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Howard County MD Business Law Blog

Restaurant investor brings lawsuit against former partners

Maryland businesses may be interested in the story of one man's restaurant investment that ended in multiple lawsuits. The final trial ended in a settlement.

In the early months of 2011, a New York man entered a partnership with two other men, investing up to $75,000 in the restaurant that the two men owned in Waldorf. The investor also worked in the restaurant's kitchen for three months as a cook. According to reports, the investor was paid only twice during this time, totaling $2,000. Four months after his initial investment, the man then asked his two partners for a certificate of ownership or some other documentation of their partnership.

Tax information for Maryland business owners

If someone is opening a new business, it is important that they are proactive about how they deal with taxes. Proper business tax planning can help prevent entrepreneurs from running into legal problems as well as help them estimate their business costs related to taxes. Planning should include selecting the most appropriate business structure, keeping track of tax-related documents and taking advantage of tax credits.

The most common business structures are sole proprietorships, partnerships, LLCs and Subchapter C or S corporationa. Each has different pros and cons, and the type of structure someone chooses for their business will also determine how they are taxed. Along with selecting the right structure, it is critical that individuals keep track of their accounting and any receipts that may be needed for tax purposes. Failing to do so may lead to problems filing and the possibility of an audit.

Maryland employers need to know employee screening laws

According to the Society for Human Resource Management, 69 percent of all employers conduct a criminal background check on prospective employees. While the vast majority of background checks are not conducted until a job offer is made, 4 percent of background checks are conducted as soon as an application is received. Although such background checks are intended as due diligence, employers are restricted regarding the type of information they review.

The Equal Employment Opportunity Commission says that employers should consider the nature of an offense, how long ago it occurred and the type of job being applied before determining if a background check is legal and relevant. Additionally, the EEOC says that background checks should not be conducted until a job offer is made as they may inadvertently disqualify minorities at a higher rate if they are done before making a formal job offer.

Apple sued for alleged meal and break violations

Maryland residents may be interested to learn about a class-action lawsuit that has been filed against Apple. The lawsuit was filed in California and alleges that the company committed several California Labor Code violations. The complaints listed in the suit include failures to provide timely meal and rest breaks to employees as well as a late payment of a final paycheck.

The employment dispute originally began when four retail and corporate Apple employees filed a lawsuit in December 2011. On July 21, 2014, the lawsuit gained class-action status and now encompasses an estimated 20,000 plaintiffs. Although the court documents list an estimate of 18,000 current and former Apple employees, the class size reportedly grew as a result of employee turnover that has taken place.

Business tax planning tips

Maryland business owners should have a long-term plan when it comes to paying taxes. Whenever a business experiences a financial gain or a financial loss, it may be a good idea to talk to a financial adviser who may be able to help a company minimize its tax burden. The first step that a business may want to take when it makes a profit is to create a retirement plan for its owner.

This will help an individual save for retirement while being able to deduct the contribution as a business expense. The next tip for business owners is to consider the structure of the business. While a sole proprietorship makes it easy to run the company, incorporating may provide legal protection that could save money in the future. An attorney may be able to help with additional paperwork that is involved when running a corporation.

Strategies for selling a business

Maryland businesses owners and residents may be aware of the recent trend towards acquisition of companies at all levels. Mergers and purchases are increasingly common from very small to very large businesses as companies take advantage of growth trends in the economy to buy up other companies. Because of these trends, business prices are currently 30 percent higher than they were in 2011.

Many small business owners might wonder about the process of selling a company to another business. It is essential to prepare correctly for the sale, which might include an accurate assessment of the company, and it is also important to create an exit strategy that provides for certain considerations, including how taxes might be levied on potential profits from the sale.

Uber facing problems in Maryland, D.C.

On July 3, more than 30 Maryland cab companies filed a lawsuit in Baltimore Circuit Court against the popular ride-sharing company Uber. The cab companies claim that Uber is interfering with their business by using a surge-pricing model, which the plaintiffs claim is similar to price fixing. Uber is barred already from operating in the state of Virginia.

Uber began its operations in San Francisco where one of the oldest cab companies in the city is now saying that it may go out of business within 18 months because of the competition it faces from Uber. The cab companies who filed the lawsuit in Baltimore are saying that Uber is not subjected to the same regulations as are cab companies, but Uber says that its ride-sharing model is not the same as a taxi service. In Maryland, Uber has proposed that it be regulated differently than cab companies, and the cab companies are lobbying against these proposals.

Judge dismisses shareholder claim against Hewlett-Packard

Maryland businesses may be interested in the resolution of a shareholder lawsuit against a major Silicon Valley technology company. The lawsuit was brought about when the company's former CEO, who had been credited with improving the company's financial position, was accused of sexual harassment.

Technology company Hewlett-Packard has Standards of Business Conduct in place, describing its commitment to acting ethically in its business practices. The standards were updated in 2006 after private company information was leaked to the media. In 2010, the then-CEO was accused of harassment by an independent consultant working for the company. Although an internal investigation found no wrongdoing, the CEO left because of the allegations.

Consider tax implcations before forming a LLC

Business owners based in Maryland owe it to themselves to study the tax implications that come with forming a LLC. LLC's are a popular form of business organization because the offer an opportunity to organize a business that is separate from personal expenses and liability.

For partners looking to start a small business and protect their family assets, this is an attractive option. Many times, when forming their business, individuals tend to put the potential taxation repercussions. When filing federal taxes, the IRS has no designated form for LLCs. Owners can file as if the business were an S or C corporation.

Rising use of non-compete contracts sparks controversy

Well drafted employment contracts are critical for many employers in the Columbia area. Successful companies often recognize that because employment is at-will under Maryland law, it is important to draw some contractual parameters. At-will employment means that both the employer and the employee have the right to terminate employment at any time for any reason that does not violate the law.

In many industries, non-compete contracts are a key element of employment contracts. Non-compete clauses are often used to keep a salesperson from leaving the company to work for a competitor, taking along clients and leads. Non-competes are also common in the technology industry where they are used to restrict employee movement in order to insulate companies from the theft of trade secrets and intellectual property.