Business Law

What is Oklahoma individual liability and why does it matter?

Diplomatic Security Service from Flickr User BSAC_Mock Dignitary Protection

We are talking about Oklahoma asset protection. That is, protecting your assets from being taken by a creditor or another party that has a judgment against you, individually.

Fortifying your assets
One way to fortify yourself and protect your assets is to do business through an Oklahoma entity. When I say entity, I am generally talking about an Oklahoma limited liability company or an Oklahoma corporation.

You form the entity, and then you use the entity to conduct business. For example, I have clients you have rental properties and they have created at least one LLC to own the rental property.

Explanation of the Mechanics
Here is how the protection works: 

For a rental property, the entity enters into a lease with a tenant. If for some reason, the property generates liability for the owner and the tenant or another party trying to recover against the owner, the creditor has to start by recovering against the entity rather than against the person who formed the entity.

The Wall of Separation
That means there is a wall of separation between what you own individually, for example, if your home and your cars, and what your business owns, which is the rental property. While there are some circumstances where a creditor could reach your individual assets, it is much more difficult when the creditor has to pierce through an entity that is out front.  For more information about piercing through the corporate veil in Oklahoma, consider – 5 Steps to prevent your Oklahoma corporate veil from being pierced

If, in my rental home example above, the owner owns the property in his or her own name and lease is the property in his or her own name then the owner is going to be liable if there is liability created which means the owner is putting all of its assets at risk. There’s no reason to have this happen using an entity to do business and if you need help getting that entity set up or getting started please reach out to me.  

 

Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma limited liability company

Can an Oklahoma Notary notarize a relative’s signature?

Oklahoma Notaries play a key role in finalizing many Oklahoma documents such as last wills and testaments, powers of attorney, deeds and real estate purchase contracts to name only a few examples. 

The Oklahoma Notary provides the certification that the person who signed the document is indeed that person.  An Oklahoma Notary Public is handy to have in most law offices and many business offices to notarize the signatures required by legal documents.

With the notary seal being so helpful, you might imagine there may be some issues created by a notary’s helpfulness and convenience.  One of those issues is whether an Oklahoma Notary Public can notarize the signature of a relative.  My instinct on this one, before researching the question, was that “no” a notary cannot notarize a relative’s signature, the same as a witness to a last will and testament cannot be related to the person making the last will and testament.  And, my instinct was mostly wrong.

According to the Oklahoma Secretary of State Oklahoma law allows a notary to notarize a relative’s signature:

A notary is an impartial witness. The law does not forbid notaries from notarizing the signatures of relatives. However, if the notarized document was ever the subject of a court suit, a judge might determine the notary was not an impartial witness.

With that in mind, my thought is that if there is someone else that can provide the notary seal for a relative, by all means, do not use the related notary to notarize a relative’s signature.

 

Posted by Shawn Roberts in Blogposts, Business Law

What business licenses are required to do business in Oklahoma City?

I believe that Oklahoma is perceived as a state with a relatively small amount of business regulations (a relaxed regulatory environment so to speak).  However, even in Oklahoma’s relatively regulation-lite environment, there are still regulations to consider if you are in business.

One example is if you are doing business within the Oklahoma City limits there are a number of occupational or business licenses you must have to be legally compliant.  Below is a list of most of the required occupational licenses and if you are looking for more information consider visiting the City of Oklahoma City’s website.

One more thing to know: The city limits of Oklahoma City are expansive and amorphous indeed the OKC City Limits are large enough to hold the cities of Philadelphia, Boston, Washington, D.C., Pittsburgh, Manhattan, San Francisco, and Miami!

Advertising License Alcoholic Beverage License
Auction Sales License Coin ­Operated Device License
Day Care And Day Camp License Dry Cleaning License
Food Service Establishment License Gasoline And Oil License
Hotel/Motel License Kennel License
Low Point Beer License Massage Establishment License
Mobile Home Park License Outdoor Sellers
Pawnbroker License Used Auto Dealer & Salvage License
Used Merchandise License Vehicle Food Sales
Vehicle Frozen Dessert Sales License  

 

Posted by Shawn Roberts in Blogposts, Business Law

What is arbitration?

When you have a legal dispute with someone, there are at least two procedures for resolving the dispute:  File a lawsuit in the tax-payer funded court system or submit to binding arbitration.

My sense with the term “arbitration” is that people who don’t spend time working with the law, probably hear the term often but do not have a clear understanding of what it means and how it is different from a lawsuit in a court.  The American Arbitration Association, one of the largest administrators of arbitration proceedings, defines arbitration as “the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator)—is faster and more cost effective than litigation.”

Below is a table that highlights some of the basic differences between a “court case” and an “arbitration.”  Both processes are used to resolve legal disputes between individuals and businesses.

  Court Case Arbitration
Who can find out about it Public Private
Who decides the winner Jury or Judge 1 or 3 arbitrators (usually attorneys) from a roster of neutral arbitrators
Selection of decision-maker Jury selected or elected judge makes decision parties select the arbitrator(s)
Where the case happens County Courthouse Private location arranged by the parties to the dispute
Length of the case 8 months to 2 years 5 months to 1 year
Punitive Damages Maybe Usually not available
Evidence allowed Relevant evidence per evidence code  Limited evidence
How it gets started File a Petition with the court File demand for arbitration
Winner entitled to attorney fees? Sometimes Usually
Costs court fees, attorney fees fees for arbitrator(s), attorney fees
Posted by Shawn Roberts in Blogposts, Business Law

How an Oklahoma Limited Liability Company is taxed

One of the factors to consider when choosing whether to do business as an Oklahoma corporation or Oklahoma limited liability company is how the new entity will be taxed.  There are several options for both corporations and limited liability companies.  Below is a diagram explaining how an Oklahoma limited liability company is taxed.

 

The source for this information is the Internal Revenue Service website, specifically this page.

Posted by Shawn Roberts in Blogposts, Oklahoma limited liability company

The Oklahoma series LLC is not only for real estate but also for . . .

Bernard Spragg. NZ

You probably know that an Oklahoma series limited liability company provides excellent protection for owning multiple tracts of real properties (think rental homes).

But did you know that the Oklahoma series limited liability company may very well work with other non-real property assets and forms of doing business such as:

◊High value medical & business equipment.

For example, a doctor or dentist who owns medical imaging equipment valued six figures, where such equipment can (in remote scenarios) generate substantial liability. Think diagnostic imaging where the machine doesn’t deliver a reliable image . . .

◊Separate divisions of a company

A business owner might use an Oklahoma series LLC to segment a large business in separate departments or divisions. In this context, the terms “department” or “division” don’t have a particular legal meaning but rather describe business segments.

◊Separate product lines offered by a company

You can create a department (or a division – they mean similar things and are sometimes used interchangeably) without filing or drafting any legal agreement at all. However, some companies appreciate the formal separation that accompanies separate series. You can do the same thing for product lines, employee teams, projects, business locations and for other business components.”

◊Equity Compensation Program within a business

As a spinoff of the separate product lines topic about, this use might work in a business with multiple divisions. With each division segregated into a separate series, the LLC can give the key employees of each series some sort of equity interest tied to that series only rather than equity interests in the entity as a whole. This rewards employees in productive divisions and protects them from the potential downside of other divisions.


The Oklahoma law series LLC law allows real property and other assets to be owned by a series. This means that the possible series LLC uses listed above are but a few items. I touched on this topic briefly in this post on the practical uses of an Oklahoma series limited liability company.

By the way, in listing these items I am not endorsing them as the correct use for you or your property. Before you implement a series LLC, take the time to talk with an attorney to discuss the plusses and minuses based on your specific set of circumstances.

Posted by Shawn Roberts in Blogposts, Oklahoma limited liability company

What is an independent contractor under Oklahoma law?

Unfortunately, there is no easy answer to this question.  It is based on a range of factors and determined by different sources depending on what you are doing and who is raising the question.  For example, the Internal Revenue Service has a list of factors it considers which you can find here.  If you are in Oklahoma, it is important to know what Oklahoma authorities say matters.

According to the Oklahoma Worker’s Compensation Commission, these are the relevant factors to consider in determining whether a worker is an independent contractor:

  • The nature of the contract shows that the worker is independent from the contractor. For example, the contract may contain an agreement that the contracting party is an independent contractor.
  • The degree of control exercised by the principal (employer) over the work. The greater the degree of control exercised by the principal, the greater the likelihood is that the worker is an employee, rather than an independent contractor.
  • Whether the worker is engaged in a distinct occupation or business for others. For example, the worker is a painter who paints houses for multiple employers.
  • The kind of occupation with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
  • Whether the occupation requires special skills, license, education, or training; which tends to indicate that the worker is a contractor.
  • The worker supplies all or most of the materials that he or she needs to perform the job. If this is the case, it tends to indicate that the worker is an independent contractor.
  • The length of the job, i.e., whether the job is a one-time job or a job that will be performed on a regular basis.
  • The worker is paid as a separate contractor, e.g., an invoice is provided to the worker for his/her services; the worker is paid by the job; the worker files a federal income tax return for his/her business; the worker is provided with an IRS Form 1099 from the principal.
  • Whether or not the work is a part of the regular business of the employer;
  • Whether or not the parties believe they are creating the relationship of master and servant;
  • The right of either party to terminate the relationship without liability.
Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma Employment Law

Checklist of items to consider when buying or selling real estate

From http://momoge.com

If you are buying real estate, my top recommendation is to use a licensed realtor. The kind of person who legally has the right put the big “R” by their name. I know several good ones, including Dave Moeller of Redbud Realty & Associates in Edmond. The standard principal applies: hire a professional to do the work that is outside of your area of expertise. Buying a home is one of the most important decisions we make and having solid representation in the process is critical.

If for some reason you find yourself purchasing or selling land without a Realtor, consider these basic points as a starting place to negotiating the deal:

 

  • What is the purchase price?

  • How will the purchase price be paid? (all at closing, part earnest money and the rest at closing)

  • What are the conditions on which earnest money can/is required to be refunded?

  • Who will pay for the title work on the property?

  • Who will pay the transfer fees connected to the recording of the deed?

  • Where will closing happen? (typically a title company in the county where the property is located, but you can close a real estate deal without being physically present at signing, you can sign the documents in advance)?

  • Are you transferring mineral rights to the property or keeping the rights?

 

If you want to get more tips and checklists like this, please sign up for the email list.

Sales Tag


Posted by Shawn Roberts in Blogposts, Business Law

Oklahoma Business Law: When is an employer required to pay for overtime?

If you are a business owner or someone in a position of authority with a business, do you know if your business required to pay overtime to employees?

You might be surprised by the answer, read on to find out.

For Oklahoma employers covered by the federal Fair Labor Standards Act (“FLSA”), the FLSA controls the payment of overtime.  Here are the basic requirements your business must meet to required to pay overtime pay:
  • The business must be covered by the FLSA.  Consider this blog post to answer the question of whether your business covered by the FLSA.
  • The employee must not be an exempt employee to qualify for overtime pay.  Consider this post for the type of employees who might be exempt from the FLSA.
  • The employee must work more than 40 hours in one work week. 

 

What is the work week? I have seen some uncertainty about this from employers.  According to the United States Department of Labor:

The Act applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.

 

To summarize:  All nonexempt employees of an FLSA-covered employer must be paid at a time and a half for all hours worked over 40 in the same work week.


Discouraging fact provided by the Tulsa World:

Oklahoma Minimum Wage

Oklahoma Minimum Wage

Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma Employment Law