good anyways and might bankrupt the company.

  30. #30
    Member insbordnat's Avatar
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    Default Re: Send Lawyers, Guns, And Money

    Quote Originally Posted by Packer View Post
    Question for Bryan or Tom,

    I'm in a legal battle with my parents former HOA over a lot split we are trying to accomplish with our former neighbor.

    I just got finished with a mediation. Although the HOA wont budge, the judge was pretty confidant that our case is solid and that the law is on our side.

    So the next step is either binding arbitration or Superior Court. I'm going forward with this no matter what because It's too much money to just leave on the table, but I'm a little worried about the possibility of loosing and having to pay the legal fees of the HOA's insurance company.

    My attorney advised me about a new kind of insurance which covers the cost of those legal fees if you loose the case. He said that the cost of that insurance is only 8% or so of what the underwriter projects the other sides legal fees might be.

    How can my premium only be 8% of the projected fees If I might only have a 70% chance of winning the case?

    Do you guys know of a good insurance company to work with for this kind of thing?
    Why would you have to pay for the legal fees of the insurance company? I'm not aware of such a provision. This isn't the UK.
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