Code Section 1202: Let’s Hope It Doesn’t Expire | Startup Company Law Blog | Davis Wright Tremaine LLP

Code Section 1202: Let’s Hope It Doesn’t Expire | Startup Company Law Blog | Davis Wright Tremaine LLP (LINK)

'via Blog this'

Joe makes some great points, but another reason is that many investors are just beginning to learn about Section 1202 and make plans that allow them to take advantage of it.

Let's face it, people don't usually live and breathe the tax code and many people didn't immediately realize (and many probably still don't) that the 100% exclusion even existed, so it is necessary to leave it in place for a reasonable length of time in order for it to have the intended effect.

California companies continue to flee state over taxes, regulatory environment

CNN ran another article on businesses leaving California for more favorable tax and regulatory climates. Lieutenant Governor Gavin Newsom is promising an economic development plan soon, but the bad news for most of my clients and for the state's economic prospects is that they are unlikely to be assisted by it, in that it appears it wiltarget only specific industries and even then likely primarily larger and more politically connected companies:

Newsom's plan will focus on California's premier industries, including biotechnology, agriculture and digital media. It will highlight the state's strengths in innovation and research and cultivate more manufacturing and exports. It also will examine how to address executives' concerns about regulation, taxes and layers of bureaucracy.

See also:



Amazon sales tax battle centers on jobs, LA Times, July 12, 2011



CEOs rank California 51st in the nation



California scheming



August 2011 Update: Lt. Governor Newsom released his short-on-specifics economic agenda for California, to a mixed response on July 29, 2011.

Recommended Reading List for Entrepreneurs and Angel Investors

After a lot of requests for "a book to read and get the basics" I have finally compiled a reading list that includes not just "a book" but a handful of the best books I know of for entrepreneurs and investors.

If I've missed a great one, please give me a shout so I can add it to the list.

*Note - the list is multiple pages, so don't forget to flip through.



**For future reference, this list is also on the bottom left of the main blog and is updated periodically.

Entrepreneur Resources - Getting an Education

So you are an entrepreneur wanting to learn about starting and running a high growth company or about the angel/vc finance world. Where do you go?

Right here:

1. For Videos - (LINK) YouTube
2. For Books - Check out the recommended reading list - (LINK)
3. For BAN information - check out our website (http://www.birminghamangels.com/)
4. For current topics/articles follow BAN on:

Facebook - (Page LINK)
Twitter - (Profile LINK) @bhmangelnetwork
LinkedIn - (Group LINK)

Gov. Haslam: TN to co-invest via INCITEinnovation and jobs-formation campaign on Venture Nashville

Although I'm thrilled to hear about these kind of initiatives in the Southeast, I would really love to see some in my home state for a change.

CAPCO all by itself, although great, is just not enough.

Gov. Haslam: TN to co-invest via INCITEinnovation and jobs-formation campaign on Venture Nashville

GOVERNOR Bill Haslam's new $50 million INCITE economic-innovation program will include co-investment for Tennessee ventures, new incubators, a push on both tech transfer and entrepreneurship, and a continuing role for Tennessee Technology Development Corporation (TTDC) and other allies, the governor said today.

Incorporation To Avoid IRS Tax Audits

According to this Wall Street Journal article, sole proprietors filing Schedule C with their personal (1040) tax return to report business income are 10 times more likely to end up involved in the stress, annoyance, and time consumed with an IRS tax audit:

IRS Statistics [Excel file] show that you are 10 times as likely to be audited as a Schedule C filer than if you incorporate your business and elect S corporation status. While it costs a bit of money to incorporate, the move affords you greater personal liability protection and reduces your chances of being audited. In deciding whether to change your business status, include both tax and non-tax factors.

Note: Forming a limited liability company for one owner will not give you any audit protection, because the owner still files a Schedule C.

"10 Ways To Avoid A Tax Audit," by Barbara Weltman, April 15, 2011

Online Notary Public Alert

California's Secretary of State has issued an alert regarding online notary services, purporting to provide notarization for California residents over the Internet using a webcam. A webcam is not a permissible substitute for appearing before a notary in person (or having the notary travel to you, if you are not mobile). Notary license may be checked online here. The full text of the alert follows:

Online webcam notarization is invalid and illegal in the State of California.

A private company claims to have the first online notarization website and has sent misleading information and made false claims to California notaries public concerning a new online notarization service. The web-based platform purports to allow a person to submit copies of identification over the Internet and to use a webcam in lieu of a personal appearance in front of a notary public. Appearance via webcam does not meet the requirements for notarization in California.

California notaries public are authorized under current law to perform electronic notarizations as long as all the requirements for a traditional paper-based notarial act are met, including the use of a seal for all but two specific documents used in real estate transactions. California law requires a person to appear personally before a notary public to obtain notarial acts like acknowledgments or jurats. This means the party must be physically present before the notary public. A video image or other form of non-physical representation is not a personal appearance in front of a notary public under current state or federal laws. The technology solution offered by this private company does not comply with California law.