randel law tri-valley Archives - Randel Law, Inc., Your Business and Succession Planning Lawyer as well as Corporate Transparency Compliance

Start planning early (at least 2-3 years before exit if possible, if not longer).
Get a valuation (this helps us determine whether the business will provide enough value to fund your retirement, what kind of tax hit you are looking at, whether there are estate tax issues, and what level of planning and associated cost are warranted).
See a financial advisor (this helps you determine how much you need to retire among other things).
Train your successor: build the next generation of ownership who can run the company after you leave (this also creates potential buyers).
Build a transferable business, one that can run without you (this runs counter to a lot of owners’ need for control, but you’re just going to have to let go of that).
Be clear about your objectives, including what you’re going to do when you retire. Do you want the most money as soon as possible or are other factors more important e.g. your legacy, the continuity of the firm, continuing its mission, or what happens to your employees and clients? Many owners get their sense of identity from their business and lose that when they retire. Be sure you know who you are going to be when you retire.
Have a Hit by a Bus Plan in case something happens to you before the full exit/succession plan unfolds.
Be flexible/adaptable. Exit/succession plans rarely unfold exactly how they are written at the beginning. Stuff happens. You and your buyer(s) need to be okay with adapting the plan to deal with changed circumstances.
Find buyer(s) with compatible personalities and communication styles, trust, shared vision and compatible goals.
Build a good adviser team. Make sure one of them is clearly designated as the quarterback with overall responsibility to coordinate the process. Let them communicate directly w/each other; don’t keep each one in his or her own silo and only communicate with them yourself.

I hope you enjoyed reading the Top Ten Tips. Feel free to contact me if you have any questions.

Rick Randel Business and Succession Planning San Francisco Bay Area, San Ramon, Walnut Creek

This article is not intended and should not be relied upon as legal or tax advice pertaining to any specific matter. You are encouraged to seek competent legal and tax counsel before proceeding with any transaction involving any of the matters discussed above.

Time to Review Your Worker Classification Status

By now you have probably read about the April 30, 2018, highly anticipated Dynamex Operations West, Inc. v. Superior Court decision wherein the California Supreme Court overturned almost 30 years of case law by concluding that a worker is now presumed to be an employee. To overcome this presumption and prove that a worker is instead an independent contractor, an employer must meet the new standard referred to as the “ABC” test, which requires all of the following:

The worker must be free from the employer’s control;
The services must be different than those of the employer’s business; and
The worker must be engaged in a business of the same nature as the services he or she provides.

This means that a plumber who is hired by a retail store for repair services would be considered an independent contractor, whereas a seamstress hired by a clothing manufacturing company to work at home would be considered an employee, because the seamstress is doing the same work in the usual course of business of the clothing manufacturer. Moreover, the worker must now have a bona fide business of the same nature as the services he or she provides. Facts that would demonstrate the existence of a separate business include, though not required, business licensing, incorporation, or advertising. Lastly, the services being provided by the worker in his or her own business, must be different from those provided by the employer. The Dynamex decision adopts a harsh new standard for employers; it appears that only in the rarest of circumstances can a worker be classified as an independent contractor.

Dynamex will probably be much-litigated over the next several years. Recent decisions indicate that courts are already expanding the Dynamex holding to apply retroactively (to claims that occurred prior to the Dynamex decision) and to Labor Code violations, not just Wage Order violations (as in Dynamex). This means that Private Attorney General Act representative claims brought by your employees will now fall under the Dynamex ABC test in determining whether a worker is an employee or independent contractor.

What does all this mean for your business? It means that there is no time like the present to have your worker classifications reviewed by an experienced employment lawyer to ensure compliance with California’s ever changing law. Misclassification can result in significant liability exposure such as non-payment of overtime and/or minimum wage, failure to pay mandatory sick time, failure to provide itemized wage statements, and a host of other potential Labor Code violations. Such an analysis is fact specific and will vary on a case by case basis.

Michelle Ferber is the Managing Shareholder at Ferber Law in San Ramon, CA. She is an employment and business lawyer, defending employers in actions involving harassment, discrimination, retaliation, wrongful termination, wage and hour violations and business torts. Michelle can be reached at Ferber Law phone: 925-355-9800 email: mferber@ferberlaw.com

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Top Ten Tips For Business Succession Planning

Are Your Workers Correctly Classified?