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Houston Business & Commercial Law Blog

Taxation rules applicable to payments made to family members

One of the biggest advantages of running a closely held family business is the ability to seek professional help from family members. Separate taxation rules are applicable for family employees in a family owned business, and it is necessary to be aware of these rules if you are running a closely held family business in Texas.

Payments made to your child below 18 years of age for services rendered by him or her to the trade or business are not accounted for while computing Social Security taxes, Medicare taxes and taxes under the Federal Unemployment Tax Act (FUTA) if the trade or business is a sole proprietorship or a partnership run by the child's parents. Exemption from FUTA is applicable until the child reaches 21. However, such payments are still subject to income tax withholding.

Meeting of minds can help avoid contract disputes in Texas

As many Texans know, contracts are the ties between businesses and between individuals that govern most business and many civil relationships, allowing those involved to have some expectation that each party will fulfill whatever obligation it agrees to in a contract. Although oral agreements sometimes suffice, a written contract ensures that both parties have indisputable records of their own and the other party's obligations. Legal action in the event of a breach of contract is also much easier to pursue.

Before signing a contract, a business must be sure it covers every critical aspect. This is especially true for businesses because contract disputes often involve expensive litigation. Under Texas law, a fundamental requirement for a contract is a "mutuality of obligation" or "meeting of the minds" whereby the parties completely understand and accept the terms of the contract. Ideally, these terms are clearly stated and do not allow any ambiguous interpretation.

Do Texas entrepreneurs know whom to approach for advice?

Entrepreneurs have reputations for strengthening the American economy. While the idea of setting up one's own enterprise is definitely appealing to most Americans, the challenges and intricacies related to business formation can be discouraging. Often, people who want to start their own business lack suitable counsel, which may be useful in preventing common but often-repeated errors in terms of planning or complying with relevant regulations.

Luckily for new business promoters in Texas, advice may be sought from a number of agencies, such as the Texas Business Advisor, which is a resource maintained by the state's Comptroller of Public Accounts. While some sources of advice might be given with the hope of enticing business operations to a certain location, many are offered by neutral entities, sometimes even at no cost. The monetary aspect can be crucial to entrepreneurs who often are struggling to put together the funds needed to start their businesses.

Leading accounting firm to acquire Houston-based competitor

Business owners in Houston, Texas, would agree that acquisitions are an integral part of business expansion. The strategic acquisitions of competitors are a fairly common part of a corporate strategy and not only do they further business interests but can also result in the addition of key competencies. However, acquisitions often pose unique challenges to the new business entity because of the differing cultures, work practices and the nature of the business. Therefore, acquisitions require expert consultancy services that can guide both companies through the acquisition process.

Recently, one of the largest accounting firms in the United States, BDO USA LLC, announced that it is finalizing the acquisition of the Texas chapter of a major competitor, UHY Advisors TX LLC, which has a presence in Houston and other cities in the state. According to reports, the deal is expected to be finalized by the beginning of December 2014. The deal also includes the acquisition of UHY Advisors' offices in Houston and Dallas. According to BDO, the acquisition would enhance their presence and capacity in Texas.

Texas business litigators offer help

Texas commercial disputes that arise during the course of business transactions can be a big problem if large amounts of money are involved, which is often the case with contracts between companies and between individuals and companies. Frequently, these matters become the subject of legal disputes and are governed by the rules of business litigation. Such litigation covers everything from contract disputes with employees or clients to tenancy issues.

The attorneys at Manfred, Sternberg & Associates can help in every area of corporate law and know how to deal with corporate legal disputes, including buy-sell agreements, licensing agreements, employment contracts, partnership agreements and shareholder agreements. Our firm also understands business operations.

Do you understand Texas trademark laws?

Trademarks are defined as the unique proprietary logo, symbol or slogan that an entrepreneur may use to brand products to identify a company's goods. Product trademarking is also closely linked with the reputation of a business. Many Texas consumers may identify products of a company merely by their logo or slogan. These trademarks help local businesses and are protected under Texas law.

Trademarks are considered intellectual property, which refers to all intangible unique designs, copyrights or trademarks owned by a person or a business. Ideas are, however, not addressed or governed under intellectual property right laws. The Lanham Act is the basic federal law that safeguards an entrepreneur's trademark rights to his or her products or goods.

Baylor University, Texas, rewards closely held family businesses

Family businesses are often closely held corporations. This is because the shareholders and members of the corporations are usually members of the family that often spans generations. Family-owned businesses help generate great wealth and are important to the economy. Members of these corporations may be members of the family by birth or by marriage.

Recently, Baylor University in Texas announced the 25th year for their Family Business of the Year Awards. The award is given each year to family-owned businesses that have shown good employee benefits, community initiatives and have displayed a commitment to the industry and to society. Every year, the university hands out awards to small family businesses that in the university's view also promote communities, families and the economy.

What are the benefits of reverse mergers?

Reverse mergers, often called reverse takeovers, are conducted when private companies, including corporations with headquarters in foreign countries, gain access to U.S. capital markets by merging with a public company based in the U.S. In a reverse merger the private company is acquired by an American public shell corporation.

In most cases, even when a private company merges with a public U.S. company, the members of the private company gain a controlling interest in the public company. The private company's shareholders may also gain a controlling interest reflected in the board of directors of the public shell company. The private company's assets then become the primary assets of the post-merger company.

What are the different types of ADR methods?

Contract disputes refer to any and all disagreements that may arise in a company or partnership as a result of a breach in contract. In this situation, all parties have the right to go to court for resolution of the dispute. However, some methods of alternative dispute resolution are gaining popularity in Texas. Engaging in alternative dispute resolution is usually cheaper and less time-consuming than heading to court.

Voluntary participation in arbitration or mediation can occur in the case of a contract dispute. Arbitration provides a neutral third party, known as an "arbitrator," who meets with the disputing parties. After hearing both sides of the dispute, the arbitrator makes a decision, which is binding on the parties who have agreed to enter into arbitration.

Texas Attorney General and the Deceptive Trade Practices Act

Business owners often come across the mention of the Texas Deceptive Trade Practices Act while operating their day to day business. The DTPA deals with false claims that many businesses make in order to further their business interests. The false claims can include supplying used products and claiming them to be new, making false accusations against a competing business, untrue or misleading advertisements and more.

In order to address these issues, the Texas Attorney General's Office files civil enforcement actions under the provisions of the Deceptive Trade Practices Act in order to protect consumers and businesses from these unfair trade practices. In addition to the Attorney General's Office, a consumer or business can also file a complaint, which can form the basis of a state-conducted investigation. All products and services are in the Deceptive Trade Practices Act ambit except for professional advice.

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Manfred Sternberg & Associates, PC
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Houston, Texas 77027
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