Converting from a Separation to a Divorce

Trusted California Attorneys

For many California couples, the prospect of ending a marriage through a final decision of divorce can be daunting and overwhelming. They may be reevaluating whether their marriage is in a good place, or ultimately the right thing to hold onto moving forward – but not yet ready to pull the plug entirely.

For these types of couples, legal separation can be a good alternative to divorce. It allows couples to go through the process of physical separation, and even consider dividing up assets and splitting child custody – but without finalizing these decisions too quickly.

One of the questions that often arises when considering separation is how a legal separation can be turned into a divorce, or whether separation precludes divorce entirely. The answer requires a look at California’s process for converting legal separation into divorce.

How an Initial Separation Works in Rancho Cucamonga

Before getting into how separation is converted into divorce, it is important to understand how the separation process works in California. When a couple wants to file for separation they file a petition with the courts, which is very similar to a divorce petition.

Where appropriate, when considering the petition, the court will help the couple with the division of assets such as a home, personal property, or even child support and child custody issues. Once all of the necessary details are finalized, a legal separation order can be entered.

The parties then act pursuant to that order until a point in time when they may want to change their status again. Obviously, this change would either come in the form of a complete divorce, or a continuation of their marriage.

Converting from Separation to Divorce

If at any point in the legal separation process one or both spouses decide that they would rather just get divorced, they can do so. Moving from separation to divorce does not require the agreement of both parties.

If a petition for separation has been filed but the other party has not yet answered that petition, then an amended petition can be filed. This amended petition can then be converted from a petition for separation to a petition for divorce.

If your legal separation is in process and both parties have filed with the court, then you will likely need to seek approval from the court to change the process from one for legal separation to one for divorce. Because of the significant overlap between the two processes, this is typically easy to do, but still requires judicial approval.

Unfortunately, if you have already received a final legal separation order, the process is not as simple. You cannot simply reopen the prior proceedings and have them changed to divorce proceedings, or convert the judgment. Instead you must file a new petition for divorce and go through the entire process again.

California Attorneys Helping You Weigh Your Options for Separation in Your Marriage

If you are considering separation or divorce, it is important to weigh the pros and cons of each procedure and evaluate how they are likely to work for you. It is relatively easy to convert a separation to a divorce while the process is ongoing. However, if you change your mind after the process is over, you’ll have to start all over again.

At CKB Vienna LLP, our attorneys can help you find the process that will work best for you, and assist you in preparing for petitions, hearings, and everything in between. For more information, contact us online or at (909) 980-1040.

Step By Step: The California Foreclosure Process

Knowledgeable Lawyers in California

Most California residents have heard of the concept of foreclosure and are no doubt aware of the prevalence of foreclosures during the 2008 housing crisis. But few understand how the mortgage foreclosure process actually works, or what banks and lenders must do to reclaim your home.

While many may believe that foreclosures are a judicial process that requires a lender to go before the courts in order to work out your financial issues, this is not usually the case. Most foreclosures in California are non-judicial and happen through a more administrative process.

Foreclosures in Rancho Cucamonga

The foreclosure process in California begins with the owner of the property, when he or she misses the first payment on a mortgage loan. This could be for any number of reasons – perhaps a family member loses their job, or an urgent medical crisis arises. Regardless of the circumstances, the failure to make a timely payment puts the bank on notice that the owner may have a problem.

Missing a payment by a few days usually is not a problem, as long as a homeowner quickly rectifies the issue and makes the payment as soon as possible. Rather, real issues begin to arise when the homeowner goes into default. Default typically occurs when the homeowner is behind on payments for 90 days.

A notice of default is the second step in the foreclosure process. This will happen after the homeowner enters default. The mortgage lender will typically file a notice of default with the court, and must then provide the owner with a copy within ten days. The owner’s copy will explain why the owner is in default and the options for getting out of default.

Depending on the bank or mortgage lender, an owner may be able to create a payment plan that will help to get out of default, and pay off all outstanding loan payments, interest, and fees.

When The Bank Or Lender Is Not Getting Paid

After an owner receives a notice of default, most lenders will give them three months to bring the loan current and make all outstanding payments. At the 180 day mark (90 days after default), the lender may begin official foreclosure on the home if the owner is still unable to pay.

Foreclosure means that the bank can attempt to auction off the home to recover the money that it has lended that the owner is no longer able to repay. This is usually done through what is known as a trustee sale. When the bank decides to go this route, it will notify the owner by providing a notice of trustee sale that sets the date for the auction of the home.

The bank must give the owner up to 20 days after the service of a notice of trustee sale to actually hold the auction to sell the home to the highest bidder. This may give the owner some last ditch opportunities to attempt to recover the home, either through negotiation or through the courts.

If the house does sell, the owner will be relieved of your financial obligations to the lender, even if the house sells for less than the amount that is currently owed on the loan. At the time of sale the owner loses both access to the home and responsibility for the debt incurred.

California Attorneys Helping All Parties through the Foreclosure Process

The foreclosure process can be difficult for all parties involved, including lenders, banks, and the debtor who owns the mortgage. Having a clear understanding of the process involved can go a long way toward avoiding disputes or difficulties in the process. At CKB Vienna LLP our attorneys have assisted clients on both side of the transaction through the foreclosure process and are equipped to handle simple foreclosures or complicated transactions. For more information, contact us online or at 909-980-1040.

What Does the Potential NAFTA Renegotiation Mean for the Automobile Industry?

Dedicated Attorneys Serving California

As many in the auto industry are no doubt aware, President Trump ran on renegotiation of the North American Free Trade Agreement as part of his winning platform. In recent months, the Trump Administration has proposed specific changes to NAFTA that directly impact the automobile industry.

What NAFTA Changes Might Affect Rancho Cucamonga?

First, the Trump Administration has proposed adding steel, aluminum, textiles, and many other materials currently used by auto makers to the tracing list under NAFTA. This means that proof would be required to show the origin of these materials and determine whether they have come from NAFTA countries or outside the region.

Second, the Trump Administration has proposed a significant increase in the auto rules of origin. The auto rules of origin dictate how much of a car must be sourced from within NAFTA to receive NAFTA benefits. Currently, 62.5 percent of cars must come from within NAFTA. The Trump Administration proposes increasing this percentage to 85 percent.

Additionally, the Trump Administration has also proposed adding a requirement that 50 percent of cars come from the United States, which would effectively require car manufacturers to build all vehicles within the United States, rather than other NAFTA countries.

These issues have become a significant source of contention for those in the automotive industry. Over the past two decades, many automakers have developed a complicated network of assembly plants that are used in their car production, many of which are located in Mexico. Changing the rules of origin, and adding a requirement that cars be produced in the United States would significantly change these networks.

Indeed, experts are concerned that the possible changes to NAFTA could greatly destabilize North America’s significant presence in the global auto industry. Adding these new requirements makes the production of vehicles more complex. Unsurprisingly, industry representatives in Mexico and Canada are also concerned how the proposed changes will affect their automotive industry.

NAFTA Moving Forward

Negotiations over the proposed changes to NAFTA remain ongoing, and most analysts expect that the Trump Administration will have to lower its rule of origin expectations if a deal is to be reached.

However, others have expressed concern that even if the Trump Administration is successful in increasing the percentage of cars that have to be made within NAFTA countries, and within the United States, the outcome will not ultimately be beneficial for the United States.

Currently, automakers must pay a 2.5 percent tariff to import cars from outside of the United States. For many U.S. automakers, this tariff may be substantially less expensive than the cost of reorganizing and reordering production in order to meet new rule of origin requirements.

Accordingly, some predict that the renegotiation of NAFTA may actually lead to more automakers moving production of vehicles out of the country and simply choosing to import finished vehicles from abroad.  

California Attorneys Keeping an Eye on Industry Movement

Dealing with national and international regulations is often a constant headache for United States automakers. The threat of substantial changes to governing rules, like NAFTA can create anxiety and consternation. At CKB Vienna LLP, our attorneys work hard to maintain contacts throughout the government and industry that help them to keep abreast of possible changes and upcoming developments. If you’re concerned about how these proposed changes could impact you, contact us online or at 909-980-1040.

Protect Your Brand: Register Your Trademark

Experienced California Attorneys

If you own a small business, you have likely worked hard to cultivate a certain image and reputation within your community, and perhaps even across the country. Often, your logo may be an important part of that image, conveying to potential customers the type of company you are and the type of product you offer.

While logos are great, they can easily be copied or ripped off by other less scrupulous business people if you do not have the proper registrations and protections. Logos are not inherently protected, but require specific registration as part of the federal trademark process.

How Do Trademarks Work in Rancho Cucamonga?

Trademarks can be registered or unregistered. Registered trademarks are registered with the U.S. Patent and Trademark Office, which is operated by the federal government. Once a trademark is registered with the office, it has special protections and the owner of the trademark is entitled to certain legal rights.

Unregistered trademarks may still be entitled to certain regional protections, but are not able to assert the broader rights that come with a registered trademarks. As a result, unregistered trademarks are more likely to be subject to infringement, or copying of the trademark by another.

Registering your trademark is a relatively straightforward process. You must file an application with the USPTO. You must show that you currently have a business that is using the trademark so that it is “in Commerce.” Alternatively, you may also file an intent to use the trademark, and then update your registration once the trademark is being actively used.

In order for your registration to be successful, your proposed trademark, or a similar mark, must not already be in use by a different company operating in a similar type of good or service as you. For example, if you make pasta, your trademark cannot be identical or similar to an existing trademark for another food company. However, it is likely okay if your trademark is similar to that of a washing machine company.

What Registering Your Trademark Protects

Going through the process of trademark registration may at first seem like a lot of work for little reward, but the reality is that trademark registration entitles you to very important protections.

After you register a trademark, if a competing company in a similar market tries to use a brand name or logo identical or similar to yours, you can file a lawsuit to protect your mark in federal court. If the court finds the competitor is infringing on your mark, your competitor will be ordered to stop using its name or logo. Additionally you can also seek monetary damages against the infringer, including damages your business suffered as a result of the competitor using a similar mark.

California Attorneys Helping You Protect Your Brand Image

If you’ve taken the time to create and perfect a name or image for your company that your customers recognize and respect, it is also worth the time and effort to protect your creation against being copied or misused by others.  At CKB Vienna LLP, our attorneys have guided countless clients through the trademark process and are available to answer any questions you may have about trademarking. For more information, contact us online or at 909-980-1040.

How Does California’s Homestead Real Estate Law Work?

Trusted California Lawyers

As homeowners who lived through the 2008 recession know, tough times and unfortunate circumstances can bring the threat of foreclosure on a personal home. Foreclosure can be a terrifying prospect for any family, and is a process that is not easy to resolve.

Thankfully, California has a homestead real estate law which helps to protect homeowners in difficult times. Under this law, homeowners who face threats of outstanding debts or judgment liens can protect their home from being seized as an asset by their creditors, and prevent a situation where they may end up out on the street.

How Does the Homestead Real Estate Law Work in Rancho Cucamonga?

California’s homestead real estate law provides protection to an individual’s primary residence in the event that a creditor seeks to foreclose on the residence in order to recover on a debt. Under the law, a homeowner can declare a property as a homestead, in order to insulate it from the reach of creditors.

However, depending on the age of the homeowner, the homestead may be protected only up to a certain value. For example, for those over the age of 65, $175,000 of the home is protected under the homestead law. For those under 65, the maximum amount that can typically be protected is $75,000.  So for those with large and extravagant homes, it may be difficult to actually entirely protect the home from a forced sale.

You may be wondering how only a certain value of the home can be protected from a creditor or foreclosure. In practice this means that if there is no value in the home, after any existing liens and the homestead exemption are applied, the creditor cannot force the sale of the home.

For example, say you have a home worth $250,000 but you have a creditor whom you owe $75,000. The creditor wants to force the sale of your home for his judgment. You have an outstanding mortgage on the home of $175,000. To determine whether the creditor can force a sale, the calculation looks like this:

$250,000 minus 170,000 minus 75,000 equals 0

Because the value of your home is tied up in existing liens and your homestead exemption, the creditor cannot force the sale of your home.  

Voluntary and Involuntary Liens

One important caveat to the protections provided by the homestead real estate law is that these protections only apply to involuntary liens. These are liens that you did not take on yourself, but that were brought against you, often by virtue of a judgment that someone obtained against you.

For example, when you purchase a house and take on a mortgage, this is a voluntary lien. Car loans are also voluntary liens, as are liens you owe for federal taxes, or for child support. So you cannot fail to pay your mortgage for your house and then claim a homestead exemption to retain part of the value of your house when the bank forecloses on your mortgage. Homestead protections don’t apply in that circumstance.

California Attorneys Advising You on How to Maximize Protection of Your Home

No one wants to lose their home as a result of a bankruptcy or an outstanding judgment lien. In order to protect yourself, you should consider how the homestead exemption may apply to your circumstances. If you are facing debt or foreclosure issues, the attorneys at  CKB Vienna LLP can work with you to evaluate your assets and liabilities and determine how to best protect your home. For more information, contact us online or at 909-980-1040.

Is Your Non-Disclosure Agreement Enforceable?

Attorneys Serving California Clients

For some employers, a necessary part of any employment relationship is the assurance that your employee will not be able to share confidential information or trade secrets learned during the course of employment.

For those dealing in highly competitive fields it can be crucial to ensure that your employees will be legally prohibited from passing such information on to others. This is one of the primary reasons for non-disclosure agreements.

In California, non-disclosure agreements are generally legal, but they must be properly drafted or they can be deemed unenforceable. In order to avoid bigger problems down the road, employers should take the time to ensure that their current agreements are enforceable as written.

What Can Non-Disclosure Agreements Legally Prohibit Rancho Cucamonga Residents from Sharing?

Properly drafted non-disclosure agreements can prohibit employees from sharing a broad range of confidential business information. For example, they can protect:

• Proprietary information

• Trade Secrets

• Prototypes or other technology not yet patented

• Customer lists and contact information

In California, trade secrets must meet a very specific definition. A trade secret must be a specific  formula, pattern, device, etc., that is valuable precisely because it is not known to the general public. Also, there must be reasonable efforts undertaken to protect its secrecy. Non-disclosure agreements cannot simply claim to prohibit sharing information regarding trade secrets without showing that a trade secret actually exists.

Non-disclosure agreements also cannot prevent an employee from discussing absolutely anything related to an employer or a business, with no limitations in scope whatsoever. This type of non-disclosure would be considered overly broad and unduly restrictive, since it would be almost impossible to abide by.

What Does an Enforceable Non-disclosure Agreement Require?

Legally enforceable non-disclosure agreements should include certain key provisions. First, they should clearly identify the parties to the agreement, including the employer, the employee and any other relevant parties or individuals. Second, the agreement should set forth exactly how long it is enforceable. The time limit for an agreement must be reasonable, and courts typically will not uphold an overly long period such as 50 years or more.

Next, the agreement should set forth precisely what the scope of the confidential information is, with sufficient clarity for the employee to understand what cannot be discussed. For example, if there are certain proprietary procedures that are protected under the agreement, these should be clearly identified.

Additionally, the agreement should also clearly explain what the employee’s obligations are as far as keeping the information confidential. And these obligations must be reasonable. For example, an employee whose information is stolen without his knowledge normally would not be held to have violated a non-disclosure agreement – unless he failed to abide by certain security obligations in the agreement.

Finally, the agreement should set forth information and terms for what is excluded from the non-disclosure agreement. For instance, if a certain recipe is deemed confidential, the agreement should make clear whether the details of the recipe are protected from disclosure, or if even reference to the recipe altogether is prohibited.  

California Lawyers Helping You Draft a Strong Non-Disclosure Agreement

The best way to protect your company’s secrets from disclosure is to ensure that your non-disclosure agreement is as legally enforceable as possible. This requires continuous review of your policies, procedures, and draft documents to ensure that they are up-to-date with California laws.

At CKB Vienna LLP, our attorneys can help you review whether your nondisclosure agreement contains all the necessary terms and provisions, and has a scope that is not overly broad. For more information, contact us online or at 909-980-1040.

What to Do When You Get That Litigation Hold Letter

Lawyers Serving California

Whether you are a business executive or low level employee, you’ve likely received a warning at some point in your career to preserve your emails due to a pending dispute or litigation. When the possibility of a lawsuit becomes real, many parties will send out “litigation hold” letters requiring a company to hold onto any documents or communications that may be relevant to the dispute.

Litigation hold letters must be treated very seriously, and the knowing failure to abide by one can lead to accusations of intentional destruction of evidence and even the possibility of sanctions. For this reason, all general counsel and corporate executives should have policies and procedures in place to ensure an efficient and effective response to a litigation hold request.

Pay Attention to What Is Required in Rancho Cucamonga

Litigation hold notices do not require a business to preserve every record or email it has ever created. Particularly for large corporations, this would be impossible. Instead, they typically relate to a certain matter or dispute that is the subject of possible litigation and require the recipient to locate and hold onto any records related to that matter.

For this reason, the first step in responding to a litigation hold is to carefully review what is being asked of you. Consider the matter at issue and the individuals likely to have relevant information or records about that issue. Then consider how the matter can be described in a comprehensive, but clearly defined way that will allow your employees to quickly locate potentially responsive records.  

Making the prospect of locating and holding onto records more time-intensive or arduous than necessary will only discourage employees from putting in the effort necessary to ensure compliance with your legal obligations.

Disseminate Notice of the Hold Broadly

After considering the requests made in the litigation hold letter and the matter at issue, you likely will identify certain top executives or key players who will be in possession of relevant records. While it is important to inform them and any key custodians of the litigation hold request, the obligation does not end there.

It is important that all potentially relevant employees be notified, in writing, as to the specific records and documents being requested. They must be directly asked to review their files, both electronic and paper, for anything that might be relevant. Employees should also be encouraged to ask questions or seek clarification if they are unsure if documents are responsive, rather than erroneously exclude certain materials from their search.

A litigation hold notice to employees should also make clear that records can come in many forms. While we often think of memos and emails, records can include calendar entries, day planners, text messages, voicemails, and even social media. Your employees should be taking care to ensure that all of these potential sources of information are being reviewed.

Make Sure Your Efforts Are Documented

Mistakes happen and important documents do occasionally get deleted.  Despite your best efforts, responsive materials can occasionally slip through the cracks. The best way to prevent this from having an impact on your litigation position down the road – and preventing the possibility of sanctions – is to clearly document your efforts.

This documentation should be done externally and internally.  Within your organization, make sure that instructions for searching and preservation are kept in writing and saved for future reference. Encourage employees to keep records of the searches they conduct and to provide written reports of their preservation efforts and the results.

Similarly, any response to a litigation hold letter should carefully detail the steps that have been taken to comply, including notices sent out and documents reviewed. To the extent that you have deemed certain categories responsive or unresponsive it is also helpful to detail these decisions in a response, thereby placing the burden on the opposing party to object to your approach.

California Attorneys Helping You Anticipate Litigation

A good strategy for dealing with litigation hold letters can go a long way towards helping your company anticipate and prepare for litigation more broadly. Getting an early understanding of the documents relevant to a legal matter can give your team a better sense of your strengths and weaknesses, and let you know when it may be time to bargain.

At CKB Vienna LLP, our attorneys can help you create and manage a litigation hold response, or review your existing policies and procedures. For more information, contact us online or at 909-980-1040.

Doing Your Due Diligence Before A Merger: What Do You Need to Know

Skilled Lawyers Serving California Businesses

As your company continues to grow and prosper, there will undoubtedly be many opportunities for you to sell to other corporate entities. Likewise, you may also find yourself thinking of acquiring smaller competitors or start-ups new to your commercial space.

These types of sales – often known as mergers and acquisitions – can be excellent opportunities for you to:

• expand your brand name,

• enter into new markets,

• acquire capital,

• acquire talent,

• all of which are necessary to continue to move forward as a company.

Mergers and acquisitions also require significant research and due diligence. Obviously, it is important to avoid acquiring a company that is ultimately a bad investment, and to eliminate the possibility of being taken over by another entity’s disorganized and inexperienced leadership team. When beginning due diligence, there are several important steps to consider.

The Goals of Due Diligence for Buyers and Sellers in Rancho Cucamonga

Buyers and sellers entering into a merger or acquisition will have very different goals and objectives that they want to achieve during the M&A process.

Sellers will typically want to complete the acquisition as quickly as possible in order to avoid the potential for any unexpected events, such as a key employee departure or lawsuit, to arise. Sellers will be more focused on simply ensuring an acceptable change of control, and minimizing the possibility of a buyer backtracking on a purchase.  

Buyers, by contrast, will want to take the process more slowly. The value of their purchase comes from ensuring that the entity they are buying is exactly what it says it is, and has the possibility to enhance their existing economic value. This means a careful review of the seller’s existing business structure, prior performance, and anticipated future performance.

Necessary Parts of Any Good Due Diligence

Whether buyer or seller, there are several important categories of information that you will want to include in your due diligence checklist. Reviewing this type of information will help you go into a transaction fully prepared and aware of all possible outcomes and contingencies.

• Corporate Structure documents, including articles of incorporation, bylaws, minutes from board meetings, and stockholder agreements. These documents will give you insight into how the company is structured and who has a vested interest in the company’s success.

• Taxes. Tax documents will shed light on any existing or prior tax liabilities, and also provide additional information about a company’s revenue sources and outstanding debts.

• Documentation of existing assets of the company.

• Existing contracts, which show a company’s ongoing consumers, but also make clear the responsibilities that the buyer will have to assume upon completion of the deal.

• If in a technological field, any documents concerning intellectual property that the company currently holds.

• Documents concerning any pending litigation involving either party.

While these are many of the big areas of concern that any due diligence approach should cover, they are not the only documents you may need to review. Depending on your industry or the circumstances of your merger or acquisition, there may be many other areas of necessary review.

California Attorneys Providing a Comprehensive Due Diligence Approach

While it is possible to go it alone in the due diligence process, and handle a merger or sale on your own, it is not recommended. Due diligence is an extensive, exhausting process that can require significant time and energy, as well as detailed knowledge about the documents being reviewed.  Hiring an attorney to assist you can make the process much smoother and ultimately, more successful.

At CKB Vienna LLP, our attorneys have handled mergers and acquisitions, and the due diligence process, for hundreds of clients throughout Rancho Cucamonga and the surrounding areas. For more information, contact us online or at 909-980-1040.

Understand the Limits on E-signatures in California

Savvy Lawyers Serving California Clients

E-signatures are an increasingly common part of business practices throughout the United States. Rather than requiring a customer to be physically present in an office in order to sign a paper contract, e-signatures allow consumers to review and sign contracts from the comfort of their own home, without the pressure of a sales person sitting in front of them.

E-signatures have generally been viewed as a step toward giving consumers greater ownership over their purchases. People also see them as improving efficiency and increasing the rate of successful contracts completed for sellers. However, they are not without controversy and limitation.  

If you are an automotive company or dealership operating in California, for instance, it is important to know that e-signatures are not allowed for new or used car sales. This is likely different from many of the other states you may operate in. Using e-signatures in California may result in lawsuits or an investigation against your company.

The Legality of E-Signatures Throughout the United States and In Rancho Cucamonga

In the early 2000s, the United States passed a law permitting electronic signatures on contracts, known as the Electronic Signatures in Global and National Commerce Act. Under the law, businesses and retailers may sell products to consumers – including  products with loans, such as cars – as long as the electronic contracts continue to abide by Truth in Lending Act requirements, including a full disclosure of necessary terms.

California, likewise, has their own state law governing electronic transactions known as the California Uniform Electronic Transactions Act (UETA). Currently, the CUETA allows e-signatures contracts, but carves out several important exceptions meant to protect consumers.

For the auto industry, one of those exceptions is very important: electronic signatures may not be used on new or used auto sales or lease contracts. California is the only state in the nation that prohibits e-signatures on auto contracts, which means that dealerships and car companies must be wary of using standard forms and practices in California.

The Concern for E-signatures in California

While California does not dispute that e-signatures improve efficiency for consumers and for retailers, the state, and consumer groups, have been concerned that the use of e-signatures increases the potential for abuse. The thought here is that e-signatures makes it easier for consumers to overlook the finer details of their contract. This, of course, leads to buyers finding out later that they have agreed to terms they were never previously informed of.

While auto industry representatives counter that these fears are not born out in reality, and that electronic contracts are as easy to read and understand as paper contracts, they have not yet had success in eliminating this exception.

Earlier this year a bill, AB 380, was introduced into the California legislature which attempted to remove the auto sales exception from the UETA – and give auto dealerships the option to offer e-signatures to consumers if they preferred. While the bill initially had strong legislative support, it was eventually abandoned after significant push back from consumer advocates and consumer groups.

California Attorneys Advising You On Technological Advances and Limitations

The e-commerce and e-signature arena is an area of constant evolution. New technologies continually seek to make the retail sales space more efficient for sellers and consumers, and safer for all parties involved.

With these changes come constant updates to regulations and legal protections for consumers, which require a watchful eye and continual review in order to ensure compliance. At CKB Vienna LLP, our attorneys consistently review new legislation and federal rules applicable to automotive companies, and work with industry representatives to stay on top of new trends and lingering concerns. For more information, contact us online or at 909-980-1040.

Adverse Possession: When Do You Face the Risk?

Decisive California Attorneys

Most of us understand that when we purchase a home or a piece of property, we own that real estate until we choose to sell it, loose it to foreclosure, or pass away. What many property owners do not realize is that in certain situations, the land you own, or portions of it, can be acquired by others through an obscure process called adverse possession.

Adverse possession is a process whereby a third party who regularly uses your land without your permission, can acquire your land over a period of time. While acquisition through adverse possession is a long and difficult road, it is one that every property owner should be aware of in order to minimize the risks of unexpected property loss.

What Does Adverse Possession in Rancho Cucamonga Require?

Under California law, in order for an individual to claim title to land by adverse possession, he or she must establish certain requirements:

• The possession must be hostile which means without permission and adverse to the current owner

• The adverse possessor must be exclusively using the property or a portion of property

• The possession must be open and notorious

• The adverse possessor must use the property for at least five continuous years.

• The adverse possessor must pay all applicable taxes on the land or portion of land for the five year period

The individual seeking to prove ownership by adverse possession (often referred to as the trespasser) has the burden of proving all of these elements.  Only after the trespasser makes an initial showing that all of five elements are met does the original owner bear the burden if disproving one or more of the elements.

How to Prevent Adverse Possession from Occuring

The easiest way to prevent a claim for adverse possession is to keep a close and watchful eye on your land. If you notice that a neighbor is frequently using your land to get from his home to a nearby lake, for instance, or has built a shed on your property, you have two options.

First, if the neighbor’s actions are not actually bothersome to you, but you want to prevent any issues down the road, grant the neighbor written permission to use your property in this fashion. Written permission negates the very first element of an adverse possession claim, as the use is no longer hostile or adverse. Use with permission can go on for any number of years without rising to an adverse possession claim.

Second, if you do disagree with your neighbor’s actions, but cannot bring him or her to stop what is happening, consider a claim for quiet title. A quiet title action essentially asks a court to declare the rights that individuals have, if any, to a piece of land. If your neighbor has no right to build a shed on your property, the court will tell him so and order him to cease building. This also prevents any later claims from arising.

California Lawyers Protecting Your Real Estate Investment From Threat

The property you own is often the most important investment you will ever make. Over the course of your lifetime you will undoubtedly pour your time, money, and hard earned effort into protecting and managing your land, which makes the threat of an outsider acquiring your property, or a portion thereof, even harder to swallow.

If you are concerned about acquaintances or unknown third parties who may be regularly using your land without your permission, the attorneys at CKB Vienna LLP can help you evaluate your situation and make a plan for protecting your property rights. For more information, contact us online or at 909-980-1040.

Does Your Arbitration Agreement Include A Class Action Waiver?

Skilled California Lawyers for Business Compliance

Arbitration agreements are a fairly common practice across the financial and banking industries. When consumers have a dispute with a credit card or banking provider, or contend that their financial servicer violated the law, arbitration agreements require the consumer to pursue the disagreement through arbitration rather than litigation.

Arbitration allows disputes to be handled in a more cost effective and efficient manner, often in a shorter period of time than a lawsuit. It also means that disputes are heard by a panel of arbitrators rather than a jury, and that the results of the arbitration can be kept fairly private.

All of these advantages makes arbitration preferable for banks and financiers, and courts generally allow companies to require their customers to go to arbitration through arbitration agreements. However, new rules have made clear that these agreements may not require consumers to waive their right to class action litigation.

The Right to Class Action Litigation in Rancho Cucamonga

In many instances, consumers who have disputes with a company will bring their claims through individual litigation, where they assert that the particular actions or decisions of a company have caused them damage.

In certain situations, however, a group of consumers may all claim that the same decision or action by a company has caused them harm. For instance, this often happens in medical cases where large numbers of patients are harmed by the same procedure or drug. It can also happen when consumers are deprived of certain financial benefits or opportunities.

These are known as class action cases, and they are a special type of litigation that allows large numbers of plaintiffs to resolve their claims all at once. All individuals have the right to participate in class action litigation if they have relevant claims.

Arbitration Agreements and Class Actions

As stated previously, California courts allow companies to require consumers to handle their individual lawsuits through arbitration by signing an arbitration agreement. However, some companies have tried to use this language to also prevent consumers from participating in larger class action litigation.

Recently, the Consumer Financial Protection Bureau (CFPB), instituted new rules clarifying that companies may not use arbitration agreements in this manner. Under these rules, the language in arbitration agreements may not bar plaintiffs from joining in class action litigation, where it is relevant to their claims.

The practical effect of these new rules means that:

• consumers will have more options for pursuing claims against financial and banking companies, but

• companies will run the risk of increased uncertainty when dealing with potential disputes and higher litigation budgets in the event that class action is pursued.

California Attorneys Monitoring Your Compliance With CFPB Rules

If  you are currently working in the consumer finance and banking arenas and have an existing arbitration agreement that you use with consumers, there is a good chance that you will need to review the language of your agreement and update it to comply with the CFPB’s rule changes. Failure to do so could lead to problems down the road.

At CKB Vienna LLP, our attorneys can advise you on the necessary changes to keep your arbitration agreements compliant with current rules and restrictions, and keep you advised of further changes that may occur. For more information, contact us online or at 909-980-1040.

Registering Your Cannabis Trademark

Experienced Lawyers for California Clients

In the highly competitive world of cannabis sales, having a recognizable name and brand is an increasingly important part of running a successful business. Consumers can often find it hard to differentiate between the many products available in the retail space, and will turn to brands they recognize, or that their friends recommend, as a safe option for purchasing.

While developing a strong brand reputation is vitally important, it is equally important for cannabis businesses to take the necessary steps to protect that brand name. If not, they may find that competitors are soon attempting to use that brand for their own benefit, or creating knock-offs to confuse consumers. One of the best ways to protect your brand is through the registration of your trademark.

How Do Rancho Cucamonga Cannabis Businesses Register Their Trademark?

Trademark registration is the process of having the federal government acknowledge your particular brand “mark” and determining that you are the official and exclusive owner of that mark for your particular industry. If another company then attempts to use your mark, or a similar mark, to market a product that is in the same commercial space as yours, you have legal recourse to stop them from doing so.

Trademark registration happens at the federal level through the United States Trademark and Patent Office, and as of January 1st, will happen with the California Secretary of State’s Office as well. Beginning in 2018, cannabis businesses may register their cannabis-related trademarks with the Secretary of State as long as they meet two important requirements:

• First, the company must be lawfully using the mark in the commercial industry in California.

• Second, the product a company is seeking to trademark falls within the current classification of good and services adopted by the USPTO.

Before rushing to get your application for registration filed with the California Secretary of State, it is important to understand exactly what these two requirements mean.

Are you Lawfully Using Your Trademark?

At the federal level, companies that develop a trademark for a product that they hope to start producing can file trademark registration applications called “intent to use.” This means that the company is seeking to register and protect a trademark that it plans to use in the future.

However, under California’s new law, companies may not seek “intent to use” registrations. Instead, the company must already lawfully be using the trademark in their commercial operations. This requires two things.

First, the cannabis company looking to register their trademark with the Secretary of State’s office must have already sold the goods or services that it wishes to trademark in California at the time of registration. Not only must the product be in existence, but the company must be actively marketing and selling it for a registration to be approved.

Second, the company must be doing so lawfully. Selling your product on black markets, under the radar, or out of your garage will not make the cut for trademark registration purposes. Instead, you must be able to prove that your business has acquired all relevant licenses and is fully in compliance with California regulations while selling the product for which you wish to register a trademark.

If you cannot meet either of these two requirements then the first step toward California trademark registration is:

• to get your business up to speed in operating lawfully, and

• get the product you are interested in protecting out into the market.

Do You Fall Within the USPTO’s Current Classifications for Goods and Services?

The second part of California’s trademark registration process requires that the product that a cannabis company is seeking to trademark falls within an existing USPTO classification.

When you register a federal trademark with the USPTO, you must identify the goods and/or services for which you are seeking a trademark. This is because your potential trademark must be compared to others within a similar industry to make sure that no duplication or overlap is occurring.

When trademark registrations are approved, they are approved for a provision of a certain category of goods and services. Their purpose is not to universally exclude anyone from ever using a similar context in any industry, anywhere in the world. This is why a trademark registration application must identify the goods and services for which the trademark will apply.

For instance, when Ben & Jerry’s registered their trademark, they likely described their goods and services as being related to ice cream and food sales. If another food company comes along and tries to use that name or a similar name for another food-related product, their trademark will likely be denied. However, if they tried to register Ben & Jerry’s to provide construction services, the trademark application may be approved.

The USPTO sets forth acceptable goods and services identifications in a manual that it updates on a yearly basis. Cannabis companies applying for California registration must be able to show which goods and services categories they fall within. While this will be easy for those companies providing more traditional services, like a retail store – it may be more difficult for those selling novel cannabis goods. A lawyer can help you review what classifications might apply to your product.

If you cannot identify an acceptable existing classification, it may be difficult to get a California trademark registration. The next few months will shed light on how California treats trademark registrations for those items that do not yet easily fit within existing USPTO classifications.

California Attorneys Assisting You With Trademark Registration

If you have a brand that has recently gained popularity, or which your consumers now regularly recognize or identify with, you should be considering trademark registration. With the opening of registration in California in 2018, now is the perfect time to consider your trademark options.

At CKB Vienna LLP, our attorneys can help you assess your options for trademark registration and whether you will be able to meet California’s new requirements. For more information, contact us online or at 909-980-1040.

How To Value A Cannabis Business

California's Trusted Lawyers for Cannabis Business Valuation

Whether you are considering starting your own cannabis business and are wondering about the long-term value of your investment, or you are evaluating the possible purchase of another company, it is important to understand how valuation works in the cannabis market.

Because the cannabis industry is still a new industry, with a significant amount of legal risk and potential fluctuation – valuing a company that you have started, or that you hope to purchase, can be challenging. As the industry continues to grow, certain markers have developed for evaluating value and growth potential, and making an educated decision about good business opportunities.

Analyzing Business Valuation in Rancho Cucamonga

Any successful purchase or sale of a cannabis business requires that the seller and buyer agree on a fair value for the business. For obvious reasons, a buyer will naturally want a lower price in order to increase potential profitability, while a seller will want to sell for the highest price possible. In order to make sure that both parties are satisfied, it is often necessary to conduct an independent valuation.

There are two primary means of valuing cannabis businesses. But due to the newness of the industry and the lack of publicly available data, both are still somewhat speculative. These two approaches are:

• Asset-based valuation

• Earnings-based valuation

Asset-based valuation looks primarily at the assets that the company has in its possession. This can include tangible assets such as equipment, plants, and staff. However, it also includes intangible benefits like brand name recognition, a loyal customer base, and relationships with government regulators and administrators.

In the cannabis world, a license to operate a cannabis business can also be of significant value, particularly where such licenses are difficult to come by. In Washington for instance, the restriction on the number of licenses to be issued has meant that ownership of a license itself is valued at upwards of $500,000.

What asset-based valuation does not take into account is the unique opportunities for potentially explosive growth in the cannabis industry, and what this might mean for potential earnings. Some buyers may appreciate the more conservative asset-based approach because it acknowledges the inherent risk in the industry and that growth is not guaranteed.

Others, however, may prefer to take an earnings-based valuation approach, which does consider the possibility of significant future earnings returns. Under an earnings-based approach, a base multiplier amount, such as two or five, is applied to the current net revenue of the company to be sold. For instance, a company with $200,000 in revenue would be worth one million dollars with a multiplier of five.

The difficult aspect of the earnings-based approach in the marijuana industry is that no set base multiplier has yet been established. In more developed industries, such as retail, with far less potential for risk, valuation experts have generally agreed on the appropriate multipliers that should be applied during a sale.

In the cannabis industry, the sale of a business is still new, and a great deal of risk and uncertainty remains within the industry. Therefore, disputes continue over the appropriate multiplier that should be applied, and one can anticipate that a seller will always want a higher multiplier than a buyer in an earnings-based valuation.

Do Your Due Diligence

No matter which valuation approach you decided to use, there are certain fundamental due diligence steps that every potential buyer should take when considering a cannabis business purchase.

First, ensure that you have received all of the necessary and important documentation related to your potential purchase. For an earnings-based valuation this should include detailed documentation to support all earnings figures for the years that the company has been in business, as well as any outstanding debts and liabilities. For an asset-based valuation, this should include documentation to verify ownership and value of all purported assets.

Second, you will need to obtain verification from the seller that the business is in compliance with all applicable California regulations and restrictions and has all necessary approvals and licensing. Given the strict controls on the cannabis industry, the last thing a buyer wants is to purchase a company acting illegally.

Third, the cannabis industry faces unique challenges that make particular aspects of a business, or assets, very important. For example, the cannabis industry faces unique challenges in acquiring adequate storefront and warehouse space, with location and potential industrial space quickly requiring payment of a significant premium. For this reason, verifying the details of any deeds or leases for the company you want to acquire can be very important.

Likewise, with the rapid expansion and growth in the cannabis industry, and so many new businesses entering the arena, the protection of brands and trademarks is also particularly important for continued growth. Any potential buyers should make sure that the business they are acquiring has properly registered all applicable trademarks and is not facing any pending trademark disputes.

While hiring a lawyer and/or valuation expert to help you navigate the purchase or sale of a cannabis business is not mandated, it is highly recommended.  Given the inherent risk in the industry – as well as the highly specific factors mentioned above – handling a cannabis business acquisition comes with significant challenges.

California Attorneys Guiding You Through the Cannabis Valuation Process

While business purchases always involve a degree of risk, and require meticulous attention to detail, this is particularly true when dealing with a cannabis business. Because the industry is a new and growing one, with significant potential and also heavy regulation – properly valuing a company for sale requires the input of experts familiar with the unique needs of the industry.

At CKB Vienna LLP, our attorneys are at the forefront of industry trends in California and can help you develop an honest assessment of the value of your company, or a company you are considering purchasing.  We will work with local valuation experts, industry professionals, and your staff to help you make the best possible purchase. For more information, contact us online or at 909-980-1040.

So You Think You Must Arbitrate? Not So Fast

For many automotive dealers and manufacturers, the preferred means of resolving disputes with customers is arbitration. It is often less costly and more efficient than litigation, and allows parties to resolve their disputes in a more private forum rather on the public stage of a courtroom trial.

Increasingly, however, states like California are carving out exceptions to arbitration where they believe it necessary to protect certain public goods, or the rights of consumers. Most recently, California has determined that car purchasers cannot waive their right to public injunctive relief through arbitration.

Pursuing Arbitration in Rancho Cucamonga

Arbitration is an increasingly popular means of alternative dispute resolution that avoids state and federal courtrooms. An arbitration is conducted similarly to a trial, with both sides presenting evidence to support their case. The big difference is that the attorneys for each side present their evidence to a panel of arbitrators – instead of a judge.

The rules of arbitration can also be very different from a courtroom. Parties can specify that they want to use the rules of a certain jurisdiction, like California, or if they want to use rules developed by arbitration associations. Because the typical Rules of Evidence often have the effect of limiting what a party can offer as evidence, being able to choose a less restrictive set of rules could have a great impact on the strength of either side’s case.

One of the reasons that arbitration is very popular, beyond being more cost-effective, is that it can be done in a much more private manner than a court case. Where sensitive issues are at stake, or a party is concerned about how they will be portrayed in the media – arbitration can eliminate many of these concerns.

Placing Limits On The Scope of Arbitration

Many automotive dealers and manufacturers require purchasers to arbitrate disputes by including language requiring arbitration in their contracts. These contracts will typically say that the individual signing it agrees to pursue arbitration rather than litigation if an issue arises.

While these arbitration clauses are perfectly legal, California courts have stepped in to limit the rights of companies to force consumers into arbitration where important public interests are at stake. Where courts feel that it is important that consumers not be forced to resolve their complaints in arbitration, they can make exceptions to arbitration clauses.

A recent example is the decision of the California Supreme Court in McGill v. Citibank. In that case, an argument was made that consumers who were seeking public injunctive relief – such as requiring a store to stop selling certain products – could be forced into arbitration. However, injunctive relief is not possible in arbitration, because the arbitrator has no authority to issue an injunction.

The California Supreme Court decided that the right to injunctive relief is not only important to consumers, but also the general public. It ensures that other members of the public are protected from harm when a harm becomes known. For example, if an auto manufacturer is manufacturing faulty parts, an injunction can stop them from manufacturing more of the faulty parts, thereby hurting more consumers.

If consumers were forced into arbitration without the right to seek injunctive relief, the court decided this would do a disservice to everyone involved. Because of this, the Court concluded that businesses may require consumers to arbitrate damages claims through arbitration clauses, but they cannot force consumers to waive their right to injunctive relief in court.

California Attorneys Instructing You On How To Draft Enforceable Arbitration Clauses

Arbitration is a great option for many California businesses in the automotive industry. It creates a faster, more straightforward, and less expensive option for dispute resolution. Arbitration, however, cannot be used in every circumstance.

At CKB Vienna LLP, our attorneys can help you draft an arbitration clause for your contracts that will encourage the resolution of disputes through arbitration, while acknowledging the limits imposed by the California courts. For more information, contact us online or at 909-980-1040.

The Whole Shebang: Equity Versus Asset Sales

The closing of a business sale is often a time for celebration and recognition of achievements. Whether you are the seller enjoying the lucrative acquisition of your company, or the buyer getting a great deal, corporate mergers and acquisitions are often the prize for hard work and years of commitment.

In the midst of excitement about a pending sale, it can be easy to lose sight of a very important question: whether the sale is for equity or assets. Indeed, many small business owners and purchasers frequently confuse the two. When this detail is overlooked, it can create serious liability issues down the road.

Helping Rancho Cucamonga Business Owners Understand Equity and Assets

Business sales fall into two different categories:

• equity sales

• asset sales

The vast majority of business acquisitions in the United States arise from the purchase of assets, rather than equity. In an asset sale, the purchaser is obtaining the goods of the company, such as the products or equipment but doesn’t purchase the actual corporate structure.

Assets sales are favorable for buyers because they allow the buyer to obtain the best parts of the company while minimizing liability for the company’s past actions or defects. Instead, the liabilities remain with the original corporate structure. For obvious reasons, this is a downside for sellers to agree to an asset purchase.

Equity or stock sales, by contrast, involve the purchase of the entire company, including name, corporate structure and potential liabilities. Equity sales generally only arise when the company being purchased is a C or S corporation, although LLPs and LLCs may sometimes be sold in equity sales.

Because the purchaser in an equity sale takes over the ownership and interest in the corporation, he or she immediately assumes an interest in both the assets and liabilities of the company.

Many purchasers will attempt to minimize the risks of an asset sale through comprehensive background checks into any exposure the business might have. They may also require the seller to provide representations and warranties about their product – sometimes even guaranteeing to defend lawsuits against the buyer if they arise after the sale is completed.

Watch Out For the Tax Man

One very important consideration when evaluating asset and equity purchases is the tax implications of either route. In an asset sale, the profits that the seller receives from the purchase of assets are typically taxed as capital gains or personal income, depending on the specific asset sold. This can significantly increase the seller’s tax bill depending on the size of the company.

In an equity sale, the seller will be expected to pay taxes on the capital gains of the increase in equity in the company when the company is sold. The capital gains tax rate for this kind of a sale is much lower than the rate applied to piecemeal asset sales, which means that this is generally a better deal for sellers.

Overall, these considerations must be balanced against the purchaser’s interest in the business and the seller’s motivation to sell. While buyers generally prefer asset sales to limit liability, sellers may be able to push an equity sale where the company seems likely to grow in value, or the liabilities are minimal.

California Attorneys Guiding You Through A Business Purchase

There are many factors to consider when deciding whether to purchase a business, or making the move toward selling your own. The care that you take in structuring a business acquisition can have consequences that impact you for many years down the road.

At CKB Vienna LLP, our attorneys can walk you through the pros and cons of equity and asset sales, and help you evaluate which approach best meets your needs. . For more information, contact us online or at 909-980-1040.

Who’s Responsible? The Many Different Parties In Construction Disputes

Construction projects, particularly commercial construction projects, can involve a dizzying array of companies and parties. From start to finish, construction work may involve architects, general contractors, independent contractors, subcontractors, and even sub-subcontractors.

When something goes wrong, keeping track of who is responsible for what liabilities, and what damages is made all the more complex by this wide range of players. It can spell problems for plaintiffs and defendants who are trying to protect their litigation interests. Before getting involved in a lawsuit, or immediately upon receiving service of a complaint, it can be important to understand the many players involved and the responsibilities they have.

The Who’s Who Of A Construction Project in Rancho Cucamonga

Claims involving construction defects and breach of contract can involve many different parties, including:

• The property owner

• Subcontractor

• General contractors

• Architects

• Engineers

Depending on the circumstances, any one of these categories of individuals can be responsible, or even multiple parties at once. For example, if a staircase in a building is built incorrectly, the architect or engineer who designed the staircase may be liable. But if the staircase was designed correctly, but there were faults in its construction, a subcontractor or general contractor may be responsible.

Subcontractors are generally hired to do specific types of work, such as installing floors or laying bricks. When their specific project is done incorrectly, they will be responsible for the work they performed. However, the general contractor can also be held responsible, as they typically have the contract with the owner and hired the subcontractor themselves.

Property owners can also become liable in construction cases where safety issues arise. For example, perhaps the property owner failed to warn the general contractor of holes or other dangerous conditions on the property, or did not properly erect barriers in order to keep children away from construction zones.

Indemnification in Construction Cases

In addition to identifying individuals responsible for construction defects, potential plaintiffs and defendants in construction cases must also look to any applicable contracts that apply to the construction taking place.

In many construction contracts, there will be indemnity provisions for certain parties that protect them from liability. Indemnity means that another party has agreed to pay for the liability of another and defend them in litigation. For instance, an architect may have an agreement with a general contractor that if he is sued for work done on the general contractor’s project, the general contractor will indemnify him.

It is often quite common for subcontractors to agree to indemnify general contractors in lawsuits. As discussed above, general contractors can be sued for work that their subcontractor incorrectly performs. In order to minimize damages, many general contractors will require that the subcontractor indemnify them if such a circumstance arises.

This means that in order to properly bring, or defend, a construction lawsuit, it is imperative that you consider not only the actors actually involved, but also those entities that may have agreed to indemnify them.

California Attorneys Navigating The Complexity of Construction Litigation On Your Behalf

Whether you are a homeowner who has just discovered a construction defect in your home, or a small business that has recently been sued for construction issues that are not your fault – one of the most important first steps you can take is to understand all the potential parties in your case.

At CKB Vienna LLP, our attorneys will quickly get up to speed on the construction defects and party issues in your case. We can decipher the various contracts, with the aim of ensuring that the correct parties are held responsible. For more information, contact us online or at 909-980-1040.

Shareholders Gone Wild: When Unhappy Shareholders Sue

At some point in the development of your business, you may decide to take on investors. This allows you to acquire additional capital that allows your company to take its next big step toward success. Typically, individuals or other companies will give you money in exchange ownership of a part of your company. As such, they become your shareholders.

While shareholders may seem like passive investors with little interest in the management of your company beyond the return on their investment, the reality is that shareholders have many important rights – and when they think those rights have been violated, they can sue. Without necessary care, shareholder lawsuits can wreak havoc on your bottom line.

Understanding the Rights Available to Rancho Cucamonga Shareholders

Shareholders have two primary types of rights: Direct and Derivative. Direct rights are rights that belong to the specific shareholder at issue and derive from injury suffered specifically by that shareholder. For example, if the company breaches a contract with a shareholder, that is a direct right that can lead to direct action.

Derivative rights are those rights that are actually owned by the company, but which the shareholder may assert on behalf of the company. These rights typically arise when individuals at the company do something that is bad for business, and therefore bad for a shareholder’s investment. An example of this would be if an officer or director were to steal from the company.

More often than not, litigation brought by shareholders is done to assert derivative rights, as these are more easily violated.

The Scope of Derivative Action Litigation

Within a business, many different individuals owe duties to the business and to its shareholders. Officers like CEOs and CFOs owe duties of good faith, fair dealing, and loyalty to the company. This means they must act in the best interest of the business and cannot pursue side deals with competitors, or take action that would hurt the company while benefitting them personally.

The same duties apply to those on the board of directors. Board members must always act in the best interests of the company. When they make business decisions they must put the interests of the company above their own personal interests.

Finally, shareholders may also owe duties to the corporation and to other shareholders. Shareholders have responsibilities to refrain from making decisions that adversely affect other shareholders.

If any one of these individuals fails in their duties, a shareholder may have a right to bring a derivative shareholder action on behalf of the company to address these wrongs. But, in order to do so, the shareholder must first take certain steps.

Notice Before Litigation

Because shareholder derivative actions are taken on behalf of a company, they can only be brought when the company itself fails to act. For example, if officers of the company learn that a member of the board of directors is stealing from the company, they may bring a lawsuit against that board member.

But if they are conspiring with that board member to fill their own pockets – and do not want to sue the board member for his misdeeds – then a shareholder may step in and take action on behalf of the company, asserting the company’s interests in its own profits and funds.

Thus, any shareholder who wants to a sue a company must be careful to raise the issue with the corporation first and give them the opportunity to respond. Only when they fail to do so may the shareholder step in.

California Attorneys Helping Protect You From Shareholder Litigation

Every business owner must realize that when shareholders enter the corporate mix, there is increased opportunity for conflict and litigation. Officers, owners, and the board of directors must be careful to educate themselves as to their responsibilities to the company, and to their colleagues and investors.

At CKB Vienna LLP, our attorneys can help you prepare to take on shareholders before the necessity arises. We work with you to develop policies and procedures that will protect shareholder interests, and work to minimize litigation. For more information, contact us online or at 909-980-1040.

Protecting Your Business With Cannabis Insurance Coverage

Securing insurance to cover your assets, personal interests, and your workers is a fundamental component of every successful business. Disasters can happen no matter how much effort you may take to prepare, and certain natural events are always out of your control.

With the recent legalization of marijuana in California, marijuana companies are increasingly turning to traditional insurers to secure coverage for their business assets in the event of theft, fire, lost crops, and other disasters. As the industry expands, it is anticipated that insurance coverage will expand also.

Why Business Insurance Is Important for Your Rancho Cucamonga Business

When starting out as a small cannabis operation, one of the challenges can be determining what to spend money on, and what to hold off until you are more established. Investments must be made into infrastructure, utilities, marketing, and initial product – and this can leave companies strapped for cash.

While many may view business insurance as an expense to be put off for later, it serves an extraordinarily important purpose and should not be overlooked. Property and casualty insurance can make the difference between surviving a disaster such as flooding or theft, or losing your life’s work. Particularly in light of the recent fires that have ravaged California, it can be a necessity.

Property and casualty insurance protects your business facilities, and everything maintained inside your business operations, including:

• Equipment

• Product

• Cash investments

• Electronics

• Start up materials

While some property and casualty insurance covers “all risks,” others are specifically limited to certain risks like fire. You’ll want to make sure to review your policy to be certain that it suits your needs.

Business Insurance For the Cannabis World

While some forms of insurance are available to cannabis companies in California, they are often very expensive, difficult to obtain, and have significant gaps in coverage. Because marijuana is still illegal on the federal level, many insurers are unwilling to provide product liability coverage for marijuana, or to protect officers and directors of marijuana companies.

Since the legalization of marijuana in California, the California Insurance Commissioner has made a concerted effort to trying to bring insurers into the market to provide affordable and comprehensive business insurance for marijuana businesses.

Recently, on November 2, 2017, California announced that it had approved the filing for Golden Bear Insurance Company to provide cannabis business insurance to California companies. It is anticipated that this approval will help to expand insurance options for businesses, their employees, and investors by filling in the gaps currently in the market.

California Attorneys Helping Your Protect Your Business

With the introduction of new insurers to the California cannabis landscape, there is likely to be an improvement in the options for business and product liability available to marijuana growers and sellers. These include improved property and casualty insurance options, and greater protection for those who work in the cannabis industry.

At CKB Vienna LLP, our attorneys understand the constantly changing landscape of California cannabis laws, and what this means for you and your business. We can work with you to appraise opportunities for insurance or greater business protection and make sure you are aware when new options become available. For more information, contact us online or at 909-980-1040.

Federal Strides: First Trademarks for California Cannabis Company

The contrast between California’s legalization of marijuana and the federal government’s criminalization of it creates complexities that go far beyond drug enforcement issues. Business must interact with the federal government in many ways, including paying taxes and abiding by federal workplace regulations, all of which create unique issues for marijuana companies.

Recently, one California marijuana company passed a significant federal milestone when it was granted a trademark from the U.S. Trademark Office. This signifies an important step in the federal recognition of cannabis business ventures.

Understanding Trademarks for Rancho Cucamonga Marijuana Companies

A trademark is a brand name that your company uses to define itself. This can be a word, a symbol, or name that you use to distinguish your company and the products it provides. As you gain increasing recognition within the marijuana industry, other companies might want to rip off your reputation by imitating your brand name and your product. This is why trademark registration is important.

In order to protect your trademark and keep others from using it, you can register your trademark with the U.S. Trademark Office. Registering your trademark makes it known to the public that a certain mark is your brand name and allows you to go after others who may try to use it.

In order to register a trademark, your mark must be distinct and cannot already be in use by another business operating within a similar industry to yours. The U.S. Trademark Office will review your application for a trademark registration and determine whether your brand name qualifies.

Trademarking and The Cannabis Industry

Because trademarking is regulated by the federal government, cannabis companies have historically been unsuccessful in pursuing trademarks for their brand names. Indeed, it is often difficult for marijuana producers, sellers, and affiliated companies to even find attorneys willing to consider a potential trademark application.

Although marijuana companies are often ineligible for federal protections – like patent recognition – the California company, BudTrader, Inc, decided to take a chance at trying to obtain a patent for its online cannabis commercial platform. Despite filing for the trademark in 2015, the road has not been an easy one.

Initially, BudTrader was denied its trademark application, but modified their application and appealed. Over the course of the next year and a half, BudTrader worked with the U.S. Trademark Office to convince them of the company’s right to a trademark. In early November, success was achieved! The company received official word that its trademark had been registered.

For many California cannabis sellers and growers, this is an important victory. It is an important milestone on the path to federal recognition – and increasingly productive relationships between legal state operations and federal agencies. It is anticipated that other cannabis companies may move toward similar trademark recognition in the foreseeable future.

California Lawyers Fighting To Protect Your Business

With the incredible growth occurring in the cannabis industry in California, competition is certain to become more intense in coming years. This can lead to business disputes, broken contracts, brand imitation, and other ongoing business issues.

If your company is looking to become a leader in the California marijuana industry, it is important that you work with qualified attorneys to protect the business that you have developed.

At CKB Vienna LLP, our attorneys will work with you to address business issues and disputes, including trademark needs, in an aggressive and strategic manner. For more information, contact us online or at 909-980-1040.

Do Good: Becoming A Benefit Corporation In California

Attorneys Assisting with Benefit Corporations Throughout San Bernardino

n an effort to promote various social benefits and public goods in addition to shareholder profits, California recently passed legislation allowing corporations to apply for benefit corporation status. This status is of increasing interest to entrepreneurs and startup companies across the state, and one you may want to consider when forming your own company.

What Is Benefit Corporation Status?

Benefit Corporation Status is a type of corporation that allows a for-profit entity to pursue certain societal goods in addition to maximizing profits for investors and shareholders. For instance, a company may pursue goals of minimizing environmental impact, or of increasing civic involvement in a community.

Traditionally, corporations are tasked with growing their revenue and maximizing profits above all other agendas, which can create outcomes that are ultimately less beneficial to society. For example, if products that damage the environment are consistently less expensive than products that are good for the environment, corporations will lean toward the cheaper, but more harmful, products in order to minimize expense and maximize profit.

Benefit corporations allow companies to circumvent these types of conundrums by declaring an interest in non-profit as well as for-profit goals. This allows companies to take a more holistic approach that benefits individuals beyond their wealthy stakeholders.

What Does a Benefit Corporation Require?

Becoming a benefit corporation requires three fundamental steps that are different from normal corporate status. First, the benefit corporation must declare a public benefit purpose. Under California law, this public benefit can include any of the following:

• Preserving the Environment

• Promoting Arts and Sciences

• Helping Low Income of Underserved Communities

• Promoting Public Health

While these types of public benefits are examples, they are not an exhaustive list and California law permits any public benefit purpose that truly supports a public good.

Once this public benefit is established, officers and directors at the corporation are required to consider this public benefit during their decision-making, and evaluate how any particular decision is likely to impact the public goods that they have chosen to focus on.

The corporation must also report on the ways that its actions have helped or hurt such public benefits. This allows the public to independently evaluate whether the corporation is meeting the objectives it has set out for itself beyond simply increasing profit.

If you are just starting out as a corporation, this process allows you to achieve benefit corporation status from the get-go. If you are working with an existing corporation that is considering transitioning to benefit corporation status, it is required that two-thirds of shareholders agree with such a status change before it can be implemented.

The “Benefits” of Benefit Status

Consumers are increasingly looking to patronize companies whose missions and goals align with their own. Benefit corporation status allows corporations to clearly signal to consumers what their goals and principles are, and how they are working to support those objectives.

Benefit corporation status also gives officers and directors more flexibility in making decisions on behalf of a company, as they are not bound to consider only those outcomes that best maximize profits.

California Lawyers Advancing Corporate Welfare Through Benefit Status

Whether you are an entrepreneur just starting out or a seasoned business professional interested in broadening  the objectives of your corporation, benefit corporation status may be an important strategic change worth considering. At CKB Vienna LLP, our attorneys can work with you to evaluate how benefit status can positively impact your company and your community as well. For more information, contact us online or at 909-980-1040.