Miscellaneous

Changes to Arizona LLC Law Effective August 9, 2017

The Arizona legislature passed SB1272, which was signed into law by the Governor or Arizona.  This new law makes minor changes to Arizona’s LLC and corporate laws.  These new laws are effective on August 9, 2017.  A summary of the changes is below.

NEW LEGISLATION SUMMARY

SB1272 was passed this last session. It was a corporation omnibus bill, and it affects several filing requirements for both corporations and LLCs. The changes are summarized below in the order in which they appear in the bill. To read the entire bill, click on the bill number.

MOD accounts:

The bill grants the Commission the discretion to allow the use of MOD (money-on-deposit) accounts. Previously, the statute did not give the Commission any discretion. (See changes to A.R.S. § 10-122(K).) For the foreseeable future, the ACC will continue current procedure with MOD accounts.

Approval of documents:

The Commission is no longer obligated to return a copy of an approved document to the customer; the obligation now is to provide notice of the approval. (See changes to A.R.S. § 10-125.) Effective August 9, 2017, the Commission will no longer send out a copy of the document with the approval letter; only the approval letter will be returned to the submitter. Approved documents are available on our website.

Rejection of documents:

The Commission will continue to return a copy of a rejected document along with the letter explaining the rejection. (See changes to A.R.S. § 10-125.)

Electronic transmission and Notice:

Definitional changes were made, and other references throughout the corporation and LLC statutes have been modified to refer to “electronic transmission” where appropriate, and that definition links back to the definition of “electronic record” found in the electronic transactions statutes, A.R.S. § 44-7001, et seq. This is an attempt to codify the use of email as an allowable means of communication and for giving Notice between the Commission and entities. (See, e.g., A.R.S. §§ 10-140(21), 10-141, and 10-504.) The Commission now can send official notices, such as a Notice of Pending Administrative Dissolution, via email. Please note that this will NOT be implemented until the new computer system is up and running. When the new system is in use, the Commission will ask for the entity to consent to receive such notices by email. If the entity does not consent, notices will be sent via the U.S. Post Office.

Change documents:

The requirements for Statements of Change have been simplified. Only the new information for address and agent will be required. We are revising our forms to reflect the minimal requirements and will have those available as of August 9.

Annual Reports:

The dissolution and withdrawal statutes have been revised to allow for a six-month suspension of the annual report requirement for corporations that file for a voluntary dissolution/withdrawal. (See, e.g., changes to A.R.S. § 10-1403.) Corporations have six months after submission in which to complete a dissolution or withdrawal. Often, corporations will try to complete the dissolution/withdrawal but find that they now owe their annual report and/or owe penalties for not filing it on time. This bill provides that the annual report requirement is suspended for six months from the date the dissolution/withdrawal is submitted. Note: once the six months passes, the annual report is due and so are penalties, if enough time has passed since the due date. TIP – obtain the tax clearance certificate before submitting the dissolution. That way, you will never run into a penalty situation with the annual report. This change is being programmed into the current system and should be implemented by August 9. The new law applies only to dissolutions or withdrawals delivered to the ACC on or after August 9, 2017.

Foreign nonprofit corporations:

The gap left by last year’s SB1356 is now closed – foreign nonprofit corporations no longer have to file applications for new authority when they amend their articles. A foreign nonprofit corporation that amends its name, duration, or state of jurisdiction will now file Articles of Amendment to Application for Authority (along with a certified copy of the amendment) – a significant cost savings ($25 fee instead of $175). This change is already in effect for foreign for-profit corporations, from last year’s SB1356. The ACC’s form will apply to both for-profit and nonprofit corporations as of August 9, 2017.

Nonprofit corporations:

Another gap was closed – nonprofit corporations can sue for false filings. For-profit corporations and LLCs were granted this right of action in last year’s SB1356. Note – this is a private right of action and is not something the ACC will do for the corporation.

LLC administrative dissolution:

LLCs whose latest date to dissolve has passed will now be administratively dissolved. (See changes to A.R.S. § 29-786.) The LLC does have an option of amending its articles, or, if it is administratively dissolved, of reinstating and then amending its articles. There are several thousand LLCs that will be administratively dissolved pursuant to this provision, beginning on or after August 9, 2017.

What Arizona Employers Need to Know about New Employee Sick Pay Time Law Effective July 1, 2017

Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), was a ballot initiative approved by Arizona voters on November 8, 2016. The Act established a new Arizona state minimum wage effective January 1, 2017, and entitles employees to accrue earned paid sick time.  Effective July 1, 2017, employers of Arizona employees must accrue and provide paid sick leave for all employees except exempt employees.  Earned paid sick time is sick time accrued by an employee that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked.

Employees can begin accruing earned paid sick time at the commencement of employment or July 1, 2017, whichever is later. Employees may use earned paid sick time for themselves or for family members (see Arizona Revised Statutes § 23-373 to see who qualifies as a family member) in the following circumstances:

  • Medical care or mental or physical illness, injury, or health condition;
  • A public health emergency; (see Arizona Revised Statutes § 23-373 for more information about what qualifies as a public health emergency) ; and
  • Absence due to domestic violence, sexual violence, abuse, or stalking.

For employers with 15 or more employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of earned paid sick time per year, unless the employer selects a higher limit.

For employers with fewer than 15 employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer sets a higher limit.

An employee who earns sick time is every person who performs work for compensation, whether full-time, part-time, or on a temporary basis, as an employee. For purposes of determining the number of employees, an employer has 15 or more employees if it maintained 15 or more employees on the payroll for some portion of a day in each of 20 different calendar weeks (the weeks do not have to be consecutive) in the current or preceding year.

Earned paid sick time shall be carried over to the following year, subject to usage limitations based on employer size. Alternatively, in lieu of carry over, an employer may pay an employee for unused earned paid sick time pursuant to Arizona Revised Statutes Section § 23-372(D)(4).  An employee of an employer with 15 or more employees may carry over to the following year a maximum of 40 hours of unused earned paid sick time. An employee of an employer with fewer than 15 employees may carry over to the following year a maximum of 24 hours of unused earned paid sick time.

Employers Must Give Employees Notices of Accrued Sick Time

Employers must give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later:

  • Employees are entitled to earned paid sick time;
  • The amount of earned paid sick time that employees are entitled to accrue;
  • The terms of use guaranteed by Arizona’s earned paid sick time laws;
  • That retaliation against employees who request or use earned paid sick time is prohibited;
  • That each employee has the right to file a complaint if earned paid sick time is denied by the employer or the employee is subjected to retaliation for requesting or taking earned paid sick time; and
  • Contact information for the Industrial Commission.

See the Industrial Commission’s 2017 model earned paid sick time employee notice.

Employer’s Record-keeping Requirements

Unless otherwise exempted from the record-keeping requirements, employers subject to Arizona’s earned paid sick time laws are required to comply with notice, posting, and record-keeping requirements pertaining to earned paid sick time. The requirements include:

(1) posting earned paid sick time notices in the workplace;

(2) providing employees with the employer’s business name, address, and telephone number in writing upon hire;

(3) providing employees with a notice that informs them of their rights and responsibilities under the Fair Wages and Healthy Families Act; and

(4) maintaining payroll records in accordance with Arizona’s statutes and rules.

For more information about which employers are subject to Arizona’s earned paid sick leave laws, see Which employers are subject to earned paid sick time laws?

Download and print the Industrial Commission’s 2017 model earned paid sick time notice.

Note:  The Industrial Commission is currently proposing rules that would exempt small employers (defined as a corporation, proprietorship, partnership, joint venture, limited liability company, trust, or association that has less than $500,000 in gross annual revenue) from the Act’s posting requirements.

Paycheck Notice Requirement

An employer must also provide employees either in or on an attachment to the employee’s paycheck:

  • The amount of earned paid sick time available to the employee;
  • The amount of earned paid sick time taken by the employee to date in the year; and
  • The amount of pay time the employee has received as earned paid sick time.

An employee may use earned paid sick time as soon as it is accrued. However, an employer may require an employee hired after July 1, 2017, to wait 90 calendar days after the start of employment before using accrued earned paid sick time.

Employers’ Recommended Reading Assignment

If you or your company is an employer that employees people who are covered by the Act then the employer must comply with the Act.  All employers should read one of the following:

Posters Employers Must Post for Employees

Arizona law requires employers to post SIX notices, or “posters,” and each notice must be posted in a conspicuous place where employees will see it.  Go to the Industrial Commission’s required notices page to see the list of required notices and download each notice.

2017-06-29T10:05:22-07:00June 29th, 2017|Miscellaneous|0 Comments

Richard C. Keyt Spoke on 4 Topics at an Estate Planning Seminar

I am very proud of my son Richard C. Keyt for speaking on four topics at a two day seminar called “Estate Planning and Administration: the Complete Guide” offered by the National Business Institute (NBI).  Ricky, who is licensed to practice law in Arizona and California and who was a CPA in a national accounting firm before he went to ASU’s law school, spoke on the following subjects on June 26 & 27, 2017:

  • Common trust structures and when they are used
  • Tax consequences of trusts
  • Post-mortem tax planning options
  • Marshaling assets and dealing with creditors

Ricky and I work together to prepare wills, trusts and estate plans for people.  We are co-authors of a book called “Family Asset Protection.”  The purpose of our book is to answer common questions people have about estate planning and explain what you need to do to protect your most valuable assets, your loved ones.  Get free access to Family Asset Protection.

2017-06-27T19:21:10-07:00June 27th, 2017|Asset Protection, Miscellaneous|0 Comments

Beware of Real Property Deed Scams

If you own real property in Arizona do not fall for the “you need to get a copy of your deed” rip off.  Companies send real property owners official looking letters that contain language intended to convince the reader that it is important to have a copy of their deed.  One of the letters says:

“The U.S. Government Federal Citizen Information Center website recommends that property owners should have an official or certified copy of their deed. If you don’t already have this important document, you may obtain one now. This document provides evidence that your property was transferred to you.”

Each letter offers to send you a copy of your deed for a price 2 – 5 times the cost of purchasing the deed directly from the county recorder.

If you get one of these letters throw it in the trash.  If you own real estate you would have gotten the original deed when you acquired the real estate.  If you need a copy of your deed you can get a copy at no cost from the county recorder’s website or from the county recorder’s office for a nominal fee if the county does not have its documents available on the internet.  To get a copy of a deed from the Maricopa County Recorder, go to the recorder’s excellent website.

Three companies that send out these letters are:

  • First Documents
  • Local Records Office
  • National Record Service Inc.
deed-scam
2017-03-23T21:54:29-07:00March 23rd, 2017|Miscellaneous|0 Comments

How to Determine if an Arizona LLC is Member or Manager Managed

A client sent me an email in which he said, “the “Arizona Department of Real Estate is asking for ‘a copy of the resolution signed by members stating: whether management of LLC is established as manager/member controlled’.

This is the first time in the 34 years I’ve been forming Arizona LLCs that anybody ever asked that question.  If that is really what the Department of Real Estate wants then it/they are ignorant of Arizona LLC law and are asking for an irrelevant document that does not actually prove the LLC’s type of management.

The type of management of an Arizona LLC is not determined by resolutions signed by the members.  Management type is stated in the Arizona LLC’s Articles or Organization filed with the Arizona Corporation Commission.  Arizona Revised Statutes Section 29-3201.B.4 states:

“The Articles of Organization must state . . . whether the company is a manager-managed limited liability company or a member-managed limited liability company.”

The Articles of Organization filed with the Arizona Corporation Commission to create an Arizona LLC contains a statement that the LLC is manager managed or member managed.  Anybody who wants to verify the type of management of an Arizona LLC should look up the LLC on the ACC’s website (enter the name of the LLC in the search box on the top right) then click on the link to the Articles of Organization and read the management type set forth in the Articles.

2020-08-29T08:36:52-07:00February 15th, 2017|Articles of Organization, Miscellaneous|0 Comments

Beware the Personnel Concepts Letter

Because my firm, KEYTLaw, LLC, is the statutory agent for 2,000+ Arizona LLCs and we form a lot of LLCs (448 in 2016) we get a lot of mail addressed to our LLC clients.  We get a lot of letters addressed to our LLC clients from Personnel Concepts.

If you get a letter from Personnel Concepts, throw it in the trash.  The letter looks like an official government letter because the sender wants to fool you into buying a labor poster your company doesn’t need.

A bona fide business poster company says this about these types of letters:

“All in One Poster Company, Inc would like to warn its customers as well as other small business owners to avoid mass mailer scams informing them that their labor law posters are outdated while pressuring them to purchase an overpriced product for their employee and business.  These mailers are false, misleading, deceptive and even threatening. . . . Even when posting is required, the individual notices are provided at no charge by the U.S. Department of Labor as well as various agencies within your state’s labor department.

See the 178 reviews on Yelp giving this company one star out of five stars and the 20 Facebook reviews that give the company 1.4 stars out of five stars.

Here’s the Personnel Concepts envelope.

 

What follows below is the actual text of the very official looking letter.

2017-02-08T20:37:55-07:00February 8th, 2017|Miscellaneous|0 Comments

Imposter Signs & Files False Articles of Termination & ACC Terminates the LLC

This week I learned about a now defunct Arizona LLC that was terminated by the Arizona Corporation Commission (the “ACC”) without the prior knowledge or consent of the sole member and manager of the LLC.  The Articles of Organization filed with the ACC to create the LLC named Homer Simpson (not the member’s real name) as the member and manager of the manager managed LLC called World Wide Widgets, LLC (not real LLC’s name).

Sometime in 2015 somebody filed Articles of Termination to terminate World Wide Widgets, LLC.  The document was not signed by Homer Simpson.  It was signed by Bob Faker (not the real name of the signer) who signed as the manager of the LLC.  The ACC approved the filing and terminated World Wide Widgets despite the fact Bob Faker was not listed on the records of the ACC as a member or a manager of the LLC.

I notified the ACC about the fraudulent termination of the LLC and this is its response:

“We accept filings at face value, and do not request any verification of authority to act.  As you know, we are just a filing agency, not an enforcement agency.  We do not investigate or have any authority to enforce any laws with respect to allegations of fraud.  We are unable to assist with reinstating this entity.  If you were to get a court order requiring reinstatement, we would follow that order”

The fraudulent termination of an LLC could have extremely negative consequences for the members of the terminated LLC.  Here are just a few problems that the termination causes:

  • The termination would cause the IRS to take the position that the termination caused all of the assets of the terminated LLC to be distributed to the members in the year of the termination.  If the value of the distributed assets exceeds the member’s tax basis in the LLC the member has taxable income equal to the value of the distributed assets minus the tax basis.  For example, if the LLC’s only asset is a parcel of real property valued at $200,000 and the  sole member of the LLC has a tax basis of $100,000, the member has taxable income of $100,000 in the year of the fraudulent termination.
  • If the LLC owns assets that have a title, there is no document that evidences a transfer of ownership from the LLC to the member.  In the example above, the member would be the beneficial owner of the real estate, but there is no deed signed by the terminated LLC that transfers the title to the land to the member.  Because the LLC was terminated, it is not possible for it to sign a deed that transfers title.  The member will be forced to file a quiet title lawsuit to get the title changed from the LLC to the member.
  • If the terminated LLC has intellectual property such as patents or trademarks those assets will be in limbo.
  • The financial history of the terminated LLC will be lost.  The member can form a new LLC with the same name, but could not say that the new LLC has been in business since 1995.

I am sure there are many additional problems a fraudulent termination can cause.

Consequence of Filing a False Document with the ACC

Arizona LLC law provides that it is a felony to file a false document with the ACC.  Arizona Revised Statutes Section 29-613.A states:

“A person who . . . signs any articles, statement, report, application or other document filed with the [Arizona Corporation] commission that is known to the person as false in any material respect is guilty of a class 4 felony.”

Solution to the Problem

The issue becomes what, if anything, can the members of the terminated LLC do to correct the problem.  The answer alluded to by the ACC’s response above is for the members of the LLC to file a lawsuit and ask the superior court to issue an order to the ACC that the ACC reinstate the existence of the terminated LLC and correct its records to reflect that the fraudulent termination of the LLC never occurred.

This sad story reinforces something I have been telling my LLC clients for years:  YOU MUST CHECK THE ACC’S WEBSITE AT LEAST ONCE EVERY THREE MONTHS TO CONFIRM THAT ALL THE INFORMATION ABOUT YOUR LLC IS CORRECT.  If you find that your LLC was fraudulently terminated then you can file your lawsuit to correct the problem sooner rather than later.

If your LLC was fraudulently terminated, call me at 480-664-7478 or send me an email message at [email protected]

Go the the ACC’s ecorp website to search for your LLC and confirm it exists and all information is correct.

Arizona Benefit Corporations Update

On January 1, 2015, Arizona’s benefit corporation law became effective.  This new law allowed people to form a new type of Arizona corporation called the “benefit corporation.”  An Arizona benefit corporation is a corporation whose Articles of Incorporation states that the corporation is a benefit corporation.  The benefit corporation may have a general public benefit goal, i.e., to have a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.

Yesterday I asked the Arizona Corporation Commission how many benefit corporations have been formed under Arizona’s relatively new benefit corporation law.  The answer is twelve!  Yes.  Twelve benefit corporations formed in Arizona in two years.  Of the twelve Arizona benefit corporations ten of them became b corps in 2015 and two became b corps in 2016.  Here are the only corporations in Arizona that are benefit corporations:

  • Goodmans, Inc.
  • Sechler, CPA, P.C.
  • Desert Sky – Music, Art & Sustainability Festival, Inc.
  • Elevate by Will Claye Inc.
  • Spirit of Esther Incorporated
  • Individualized Pool Care, Inc.
  • Spex: Sedona Philosophy Experience Corporation
  • Nail Art Club, Inc.
  • Good Market Inc.
  • Upcycle Tucson Inc.
  • The Bull Market, Inc.
  • Envusion, Inc.

You might ask “why would anybody form an Arizona benefit corporation?”  My answer is I don’t know.  If you can think of a good reason to form a benefit corporation rather than a form a for profit corporation, a nonprofit corporation or a limited liability company, leave a comment and tell me.

Proposition 206, Minimum Wage and Paid Sick Time Off Initiative Passed by Arizona Voters

On November 8, 2016, Arizona voters approved Proposition 206, the Minimum Wage and Paid Sick Time Off Initiative, by a 59% to 41% margin.  Effective January 1, 2017, the Arizona minimum wage increases to $10.00 per hour.  The minimum hourly wage increases to $10.50 on January 1, 2018, $11 on January 1, 2019, and $12 on January 1, 2020.  Beginning January 1, 2021, and every January 1 thereafter the minimum hourly wage will increase by the increase in the cost of living increase per the U.S. consumer price index.

The paid sick time component is effective July 1, 2017. The new law includes the following sick time provisions:

  • For every 30 hours worked the employee accrues one hour of sick time.
  • If an employer employs 15 or more employees the employer may cap maximum annual accrual of paid sick time at 40 hours.

  • If an employer employs less than 15 employees the employer may cap maximum annual accrual of paid sick time at 24 hours.  Note:  This means that an employer that has ONE employee is subject to this sick leave accrual law.
  • An employee that is exempt under the Fair Labor Standards Act of 1938 is deemed to work 40 hours per week when calculating paid sick time accrual unless the employee’s normal work week is less than 40 hours.  When an exempt employee works a less than 40 hours the employee’s accrued sick time is based on the actual hours worked.

  • If an employee does not use sick time accrued during a year the unused amount will be carried forward to the next year unless the employer adopts a procedure that eliminates the carry forward.

  • New employees are subject to a 90-day probationary period that provides the employee is not entitled to any compensation for accrued and unused sick time during the probationary period if the employee is fired before the expiration of the 90 day period.

2016-12-03T17:15:39-07:00December 3rd, 2016|Miscellaneous|0 Comments

KEYTLaw Formed LLC’s Documents Stored in the Cloud

We are proud to announce that when Richard Keyt forms a Silver or Gold LLC KEYTLaw will upload and save all of the LLC’s documents to a secure folder in the cloud hosted by the Citrix ShareFile service.  We are very excited to offer this new service that has the following features:

  • We send an email message to all LLC members notifying them that their LLC’s documents have been saved in the LLC’s ShareFile folder.
  • When the member clicks on the link in the Welcome email the member is taken to a ShareFile page that tells the member ShareFile sent the member an email message that contains an access code.  The member is asked to check his or her inbox, copy the access code in the follow up email and paste the access code on the ShareFile web page.
  • When the member inserts the access code and clicks on the login button the member is taken to a secure web page on which the member enters a password, a confirmation of the password, first name and last name.
  • When the member saves the information the member is taken to a ShareFile folder in which all of the LLC’s documents are saved in Adobe .pdf format.
  • When logged in to the LLC’s ShareFile folder the member can: (1) download a document, (2) copy a document, (3) upload documents, and (4) share a file with another person.

ShareFile Security

ShareFile is a state of the art secure online document storage service.  ShareFile’s security features include the following:

Data Protection During File Transfer

  • File transfer: ShareFile employs SSL/TLS protocols to protect client authentication, authorization and file transfers.
  • High-grade encryption: ShareFile secures files in transit with no less than 128-bit encryption using industry-standard encryption protocols.
  • File integrity: ShareFile employs a keyed hashed message authentication code (HMAC) to authenticate and ensure the integrity of intra-system communications. ShareFile verifies file size and file hash to ensure integrity.
  • Link generation: ShareFile download links are uniquely and randomly generated using strong hash-based message authentication codes. ShareFile provides technical countermeasures to protect links from guessing attacks.

Data Protection During Storage

  • Datacenters: ShareFile uses SSAE 16 Type II accredited or ISO 27001 certified datacenters to host the SaaS application and metadata. All files are stored in SSAE 16 Type II (SOC1), SOC2 and ISO 27001 accredited datacenters with high availability and durability ratings.
  • Encryption: ShareFile stores client files at rest using AES 256-bit encryption, a Federal Information Processing Standards (FIPS) encryption algorithm.
  • Firewalls: Files are processed using systems protected by securely configured firewalls that effectively limit and control access to network segments.
  • Redundant storage: Files are stored in replicate with leading Infrastructure-as-a-Service (IaaS) providers that ensure high file durability and availability.
  • Backup: Files are backed up according to configurable file-retention and versioning settings

We look forward to providing members of LLCs we form and clients with state of the art online document storage.

2017-08-25T14:54:40-07:00October 18th, 2015|Forming LLCs, Members, Miscellaneous|0 Comments

Keyts Finish Teaching LLC Class at Arizona Summit Law School

Today my son Richard C. Keyt and I finished teaching a class on Arizona LLC law to second and third year law students at Arizona Summit School of Law.  It’s the fourth year I’ve taught the class and Ricky’s third year.  I always get charged up by interacting with young people who will soon graduate and become lawyers in this new era of the practice of law dominated by technology.

2015-10-09T19:32:01-07:00October 8th, 2015|Miscellaneous|0 Comments

Arizona Benefit Corporation Law Effective January 1, 2015

The Arizona legislature passed Senate Bill 1238, in April of 2013.  Governor Brewer signed the bill on April 30, 2013.  SB 1238 provides for the creation of a new type of Arizona corporation called the “benefit corporation” beginning January 1, 2015.  As of the date of this post, 27 states have adopted benefit corporation statutes.

The benefit corporation is not a type of nonprofit corporation. An Arizona benefit corporation is a type of for profit corporation that seeks higher standards of corporate purpose, accountability, and transparency.  The Articles of Incorporation on an Arizona benefit corporation must state that the corporation is formed for a general public benefit.

An Arizona benefit corporation may also promote one or more “specific public benefits.”  Arizona Revised Statutes Section 10-2402.5 provides that “specific public benefits” include:

(a) Providing low-income or underserved individuals or communities with beneficial products or services.

(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.

(c) Protecting or restoring the environment.

(d) Improving human health.

(e) Promoting the arts, sciences or advancement of knowledge.

(f) Increasing the flow of capital to entities with a purpose to benefit society or the environment.

(g) Conferring any other particular benefit on society or the environment as specified in the benefit corporation’s articles of incorporation.

2018-05-20T08:58:16-07:00December 20th, 2014|Miscellaneous|0 Comments

Thanks for the Nice Testimonial

I want to thank California attorney Mark G. Lerner of the Lerner & McDonald law firm in Santa Ana, California, for his recent very nice testimonial about my LLC formation services.  He said:

“As a California attorney, I have used Richard Keyt’s LLC formation services for many of my clients as well as myself over the past 7 years.  Richard and his staff do an excellent job of creating high quality documentation in a very efficient manner. I have always been quite satisfied with each time that I have used Richard Keyt to form an Arizona LLC. I would strongly recommend his LLC formation services to others as we.”

See the great testimonials many other happy LLC clients have given me.

2016-11-16T08:23:43-07:00October 3rd, 2013|Miscellaneous|0 Comments

Ashton Kutcher’s 2013 Inspirational Speech

I wasn’t an Ashton Kutcher fan until I watched his speech at the 2013 Nickelodeon Teen Choice Awards.  Kutcher’s speech to the young audience was fabulous and contained excellent life-changing advice for people of any age.  I urge you to watch the four minute clip below and pass it on to young people you love.

Chris, aka Aston, Kutcher’s main message is that success in life comes from a stong work ethic and hard work.  Aston said. “The sexiest thing in the entire world is being really smart, and being thoughtful, and being generous. Everything else is crap. I promise you.”

2019-06-15T09:42:17-07:00September 11th, 2013|Miscellaneous|0 Comments

Obamacare May Fine Businesses $100/day Beginning October 1, 2013

Effective October 1, 2013, all businesses that  have $500,000 in annual revenue and one or more employees are required to give written notice to every employee about the Affordable Care Act’s health-care exchanges.  An employer who fails to give the required notice to all employees will be subject to a $100-per-day fine. This written notice requirement applies to any business regulated by the Fair Labor Standards Act.  After September 30, 2013, these employers must give the written notice to all new hires within 14 days of the date, according to the Department of Labor.

The U.S. Department of Labor issued a notice that states:

A. Employers Subject to the Notice Requirement

In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies.(4) The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.(5)

B. Providing Notice to Employees

Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

C. Form and Content of the Notice

Pursuant to the statute, the notice to inform employees of coverage options must include information regarding the existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace. The notice must also inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

D. Timing and Delivery of Notice

Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.

With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge.

The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.”

2018-07-15T07:59:55-07:00September 9th, 2013|Miscellaneous|0 Comments

If You Have a Confidential Trust Don’t Create a Separate Estate Planning Trust

Question:  You created a Confidential Trust for me to own my Arizona LLC and keep my name off the public records of the Arizona Corporation Commission.  Recently I signed a new trust that is for estate planning.  My new trust includes provisions for the administration of my assets after my death.  How does my new trust become the owner of the LLC currently owned by my Confidential Trust?

Answer:  You now have two trusts, each with their own names and creation dates.  The problem is that the Confidential Trust owns the LLC, but the Estate Planning Trust should own it.  Instead of creating an entirely new estate planning trust you should have kept the same trust name, trustees and trust creation date and just amended and restated the entire trust agreement to contain the language needed for your estate plan.  In other words, you should have converted the Confidential Trust to your estate planning trust with the end result that you would have one trust and it would be the owner of the LLC.

Going forward your choices are:

1.  Transfer ownership of the LLC from the Confidential Trust to the estate planning trust and allow the Confidential Trust to die.  However, if the new estate planning trust has your name in it and you want to continue to keep your name off of the Arizona Corporation Commission’s public records then retain ownership of the LLC in the Confidential Trust and follow the next option.  We charge $545 to do this.  It includes preparing an Assignment of Membership Interest Agreement, Amendment to the Articles of Organization, resolutions of the member and a new membership certificate.

2.  Modify the Confidential Trust to provide that the beneficiary is the trustee(s) of the new estate planning trust.

My recommendation is to do option 1 now because option 2 postpones the need to do option 1 until the creator(s) of the Confidential Trust is/are deceased.

To learn more about how a Confidential Trust can keep your name off the Arizona Corporation Commission’s public records read my article called “How to Form an Arizona LLC without Disclosing Its Ultimate Owner(s).”

2013-08-28T06:48:53-07:00August 28th, 2013|FAQs, How Do I, Miscellaneous, Operating LLCs|0 Comments

Arizona LLCs Registered to do Biz in California May be Subject to Its New LLC Law

California adopted a terrible new LLC law that becomes effective on January 1, 2014.  California’s new LLC law appears to say that LLCs formed outside California that register to do business in California will be subject to the new California limited liability company law.  Section 17713.04(a) of the new LLC law provides that, except as otherwise provided in the law, the new LLC law applies to all California formed LLCs existing on or after January 1, 2014, but also to all foreign LLCs registered with the Secretary of State before January 1, 2014, and after December 31, 2013.

California is the state that has the highest annual maintenance fee on LLCs – $800/year minimum.

For more on this topic see “Potential Challenges Associated With California’s Revised Uniform Limited Liability Company Act.”

2018-05-20T08:56:39-07:00August 26th, 2013|Miscellaneous, Operating LLCs|0 Comments

Speaking on Forming LLCs to Military Personnel Exiting the Service

Today I will speak to a group of young military personnel who will soon leave the service and seek employment outside the military.  The U.S.Small Business Association’s Phoenix chapter of Service Corps of Retired Executives (SCORE) sponsors the two day workshop called “Operations Boots to Business from Service to Startup.”  I enjoy speaking to the young people and trading “war” stories from my five years flying the F-4 Phantom in the United States Air Force in another life.

2016-11-16T08:23:44-07:00August 15th, 2013|Miscellaneous|0 Comments

Keyts to Teach LLC Class at Phoenix School of Law

Beginning in September I will teach another class on LLCs and entity formations to third year law students at the Phoenix School of Law.  My son Richard C. Keyt, JD, will co-teach the class with me.  I’m very proud of my son and his accomplishments at such a young age and lucky to be able to work together with him every day in our business law and estate planning law firm.

2015-07-02T07:20:06-07:00August 14th, 2013|Miscellaneous|0 Comments
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