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    The Greater Williamsburg area is an exciting place to live and work, especially because of the large number of entrepreneurs who have built businesses from the ground up. These entrepreneurs have taken their passion and made it their profession. Many of us want to take that step. Before you begin, you need to think of the type of business entity you want to form. Our attorneys have extensive business experience, from small one-person companies to publicly traded major corporations. Our attorneys are among the leaders in Virginia in the representation of Common Interest Communities. These communities are generally referred to as "homeowners associations," or "HOAs," and "condominium associations." In the greater Williamsburg area alone, we provide legal assistance to nearly 100 associations. Our attorneys have successfully prosecuted and defended a wide array of civil disputes involving community association covenant enforcement, commercial transactions, construction disputes, contracts, real estate matters, boundary line and easement disputes, employment matters, antitrust litigation, copyright violations, administrative proceedings, and estate issues. Real Estate law encompasses a wide variety of matters, and our attorneys have vast experience to assist you. Whether you need assistance with a commercial or residential closing, or you have questions relating to residential or commercial leasing, we provide experienced advice and counsel to our clients. Zoning law can be a complicated maze of statutes and ordinances. We have ample experience in successful applications for rezoning, variance, and special use permit requests. Finally, commercial and residential construction provide special challenges with respect to financing issues and the construction process. We serve as counsel to various financial institutions.

It’s time for your Small Business to audit its Corporate Documents

April 23, 2020 on 2:06 pm | In Business Planning, John Tarley | No Comments

Many of our New Year’s Resolutions address our personal health, but owners of small businesses should also resolve to address your corporate health. Small businesses operate with great attention to the product or service the company provides, but little energy is left to review the infrastructure of the company. Issues such as shareholder agreements, key person insurance, disability insurance, annual meetings and other corporate necessities are given short shrift because of the attention we pay to running the business.

Williamsburg Virginia Business Lawyers

Business Agreements

This blog post provides a few suggestions to help you overcome a problem unique to small businesses: spending too much time working in your business rather than working on your business.  Continue reading “It’s time for your Small Business to audit its Corporate Documents”

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Small Business Break-Ups – The High Cost of Litigating a Forced Separation

April 23, 2020 on 2:04 pm | In Business Planning, John Tarley, State & Federal Litigation | No Comments

A recent Virginia Supreme Court Case, Cattano v. Bragg, illustrates two points we have made time and time again: 1) Make sure your small business is prepared for an eventual “divorce” between the shareholders; and 2) Litigation is very, very expensive.

In this blog post we will review the Supreme Court’s decision and provide some tips for your small business so that you can avoid the calamity that occurred in this case, which included an attorneys’ fee award of over $260,000 for the prevailing party.

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Preserve your friendships when borrowing or lending with friends or family – Document your transactions

April 23, 2020 on 2:07 pm | In Business Law, Business Planning, General Interest | No Comments

Many small businesses rely upon loans from friends and family for startup funds, for business expansions, or to support existing operations. Many times, these loans are made upon an oral agreement. As we have written previously, although oral agreements can be enforceable, without a writing, the terms of the agreements can be difficult to prove. In this blog post, we will describe other problems with informal lending transactions between family and friends.

contract, borrow money

In a study entitled “Lenders’ Blind Trust and Borrowers’ Blind Spots: A Descriptive Investigation of Personal Loans,” researchers outlined many of the difficulties of maintaining a lender-borrower relationship  between friends and family. In many “informal” lending relationships, the borrowers and the lenders remember the transactions differently. This “self-serving bias” can lead to problems. For example, borrowers may believe that the “loan” was a “gift,” or although agreeing that the transaction was a “loan,” may believe they paid off the loan. On the other hand, the lenders may feel angry when the “loan” is not repaid, especially when the borrower never raises the issue of repayment.

The study documented these differences between borrowers and lenders:

 Many borrowers thought the idea for the loan originated with the lender, not themselves, although the lenders thought otherwise;

 Borrowers reported far fewer delinquent loans than lenders;

 Borrowers were fairly confident they would eventually repay the loan, but lenders thought even one missed payment probably meant the loan would never be paid off;

 Delinquent borrowers “are much more likely to report feeling guilty, and also strangely, relieved and happy. Lenders associated with delinquent loans, in contrast, are much more likely to report feeling angry.”

Even though banks are flush with cash to lend, you may not qualify for a loan, or the bank’s terms may be too onerous. Consequently, family and friends are natural sources of funds for startup funds or for operating capital. However, as the proverb says,”Before borrowing money from a friend, decide which you need most.” Therefore, if you must borrow from friends or family, it is a small price to pay to perserve your personal relationships to have your business attorney draft the appropriate loan documents, including a promissory note, so that everybody knows the expectations of the transaction. Taking this step at a relatively small price can save your friendships.

Tarley Robinson, PLC,  Williamsburg, VA

Attorneys and Counsellors at Law

 

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When might a Virginia business be liable for unemployment compensation?

April 23, 2020 on 2:07 pm | In Business Planning, John Tarley, Merger & Acquisition | No Comments

In the Greater Williamsburg area, many small businesses face seasonal layoffs when the summer tourism season ends. For small businesses, these layoffs lead to questions regarding unemployment compensation. In this blog post, we will discuss the issue of when an employer can be liable for the unemployment compensation for a terminated employee.

 

Generally speaking, an employee terminated by you may be otherwise eligible for unemployment benefits, chargeable to your company if:

The basic qualifications for unemployment compensation are:

Once you have been determined to be the “employer” liable for unemployment compensation, you are responsible for all the benefits payable to that former employee. Unless extended benefits have been approved, the maximum benefit is 26 times the weekly benefits payable to the employee.

The weekly benefits are found in a table at Virginia Code § 60.1-602. This table is regularly updated, it tells you how much a person would receive per week in unemployment, based upon the amount they made when employed. For example, if a person made $6,300 in the prior twelve weeks when employed, he would receive $125 per week in unemployment, and a total of $3,250, if he were employed for the entire 26-week period.

The possibility of being liable for unemployment compensation worries many small business owners. Discuss the issue with your business attorney so that you can plan properly for your employment needs.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

 

jt photo 150x150 Using a company computer to email your attorney may be a bad idea

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How long should your HOA retain its records?

April 23, 2020 on 2:06 pm | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

You are elected Secretary of your homeowners’ association. Congratulations! Someone hands you the minute book, owner roster, and the governing documents. You think, hey this is not overwhelming at all. Then the retiring Secretary mentions in passing that “If you’re home tomorrow I’ll deliver the boxes.” You ask “What boxes?” “Oh, all of the HOA’s records are boxed up and have been in my garage – I’ll bring them by,” replies the retiring Secretary.

What do you do with the boxes? What records and documents do HOAs need to keep? How long do you need to keep them? How should they be stored? This blog post provides some basic guidance on best practice tips for community association record retention.

HOA Filing Information

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You obtained a PPP Loan? Here are some answers to questions you may have on spending the funds

April 23, 2020 on 2:06 pm | In Business Law, Business Planning, John Tarley | Comments Off on You obtained a PPP Loan? Here are some answers to questions you may have on spending the funds

With the COVid-19 Pandemic, amongst the financial packages available to small businesses is the Payroll Protection Program (“PPP”). Small businesses must make themselves aware of the benefits of these loans. This blog post assumes you were able to obtain a PPP loan, and provides you with basic information you need to know, if you want your PPP loan to be forgiven (essentially converting the loan to a grant).

Please note that what follows is NOT legal or tax advice. These are simply my observations and notes based upon information I have gathered through an analysis of the CARES Act, an analysis of proposed regulations governing the PPP, and my attendance at numerous webinars given by tax and banking experts explaining the PPP.

YOU SHOULD CONTACT YOUR TAX ADVISOR AND BANK FOR PERSONALIZED INFORMATION FOR YOUR CIRCUMSTANCES. The purpose of this blog post is to provide you basic information that you can use to educate yourself about the PPP loans, so you can use that knowledge to ask more informed questions of your financial professionals.

First, if you were funded with a PPP loan, the period of time for calculating possible forgiveness of the loan is 8 weeks from the time you were funded. Therefore, if you were funded on April 20, 2020, your allowable expenses can only be calculated for the 8 weeks after that date.

Second, as the name suggests, the PPP is primarily to be used for payroll. At this point, it appears as though your business must spend at least 75% of the PPP funds on payroll in order to qualify as fully forgiven. Be advised that no employee (or owner) can be paid from the PPP loans at an amount greater than $100,000 per year, pro-rated over the 8-week period.

What constitutes “payroll?” Here are the current general guidelines, but there are more specifics that go beyond the scope of this blog post, so your particular situation may vary:

  • Draws or distributions to owners;
  • Payroll to full-time equivalent employees (payments made to independent contractors reported on a 1099 are not considered “payroll” because ICs are not “employees” and will not be calculated in your payroll). Also, the payment of state and local income tax on employee compensation counts in the “payroll” category;
  • Payment for group health-care benefits, including insurance premiums; and
  • Employee retirement benefits.

Third, besides payroll, you can use the PPP loan to pay your business’ lease or mortgage payments. Again, the 8 week period applies, and prepayment of future rent or mortgage probably will be disallowed in calculating the “forgiven” portion of your PPP loan expenditures.

Fourth, you can use the PPP loan proceeds to pay your business’ utilities expenses, as well as interest on any other debt obligations that were incurred before you obtained the PPP loan.

As you can see, the PPP loan can work for sole-proprietors, as well as small businesses with multiple shareholders/members. You are an employee of your small business, along with any other employees you may have.

Finally, so long as you follow the guidelines, your PPP loan will be forgiven if the proceeds are used for the program’s intended purposes (see above) over a period of time no more than 8 weeks from when your loan was funded. The bank where you obtained your PPP loan will make the determination of forgiveness, based upon your documentation and your expenditures. For any amount of the loan used that does not meet the PPP loan criteria, that amount will NOT be forgiven.

As a reminder, nothing in this blog post should be considered legal advice or tax advice, but instead is a very basic overview of how to spend your PPP loan proceeds. Contact your tax or financial advisers for your particular situation. But in any case, document every PPP expenditure you make to support your case to have the entire PPP loan forgiven.

At the end of the day, we know many of our small businesses cannot afford to seek out legal advice at this time, but it is vitally important that if we are to survive the financial crisis arising out of this novel Coronavirus pandemic, and we have to be willing to help each other out. As information is made available, we will keep you updated as best we can. Stay safe!

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Common Interest Community Board revokes a management company’s license

April 23, 2020 on 2:06 pm | In Business Planning, Common Interest Community, HOA, Merger & Acquisition, State & Federal Litigation, Susan B. Tarley | No Comments

The Common Interest Community Board (the “CICB”) revoked a management company’s license for regulatory violations.  In a case reported in the September issue of the Community Associations Institute Law Reporter (Virginia Common Interest Community Board v. Sarraga t/a Lakeside Community Management, File No. 2010-00562, June 24, 2010), the CICB revoked the license of Sarraga t/aLakeside Community Management and issued fines totaling $2,000.

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Can I “hire” an unpaid intern for my business?

April 23, 2020 on 2:06 pm | In Business Planning, Employment law, John Tarley, Merger & Acquisition, State & Federal Litigation | 2 Comments

I teach as an adjunct faculty member at the William & Mary Law School. I find this part-time teaching gig very stimulating intellectually because the law students at W&M are extremely intelligent, diligent, and driven. This past week a new class of first-year law students arrived with great expectations about their futures. The reality of the job market, though, is that the legal profession has not been immune from the effects of this difficult economy.

Some of my second-year law students have also arrived back into Williamsburg, and I have been surprised at the number of students who report they worked as an “unpaid intern.” Although this practice is permissible in certain situations, these working arrangements with private law firms probably violates federal labor laws, and it is particularly distressing that it occurs in the practice of law. This blog post provides some guidance for your small business when deciding whether to “hire” an unpaid intern.

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Immigration and Employers – Remember your I-9 Forms

April 23, 2020 on 2:06 pm | In Business Planning, Common Interest Community, John Tarley, Merger & Acquisition | No Comments

There are many issues for entrepreneurs starting and operating their small businesses. In that light, immigration is not just a national issue involving major companies. Small businesses must be aware of government requirements, too.

Since 1986, the Immigration and Nationality Act has required employers to to verify that its employees are able to accept employment in the United States. Consequently, the I-9 form was developed. Every employee must complete an I-9 form at the time of hire. Employers are required to ensure the form is completed within three days of hire. Furthermore, even if the company engages contractors, the company could be liable if it knows the contractor employs unauthorized workers. Obviously, criminal penalties await those who fraudulently fill out the I-9 form, but civil penalties also can be levied against companies who fail to keep proper records, even if the employee is legally authorized to work in the United States.

As always, ask your attorney to make sure that your company’s legal issues are covered so that you can focus your energy on growing your business.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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Should I incorporate my business?

April 23, 2020 on 2:05 pm | In Business Planning, Merger & Acquisition, Neal J. Robinson | No Comments

Frequently, budding entrepreneurs merely evolve into business without giving it the upfront thought the transition deserves.  They become what are usually known as “sole proprietors” operating “sole proprietorships,” or one-man/woman businesses.

Business Deal

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