(i) a start-up company’s president is considered to be an employee of the company and, as such, can bring a claim for deferred but unpaid salary arising out of his employment against both the company and the company’s CEO (in this case, his former partner and co-investor in the business);

(ii) wage deferral agreements, including the president’s own such agreement, are unenforceable; and

(iii) depending on the circumstances, each of the company’s principals may be considered to be both an employee (i.e., a potential claimant under the Wage Act) and an employer (i.e., a potential defendant on a claim under the Wage Act) vis-à-vis the other.

Common Questions/Practical Answers

1. What are the facts of the Lighthouse case?

      Plaintiff Stanton (“Stanton”) was a co-founder of Lighthouse Financial Services, Inc., a sub-chapter S corporation (the “Company”).  Stanton invested in the company and recruited defendant Drunsic (“Drunsic”) to do the same.  Both Stanton and Drunsic eventually executed employment agreements with the Company, with Stanton agreeing to serve as President and Drunsic agreeing to serve as CEO, each for a term of one year.  Drunsic signed Stanton’s employment agreement on behalf of the Company and Stanton signed Drunsic’s.

      Each of the employment agreements provided that the relevant employee’s first year salary would be $144,000 and that payment of this sum (i) might be deferred at the sole discretion of the board of directors and (ii) would have to be made before distribution of any of the Company’s profits.  A third investor was eventually brought in who supplanted Stanton as the Company’s second largest shareholder.  Neither Stanton nor Drunsic was ever paid and, as the Company’s finances deteriorated, Stanton left the Company and filed a complaint for non-payment of wages with the Massachusetts Attorney General under the Wage Act.  The Wage Act claim asserted with the Massachusetts Attorney General enabled Stanton to file a civil lawsuit.  He named as defendants in the suit both the Company and Drunsic.  None of the Company’s other directors or investors were named in the lawsuit.

2. What does the Wage Act provide?

 The Wage Act requires that every person having employees must pay to each of his or her employees, on a weekly or biweekly basis, such employee’s earned wages within six (6) or seven (7) days, depending on the length of the work week, following the end of the relevant pay period.  The Massachusetts Attorney General may make a civil complaint or seek an indictment against any person for a violation of this statute, and there can be no valid defense raised in such a proceeding for failure to pay required amounts.  Additionally, within ninety (90) days following the submission of a claim to the Attorney General, an aggrieved employee may file his or her own civil lawsuit for (a) injunctive relief; (b) damages, including treble damages for any loss of wages and other benefits; and (c) if he or she prevails at trial, his or her litigation costs and reasonable attorney fees.  By legislative amendment dated April 15, 2009, the Wage Act specifically provides that (i) no person may, by special agreement, exempt himself or herself from the Wage Act, and (ii) “[t]he president and treasurer of a corporation and any officers or agents having management of such corporation shall be deemed to be the employers of the employees of the corporation within the meaning of the [Wage Act]”.

3. What is the legal significance of the Lighthouse decision? 

      First, the Court rejected the defendants’ arguments that (i) the Wage Act should not apply to co-venturers starting up a business and (ii) Stanton was disqualified from bringing a claim under the Wage Act because he was an “employer”.  The Court found that, under the “plain text” of the Wage Act and depending on the context, a corporate president could be liable as an employer and yet also be protected as an employee.  In other words, a single individual could be considered to have different roles, with differing rights and responsibilities, within the same organization.  Having also determined that the Wage Act does not exclude those who are “highly compensated”, the Court concluded that Stanton, in his capacity as President of the Company, was an employee who could bring suit under the Wage Act.

      Second, although the Wage Act, as interpreted by other courts, may not apply with respect to compensation payable solely upon the happening of a contingency, the Court rejected the defendants’ argument that Stanton’s deferred base salary comes within that exception.  The Court therefore concluded that Stanton’s base salary constituted “wages” under the Wage Act.

      Third, the Court held that, under the Wage Act, Stanton’s agreement to defer payment of his salary upon the board’s decision is void as a matter of law.  Under the Wage Act, one cannot agree to exempt himself/herself from the provisions of the Wage Act (and including, in this case, to agree to defer one’s compensation) regardless of the circumstances.  Such an agreement would have the effect of circumventing the Wage Act and, as such, would be unenforceable.  The Court cites as its reason for this conclusion the importance of the Wage Act as a matter of public policy, noting that any limitations with respect to the scope of the Wage Act must come from changes to this statute adopted by the state Legislature.

      Finally, the Court acknowledged that Drunsic could have asserted his own claim under the Wage Act against both the Company and Stanton had he done so at the outset of the lawsuit.
     
      It should be noted that the judge’s decision in this matter is at the trial court level and came about in a pre-trial proceeding (to the best of our knowledge, the trial of this case, barring any settlement, is pending).  This means that the judge’s decision has less precedential value than a ruling of law by an appellate court (e.g., Massachusetts Supreme Judicial Court, U.S. Court of Appeals, U.S. Supreme Court, etc.).  Nevertheless, her decision is noteworthy for the reasons discussed in this Business Client Advisory.

4. What are the lessons of the Lighthouse case? 

      The scope of the Wage Act has become very broad, and, as illustrated by the Stanton case, the Act is being further expanded by judicial interpretation.  Business entities must, therefore, be structured in such a way that minimizes potential personal liability on the part of, and among, the principals/partners of those entities.

 In this regard, we offer the following observations:

 A. This case reflects a trend toward a broader application of the Wage Act than might have been anticipated by many companies.  While there appears to be a split of authority among Massachusetts trial courts with respect to the question of whether a senior corporate officer should be considered an employee under the Wage Act, the U.S. District Court has opted to follow a line of cases which stand for this proposition.  Absent clarification by the state Legislature or an appellate court, we expect this trend to continue.

 B. The Wage Act provides for the possible imposition of substantial criminal or civil penalties in the event of a willful violation of the provisions of this statute by an employer.  Thus, as the Wage Act is extended to apply to shareholders, a sword is being forged which is both disruptive to the concept of a closely held company, in particular, start-up companies, and potentially detrimental to its principals.

 C. The fact that Drunsic was barred from asserting his own Wage Act claim against the Company and Stanton by the Statute of Limitations (he would have had to file a complaint with the Attorney General and then file a civil suit within three (3) years of the alleged violation) serves as a reminder of the need for constant vigilance with respect to the understanding and exercise of one’s rights under the law.

 D. The best way to avoid these potential results is through careful drafting and competent legal advice.

 E. The Wage Act cannot be waived and, as we have seen, is now being interpreted so as to prevent an employee who is a senior officer (as well as, presumably, a sophisticated business person) from agreeing to defer payment of compensation due him or her.  This is a common situation with many companies, especially start-up companies, and there are ways founder or partnership relationships can be structured which could minimize the impact of the Wage Act as it now is being interpreted.

 F.  Finally, the Lighthouse case demonstrates that, unless proper precautions are taken, duties will continue to be created or implied with respect to shareholders that might never have been intended or desired.  This is all the more reason why all business organizations, whether new or established, should avail themselves of sound professional advice before making important business decisions.

      Beyond the lessons raised by the Lighthouse case, it should be noted that, with any deferred compensation arrangement, Internal Revenue Code Section 409A imposes certain restrictions and limitations which must be adhered to in order to avoid potentially adverse personal income tax consequences to affected employees.

5. What should I do if I have questions?

      Innovative Business Law Group can counsel you in determining the best structure for your business and assist you in developing a comprehensive strategy for minimizing the potential for personal liability under the Wage Act as well as the unfavorable tax consequences of Section 409A.

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Legal Disclaimer:  The content of this Business Client Advisory is provided for informational purposes only.  It is not legal advice and should not be construed as such.  Please do not act upon this information without seeking professional advice or rely on this Business Client Advisory or use the content as a substitute for consultation with professional advisors.  Receipt of this Business Client Advisory by any party is not intended to and will not create an attorney/client relationship with such recipient. 

IRS Circular 230 Disclosure:  Please be advised that any discussion of U.S. tax matters contained within this communication (including any attachments) is not intended or written to be used and cannot be used for the purpose of avoiding U.S. tax related penalties.

About Innovative Business Law Group:  Innovative Business Law Group, PC is a boutique corporate law firm assisting entrepreneurs in reducing risk and avoiding circumstances that might limit their success.  The firm’s attorneys pride themselves on finding creative solutions to challenging problems.  We focus on advising start-up companies, providing general corporate counsel to existing companies and representing businesses in merger and acquisition transactions.  Visit our website at www.innovativeblg.com for more information.  

©2009-2010 Innovative Business Law Group, PC • www.innovativeblg.com

On July 19, 2004, the Massachusetts statute governing independent contractors was revised. The presumption is that any work arrangement is an employer-employee relationship.  The revised law reduces the number of individuals who are eligible for independent contractor status, thus requiring employers to classify them as employees and as such, comply with the required worker’s compensation insurance contributions, unemployment insurance contributions, state and federal tax withholding, social security contributions and wage laws.

The Statute:

As of July 1, 2004, the three part test for determining whether an individual may be classified as an independent contractor, as set forth in Chapter 149, Section 148B of Massachusetts General Laws, is whether:

(1)  the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and

(2)  the service is performed outside the usual course of the business of the employer; and,

(3)  the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

According to an Advisory from the Office of the Attorney General regarding the amended law, the first part of the test, “the individual is free from control and direction …both under his contract … and in fact” states that the individual’s “activities and duties must actually be carried out with independence and autonomy” and that such individual “completes the job using his or her own approach without instruction and also dictates the hours that he or she will work on the job.”

With respect to the third part of the test, the Advisory goes on to rely on the IRS’s Revenue Ruling 87-41 (which sets forth the IRS’s so-called “20-factor” test for determining whether an individual should be classified as an employee or an independent contractor), stating that the individual, to be considered an independent contractor, “must represent him or herself to the public as ‘being in business to perform the same or similar services.’ …. Furthermore, an independent contractor often has a financial investment in a business that is related to the service he or she is currently performing for the employer.”

Difference from previous statute:

The only significant revision from the previous text of the statute is the omission of a phrase in subparagraph (a)(2). The previous version of the statute read as follows:

“and such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all places of business of the enterprise.”

The removal of the language “or is performed outside of all places of business of the enterprise” broadens the number of workers who may not be classified as independent contractors as the law now also covers those individuals who might work from home, at their own separate office location or at other locations not in an office of the company (i.e., at a client’s site).

Penalties for an Employer’s Failure to Comply:

The revised statute also more specifically details the penalties for an employer’s failure to comply with this section, including violations of the Massachusetts Wage Law, overtime laws, employer’s payroll records obligations and worker’s compensation insurance requirements.

Willful violations of the law could result in fines up to $25,000 or imprisonment for up to one (1) year for the first offense and fines up to $50,000 and imprisonment for up to two (2) years for subsequent offenses. Non-willful violations can result in fines up to $10,000 or imprisonment for up to six (6) months for a first offense and fines up to $25,000 or imprisonment for up to one (1) year for subsequent offenses.

The Attorney General may debar violators from public works contracts.  The length of disbarment depends on the nature and number of violations.

In addition, employees may also file civil actions against the employer seeking treble damages, attorney’s fees and costs.

Effect on tax withholding requirements:

It should be noted that M.G.L. Ch. 62B governs the employer’s requirement to withhold taxes and what “wages” are subject to the withholding requirement. This determination is based upon the IRS’s so-called 20 point test, which is a less stringent standard as all facts are considered and no one factor is decisive. Because the new Independent Contractor Law does not amend Ch. 62B’s definitions of “employer” and “employee”, for purposes of identifying the employer’s income tax withholding obligations under Ch. 62B, the standard will continue to be governed by the IRS’s 20 point test, and the DOR will accept any classifications of specific individuals determined by the IRS.

The Massachusetts Department of Revenue (the “DOR”) is working on a Technical Information Release (“TIR”) to assist employers in determining whether or not the employer is required to withhold Massachusetts income tax on an employee’s wages. However, because the current draft of the DOR’s TIR continues to use the Internal Revenue Service’s so-called “20 factor” test to determine whether an employer must withhold Massachusetts income tax, rather than the 3 factor test outlined above, a conflict exists. Specifically, an employer could find that it is required to treat an individual as an employee for purposes of the Independent Contractor Law, but may not be required to treat that same individual as an employee for income tax withholding purposes. This means that the employer would be required to make its contributions to FICA, unemployment insurance and worker’s compensation insurance, but would not be required to withhold income taxes on the individual’s wages.

The full text of Chapter 149, Section 148B of Massachusetts General Laws:

“(a)  For the purpose of this chapter and chapter 151, an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless:–

(1)  the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and

(2)  the service is performed outside the usual course of the business of the employer; and,

(3)  the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

(b)  The failure to withhold federal or state income taxes or to pay unemployment compensation contributions or workers compensation premiums with respect to an individual’s wages shall not be considered in making a determination under this section.

(c)  An individual’s exercise of the option to secure workers’ compensation insurance with a carrier as a sole proprietor or partnership pursuant to subsection (4) of section 1 of chapter 152 shall not be considered in making a determination under this section.

(d)  Whoever fails to properly classify an individual as an employee according to this section and in so doing fails to comply, in any respect, with chapter 149, or section 1, 1A, 1B, 2B, 15 or 19 of chapter 151, or chapter 62B, shall be punished and shall be subject to all of the criminal and civil remedies, including debarment, as provided in section 27C of this chapter. Whoever fails to properly classify an individual as an employee according to this section and in so doing violates chapter 152 shall be punished as provided in section 14 of said chapter 152 and shall be subject to all of the civil remedies, including debarment, provided in section 27C of this chapter. Any entity and the president and treasurer of a corporation and any officer or agent having the management of the corporation or entity shall be liable for violations of this section.

(e)  Nothing in this section shall limit the availability of other remedies at law or in equity.”

©2005-2010 Innovative Business Law Group, PC. • www.innovativeblg.com

All employers must use the new USCIS Form I-9 beginning December 26, 2007.  New employees and any existing employees who have not previously completed a Form I-9 must fill out the new Form I-9.

Common Questions/Practical Answers

1. Why is this required?  USCIS has publicly stated that they will step up workplace enforcement of U. S. immigration laws.  Revising Form I-9 and adopting a substantially revamped Handbook for Employers (the first such revision in over ten years) are part of this initiative.

2. Who must comply?  Any business, organization or sole proprietor that has any employees must comply with the new Form I-9 rules by having a completed Form I-9 on file for all employees within three (3) days of commencement of employment.

3. If I have completed a Form I-9 for existing employees prior to December 26, 2007, am I required to obtain a new Form I-9 from them?  You are not required to obtain a new Form I-9 for your existing employees unless a prior properly completed Form I-9 indicated that an employee’s work authorization is scheduled to expire.  Requiring the completion of a new Form I-9 for existing employees may violate anti-discrimination provisions of the Immigration and Nationality Act (“INA”).  Always avoid even the appearance of discrimination in interviewing and hiring new employees.

4. What if any of my employees have not completed a Form I-9 previously?  If you do not have a Form I-9 on file for any employee hired on or after November 6, 1986, a new Form I-9 should be completed immediately.

5. What documents must I see to verify an employee’s immigration status?  USCIS’s regulations provide a detailed list of the documents that are acceptable for proving (a) identity and (b) employment eligibility.  (See Question 11 below for additional resources).

6. Does this law apply to 1099 independent contractors?  Provided that the independent contractor meets the federal requirements for being treated as an independent contractor, you are not required to complete a Form I-9 for that individual.  Determining an individual’s status for tax and immigration purposes should be reviewed carefully with your tax and legal professional advisors.

7. Must I file anything with USCIS?  USCIS does not currently require anything to be filed to verify compliance; but the completed Form I-9’s of a business are subject to inspection by USCIS at any time.
 
8. What are the penalties for noncompliance?  USCIS will assess a penalty of between $110 and $1,100 for each Form I-9 that is missing or completed incorrectly, including use of an outdated Form I-9 after December 26, 2007.  Additional penalties may be assessed for hiring or continuing to hire persons who are not authorized for employment, for engaging in a pattern or practice of knowingly hiring unauthorized persons, and for unfair/discriminatory immigration-related employment practices.  Such penalties may include fines ranging from $275 to $11,000 per person, based on the severity of the offense, as well as back pay and attorney’s fees.  Title VII compensatory damages may also be imposed in cases of intentional discrimination.

9. What records must I retain?  USCIS’s regulations require that you maintain a completed Form I-9 for each employee for a period of the later of (a) three (3) years from the date of hire or (b) one (1) year from the date employment ends.

10. Are there any best practice compliance recommendations?  To limit the risk of being found by USCIS to be noncompliant, Innovative Business Law Group recommends that you not only retain copies of all Form I-9’s, but also copies of identity and employment eligibility documentation for every employee.  Form I-9’s must be kept for all employees and not only for employees who are foreign nationals.  All such information should be stored in a private and secure employee file.  All paper copies should be kept in a locked receptacle to prevent access by unauthorized individuals.  Alternatively, such documentation may be scanned into a file securely stored on a computer that is backed up daily at a secure offsite location.

11. Where can I obtain more information?  The new Form I-9, Form I-9 instructions and Handbook for Employers are available at www.uscis.gov.

12. What if I have additional immigration law questions?  As business lawyers, Innovative Business Law Group can answer your general business law questions.  For immigration law questions, Innovative Business Law Group works closely with immigration attorney Jane Devlin, Esq. (Flynn & Clark, P. C., One Main Street, Cambridge, MA 02142, www.flynnclark.com, (617) 354-1550) who has reviewed this Business Client Advisory.  We encourage you to contact her directly with any immigration law compliance questions.

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Legal Disclaimer:  The content of this Business Client Advisory is provided for informational purposes only.  It is not legal advice and should not be construed as such.  Please do not act upon this information without seeking professional advice or rely on this Business Client Advisory or use the content as a substitute for consultation with professional advisors.  Receipt of this Business Client Advisory by any party is not intended to and will not create an attorney/client relationship with such recipient. 

IRS Circular 230 Disclosure:  Please be advised that any discussion of U.S. tax matters contained within this communication (including any attachments) is not intended or written to be used and cannot be used for the purpose of avoiding U.S. tax related penalties.

About Innovative Business Law Group:  Innovative Business Law Group, PC thrives on assisting entrepreneurs in reducing risk and avoiding circumstances that might limit success.  The firm’s attorneys pride themselves on finding creative solutions to challenging problems.  Visit our website at www.innovativeblg.com for more information.

©2007-2010 Innovative Business Law Group, PC • www.innovativeblg.com

The BSA has expanded its “Know it/Report it/Reward it” campaign to encourage individuals to report software piracy.  In the event your business is using pirated software, you should obtain proper licenses and implement best practices to make sure all licenses are legally obtained and remain current.

Common Questions/Practical Answers

1. What is software piracy?  Software piracy is the unauthorized use, copying or distribution of any type of software.  Typically, a user purchases a license for software which allows them to use that software on a certain number of computers.  Exceeding the number of computers licensed, or distributing or using unauthorized copies of the software, is illegal, and may result in both criminal and civil legal proceedings.  

2. What is the Know it/Report it/Reward it campaign?  Initially launched in 2005, this campaign was designed by the BSA, a non-profit organization sponsored by some of the leading software companies, to target individuals who have knowledge of software piracy and induce them to report software piracy to the BSA’s reporting program.  The BSA provides financial rewards of up to $1,000,000.  Anyone with knowledge of software piracy may report it confidentially online or by calling a toll free number.  The webpage for this campaign is www.nopiracy.org.  This expanded initiative increases the likelihood of reporting as the BSA is now actively promoting the program. 

3. What is the risk to my business?  If your business is using pirated software, any individual who has knowledge of this fact may report you to the BSA.  It will then be up to the BSA and its individual members as to whether it will take legal action against you.  Federal copyright law allows for fines to be levied up to $250,000 for copyright infringement.

4. What can I do to lower my risk?  The first step to lower the risk of a report is to determine if the computers at your business are running pirated software.  The BSA has created some basic software audit tools on their website at www.bsaaudit.com.  In the event that your business is using pirated software, it is in your best interest to take steps to ensure all copies of software in your business are legal, including the purchase of additional licenses.  In addition, the creation of a software use policy and the implementation of good software management procedures will reduce your risk of being reported and fined.  Innovative Business Law Group assists many clients with legal compliance audits to protect them and help them grow their business.

5. What should I do if I have questions?  Once you have determined your risk of being reported, Innovative Business Law Group can counsel you in determining the best software management procedures for your business and assist you with implementation of a written software use policy.  If you have been reported, and are subject to, or threatened with, a BSA copyright action or other related litigation, Innovative Business Law Group can refer you to an experienced intellectual property litigation attorney.
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Legal Disclaimer:  The content of this Business Client Advisory is provided for informational purposes only.  It is not legal advice and should not be construed as such.  Please do not act upon this information without seeking professional advice or rely on this Business Client Advisory or use the content as a substitute for consultation with professional advisors.  Receipt of this Business Client Advisory by any party is not intended to and will not create an attorney/client relationship with such recipient. 

IRS Circular 230 Disclosure:  Please be advised that any discussion of U.S. tax matters contained within this communication (including any attachments) is not intended or written to be used and cannot be used for the purpose of avoiding U.S. tax related penalties.

About Innovative Business Law Group:  Innovative Business Law Group, PC is a boutique corporate law firm assisting entrepreneurs in reducing risk and avoiding circumstances that might limit their success.  The firm’s attorneys pride themselves on finding creative solutions to challenging problems.  We focus on advising start-up companies, providing general corporate counsel to existing companies and representing businesses in merger and acquisition transactions.  Visit our website at www.innovativeblg.com for more information.  

©2008-2010 Innovative Business Law Group, PC • www.innovativeblg.com

The SOS has enacted changes designed to make the filing requirements for LLCs and LPs similar to the requirements for corporations and Limited Liability Partnerships (“LLPs”), including the ability to administratively dissolve the entity for failure to file annual reports.

Common Questions/Practical Answers

1. What are the changes to the filing requirements?  There are multiple amendments to the filing requirements set forth by the SOS.  The first amendment increases the length of time a prospective LLC or LP can reserve a name they wish to use, from the current 30 days to 60 days.  The second amendment requires the person who is appointed as the LLC’s or LP’s resident agent for service of process to consent in writing to their appointment. 

In addition, the SOS is requiring all LLCs and LPs to file annual reports.  The fee for filing LP annual reports is $500.00 if filed by mail or fax, or $450 if filed electronically.  The filing fee for LLC annual reports is $500 and these can be filed electronically or by mail.  To enforce this requirement, the SOS now has the authority to administratively dissolve LLCs and LPs for failure to file annual reports; however, an LLC or LP which has been administratively dissolved may be reinstated by filing all delinquent annual reports (including paying all outstanding annual report fees) and filing an Application for Reinstatement with a $100 reinstatement fee.

2. What is the risk to my business?  The new mechanism for administrative dissolution is the greatest risk to business owners.  Prior to these amendments, LLCs could not be administratively dissolved for the failure to file annual reports and LPs were not required to file any annual reports.  Now, if an LLC or LP business owner does not file their annual reports in a timely manner, they may lose the benefit of limited liability protection in the event their LLC or LP is administratively dissolved. 

In some instances, the administrative dissolution of the LLC or LP may trigger adverse consequences for a business owner based on the terms of its Operating Agreement or Limited Partnership Agreement, as well as contracts with outside vendors or clients or documentation for a business loan or line of credit.  For example, the dissolution of an LLC or LP could qualify as an event of default under a business loan or line of credit, thereby allowing the lender to call the loan.  In addition, such a default may trigger investor rights and/or remedies that they would not otherwise have; such as the ability to remove managers or general partners as the case may be.

3. What can I do to lower my risk?  To reduce your risk under these new SOS filing requirements, it is important to be mindful of the SOS filing deadlines for your business.  Your business should keep a corporate minute book documenting your SOS filings.  Innovative Business Law Group has developed a Small Business Checkup which can assist clients by preparing the necessary SOS filings prior to the applicable deadlines, as well as by setting up an easy-to-use minute book template.  Traditionally, CPA’s and accountants have filed annual reports for their corporate clients.  You should check with your CPA or accountant to see if they will be providing you with this service going forward.

4. What should I do if I have questions?  Once you have determined your risk under these new filing requirements, Innovative Business Law Group can assist you with preparing and filing any delinquent SOS filings.  If your LLC or LP has been administratively dissolved, Innovative Business Law Group can assist you with the reinstatement process.
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Legal Disclaimer:  The content of this Business Client Advisory is provided for informational purposes only.  It is not legal advice and should not be construed as such.  Please do not act upon this information without seeking professional advice or rely on this Business Client Advisory or use the content as a substitute for consultation with professional advisors.  Receipt of this Business Client Advisory by any party is not intended to and will not create an attorney/client relationship with such recipient. 

IRS Circular 230 Disclosure:  Please be advised that any discussion of U.S. tax matters contained within this communication (including any attachments) is not intended or written to be used and cannot be used for the purpose of avoiding U.S. tax related penalties.

About Innovative Business Law Group:  Innovative Business Law Group, PC is a boutique business law firm assisting entrepreneurs in reducing risk and avoiding circumstances that might limit their success.  The firm’s attorneys pride themselves on finding creative solutions to challenging problems.  We focus on advising start-up companies, providing general corporate counsel to existing companies and representing businesses in merger and acquisition transactions.  Visit our website at www.innovativeblg.com for more information.  

©2008-2010 Innovative Business Law Group, PC • www.innovativeblg.com