Things To Remember

Last Updated on Friday, 17 January 2020 06:46 Written by Chris Griswold Friday, 17 January 2020 06:46

It’s a New decade, and there’s lots going on….  Often, growth is accompanied with debt (and debt forgiveness), the extension of credit, and a little tax/bankruptcy information thrown in.  Here’s some good, basic, “blocking and tackling information” for those out there growing.  The questions below are ones I’ve recently been receiving from different areas of our economy.  This is good stuff for everybody to know… (don’t forget to click on my links below to also see my short video on this material).

Things To Remember

Question #1I’m a business person considering taking on debt in the form of mezzanine debt, what is that and what are its considerations?

Answer:  It’s where a bank loans you money against your interest (whether a majority or minority interest) you hold in an entity – usually a form of unit ownership held in a limited liability company.  It’s secured against the unit ownership you hold, but it’s really unsecured debt in the eyes of the bank.  Accordingly, the rate of interest charged is pretty high, like all unsecured debt – at least higher than most other forms of debt.  So, be aware.  This isn’t as common as it used to be, but it’s still very much alive and well on a national level.  If possible, you might want to instead look at obtaining a loan from your bank against your other hard assets, which can even be your accounts receivable.

Question #2I’m a business owner who needs a loan to purchase a major piece of equipment, what can I expect when working with my banker?

Answer:  Once qualified, your bank will want to file a financing statement (with the public filing authority) which secures their interest against such collateral.  It will occur in the form of a UCC -1 (a Uniform Commercial Code, Form 1 filing) which is filed with the local jurisdiction’s Central Filing Office.  Until this UCC-1 is released by the later filing of a UCC-3, the bank continues to hold a valid security interest in such major piece of equipment (which will only occur once the loan is paid off).

Question #3Are there ever any problems with the filing of UCC-1’s?

Answer:  Yes, due to a bad, inaccurate, incomplete, or poorly described collateral, the collateral interest held by the bank may either be: 1) so vague as to render the bank’s interest unenforceable against its own collateral, and/or 2) so broad as to arguably also encumber other equipment you own, although unintentionally.  Either way, both of the foregoing are a bad outcome, so, be attentive to describing collateral in UCC financing statements.  Use the unique serial numbers on each piece of equipment, if they’re available.

Question #4I’ve had certain debt forgiven which all surrounded my previous bankruptcy.  What should I know?

Answer:  Once forgiven and you’re 1099’d, it’s declared income, and you need to pay the appropriate tax rate upon such forgiven debt.  So, plan accordingly.  Bankers, also be aware to ask this question.

Question #5As I’m trying to make a fresh start in a new venture, I have unfiled tax returns from years past that led up to the granting of my recently received bankruptcy discharge.  Will the taxes due and owing in connection with such previous tax years be included in my discharge? 

Answer:  No, not if the tax returns for such previous tax years weren’t done.  Much to the surprise of many, such amounts are not discharged and made a part of your discharge if the returns were not made and timely filed.  This is something the banking community should also be aware of when writing new loans….

What My Clients Are Saying

“Chris Griswold has a unique skill set for a Real Estate attorney.  He is equally adept in the courthouse as well as in a transactional setting.   We have worked with him in lease negotiations where we found him to be pragmatic and fair minded while representing his client.  As result of working on the other side of the table with Chris, we engaged him to assist us with various lease enforcement issues.  We have used many attorneys to assist us with FED’s, collections etc. and Chris has by far been the most efficient and cost effective counsel we have ever used.”
Jeff Norman /  President / JAH Realty, L.P. / Oklahoma City, Oklahoma

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Things To Remember When Starting A New Business

Last Updated on Tuesday, 22 October 2019 09:12 Written by Chris Griswold Tuesday, 22 October 2019 09:12

I get quite a few phone calls from people starting new businesses, especially now, here at the end of the year (as people begin to make resolutions for the coming year).  From the questions I normally receive, I wanted to share a few of these good ideas with everyone (and for the benefit of everyone).  This is good stuff for everybody to know… (don’t forget to click on my links below to also see my short video on this material).

Things To Remember When Starting A New Business

  • Get a line of credit established before you quit your day job and start your own business (not afterwards when you probably won’t qualify),
  • If you don’t have a written agreement with your business partner, then the law deems you both to have formed a general partnership (and hence each of you are liable for the other’s acts/omissions and debts incurred),
  • If you enter into a business contract (e.g., an advertising contract with the yellow pages for a full-spread ad, to the tune of $30,000) and haven’t yet formed a corporation or an LLC, you’ll be deemed a “promoter” in the eyes of the law, and, as such, you will be personally liable for the debt,
  • If you form an LLC, another LLC, corporation, business trust, etc… can be members of such LLC.  However, if you form a corporation, then only natural persons (i.e., individually named persons) can be shareholders (not other entities like an LLC can use),
  • Carry professional and/or general liability insurance on your business.  Your personal, homeowner’s insurance (and any umbrella upon same) will only cover your personal activities and liabilities, not your professional and business liabilities.  So, obtain such policies (and their corresponding umbrellas) in the name of your business, lest you not be covered for business and/or professional claims,
  • Get an accountant involved early on.  Why? People think that being in business is just about earning money and paying taxes; however, it can be more complicated than that….  Filing taxes is an ongoing process when you factor in both federal and State wage withholding reports for employees, unemployment tax withholdings, franchise/business activity tax, and quarterly estimated taxes.  These requirements can occur before you file your annual return.  Even if you do not plan to hire any employees, you should still be aware of the IRS “reasonable compensation rule” which says that you’ve got to pay yourself personal income in an amount at least equal to 30% of the gross amount your business produces.  Salary pays federal tax, state tax, and FICA tax….  Most of today’s LLC and Sub-S Corp’s will flow net profit/loss to your personal tax return (schedule K) and will require an additional annual Corporate Tax Return to be filed for your business.  The net profit will then be subject to Federal and State tax at your income bracket, and
  • Once you’ve formed a business entity, you need to open up an operating account (i.e., a bank account) in the name of your business.  When you make money from operations, you deposit it into your operating account.  When you pay yourself your personal payroll, you draw against such operating account and deposit it into your personal bank account (Note: you don’t commingle the funds from one account with another).

What My Clients Are Saying

“I would certainly like to commend Chris for his efforts is a recent transaction and for keeping communications with distant legal departments of large companies informed and involved as regarding the negotiations.  Chris Griswold has been a real asset in bringing together people and has the ability to center the focus on the transaction and that is really needed in today’s commercial real estate market.  Even though we may be experienced and seasoned veterans of commercial real estate, it’s good to have qualified, energetic, and capable legal support ready to move the process along at the faster rate we need today.  My thanks to Chris in this most recent transaction.” Irmon Gray / Broker / NAI Sullivan Group / Oklahoma City, Oklahoma

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Constitutional Carry

Last Updated on Friday, 8 March 2019 02:32 Written by Chris Griswold Friday, 8 March 2019 02:29

Guns and “Constitutional” or “Permitless” Carry.  We’ve all been hearing about this issue a little bit more recently in the news, for those who can legally possess a firearm – now law here in Oklahoma to become effective November 1, 2019 (though still subject to a federal background check to purchase the firearm).  In response to a number of inquiries I’ve received from some concerned commercial property owners (as commercial landlords) and property managers (who act for those commercial landlords) in our business community – I wanted to write a short piece about the do’s and don’ts of enacting a uniform gun policy at your privately owned or managed commercial properties which are open to the public.  I’ll answer the most commonly asked questions from the groups mentioned above.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Constitutional Carry

Question #1:
As the owner/landlord or property manager (for such owner/landlord) of a commercial property, can I restrict, prohibit or control people (including commercial tenants) who are otherwise able to open or concealed carry (e.g., non-felons, 21 years of age or older, or those 18 years or older in military service) from coming onto my property with a handgun?

Answer:
YesCommercial property owners/landlords and property managers (who act on behalf of such commercial property owners/landlords) can control the possession of weapons on any commercial property “…owned or controlled…,” whether concealed or unconcealed.  This means that, as either a commercial landlord or a property manager, you can control whether or not your commercial tenants or other people bring concealed or unconcealed guns onto your owned or managed commercial property.

Question #2:
How can I exercise such restriction, prohibition or control?

Answer:
If the privately owned commercial building or property is open to the public, property owners/landlords or their property managers shall post signs on or about the commercial property stating such prohibition, as to either concealed or unconcealed weapons, or both.

[Note:  If the commercial building or property which is leased by a commercial tenant is not open to the public (i.e., a space which only the commercial tenant will go in and out of, and no one else, like a standalone building), then the commercial tenant can carry concealed or unconcealed guns in their demised space, unless it’s written in their lease that they can’t  – however, as a technicality, if and when they pass through any publicly trafficked areas of your owned or managed commercial properties (which are in between their non-public premises and the parking lots of your commercial property), they are still subject to the no carry signs you’ve posted upon the property, thereby violating your “no carry policy”; thus subjecting them to the consequences found in the answer to Question #4 belowSo, only if the commercial tenant’s premises are a private, stand alone building through which no public traffic shall occur (and no common areas exist), will you, as an owner/landlord or property manager, be barred from posting signage on your commercial property (i.e., their leased premises) which restricts persons from carrying concealed or unconcealed guns on that particular commercial tenant’s leased premises.]

Question #3:
“Is there anywhere on my commercial property that I cannot restrict, prohibit or control the presence of guns?

Answer:
Yes.  You cannot, as a commercial property owner/landlord or property manager, establish any policy or rule that has the effect of prohibiting any person (except for a convicted felon), from transporting and storing firearms in a locked vehicle on any property set aside for any vehicle (i.e., parking lots).  In other words, you cannot restrict, prohibit or ban commercial tenants (or such tenant’s employee’s) from having guns in locked cars located in the parking lots of your owned or managed commercial properties.

Question #4:
“What happens if some person brings a gun onto my commercial property, either owned or managed, after I post signage to the contrary?

Answer:
It depends.  Be aware, the otherwise lawful carrying of a concealed or unconcealed handgun by a person who can lawfully carry a handgun on your owned or managed property that you have posted no carry signs upon subjects the person to either being denied entrance onto your property (if you know they are carrying ahead of time), or to being removed from the property if you ask them to leave after your discovery of such firearm (which means they need to leave if your security asks them to leave).  If the person thereafter refuses to leave your commercial property and a peace officer is summoned, the violator will be in violation of law.

Question #5:
“What about publicly owned property?  What about apartment complexes and residential rent houses?

Answer:
Don’t carry on property owned or leased by public entities, such as jails, prisons, airports, or public or private elementary or secondary schools – among other public property types.  As for apartment complexes and residential rental homes, look to the leases (as it usually is private property) and speak with a qualified attorney.

The information presented within this article is of a general nature and is not intended to be relied upon as legal advice in any particular matter without first consulting qualified counsel.

What My Clients Are Saying

“I can’t say enough good things about Chris Griswold and his firm.  He jumped in and tactfully assisted me in navigating a hostile easement issue with the City.   Based upon Chris, we were successful in negotiating a fair settlement in a very timely manner.  I would highly recommend Chris Griswold to anyone and I plan on using him again in the future.”
David Ostrowe / Principal & Owner, O&M Restaurant Group / Oklahoma City, Oklahoma

 

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