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Internet and E-Commerce Blog

S-Corp or LLC Better for My Business Part II?

S-Corp or LLC Better for My Business Part II? One of the most important distinctions between an S-corp and an LLC involves ownership. In general, an S-corporation may have only shareholders who are: (1) individuals who are U.S. citizens; (2) resident aliens; (3) certain types of trusts; and (4) other S-corporations

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Should I form a Nevada Corporation for my California Business?

There can be valid reasons for a California business to incorporate under the laws of another state. However, saving money is not one of them.

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The IRS and the Civil Fraud Penalty

Any civil fraud case will be very fact-specific. The key question is whether the IRS can prove, by clear and convincing evidence, that the taxpayer intended to evade a tax that the taxpayer knew he or she owed. Given the stakes involved, this merits close examination. If the IRS assesses or threatens to assess the civil fraud penalty against you, you would be well advised to consult with a tax attorney to discuss your rights and potential defenses.

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You Have a New California Corporation, What Now? Part II

You have a new California Corporation, What Now? Part I dealt with an overview on your California Corporation, withdrawing corporate funds, taxes & accounting and books and records. I’ll continue to address the advantages that your Corporation will enjoy as a S Corporation.

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Protecting Your Business from Cyber Risks

In November 2014 Sony Pictures experienced a debilitating cyber-attack, one which many experts believe was perpetrated by the North Korean’s. While most small businesses are unlikely to incur the wrath of Kim Jong-Un, any business with a computer or mobile device, i.e., nearly every business, is potentially vulnerable to cybercrime of one kind or another. […]

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IN·DEM·NI·FY: A Dangerous Little Word…

Where do you find indemnity clauses? They are often contained in the “boilerplate” section of contracts, and are easily overlooked by people in a hurry to sign on the dotted line. If the contract includes an indemnity clause, be sure to discuss it with your attorney. It could potentially cost, or save, you a lot of money.

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Making Payroll by Shorting Your Employees’ Tax Withholdings is Bad Idea!

Finally, in a delicious irony (at least if you are an IRS agent), this approach will ultimately make the company’s financial situation much worse. When tax time comes, the corporation will only be able to deduct employee compensation that was reported as employee compensation. “Under the table” transfers are, by definition, not reportable for tax purposes. This will make the corporation will appear much more profitable than actually was, leading to a downward spiral of tax debt.

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Rather than peer hungrily at the data gathered by sites such as Facebook and Twitter, Google decided to create its own data gold mine—Google+. Unlike Facebook and Twitter, Google has complete access to the information on Google+ and is able to use that information to evaluate each website’s identity and reputation.

So…if you value your business’s search rankings on Google, better have a good Google+ presence!

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JONATHAN WATTS, has been named to the 2014 California Rising Stars list.

We are pleased to announce that Jonathan Watts has been selected to the 2014 California Rising Stars list. This is an exclusive list, recognizing no more than 2.5 percent of the lawyers in the state. Super Lawyers, a Thomson Reuters business, is a research-driven, peer influenced rating service of outstanding lawyers who have attained a […]

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Zappos Told Their Terms of Use Contract is Invalid and Unenforceable

Like many e-commerce sites,’s Terms of Use was accessible by means of a hyperlink at the bottom of each page. Users were not required to click “I accept” when setting up an account or making a purchase (i.e., a “click-wrap” agreement). Instead, users were supposed to locate and click on the hyperlink to the Terms of Use that purportedly governed their relationship with Zappos. (This type of setup is sometimes referred to as a “browse-wrap” agreement.) The hyperlink to the Terms of Use was not prominently displayed.

This arrangement was weighed in the balance and found wanting. By the stroke of a pen, District Judge James denied Zappos the right to send their goof-up to arbitration (and thus save themselves a lot of money, further embarrassment and a massive headache) because Zappos’ customers never agreed the Terms of Use in the first place. In the judge’s words:

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The Fiscal Cliff is Looming. What Should You Do?

If you own a C-Corp it is likely it will make sense to pay yourself the qualifying dividends from your company’s retained earnings. This will take advantage of the low 15% 2012 tax rate and avoid the astronomical 39.6% 2013 tax rate. Finally, you should review whether selling your investments that have unrealized gains before 12.31.2012 makes economic sense.

Deferring your expenses probably would be the wrong call to make. Itemized deductions seem to be on the chopping block, both by Romney, many Democratic plans as well as most states. The 2012 itemized deduction rule should be, if you see a deduction, take it!

Of course the election results will further hone the New Year’s trajectory. These are just a few tips on ways to stay informed and savvy in the meantime.

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What Features Should be Made Available or Enhanced on My Mobile Business Site?

The larger and more complex the files, the slower the downloading for your potential customer. Customers on mobile devices have seconds, not minutes, in which they’re trying to accomplish something. If your potential customer has reached the order window at their local Taco Bell and your site is still downloading chances are they’ll decide to redirect their search to another business.

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Mobile-Friendly: Is it Just a Fad or Does it Matter for My Small Business?

Google recently commissioned research firms Sterling Research and SmithGeiger to poll over 1000 adults on their opinions and thoughts on their mobile web experience. These statistics unearthed some enlightening data that further supports the mobile web’s wide open vista that has been largely untapped by small business owners.

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Now that I have a Corporation, Do I still need Insurance?

The takeaway message is that corporation or limited liability company can be an excellent way for a business owner to minimize his or her personal liability. But insurance is still a vital piece of the puzzle.

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