Celebrating 5 years of service

On this day in 2012, this law firm was born.

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Here’s to my clients, who made it all possible. It’s been an honor to serve you, and may the next five years be as successful as the last.

-NB

 

Posted in Uncategorized

Non-residents doing business in DC

If you own a non-resident (or “foreign”) company and want to do business in DC, you probably have to register with the DC government.

This applies to all corporations (including professional corporations), limited partnerships and LLPs, and LLCs. Unincorporated entities (like sole proprietorships or general partnerships) do not have to register.

There are a few exceptions to the registration requirement, which you can find in the DC Code here. Most significantly, if you are just engaging in an isolated transaction in DC and will not be doing other transactions in the ordinary course of your business, you do not have to register.

Foreign companies doing business in DC must file a report every two years.  They also need to maintain a registered agent in the District who can receive legal process on their behalf.

For more information on registering as a foreign entity, visit DCRA’s website, or contact Nigel for a free consultation about your business’s legal needs.

Posted in Business

Choosing a business structure in the District of Columbia

 

image courtesy of Nick Youngson http://nyphotographic.com/ CC BY-SA 3.0A common question in the very early stages of any business is what business structure to choose.

There is no one-size-fits-all answer to this question. Different business structures have different advantages and disadvantages. The following is a short overview of the main categories of businesses in the District of Columbia (and many states).

Sole proprietorship

This is the easiest choice for beginning your own business without partners or other stakeholders. It costs nothing to form a sole proprietorship. Essentially, you are the business, and the only real paperwork is on your personal income taxes. (Of course, all businesses must get any necessary licenses and permits to operate, but this article is about forming a business, not running one!) This is also one of the advantages of a sole proprietorship: you are taxed at the individual level — there is no corporation, so you do not have to pay federal corporate income tax. (This is known as “pass-through taxation” — taxes are paid by the owners, not the business entity itself.)

The tax advantage of a sole proprietorship is less substantial in DC, which has an unincorporated business franchise tax that applies to many businesses. This puts unincorporated and incorporated business on roughly equal terms, at least at the DC income tax level. But it may still save you on the federal level.

A significant downside of an unincorporated business, however, is that you are the business, and are personally on the hook for debts or other legal claims arising from your business. This is why a more popular choice is…

LLC

LLC stands for “limited liability company.” A single-member LLC in DC has all the benefits of a sole proprietorship, but as the name implies, your liability as the business owner is mainly limited to your investment in the business. If the business fails or gets sued, your personal assets generally won’t be at stake.

The main disadvantage of this structure (relative to a sole proprietorship) is that it takes more work, time, and money to set up. In DC, you have to file paperwork to set one up (and pay a fee), and you have to file a report every two years (more fees).

Partnerships and multi-member LLCs

If you’re going into business with someone else (one or more partners), there are several ways to do this:

  • You can form a general partnership, which is sort of equivalent to a sole proprietorship — you share the profits and risks with your partner(s). Little paperwork required, pass-through taxation, but you and your partners are personally at risk for the business’s liabilities. Also, any partner can dissolve the partnership, unless there’s an agreement to the contrary.
  • Limited partnerships and limited liability partnerships (LPs and LLPs) are more work to set up (including a partnership agreement and registering in DC), but have clearly defined terms and, in the latter case, limited liability. They also allow some partners to be treated differently than others.
  • LLCs can also be multi-member LLCs. They are kind of like general partnerships, but with the benefit of limited liability. An operating agreement organizing the LLC is highly recommended.

Corporations

All of the businesses above are mainly for people who own and operate their businesses, with money they put in themselves or get through loans. But sometimes you want other people to invest in your business, and own some share (or stock) in the company (even if they do not participate in operating the business). This is when you need a corporate structure, which lets you raise funds by selling shares to investors. A corporation also takes on a life of its own — shareholders can simply sell their shares and walk away, and the corporation keeps going.

One disadvantage of corporations, besides being more complicated to set up and operate, is that most corporations have to pay corporate income taxes of their own. Federal law also allows for a special kind of corporation known as an “S” corporation that benefits from pass-through taxation to its owners, but qualifying as an S corp is complicated and has a lot of requirements.

Not One-Size-Fits-All

Even within these categories, there are countless ways for companies to be structured or operated, based on the operating agreement, articles of incorporation, or similar governing documents. Above are just the main categories we group businesses into, for legal and tax purposes. Even within these categories, there’s a lot of diversity.

If you’re starting a business in DC and are not sure which entity to choose, contact Nigel for a free consultation. He can help you get started with an assessment of your business’s needs and goals.

Posted in Business

Dusting off this old site

Under Construction

It has been nearly five years since I started my firm (and this website), and the latter has not really kept up with the former.

So, as a five-year firm-iversary gift (from me, to me) it’s time to update this site and bring into 2017. And maybe put up some information that will be useful to people, too.

In short, big overhaul coming. Check back soon.

Posted in Uncategorized

DCCA on Drug Paraphernalia, Proof Beyond Reasonable Doubt

I haven’t written a DCCA criminal case summary in a long time, partly because PDS came along and started writing them all up (and doing it better than I ever did). But I simply couldn’t resist writing about this one, as a lovely demonstration that legal standards like “proof beyond a reasonable doubt” and “sufficiency of evidence” have meaning, have teeth — at least sometimes. It also doesn’t hurt that this case involves an extensive discussion of something called a “Bob Marley grinder.”

bobmarley

The opinion of the court, written by Judge McLeese (the most recent appointee to the DCCA), reverses one man’s conviction of possessing drug paraphernalia. The alleged paraphernalia was the “Bob Marley grinder.” Which, apparently, is a metal tobacco/herb/spice grinder, with “a picture of Bob Marley on the front.” (Looks like they’re for sale on Amazon, just like everything else under the sun.) Which — of course — we can assume is being used to grind up marijuana, even though the defendant had no marijuana when he was arrested. I mean, come on! It has a picture of Bob Marley on it!

But that “of course” isn’t enough to meet the standard for a criminal conviction — proof beyond a reasonable doubt. And as the opinion notes:

drug use and drug trafficking are associated with a wide array of items, including spoons, needles, syringes, ziplock bags, microwave ovens, cigarette rolling papers, razor blades, pipes, foil, mirrors, straws, scissors, measuring cups, strainers, and scales.

Grinders, too, have lawful uses. Who’s to say beyond a reasonable doubt that the defendant wasn’t using the grinder for tobacco (or, less likely, cilantro)? The prosecution would have to do more — like show traces of marijuana inside this particular grinder.

The court compares this to a situation in which the prosecution insists — without other evidence — that a single silver spoon is being used for heroin. Of course, it’s not quite the same situation — but the difference between that situation and this case is only a “difference in degree.” That doesn’t warrant a different conclusion when analyzing whether the evidence is sufficient, beyond a reasonable doubt, that this grinder was possessed for drug-related purposes.

Overall, an excellent (and easy to read) opinion that illustrates what meaningful appellate review looks like. Kudos to Jamison Koehler for representing his client (with obvious excellence) in this appeal.

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Posted in Appeals