Unless you are a corporate lawyer, even if you’ve been in business for years, you may be unfamiliar with things that can have a significant impact on your business. That’s where Allegiance Abstract Services comes in. A lot of our clients come to us again and again, because they know they can trust us to take care of the nitty-gritty details that they don’t want to be bothered with, or because they know that those details are way too important to leave to someone who isn’t a professional.
This article attempts to shed some light on some legal issues your company may need to deal with, that we can help with. While it would take about 20-times the 600-or-so words we’ve written here to give you a solid understanding of these legal issues, our hope is that we’ll give you enough information here to understand why these things are important and require professional assistance.
Corporate Franchise Tax Search
A franchise tax is not a sales tax, nor is it based on income. It is a tax charged in some areas, and it is based on an entity’s net worth or the capital it holds. Determining if your business is subject to these taxes, and how much the tax burden will be, is based on many factors, including how many employees you have in the area, if you have a physical business location in the area, and if you are selling physical goods in the area. The type of business you are running is also a factor, as is how many locations your business operates in.
This is not a tax on franchises. It is considered a privilege tax, essentially a tax imposed by a state or province for the privilege of doing business there.
Franchise taxes may be based on income, capital, net worth, par value of company stock, shares of outstanding stock, value of real property, and many other factors.
Corporate Good Standing Certificates
This is an official government document that is required in order to do business in a given state or province. It is critical to make sure that any business you are considering buying or partnering with is in good standing. Some things that may determine whether or not a business is in good standing include whether or not it is up to date on fees, has filed required reports, including an annual report, and has paid its franchise taxes. A certificate is also required if you are applying to do business as a non-citizen or foreign entity, if you are attaining a business loan, and if you are seeking individual or institutional investors.
Uniform Commercial Code Search
The set of laws that make up the uniform commercial code provide the guidelines for all business dealings. Virtually every business transaction is subject to the uniform commercial code. Originally, it was intended to simplify onerous laws and requirements faced by businesses. It deals with issues related to leases, bank deposits, letters of credit, bills of lading, investment securities, and other documents and secured transactions.
The code may differ from state to state and province to province, so it is important to have a firm understanding of how the code in enforced in every single place you are doing business. So, while it was intended as a way to simplify business, it can still get very complicated for businesses operating in multiple locations.
A uniform commercial code search ensures that a business is in compliance with what can be a very complicated set of rules and regulations.
We hope that this overview has been helpful. If you need assistance in any of these area, or with title searches, tax lien searches, or other legal issues related to business and real estate, please give us a call. We’ve been doing this a long time and have the processes and procedures in place to make all of these complicated issues much more manageable.