Articles Posted in Small Business Transactions

The economy is topsy turvy, the job unrewarding, the grass always greener . . . . . so why not start a business. America runs on . . . small business (and the coffee), so let’s consider the basics. While insurance will protect your assets sometimes, starting a separate entity helps to shield yourself from liabilities.

A Name to Call Thyself. Not all names are created equal. Take a name, say, “The Chocolate Library,” creative, descriptive, perfect. Turns out that under the New York State Business Corporation Law, “Libraries” are generally known as a collection of books and other materials for reading and study. So, New York bans the use of school-related words such as ‘library,’ ‘school,’ academy,’ ‘institute,’ and ‘kindergarten,’ in a certificate of incorporation by any New York business is barred unless there is prior consent from the education commissioner.

A Form to Fill. Now that we have a name, what “type” of entity for liability and tax purposes. New York State recognizes various corporate structures, but why choose one over another. While your attorney and accountant are best prepared to advise you for your particular situation, but here are some of the more identifiable structures:

[Dutchess County, New York]. When is a television monitor a “sign,” under Rhinebeck Zoning Enforcement Regulations. That is a battle being waged between our client and the Village of Rhinebeck, New York. Since this is a pending matter, we will permit the Poughkeepsie Journal newspaper account to speak for itself.

Bottom Line– The First Amendment of the US Constitution is a powerful tool, supported by the New York State Constitution which provides even broader protection to freedom of speech.

Judge for Yourself

Buyer Beware: When buying a small business in New York be sure that your small business attorney follows the New York State Bulk Sales rules.

Prior to 1990, Article 6 of the Uniform Commercial Code (UCC) regulated bulk sales– the transfer of large pieces of inventory, notes, etc. Article 6 was enacted to deal with sellers who attempted to fraudulently convey inventory (obtained on credit) by selling in a “bulk sale” transfer to a single buyer outside the ordinary course of business, disappearing with the proceeds, and leaving creditors without paying.

Under New York’s version, the Code provides various mechanisms to protect both potential buyers and creditors of businesses where bulk transfers of inventory occur. Failure to comply with the Bulk Sales or Transfers Act means that the original creditors (of the seller) get a lien against the assets (inventory) transferred to the buyer. Buyers must comply with the Bulk Sales provision and be ready for its implications.

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