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California Business Law Questions & Answers
3 Answers | Asked in Business Law and Employment Law for California on
Q: Is withholding discretionary bonuses legal in CA for winding-down business?

I work for a small business with around 30 employees in the aircraft leasing industry. My company is undergoing an asset sale and winding down its operations. I was informed in March, via a group phone call, that there will be no annual bonuses this year. Our employment agreement includes an annual... View More

Michael R Trust
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answered on May 23, 2025

Hello. The short answer is "yes". By it's very nature, the bonus is discretionary, which means that the company can choose to pay or not pay it for no reason or any reason. Even though there are conditions attached for the employee, it doesn't change the discretionary nature of the bonus.

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2 Answers | Asked in Divorce, Business Law, Real Estate Law and Family Law for California on
Q: How can I manage divorce and asset division without an attorney in CA?

I am wanting to file for divorce but cannot afford an attorney to look over the paperwork. My husband has been out of work for about three years, and I am paying for everything on my own, barely managing to cover food and gas. We have been married for 9 ½ years and have no children together. We... View More

Robert Kane
Robert Kane
answered on May 23, 2025

You will need to devote a substantial amount of time and effort to manage the divorce and asset division without an attorney in CA. You need to decide how to best allocate your resources.

https://selfhelp.courts.ca.gov/divorce-california

You can get the help of a limited-scope...
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1 Answer | Asked in Intellectual Property, Internet Law and Business Law for California on
Q: Can I sell a yard game with IP-protected products without permission, and name it?

I am considering selling a yard game online, which consists of multiple products. These products have their own intellectual property rights, and I plan to market the game with a new name, although I don't have permission from the intellectual property holders. Additionally, I intend to sell... View More

James L. Arrasmith
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answered on May 22, 2025

You're walking into dangerous legal territory by using IP-protected products in your yard game without permission. Even if you give the game a new name, this doesn't shield you from infringement claims since you're still using protected elements without authorization. The fact that... View More

1 Answer | Asked in Bankruptcy and Business Law for California on
Q: How to file Pro Se bankruptcy for S Corp with $104,000 judgment in CA?

I am seeking guidance on filing Pro Se business bankruptcy for my S Corporation, which is facing a judgment debt of $104,000 in California. I have attempted to settle this debt, but the negotiations failed. I am considering filing in either Los Angeles or Orange County. Could you advise on how to... View More

James L. Arrasmith
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answered on May 22, 2025

Filing bankruptcy for your S Corporation requires careful consideration of which chapter best suits your situation. You'll need to decide between Chapter 7, which involves liquidating the business assets to pay creditors, or Chapter 11, which allows reorganization and continued operations.... View More

1 Answer | Asked in Contracts, Tax Law, Business Formation and Business Law for California on
Q: Are there any "behind the scene" fees for operating a Wyoming LLC in California.

Hello, My partner and I are looking to form an LLC in Wyoming while living in California. This would be a totally online, e-commerce storefront with no inventory in California. We were looking for potential legal risks specific to e-commerce, any behind the scene fees, and filing fees regarding... View More

James L. Arrasmith
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answered on May 22, 2025

Yes, there are significant "behind the scene" fees when operating a Wyoming LLC while physically based in California. Even with an online e-commerce business and no inventory in California, your Wyoming LLC would need to register as a "foreign LLC" in California because... View More

1 Answer | Asked in Copyright, Business Law and Intellectual Property for California on
Q: Is selling upcycled tank tops from copyrighted fabric infringement?

I want to sell upcycled tank tops made from thrifted or donated old Hawaiian/aloha shirts, which are made of copyrighted fabric. Is this considered copyright infringement if I am not replicating or modifying the fabric design, just changing the structure of the shirt? I plan to sell about 50 tank... View More

James L. Arrasmith
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answered on May 21, 2025

Your plan to create upcycled tank tops from thrifted Hawaiian shirts likely falls under the "first sale doctrine" in U.S. copyright law. This doctrine generally allows you to resell or repurpose items you've legally acquired without the copyright holder's permission. When you... View More

1 Answer | Asked in Business Law, Contracts, Civil Litigation, Criminal Law and White Collar Crime for California on
Q: Can I sue a high net worth individual in California for breaking a promise and potential fraud?

I'm considering filing a lawsuit against a high net worth U.S. citizen and doctor residing in Shanghai who supported me financially during our relationship. He flew me to Asia and promised a payment via email, which he did not follow through on, leaving me far from home and unable to return... View More

James L. Arrasmith
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answered on May 22, 2025

You may have a viable legal case in California based on several factors. Your situation could involve claims for breach of contract (the written promise in emails), promissory estoppel (reasonable reliance on his promise), or potentially fraud if you can prove deceptive intent. The evidence... View More

Q: Can transferring assets to family legally protect my sole proprietorship?

I am being sued by my previous employer after leaving the company in June 2024 to start my own sole proprietorship doing construction inspection. The complaint alleges breach of duty, misappropriation of trade secrets, and intentional interference with prospective economic relations, and seeks to... View More

James L. Arrasmith
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answered on May 22, 2025

Transferring assets to family members after a lawsuit has been filed is likely to be viewed by courts as a "fraudulent transfer" designed to hide assets from creditors. In your situation, with litigation already underway, moving clients to your nephew's corporation could appear as an... View More

1 Answer | Asked in Divorce, Business Law, Civil Litigation and Family Law for California on
Q: How can I enforce unpaid spousal support from my ex-husband in CA?

I divorced my ex-husband in December 2014 in Colorado, although I was living in California at the time due to him abandoning me in Las Vegas. He was ordered to pay $500/month in spousal support until December 2024, but I haven't received any payments since June 2017. Despite multiple attempts,... View More

James L. Arrasmith
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answered on May 20, 2025

You have a valid Colorado support order that California courts can enforce under the Uniform Interstate Family Support Act (UIFSA), which allows you to register and enforce your out-of-state judgment in California without returning to Colorado. Your first step is to register your Colorado divorce... View More

2 Answers | Asked in Consumer Law, Business Law and Civil Litigation for California on
Q: Amazon lost my inventory items, reimbursed too low. How to get full compensation?

I am an Amazon Seller, and Amazon admitted in writing that they lost two of my Fulfilled by Amazon (FBA) inventory items. Each item is valued at over $1,200, but Amazon reimbursed me only $23 per item and closed the case. Despite submitting invoices and escalating the issue, they are asking for the... View More

Scott Richard Kaufman
Scott Richard Kaufman
answered on May 18, 2025

You have two main options:

1- go to small claims court with them

2- talk to a consumer protection attorney to see if s/he will agree to take the case in superior court.

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Q: Seeking compensation after car accident; driver at fault, total loss of vehicle and injuries.

I was involved in an auto accident on April 23, 2025, where another driver, who was on the job, swerved into my lane causing me to veer into his lane to avoid a head-on collision. He then swerved back and hit the gravel, fish-tailing and colliding with the driver's side of my car, totaling my... View More

Emery Brett Ledger
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answered on May 16, 2025

Thank you for sharing the details of the incident. We understand how stressful and overwhelming a situation like this can be, especially when it involves injuries to both yourself and your family members.

Based on the information you've provided, your inquiry involves complex legal and...
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2 Answers | Asked in Business Law and Contracts for California on
Q: Is the Manager's conduct lawful in altering contact without notice in a CA LLC?

I am a member of a California LLC with 55 members, managed by another LLC. Our operating agreement specifies a contact for the Manager, but this was changed without notice or consent. Now, I can only communicate through an Investor Relations team that neither provides Manager access nor answers my... View More

Pavel Kolmogorov
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answered on May 16, 2025

The manager's conduct in changing the contact method without notice or consent may not be lawful under California LLC laws and the operating agreement, depending on the specific terms of the operating agreement and the manager's fiduciary duties. California law provides that the operating... View More

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2 Answers | Asked in Business Law, Estate Planning, Tax Law and Real Estate Law for California on
Q: Ensuring capital gains exclusions on home sale without reassessment.

I have lived with my boyfriend in California for over 10 years. He bought the home before we started dating, and I'm not on the title, but I've contributed equally to the home's finances. We file taxes separately, each claiming half of the property taxes and interest. I'm listed... View More

Klaus Gottlieb
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answered on May 15, 2025

Since the home is in your boyfriend’s name and you’re not on title, you don’t currently meet the ownership test for the $250,000 capital gains exclusion. However, if you get married before the sale and file jointly, you and your spouse can exclude up to $500,000 in gain—assuming one of you... View More

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2 Answers | Asked in Business Law and Contracts for California on
Q: Is it legal to subcontract services without informing clients in a recruitment business?

I own a recruitment services business and have recently hired a contractor at half the hourly rate that I charge my clients. Although I am still billing my clients at the full rate, I haven't informed them that a subcontractor is handling their work. This arrangement began a few weeks ago, and... View More

Pavel Kolmogorov
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answered on May 14, 2025

Review the contract carefully, paying attention to provisions about delegation, subcontracting, or service provider identity. If the contracts prohibit or require disclosure of subcontracting, failing to comply with these terms could result in breach of contract claims.

Even in the absence...
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2 Answers | Asked in Business Law and Employment Law for California on
Q: Employer did not honor 401k matching as stated in employee handbook, what should I do?

In June 2021, my employer implemented a 401k program and claimed they would match up to 4% of contributions. The employee handbooks from September 2022 onwards consistently state this matching policy. Recently, I was informed that the matching was never enabled, and there were no signed documents... View More

Michael R Trust
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answered on May 13, 2025

Hello. What do the plan documents say? That will govern what should happen here. It's very likely that a law named ERISA covers this plan. If the plan was supposed to have matches, and they didn't occur, there could be an ERISA violation (potentially for every affected employee, past or... View More

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1 Answer | Asked in Business Law for California on
Q: Is a one-page letter sufficient for a $3,000 grant between 501(c)(3)s in CA?

I work at a 501(c)(3) organization in California, and I'm considering awarding a $3,000 grant to another 501(c)(3) organization to support community engagement activities that raise awareness of early literacy. Currently, we use a 10-page grant agreement, but I'm wondering if a one-page... View More

James L. Arrasmith
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answered on May 14, 2025

Your one-page letter is a clear and thoughtful way to document a small grant, and for a \$3,000 award between two 501(c)(3) organizations, it is likely sufficient in most cases—especially if your organization doesn’t have an internal policy requiring a longer agreement. The letter covers the... View More

1 Answer | Asked in Divorce, Contracts, Business Law and Family Law for California on
Q: How to claim unacknowledged debt in California divorce?

I'm applying for a divorce in California. I owe my brother money, which I used to buy a house during my marriage, but my wife does not acknowledge this debt. My brother lives in Iraq, and unfortunately, I don't have any documents proving the debt as the bank doesn't have the... View More

James L. Arrasmith
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answered on May 13, 2025

Proving undocumented debts in California divorce proceedings presents significant challenges, particularly without formal bank records. In California's community property system, debts acquired during marriage are presumed to be community obligations, but disputed debts require substantiation.... View More

1 Answer | Asked in Mergers & Acquisitions, Business Law and Contracts for California on
Q: Seller seeks legal actions for indemnification clause enforcement in M&A deal.

I am the Seller in an Insurance Agency M&A deal where the Purchaser is refusing to pay for services provided between October 2024 and January 2025. The services include Accounting, Acquired Client Transitional Services, IT, and Integration Services. The agreement includes an indemnification... View More

James L. Arrasmith
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answered on May 12, 2025

You have several viable legal options to address the Purchaser's refusal to pay for services rendered between October 2024 and January 2025. Our firm recommends filing a breach of contract lawsuit against the Purchaser, as they have failed to fulfill their payment obligations under the... View More

1 Answer | Asked in Divorce, Business Law, Child Support and Family Law for California on
Q: Does my spouse have entitlement to business started post-divorce in CA?

I am in the process of divorcing my spouse; we have no prenuptial agreement. After filing for divorce and a judge ordered my spouse to give me 50% of the money in our joint account, I started a business. This happened about a year after the divorce filing, and we had already agreed on a child... View More

James L. Arrasmith
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answered on May 12, 2025

In California, property acquired after the date of separation is generally considered separate property. According to California Family Code § 771, earnings and accumulations obtained after separation are the separate property of the spouse who acquired them. Since you started your business... View More

Q: How to address lockout and fraud issues with ex-partner in S corp?

I am dealing with a complex legal situation involving my ex-partner in our S corp business. Over the past 5 years, court proceedings have been delayed, during which my ex-partner has unjustly locked me out of the business and all banking operations. Despite the company's substantial annual... View More

James L. Arrasmith
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answered on May 12, 2025

Your situation involves multiple serious legal issues: business lockout, potential financial fraud, inadequate court-ordered support, and possible ethical violations by opposing counsel. Given the complexity and the significant revenue involved, you need a business litigation attorney with... View More

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