Tuesday, October 18, 2011

California's New B Corporation

Governor Brown recently signed Assembly Bill 361 enacting a new kind of corporation for California, the B-Corporation.  You may be familiar with B Corporation Certification which already exists.  However B Corporation Certification and California's new B-Corporation are different.  B Corporation Certification is certification awarded by NGO B-Labs which certify companies that operate under sustainable principals.

California's new B-Corporation legislation, effective January 1, 2012, allows a new business to legally incorporate as a Benefit Corporation, or an existing corporation to change its legal designation to a Benefit Corporation.  The Benefit Corporation shall have the purpose of creating a general public benefit.  Under existing corporate law, Corporations owed a fiduciary duty to its shareholders, and all decisions must be made with the shareholders' interests as paramount.  Decisions made to maximize sustainability, minimize detrimental impact to the environment, and/or maximize social benefit could leave directors liable to shareholders if those decisions negatively impacted shareholders.  With the new B-Corporation legislation, however, directors would have maneuverability in making such decisions without the concomitant liability.

AB 361 encourages corporate transparency.  Indeed, as part of the legislation, B-Corps must include in their annual reports a review of the corporation's overall social and environmental performance.  In addition, B-Corps must post all of its benefit reports on the public portions of the corporate web site, if there is one.

Monday, October 10, 2011

What is a 529 Plan?

A 529 plan is a tax-deferred College Savings Plan which can be used to fund a child's education.  Contributions to the plan can grow tax-deferred, and income distributed tax-free as long as it is being used for qualified education expenses, which can include room, board, and tuition at universities.  The plans are state sponsored, so specific rules will differ from state to state.  As such, it is wise to consult with your tax advisor before pursuing a 529 plan investment.

If money is withdrawn from a 529 plan for purposes other than qualified education expenses, then the withdrawal is subject to income tax as well as a 10% federal tax penalty on earnings.

The existence of a 529 plan benefiting a student may reduce that student's eligibility for need-based financial aid.

More information about 529 plans can be found at http://www.sec.gov/investor/pubs/intro529.htm

Sunday, October 9, 2011

Living Trusts and Estate Planning

What do the new estate tax laws mean for you and your children? What kind of documents are important to ensure you and your children will enjoy the benefits of your hard work?  These questions and more will be explored in a new class being offered on October 17, 2011, by Coronado Adult School on trusts and estate planning.  To get more information on this class, or to register, visit Coronado Adult School's site at http://www.adultedreg.com/coronado

Wednesday, October 5, 2011

Contracts and Leases

Learn more about contracts and leases for your business at the seminar hosted by SCORE San Diego tomorrow, October 6 at 9 am. 
Legal Issues for Small Business - Contracts and Leases

Understanding the provisions of contracts, including leases, is one of the major responsibilities of the small business owner.  What is a contract, verbal or written?  What terms protect the parties in the contract?  When is a contract valid or not valid?  What provisions should be in a property lease?  These are all important issues in the every day operation of a business.

This workshop provides details on these essential topics:

    *  Negotiating Contracts and Leases

    *  Oral and Written Contracts

    *  Offers and Acceptance

You'll learn important information to help you avoid some of the most common small business mistakes!
 SCORE San Diego is part of a national association which serves as a resource partner with the Small Business Administration.  Learn more about SCORE at their website:  www.Score-SanDiego.org.    

Tuesday, October 4, 2011

Small Business Health Care Tax Credit

Qualifying small businesses may be eligible for a tax credit relative to premiums paid for health insurance covering its employees.  Small business owners should consult with their tax adviser if they contribute to health care premiums for their employees and are not taking advantage of this tax credit.  The credits have been available since 2010, and can be used for a maximum of six years, from 2010 to 2013 and for any two years thereafter.  The qualifying business with ten or fewer full-time employees and which pays average annual wages of $25,000 could be eligible for the maximum credit, which phases out for firms with 25 or fewer employees or which pay average annual wages of above $50,000.  In addition, to qualify, businesses must pay at least 1/2 of their employees' health coverage.

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