Practical Differences: Oklahoma Last Will and Testament vs. Revocable Trust

People are curious about the differences between and Oklahoma last will and testament and an Oklahoma revocable living trust.  In particular, people want to know how each document will impact them and their family.

On this Blog, I have written quite a bit about each of the Will and Trust and some of the differences.  You can check out this PAGE as a solid resource for finding a substantial amount of my written materials.  Below is a simple info graphic highlighting some of the differences between an Oklahoma last will and testament and an Oklahoma revocable living trust.

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

Do you know what an Oklahoma estate is?

You would be correct if you pointed to Investopedia’s definition of an estate:

An estate is everything comprising the net worth of an individual, including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in.

Each person has an estate during their life and following their death.  The difference between a person’s estate during life and death is that after death the estate technically becomes a separate legal entity.  Consider the Internal Revenue Service’s definition of an estate:

  • An estate (or decedent estate) is a legal entity created as a result of
    a person’s death.
  • The estate consists of the real and/or personal property of the deceased person.
  • The estate pays any debts owed by the decedent and distributes the
    balance of the estate’s assets to the beneficiaries of the estate.
  • An estate arises on a person’s death whether the person died with or without a will.

It is also worth pointing out that since you have an “estate” you need to make an “estate plan”, a topic that is discussed several places on this Blog: Here, Here and Here to mention a few.

 

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning, Oklahoma Probate

Making the rules while playing the game: Check out the new guidance from the SBA on the Paycheck Protection Program program

The United States Government rode to the economy’s rescue in March when it enacted the Paycheck Protection Program (PPP), established by Section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the “Act”). 

The PPP provided funding for businesses and nearly everyone connected to the economy including Oklahoma small businesses, employees, and independent contractors.  The PPP is administered by the United States Small Business Administration (the “SBA”), meaning the SBA makes up the rules for the PPP loan program. 

In what was certainly a path leading to confusion and difficulty but perhaps a path required by the severity of Coronavirus National Emergency, the SBA made the rules for the PPP during, after, and while it was distributing the funds from the PPP.  That means Oklahoma small businesses and businesses around the United States received PPP loan funds and since then have had to address new rules.

In a bid to try to ease the confusion, yesterday, May 6, 2020, the SBA issue these PAYCHECK PROTECTION PROGRAM LOANS Frequently Asked Questions (FAQs):

Paycheck-Protection-Program-Frequently-Asked-Questions
Posted by Shawn Roberts in Blogposts, Business Law

Why does the Oklahoma Secretary of State show my LLC as terminated or expired?

The Summer Solstice Seen from GOES East from NOAA Satellites

The Oklahoma Secretary of State is the record keeper for Oklahoma limited liability companies. 

You start with the OK SOS to form an Oklahoma limited liability company and the OK SOS tracks your entity through its.  One piece of data you can find when searching for a limited liability company on the OK SOS website is the entity’s status.  Status is usually expressed as either:

Active

Termination

Suspended

As you might guess, you want your company to be active and you need to fix your LLC’s status if it is terminated or suspended. 

Why does an Oklahoma LLC’s status show terminated or suspended? 
Here is what the Oklahoma Secretary of State says:

It means the LLC or LP is not in good standing with the State of Oklahoma due to a late Annual Certificate. Annual Certificates are due on the formation date of the entity each year, and a 60 days grace period is given to file them. After 60 days if there has been no Annual Certificate filed, the entity becomes inactive and not in good standing.

https://www.sos.ok.gov/business/faq.aspx

How do you get your LLC back in good standing?
I provide the steps to back to good standing with the Oklahoma Secretary of State in this Blog Post.

Posted by Shawn Roberts in Blogposts, Oklahoma limited liability company

What are the consequences when an Oklahoma corporation is suspended by the Oklahoma Secretary of State?


In a previous Blog Post, I talked about why a corporation ends up being suspended by the Oklahoma Secretary of State.  This Post discusses some of the consequences for a suspended corporation.

The Oklahoma Tax Code provides for multiple penalties if a corporation’s charter is suspended:

  • The directors and officers become liable for any and all debts of the corporation incurred or created with their knowledge, approval, and consent as if the directors and officers were partners;
  • Any contract entered into by the corporation during the suspension is voidable;
  • A court cannot grant to the corporation any legal relief in a lawsuit until the corporation is “reinstated” (meaning back in good standing); and
  • The corporation loses its right to sue or defend in any court of this state, except in a suit for forfeiture of its charter.
    MONCRIEFF-YEATES v. KANE 

 

The upshot of these penalties is that you may lose the protection from the Wall of Separation I mentioned in this Blog Post. Needless to say, if you do business through a suspended corporation, you lose a lot of the protection the corporation normally provides and subject yourself to substantial but unnecessary legal risk.

Posted by Shawn Roberts in Blogposts, Business Law

Why did the Oklahoma Secretary of State suspend my corporation?

View along Adelaide Street from George Street with the buildings decorated for the Royal Visit, 1954 https://www.flickr.com/photos/statelibraryqueensland/

The Oklahoma Secretary of State is the record keeper for among other things Oklahoma corporations and Oklahoma limited liability companies.  To form a corporation, you submit paperwork to the Oklahoma Secretary of State.  To form and maintain a limited liability company, you also submit paperwork to the Oklahoma Secretary of State.  So, as you might expect, the Oklahoma Secretary of State keeps records about whether a corporation is in good standing, suspended, or terminated.

Reasons an Oklahoma corporation is suspended
You may have searched the Oklahoma Secretary of State’s records and found a corporation you own and discovered that the corporation was “suspended.” The suspension is usually connected to the Oklahoma Tax Commission.  Corporations are usually suspended because either the owners have failed to file an annual Oklahoma Franchise Tax Return and/or failed to pay the franchise tax. Sometimes corporations are suspended for failure to file an Oklahoma corporation income tax return:

–> Failure to file Oklahoma Income Tax Return
According to the Oklahoma Tax Commission, any corporation doing business within or deriving income from sources within Oklahoma is required to file an Oklahoma Corporation Income Tax Return, whether or not a tax is due.

–> Failure to file a franchise tax return
The Oklahoma Tax Commission says:
Oklahoma Franchise Tax is due and payable July 1 of each year unless a Franchise Election Form (Form 200-F) has been filed. The report and tax are delinquent if it not paid on or before September 15. 

How is a corporation’s charter suspended?
If a corporation fails to pay the required franchise tax, the Oklahoma Tax Commission enters an order suspending the corporation’s charter and then send the order to the Oklahoma Secretary of State directing that the corporation be suspended.

Posted by Shawn Roberts in Blogposts, Business Law

How does forming an Oklahoma corporation help protect you from liability?

STS-114 Thermal Protection System from NASA on The Commons

I advise people to form an entity, such as a corporation, to provide protection for them from the liability their business can create.  You can read more about individual liability and why you need to protect yourself from individual liability in this Blog Post.

The protection from individual liability for the people who own the company is one of the essential benefits of having a corporation. 

Example
Think in terms of a landscaping business that accidentally hits a gas line leading to people being injured and the property being destroyed.  The landscaping business is going to be responsible for huge damages.  But, if the landscaping business was working through a corporation, there is a good chance that the liability will stop with the corporation and not bleed into the corporation’s owners’ assets.  If the owners were operating the business without a corporation or Oklahoma limited liability company, as sole proprietors, the owners’ assets would be at risk of being taken to pay the damages from the accident (liability insurance coverage might limit the owners’ risk in this scenario). 

The Wall of Separation
I refer to this protection as the “wall of separation.” The corporation (or in many cases the Oklahoma LLC) is the “wall” between the individuals who own the company and the liability created by the company.  On one side of the wall rest the owners’ assets and on the other side of the wall sit all the unknown liabilities that come from operating a business. 

When is the wall’s protection lost?
One way the wall breaks is when a corporation’s charter is suspended.  

 

Posted by Shawn Roberts in Blogposts, Business Law

Questions and Answers for Oklahoma employees and employers: The Families First Coronavirus Response Act

Below is a table I put together for Oklahoma employers and Oklahoma employees answering some basic questions about the Families First Coronavirus Response Act.  A more detailed discussion of the Act is located here.

What is the Families First Coronavirus Response Act?

The Families First Coronavirus Response Act ( the “Act”) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. 

Which government agency enforces the Act?

The Department of Labor. Through its Wage & Hour Division, will administer and enforce the Act. 

When does the Act start, and how long does the Act last?

The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.

To which businesses does the Act apply? 

Under the Act, “covered employers” are certain public (Government) employers and private employers who employ fewer than 500 people.

What does the Act require employers to do?

 

Provide employees with paid leave along these lines:

  • Leave at Regular Pay Rate.
    Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Leave at 2/3rds of employee’s regular pay rate.
    Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition.

How long is the Act effective?

The Act becomes effective April 1, 2020, and runs through December 31, 2020.

What employees are covered by the Act?

(a) All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19, or (b) Employees employed for at least 30 days are eligible for up to an additional ten weeks of paid family leave to care for a child under certain circumstances related to COVID-19.

What reasons qualify an employee for leave under the Act?

Employees qualify for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because of:

  1. Quarantine.  The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. Self-Quarantine. A health care provider has advised the employee to self-quarantine related to COVID-19
  3. Experiencing Symptoms. The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis
  4. Caring for Person.  The employee is caring for an individual subject to an order described above or a person who self-quarantined as described above;
  5. Caring for Child. The employee is caring for a child whose school or care place is closed (or no child care is unavailable) for reasons related to COVID-19; or
  6. Similar Condition.  The employee is experiencing any other substantially-similar condition specified by the Government

How much leave does an employee get?

For reasons 1-4 and 6 above – a full-time employee is eligible for up to 80 hours of leave, and part-time employee is eligible for the number of hours of leave the employee works on average over two weeks.  

How much leave does an employee who is caring for a child receive?

For reason five above, a full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 40 hours a week. A part-time employee is eligible for leave for the number of hours that the employee is typically scheduled to work over that period.

How does an employer calculate pay?

  • Reasons 1, 2, or 3 above: Employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day, and $5,110 in the aggregate (over 2-weeks).
  • Reasons 4 or 6: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day, and $2,000 in the aggregate (over 2-weeks).
  • Reason 5: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day, and $12,000 in the aggregate (over 12-weeks). 

What if complying with the Act’s paid leave requirements would crush my small business and maybe put me out of business?

There is a small business exemption: To choose the small business exemption, you must document (in writing) why you believe your Oklahoma small business meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations (How about that?!? You are required to comply with regulations that do not exist yet!).

Do I have to post Notice about the Act at my business?

Yes.  The USDOL has provided mandatory posters regarding employee rights under the Families First Coronavirus Response Ac.  All private-sector employers with fewer than 500 employees are required to place the poster in a conspicuous area, which will generally be alongside your other federally mandated employee notices, you can find the post here. Additionally, you can find answers to questions about posting the Notice here.

 

The US Department of Labor also has some excellent resources on the Act, including a Q&A, a Fact Sheet for Employers, and a Fact Sheet for Employees.

Posted by Shawn Roberts in Blogposts, Business Law

Some help for Oklahoma employers understanding the Families First Coronavirus Response Act

Along with President Trump’s national emergency declaration because of the Coronavirus and COVID-19, comes additional obligations for business, including new obligations to employees who miss time at work. 

Overview: Families First Coronavirus Response Act

The new law is the Families First Coronavirus Response Act (the “Act”).  Division C of the Act (the “Emergency Family and Medical Leave Expansion Act”) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. 
Division E of the Act (the “Emergency Paid Sick Leave Act”).

For most employers reading this Blog Post, the Act contains NEW requirements (at least temporarily) to provide leave to employees, when you probably did not have an obligation to provide leave before the new law.  Note:  If your business is subject to the Family and Medical Leave Act (more about that here), you are not subject to the Families First Coronavirus Response Act.  Wondering if your business is subject to the Family and Medical Leave Act? Check out this Blog Post for guidance.

The Act is very new, so new in fact that the United States Department of Labor has yet to issue any regulations for the Act.  The lack of regulations from the USDOL means we will have unanswered questions (the USDOL website suggests it may issue regulations in April 2020).  Working, however, with the information we do have, below is an executive summary of the Act and then questions and answers which should provide you with a sound understanding of the Act and how (or if in some cases) it applies to your business:

 

Executive Summary of the Act

 —> Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or

—>Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (according to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition; and

—>Up to an additional ten weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Questions and Answers: The Families First Coronavirus Response Act

 

What is the Families First Coronavirus Response Act?

The Families First Coronavirus Response Act ( the “Act”) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. 

Which government agency enforces the Act?

The Department of Labor. Through its Wage & Hour Division, will administer and enforce the Act. 

When does the Act start, and how long does the Act last?

The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.

To which businesses does the Act apply? 

Under the Act, “covered employers” are certain public (Government) employers and private employers who employ fewer than 500 people.

What does the Act require employers to do?

 

Provide employees with paid leave along these lines:

  • Leave at Regular Pay Rate.
    Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Leave at 2/3rds of employee’s regular pay rate.
    Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition.

How long is the Act effective?

The Act becomes effective April 1, 2020, and runs through December 31, 2020.

What employees are covered by the Act?

(a) All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19, or (b) Employees employed for at least 30 days are eligible for up to an additional ten weeks of paid family leave to care for a child under certain circumstances related to COVID-19.

What reasons qualify an employee for leave under the Act?

Employees qualify for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because of:

  1. Quarantine.  The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. Self-Quarantine. A health care provider has advised the employee to self-quarantine related to COVID-19
  3. Experiencing Symptoms. The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis
  4. Caring for Person.  The employee is caring for an individual subject to an order described above or a person who self-quarantined as described above;
  5. Caring for Child. The employee is caring for a child whose school or care place is closed (or no child care is unavailable) for reasons related to COVID-19; or
  6. Similar Condition.  The employee is experiencing any other substantially-similar condition specified by the Government

How much leave does an employee get?

For reasons 1-4 and 6 above – a full-time employee is eligible for up to 80 hours of leave, and part-time employee is eligible for the number of hours of leave the employee works on average over two weeks.  

How much leave does an employee who is caring for a child receive?

For reason five above, a full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 40 hours a week. A part-time employee is eligible for leave for the number of hours that the employee is typically scheduled to work over that period.

How does an employer calculate pay?

  • Reasons 1, 2, or 3 above: Employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day, and $5,110 in the aggregate (over 2-weeks).
  • Reasons 4 or 6: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day, and $2,000 in the aggregate (over 2-weeks).
  • Reason 5: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day, and $12,000 in the aggregate (over 12-weeks). 

What if complying with the Act’s paid leave requirements would crush my small business and maybe put me out of business?

There is a small business exemption: To choose the small business exemption, you must document (in writing) why you believe your Oklahoma small business meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations (How about that?!? You are required to comply with regulations that do not exist yet!).

Do I have to post Notice about the Act at my business?

Yes.  The USDOL has provided mandatory posters regarding employee rights under the Families First Coronavirus Response Ac.  All private-sector employers with fewer than 500 employees are required to place the poster in a conspicuous area, which will generally be alongside your other federally mandated employee notices, you can find the post here. Additionally, you can find answers to questions about posting the Notice here.

 

The US Department of Labor also has some excellent resources on the Act, including a Q&A, a Fact Sheet for Employers, and a Fact Sheet for Employees.

Posted by Shawn Roberts in Blogposts

Oklahoma Coronavirus Emergency: Governor Stitt further clarifies the elusive meaning of being an “essential” business

As I mentioned earlier, yesterday, as the number of Covid-19 cases in Oklahoma continues to grow in the Coronavirus emergency (164 confirmed positive COVID-19 cases as of now), on March 24, 2020, Oklahoma Governor Kevin Stitt issued his Fourth Amended Executive Order 2020-07.  

Section 20. of the Amended Executive Order provides that all business that are not essential must close by 11:59 PM at March 25, 2020.

Then late this afternoon, Governor Stitt further clarified what it means to be an “essential” business through another Order which you can find below:

 

1921
Posted by Shawn Roberts in Business Law