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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.

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

April 23, 2020 on 2:19 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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Can an advisor be held liable for the false statements in a prospectus made by another?

April 23, 2020 on 2:19 pm | In Business Planning, Contributors, General Interest, Merger & Acquisition, Neal J. Robinson, State & Federal Litigation | No Comments

For all you accountants, investment advisors, and even attorneys who provide advice and guidance to companies or other entities raising money or other property for investment purposes, it might be a good idea to pay particular attention to the

United States Supreme Court opinion, when issued, in the case of Janus Capital Group, Inc. v. First Derivative Traders, No. 09-525 (S. Ct.). This case was argued before the Court on December 7, 2010. The Court’s opinion should be issued sometime during the first half of 2011.

Janus Capital Group, Inc. is somewhat factually and legally complex. However, in very simplified terms, First Derivative Traders is attempting to assert primary Securities Exchange Act Section 10(b) fraud liability against an entity,

Janus Capital Management LLC, that “helped” and “participat[ed] in” preparing a prospectus. The prospectus was actually that of, and was issued by, Janus Funds, a separate entity. Janus Funds had its own lawyers review the prospectus. Further, the Funds’ Board of Trustees, which was primarily responsible for it, reviewed it, as did the outside Trustees of Janus Funds, who also had their own counsel review it.

The United States (i.e., the Securities and Exchange Commission) filed an amicus brief in this case advocating such indirect liability in private actions, never mind the right of private action was judicially, not statutorily, created.

Williamsburg Virginia Business Lawyers

United States Supreme Court

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Requests to Inspect and Copy Community Association or Company Records: Should it be this complicated?

April 23, 2020 on 2:19 pm | In Business Law, Business Planning, Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

A Virginia Beach jury found a condominium association liable for failing to permit unit owners an opportunity to inspect and copy association records. Not only must the condo board allow inspection and copying, they must pay for an audit of the association records and pay $50,000 for the unit owners’ attorneys’ fees.

These questions arise frequently. This blog post reviews the various Virginia statutes that address the right to inspect and copy records for companies, HOAs and condominium associations.

HOA Filing Information

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Zoning and “Adaptive Reuse” – What does that actually mean?

April 23, 2020 on 2:19 pm | In Business Planning, General Interest, Land Use Planning, Real Estate Strategies, Zoning | No Comments

DOG Street Pub, the former SunTrust Bank

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Common Interest Community Board revokes a management company’s license

April 23, 2020 on 2:19 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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When might a Virginia business be liable for unemployment compensation?

April 23, 2020 on 2:19 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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Can I “hire” an unpaid intern for my business?

April 23, 2020 on 2:19 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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When is a “Contract” not a Contract?

April 23, 2020 on 2:19 pm | In Business Planning, Construction litigation, General Interest, John Tarley, Real Estate Litigation, State & Federal Litigation | No Comments

We know that in Virginia, the parties to a contract are bound to the terms of that contract. We also know that Virginia courts look to the terms of that contract to determine each party’s rights and obligations. But what is a “contract?” This blog post looks at a recent Virginia Supreme Court case that gives a little guidance to answer that question.

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Using your business’ computer to email your attorney may be a bad idea

April 23, 2020 on 2:19 pm | In Business Planning, Common Interest Community, General Interest, HOA litigation, John Tarley, Real Estate Litigation, State & Federal Litigation | No Comments

Email

Well, we have written about protecting the attorney-client privilege and about safe emailing tips when emailing your attorney. Although we thought we had it pretty well covered, a recent decision from a California appellate has given us something more to think about.
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Virginia’s New Noncompete Statute effective July 1

April 23, 2020 on 2:19 pm | In Business Law, Business Planning, Employment law, General Interest, John Tarley | Comments Off on Virginia’s New Noncompete Statute effective July 1

Virginia became one of the latest states to pass legislation limiting the use of employee noncompete agreements. Beginning July 1, 2020, certain noncompete agreements are prohibited by statute. This blog post examines that new statute and what it means for employers and employees.

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