Small Business Transactions

January 10, 2024

LLC Transparency (New York) and the CTA (Federal) Compliance becomes reality and potentially expensive.

Corporate Compliance UPDATE—(January 10, 2024).

LLCs have been a favored entity for real estate for many years in New York. Times are changing. For those of you who own a beneficial interest in a New York Limited Liability Company, you need to contact your attorney. Effective January 1, 2024, LLCs must comply with New York’s new LLC Transparency Act, which will create a database of the beneficial owners of Limited Liability Corporations that is accessible to government agencies and law enforcement. According to our Governor,

“For far too long, bad actors have been protected by the loose disclosure requirements of LLC ownership. Wage theft, money laundering, tenant mistreatment and other unlawful activity has been masked by the opaque ownership structure of an LLC. The new LLC Transparency Act will give law enforcement and State regulators the tools they need to hold bad actors accountable.”

April 3, 2020

COVID -19 Response from a Legal and Estate Planning Perspective- Protect your Family.

by Peter Klose

(Nyack, New York- April 3, 2020) We all hear the horrible, and getting worse, stories of loved ones sick, suddenly finding themselves in the hospital, incapacitated, and no longer in touch with their family members, unable to pay their own bills, manage assets, or even make medical decisions. With the outbreak of Coronavirus (COVID-19), this scenario is a growing concern, and unfortunately, a growing reality for many.

What are common issues families face when a loved one is incapacitated and what Estate Planning documents might give all a piece of mind:

* No power to make medical decisions if you are unable to communicate your medical wishes;

September 30, 2013

Attention New York Property Owners – Reduce Your Property Tax Bill.

by Peter Klose

In New York, grieving your property taxes means more than just complaining when your bill and assessment arrives. Each year the tax assessor for hundreds of municipalities sets a base line “assessment” for how much your they believe your real estate property is worth. Then, based upon formulas adopted by the State, they determineshow much you pay in taxes. You have the right to “grieve” your taxes by filing the correct form with your local “assessor,” in a formal review of the assessment, called a “tax grievance.”

As the property values escalated during the last decade, municipalities gleefully re-assessed the properties at higher and higher values so they could increase the amounts of revenue they collected from the real estate taxes. Homeowners are traditionally skitish about filing a tax grievance for various reasons– maybe they benefitted from such increased assessments because they took out home equity loans, or mortgages. That said, others refrained from filing a grievance fearing that the Town would reassess their property, find the various improvements made to the property, and then tax you more? While you may not file objections every year, the municipality is not permitted to raise your assessment because you grieved your taxes.

What does it mean for New York homeowners to “grieve” your property taxes. To begin with, you must file an RP-524 Form. This process is supposed to be simple, and is well explained here.

July 29, 2013

Insurance Tips when Buying a Home In New York.

by Peter Klose

Last month we spoke about some tips for new home buyers in New York State when purchasing home owners insurance, and we solicited the help of my friend Bill Allen, an independent insurance broker at the William C. Allen Insurance Agency, Mineola, NY 11501. Here are some ways to try to lower those costs:

1) Consider installing a security system and smoke detectors: A security system that is monitored by a central station alarm company or notifies the police directly will typically provide a 5% discount. Smoke detectors are a standard safety feature in new homes and should be installed in older homes. Having them may not only save a life but could also reduce the cost of insurance.

2) Raise the deductible. Higher deductibles equal reduced premiums: A homeowner willing to take a greater portion of the risk by agreeing to paying a higher deductible in the event of a claim, will pay a much lower premium. Since insurance should only be used for catastrophic events and never for small claims, it makes sense to have higher deductible.

June 5, 2013

Restaurants serving up copyright infringement/Dinner with a side of copyright infringement?

by Peter Klose

Restaurants try to provide a relaxing and pleasant atmosphere, so their diners enjoy a nice experience, . . . . romantic, relaxing, . . . not their customer’s home. Often, ambience and mood includes music, but your favorite spot might be dishing out copyright infringement in addition to the special of the day.

A copyright is the exclusive right to perform an artistic piece such as a song. It protects the person who created the work from unauthorized (unpaid for) use of the song. Federal law governs copyrights, which means that the law is the same regardless of whether the restaurant or bar is in New York, or another state. There is a struggle for the artists who created the songs to manage the license to play the music in a public establishment (a mini-booking fee). Some restaurants and bars actually acquire a license to play songs and television on the radio or over the speakers and televisions installed at your favorite dining establishment. More and more, as music moves to the digital environment, licensing companies are pursuing these small restaraunts and bars to “enforce” their claimed right to copyrighted work. So, when does the restaraunt need such license?

Generally speaking, restaurants with 3,750 gross square feet, excluding areas used only for parking, do not need licenses to play music and televisions. But what about restaurants with more than 3,750 gross square feet? Those establishments do not need licenses to perform music if any of the following apply:

February 11, 2013

CHOCOLATE KISS COLORED CARPET…. BEAUTIFUL? YUMMY? or INFRINGING?

by Peter Klose

Shaw Industries Group, a leading carpet manufacturer recently sued The Hershey Company in Federal Court in Georgia for a declaratory judgment that its Chocolate Kiss colored carpet did not infringe Hershey’s CHOCOLATE KISS trademark.

According to the complaint, Shaw has been using CHOCOLATE KISS as a color in connection with its carpets since 1993 and has used it in connection with 200 carpet styles since that time. Shaw received a cease and desist letter from Hershey’s in December of 2012 which claimed that the use of the CHOCOLATE KISS mark illegally diluted and infringed its trademark. Despite its almost 20 years of use of the Chocolate Kiss color name, Shaw claimed that this December letter was the first time that it was notified that Hershey’s objected to the use. In its response to Hershey’s cease and desist letter, Shaw noted that it was discontinuing use of the CHOCOLATE KISS colored carpets in June of 2013.

Apparently dissatisfied with Shaw’s response to its cease and desist letter, Hershey’s sent a responsive letter demanding that Shaw “immediately” discontinue the carpet. Shaw responded by commencing the lawsuit. Given the planned phaseout of the Chocolate Kiss colored carpet, it is doubtful that this case will ever go to trial, however, it presents an interesting issue of whether products named after popular goods and services do infringe or dilute the trademarks in those goods. In light of Shaw’s long use of this carpet color, another interesting issue would be whether the defense of laches would be sustained by the court. Laches is a defense to certain actions based upon the right holder failing object or do something to curtail the illegal use.

November 18, 2012

Think Twice Before Posting an Online Review.

by Peter Klose

It seems to be getting a little more risky to post negative online reviews. A Virginia Court recently ordered that certain negative online reviews of a home improvement contractor be removed from Yelp.com, pending a trial for defamation against the reviewer.

The reviewer, apparently unsatisfied with the work performed by the contractor at her home, posted negative comments on the websites of Yelp and Angie’s List, alleging that the contractor caused damage to her home and that jewelry had gone missing after the contractor performed work at her home. A civil suit is currently pending against the reviewer who posted the negative comments seeking $750,000 in damages for defamation of the contractor.

While this isn’t the first defamation case arising from a negative online review, these lawsuits are fairly uncommon. Although the Communications Decency Act of 1996 protects websites like Yelp and Angie’s List from lawsuits relating to negative reviews posted by their users, the individuals posting such reviews are not immune from liability. In New York, like most other states, a claim for defamation arises when a person makes a false statement resulting in harm to another person’s reputation. Although there are a number of defenses that can prevent a plaintiff from succeeding in recovering damages on a defamation claim, proving that the statement is true is always a defense to such a claim.

September 7, 2012

Do You Have the Right Amount of Insurance– Think About it when you Buy a House in New York?

by Peter Klose

It can be difficult to strike a balance in finding adequate insurance coverage, while avoiding unnecessary coverage or being underinsured.

While states generally require a minimum amount of auto insurance coverage, and mortgage lenders also generally require you to maintain homeowner’s insurance for at least the value of the mortgage, these amounts may not represent the optimum amount of insurance for your circumstances. For example, in New York, motorists are required to carry $25,000 in liability insurance for bodily injury to a single person, $50,000 for bodily injury to all persons, and $10,000 for property damage in any accident. Minimum “no-fault” coverage of $50,000 is also required. However, given the price of auto repairs and the price of a replacement car if a car is totaled in an accident, damages could far exceed the $10,000 minimum. If you only carry the minimum amount of insurance, you will be personally liable for any property damage in excess of $10,000.

In addition, insurance policies, whether they are auto, homeowner’s, or life insurance, contain a seemingly endless list of exclusions from coverage – it can be hard to determine exactly what is covered. However, these exclusions and limits are very important in protecting your hard earned nest egg in the event of an accident or other unforeseeable event.

July 30, 2012

FB, Linkedin, Social Profiles and death in New York and on the internet.

by Peter Klose

So maybe your will was drafted a while ago or you are just starting to put together your important papers in anticipation of getting a new will. You’ve considered all the basics: who gets the house, the cash and stocks, and who will take care of your children, but have you thought about what will happen to your social media accounts when you die?

Most social media sites will not give your account information to anyone in an effort to protect your privacy, but allow certain people to cancel your account upon your death. For example, Facebook has a policy of “memorializing” deceased users’ accounts, and permits only confirmed friends to see the deceased user’s profile and post on their page. Facebook allows immediate family members to request the removal of a deceased user’s account, but it will not provide login information to anyone. Twitter has a similar policy allowing family members or other “authorized” persons to deactivate a deceased user’s account, but will not provide login information to third parties. LinkedIn also allows family members or other survivors to close an account upon satisfactory verification of a user’s death. On the other hand, email providers like Gmail, allow authorized persons to access the deceased user’s email account upon a lengthy verification process, including obtaining a Court Order directing Google to disclose account information.

In New York earlier this year, Assemblyman Felix Ortiz introduced legislation that would allow users to appoint an “online executor” in their will providing them with the authority to cancel social media accounts upon the user’s death. The Committee on Judiciary is currently considering the bill. Other states have enacted similar legislation in an effort to bring probate laws into the 21st century.

March 14, 2011

New York Small Business and Small Towns Need Lawyers.

by Peter Klose

I own a small business, and am proud of it. In fact, I “know it all,” and, better yet I “can do it all,” because “Paying professionals a waste of money.” So, why should I need a lawyer when I buy, sell or even operate a business.

Since the bottom line is key, most small business owners I encounter genuinely think that hiring a lawyer is akin to turning on the water faucet, and getting little in return but a hefty water bill. I assure you that such rationale is flawed.

Take for example the client who was operating a thriving New York City diner. The business flourished, because it had a ten (10) year lease with options to renew; or so they thought. Then, the building was sold. Deep in the “standard form” lease agreement signed ten years earlier was the barely legible clause, “Upon sale, the incoming owner may cancel and terminate this Lease on ten (10) day notice,” and that’s what happened.