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Business Formation Questions & Answers
1 Answer | Asked in Banking, Business Formation and Business Law on
Q: What business license is required to operate an escrow service for consumers? Home renters are my customers.

My startup allows home renters to put their security deposit in my platform when they rent homes. I return the money back after their lease ends minus the fees for the service. What type of license is needed to run this? Its like a consumer escrow i think

Jennifer Newton
Jennifer Newton
answered on Jun 17, 2024

Your startup idea is indeed similar to a consumer escrow service, which typically involves handling financial transactions and holding funds on behalf of your customers. Operating an escrow service generally requires specific licensing and regulatory compliance, which can vary by state.

1 Answer | Asked in Business Formation for Illinois on
Q: I'd like to start a small business in the form of a wellness center. What kind of ownership structure would I need?

The wellness center would focus on physical fitness and recovery but would also hope to drive a lot of community value by being very active with the locals in terms of volunteering and events. It would ideally be a holistic approach to serving the community as well as the members themselves. I want... View More

Jennifer Newton
Jennifer Newton
answered on Jun 12, 2024

Choosing the right ownership structure is crucial for both the success of your wellness center and your personal and financial interests. Here are a few options to consider:

Sole Proprietorship: As the sole owner, you would have complete control over the business. This structure is simple...
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1 Answer | Asked in Gov & Administrative Law, Business Formation and Business Law for North Carolina on
Q: If I am a resident of North Carolina, would I be able to start an LLC in New York or any other state?

Are there certain things I need to be aware of or do? I have a business now in NC but would like to start a new one and also register the same (thats operated in North Carolina) one in New York and Florida if possible.

Jennifer Newton
Jennifer Newton
answered on Jun 12, 2024

As a resident of North Carolina, you can start an LLC in New York or any other state, but there are several considerations and steps to be aware of. First, you can form your LLC in any state, but you should consider the legal and tax implications; states like Delaware and Nevada are popular due to... View More

1 Answer | Asked in Business Formation for Illinois on
Q: Can you please help me understand if my company requires foreign llc formation

-Business Owners/Cofounders: 3

-Business Nature: Online digital marketing agency offering online services, no physical locations, completely remote work

-Business Owner Locations: Florida, California, Ohio

Jennifer Newton
Jennifer Newton
answered on Jun 12, 2024

To better understand whether your company requires foreign LLC formation, we need to clarify what you mean by "foreign LLC." In general, a foreign LLC refers to an LLC that is registered to do business in a state other than the one in which it was originally formed.

Here are a few...
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1 Answer | Asked in Banking, Business Formation and Business Law for Texas on
Q: I want to sue regency bank. I’m in Tx, ex business partner is in Oldsmore,FL.

My business partner and i created a bank account. He set it up in Fl and signed for me to be on bank account. We are both owners splitting 50/50 % ownership.

I transfer 80k into business account. Which is everything to my name at the moment.

I thought both owners had to be on... View More

John Michael Frick
John Michael Frick
answered on Jun 11, 2024

Without reviewing the account application, company agreement, and company banking authorization, it is impossible to say based on your description if the bank was negligent. Importantly, as an owner of the company, it was clearly your duty to make sure the account application, company agreement,... View More

1 Answer | Asked in Business Formation and Cannabis & Marijuana Law for Illinois on
Q: Can a person start a small thc edibles business in Illinois?

Is it possible for a person to have a legal business similar to a cottage food license in Illinois for selling edibles containing THC?

Jennifer Newton
Jennifer Newton
answered on Jun 8, 2024

Starting a THC edibles business in Illinois requires obtaining an infuser license from the Illinois Department of Financial and Professional Regulation (IDFPR). THC edibles cannot be produced under a cottage food license due to stricter regulations. Compliance involves ensuring product testing,... View More

1 Answer | Asked in Immigration Law, Business Formation, Business Law and International Law on
Q: Hi, I recently obtained an EIN number over the phone, I'm from Jamaica, is it possible for me to attain an ITIN

Hi, I recently obtained an EIN number over the phone, I'm from Jamaica, is it possible for me to attain an ITIN number to use in place of an SSN number in order for me to open a bank account and use Paypal and those other services which require such details ?

James L. Arrasmith
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answered on Jun 8, 2024

As a foreign national from Jamaica, it is possible for you to obtain an Individual Taxpayer Identification Number (ITIN) from the U.S. Internal Revenue Service (IRS). However, you must meet certain eligibility requirements:

1. You must have a valid reason for needing an ITIN, such as filing...
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1 Answer | Asked in Immigration Law, Business Formation, Business Law and International Law on
Q: I'm a jamaican citizen who recently attained an EIN over the phone from the IRS, I need an ssn number to operate my onli

I'm a jamaican citizen who recently attained an EIN over the phone from the IRS, I need an ssn number to operate my online business through serivces such as paypal, how can i attain one or is there another number i can use for this kid of process ?

James L. Arrasmith
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answered on Jun 6, 2024

I apologize, but as a foreign citizen, you are not eligible to obtain a U.S. Social Security Number (SSN) solely for operating an online business. SSNs are typically issued to U.S. citizens, permanent residents, and certain temporary residents who are authorized to work in the United States.... View More

1 Answer | Asked in Business Formation and Business Law for Missouri on
Q: Can my Board of Directors of my Non for Profit, re write the bylaws to change the definition of a membership of the org?

We want to have just the board of directors and teachers committee vote on board seat vacancies and we don't get a lot of membership activity to warrant their input, other than their regular participation in weekly sits (Meditations and Dharma Talks)

Jennifer Newton
Jennifer Newton
answered on Jun 3, 2024

Yes, your Board of Directors can generally amend the bylaws to change the definition of membership and voting rights, provided that the current bylaws and your state laws permit. Here would be the steps:

Review Current Bylaws: Check for the amendment process.

Draft Amendments:...
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1 Answer | Asked in Business Formation and Business Law for Pennsylvania on
Q: Could I buy a “holding” company LLC that holds recipes and stipulations for the restaurant LLC I own 60-40?

My partner is essentially a silent partner so I would be interested in buying the “holding” company and use that to possibly expand in the future and keep the restaurant LLC its own thing.

Michael Cherewka
Michael Cherewka
answered on Jun 2, 2024

Not sure what you mean by buying the holding company. But it is not unusual to set up a separate LLC to own recipes or systems/processes or equipment and the license or lease them to multiple operating entities for each restaurant location. Provides asset protection, different streams of revenue... View More

1 Answer | Asked in Business Formation and Business Law on
Q: There are four person going to start a business. Two are investors two are handlers.

One person from handler is the one who made idea and found investor to start it. He knew investor and handler and he is the source developer and we can say manager. I want to know the profit division of this business .

Jennifer Newton
Jennifer Newton
answered on May 31, 2024

Determining the profit division in a new business with multiple stakeholders requires careful consideration of each person's role, contributions, and the agreements among all parties involved. Here’s a general approach to structuring the profit division for your business involving two... View More

2 Answers | Asked in Business Formation, Contracts, Federal Crimes and Tax Law for Florida on
Q: Have I been a victim of investment fraud? Has he violated the law? What steps can I take to resolve this?

In 2020, a friend went into the cannabis business in Oklahoma. He told me it was legal and profitable and convinced me to invest $100,000, promising me shares. I wired the money to his real estate company, AAA LLC, in September 2020 (I have the receipt). By 2022, he had not provided any updates,... View More

James L. Arrasmith
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answered on May 31, 2024

It sounds like you may have been a victim of investment fraud. Your friend’s failure to provide updates, the lack of formal documentation, and his reluctance to return your money are concerning. The fact that your name is not listed in the cannabis company and the handwritten statement without... View More

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2 Answers | Asked in Business Formation, Contracts, Federal Crimes and Tax Law for Florida on
Q: Have I been a victim of investment fraud? Has he violated the law? What steps can I take to resolve this?

In 2020, a friend went into the cannabis business in Oklahoma. He told me it was legal and profitable and convinced me to invest $100,000, promising me shares. I wired the money to his real estate company, AAA LLC, in September 2020 (I have the receipt). By 2022, he had not provided any updates,... View More

Jennifer Newton
Jennifer Newton
answered on May 30, 2024

After reviewing the details of your investment in the cannabis business in Oklahoma and the issues you've encountered, here are some potential legal actions you can take :

Demand Letter: Initiate with a formal demand letter requesting the return of your $100,000 investment. Clearly...
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1 Answer | Asked in Contracts, Business Formation and Business Law for Arizona on
Q: Can I access business loans and grants in a state other than the one my LLC is filed in?

I want to start a new LLC and take advantage of the privacy and tax advantages states like Nevada, Delaware and Wyoming provide however I do not reside in those states. I would be a minority owned business so wondering if any of the programs in my home state for helping small businesses through the... View More

Jennifer Newton
Jennifer Newton
answered on May 30, 2024

Starting an LLC in states like Nevada, Delaware, or Wyoming can offer various privacy and tax advantages. However, if you do not reside in these states, you may face limitations regarding access to small business assistance programs in your home state. As a minority-owned business, you might be... View More

1 Answer | Asked in Banking, Business Formation and Stockbroker Fraud on
Q: How should I get back my account and USDT from account frozen and restricted without any top up money?

I'm a new user of one of the ETH platforms. Last night, I traded dynamic market of ETH/USDT for 3 times. And I got back some profit from that. In the next day, I got a warning box "your account has been frozen due to suspected illegal transactions". When I contacted to customer... View More

James L. Arrasmith
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answered on May 27, 2024

I'm sorry to hear about your situation. Unfortunately, it sounds like you may have fallen victim to a scam. A few red flags stand out:

1. Legitimate trading platforms would not typically freeze your account and funds over "suspected illegal transactions" without providing...
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1 Answer | Asked in Business Formation and Business Law for New York on
Q: I have a NY Physical Therapy PLLC. Can I also form a separate NY LLC for coaching to see clients outside of NY?

I formed a PLLC for my physical therapy practice in NY. In the NY state PT practice act it states that licensed PTs cannot engage in unlicensed activities as that might give PTs an advantage over other professionals. Other PTs also provide wellness coaching services to clients outside of where they... View More

Samuil Buschkin
Samuil Buschkin
answered on May 22, 2024

Without having inquired all facts and done proper research in your case, and not making this any form of legal advise, I believe at first glance that if you make it a separate entity and do not commingle with your other entity, there is no prohibition for a licensed professional against engaging in... View More

1 Answer | Asked in Employment Law, Immigration Law, Tax Law and Business Formation on
Q: Hi, I'm a canadian citizen who is looking to rent an office in the U.S to work out of. Do I need a work visa for this?

I live very close to the border and rental spaces in buffalo are not only closer but also cheaper than here in Canada. I'm a sole proprietor so the business operates in Canada. I just want to rent an office where I will do my work out of.

James L. Arrasmith
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answered on May 17, 2024

As a Canadian citizen looking to rent an office space in the United States for work purposes, it's important to understand the visa requirements. In most cases, you will need a valid work visa to legally work from a U.S.-based office, even if your business operates in Canada.

However,...
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1 Answer | Asked in Business Formation, Business Law and Mergers & Acquisitions for California on
Q: Dissolution and closing of a Personal Service C Corp upon the death of sole shareholder & president

A Personal Service C Corp had only one shareholder, who was also the president. Upon the death of the sole shareholder & president, the business is closed and the C Corp needs to be dissolved. The Secretary of the C Corp will sign the Certificate of Dissolution to be filed with the Secretary of... View More

James L. Arrasmith
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answered on May 15, 2024

In the case of a Personal Service C Corporation with a single shareholder who was also the president, and upon their death, the corporation needs to be dissolved and closed. Here's a step-by-step guide on how to proceed:

1. Appoint a new director: If the deceased shareholder was the...
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1 Answer | Asked in Business Formation and Business Law for Massachusetts on
Q: I have a MA C corp, want to reorganize as an LLC (I'm the only stockholder & employee). Can I do this simply/cheaply?

Is an LLC a "domestic other organization" so I can just file Articles of Entity Conversion of Domestic Business Corporation to a Domestic Other Entity?

If I do this will I get a new EIN?

Nicholas Arthur Matlach
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answered on May 15, 2024

While converting your MA C Corp to an LLC is certainly possible, the process might be more involved than you anticipate. Here's why:

Entity Conversion vs. Dissolution and Formation:

- Entity Conversion: While Massachusetts law does allow for entity conversion (as you...
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1 Answer | Asked in Business Formation and Tax Law for New York on
Q: If I started a NY apparel business some years back but never did anything with the business just the formation

If I started a NY apparel business some years back but never did anything with the business just the formation ( business formed w/ state, trademarks, EIN business account) all done. I have filed taxes, Franchise & income taxes every year for the business and now want to apply for the... View More

James L. Arrasmith
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answered on May 14, 2024

Based on the information you provided, there shouldn't be any major issues with obtaining a Certificate of Authority (CoA) or resale license for your New York apparel business. Since you have already formed the business, obtained trademarks, secured an EIN, and have been filing taxes... View More

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