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Maryland Business Law Questions & Answers
1 Answer | Asked in Tax Law and Business Law for Maryland on
Q: Schedule K-1 Taxes on Conversion from LLC to C-Corp on unvested shares?

I was a partner with an LLC startup & it converted to a C-Corp in Jan 2019. At that point, I had been vested 33% of my LLC units/C-Corp Shares. In Apr 2019, my total number of shares (vested + unvested) were reduced from 125k to 48k. In Jul 2019, I vested another 33% of the new amount (half of... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on May 17, 2020

There are several different types of restricted equity that can be provided to an employee. Each is taxed in a different way. To review your particular situation is going to require the documents for the equity grant and the conversation documents to be reviewed.

Without a thorough...
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3 Answers | Asked in Real Estate Law, Tax Law and Business Law for Maryland on
Q: I own a sngl-mbr LLC (reg'd in FL). I own a home in MD. I want to rent it entirely to my LLC to operate business. Legal?

Is it legal for me to rent out my Maryland state home to my LLC (Registered in FL)? My LLC's principle address is the same as my Maryland home, but now I want to rent the home entirely to the LLC and move out. I would live somewhere else, but use the home for business purposes only. Given the... Read more »

Richard Sternberg
Richard Sternberg answered on May 1, 2020

I agree with Mr. Blackburn that it is perfectly legal, but I don't think it accomplishes what you are trying to accomplish. If the LLC you form is a passthrough entity with partnership taxation, then the formation is a wash. The rental income passes through to you after writing off the... Read more »

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1 Answer | Asked in Business Law and Employment Law for Maryland on
Q: received termination saying I executed confidentiality and invention assignment agreement from amazon.

on my day off I received a termination letter from Amazon stating that the reason for termination is I executed a confidentiality and invention assignment agreement. What does this even mean? I am so confused right now.

Joseph D. Allen
Joseph D. Allen answered on Apr 13, 2020

To speculate, given the lack of facts- perhaps the company is alleging a violation of their confidentiality agreement, rather than alleging that you signed one with another company. It might be advisable to discuss with a labor/employment attorney.

1 Answer | Asked in Business Law for Maryland on
Q: I work in Maryland was wondering does law account for employees at multiple store or if it’s just employees at 1 store

I work for arbys. The law was passed in 2018 it states for an employer with 15 or more employees they owe 1 hour of paid sick time for every 30 hours. I said something to my area supervisor he said since we only have 10 employees at my store it doesn’t affect us

Joseph D. Allen
Joseph D. Allen answered on Feb 18, 2020

The Maryland Healthy Working Families Act (aka Sick and Safe Leave) is a vague about whether franchises of the same restaurant chain would be counted together as the same employer for purposes of the 15 employee threshold. However, it is clear that if the national chain is properly the... Read more »

1 Answer | Asked in Business Law for Maryland on
Q: Does a S corporation have to be registered somewhere...ie in MD, FL, VA or can it be legal without registration?
Mark Oakley
Mark Oakley answered on Jul 24, 2019

You’re mixing apples and oranges. First, any business that is not a state-registered entity (corporation, limited liability company, close corporation, etc.), is simply a sole proprietorship and all owners are personally at risk. A registered corporation can elect “Subchapter S” taxing status... Read more »

1 Answer | Asked in Banking, Business Formation, Business Law and Consumer Law for Maryland on
Q: Do I have a Maryland Consumer Loan license to lend a friend $6,000.00 and charge 14% interest for a four year term?
Bruce Alexander Minnick
Bruce Alexander Minnick answered on Jun 18, 2019

Say what? How can anyone know whether you "have a Maryland Consumer Loan license" or not? And why do you not know?

1 Answer | Asked in Business Formation, Business Law and Contracts for Maryland on
Q: Can I force a partner out of a partnership LLC with no operations agreement, for not putting in enough time?

We are a cabinet manufacturer. We are attempting to be a women owned business that was created last year. We have not sold any work as of yet. We do have equipment we are paying for. The shop is located on my property, and everything is in my name. If I am not able to force them out, can I... Read more »

Mark Oakley
Mark Oakley answered on Jun 11, 2019

You can withdraw from the company, boot it out of your home, and demand liquidation of the assets, and either pay your co-owner their fair share of the costs they expended on the equipment, or otherwise buy out out the equipment. Meantime, start a new LLC and begin cabinet making under a new... Read more »

1 Answer | Asked in Business Law and Contracts for Maryland on
Q: I did side work (bookkeeping) without a contract and I'm terminating them. What's the best way to protect myself?

One owner requested I do things that, although are non-reportable but are wrong per the IRS, I won't agree so I'm ceasing the relationship with a termination letter. How do I best word it to protect myself?

Bruce Alexander Minnick
Bruce Alexander Minnick answered on Apr 23, 2019

Unless you have a written contract with the company (or person) that says otherwise, you do not have to tell them any reason why you feel the need to terminate the relationship. Therefore, IMPO you should keep your letter of resignation as short as possible, making very sure not to say anything... Read more »

1 Answer | Asked in Business Law for Maryland on
Q: If a synagogue merger requires the approval of two-thirds of its members, does the two-thirds requirement apply only to

If a synagogue merger requires the approval of two-thirds of its members, does the two-thirds requirement apply only to those voting or to the entire membership.

Mark Oakley
Mark Oakley answered on Apr 2, 2019

Depends what the by-laws or operating agreement specifies. It is common for the majority requirement for passage of resolutions or decisions to be limited to those present at the meeting called for that purpose, but generally there is a “quorum” requirement in that scenario, which is also... Read more »

1 Answer | Asked in Business Law for Maryland on
Q: What is the maximum interest I can charge for a business tenant rent default in Maryland

this is a partial rent default by an offshore tenant

Cedulie Renee Laumann
Cedulie Renee Laumann answered on Mar 20, 2019

Maryland's usury laws are fairly complicated. The location of the tenant is likely irrelevant. The general legal rate of interest in MD is 6%. Most of the time people can charge up to 8% so long as there is a written agreement to that effect. However parties can agree in various... Read more »

1 Answer | Asked in Business Law for Maryland on
Q: What section/article of MD Code deals with requirements for non-profit associations re: budget approval by board?

The board of our 501(c)(6) non-profit association is spread out geographically throughout the Eastern and Western Shores of MD, and our budget needs to be approved. We want to know if the State of Maryland Code allows voting on approval of our budget electronically (via email). Thank you.

Mark Oakley
Mark Oakley answered on Mar 1, 2019

MD Code, Corporations and Associations, § 2-409. Place and notice of meetings

(a) Unless the bylaws of the corporation provide otherwise, a regular or special meeting of the board of directors may be held at any place in or out of the State or by means of remote communication....
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1 Answer | Asked in Business Law, Insurance Bad Faith and Insurance Defense for Maryland on
Q: My mom owned a cosmetology school. It was under a LLC. The business closed, and the students had to transfer....

Because the students transferred, the insurance my mom had "covered" the expenses of the students tuition and fees. This insurance company is claiming she, the co-owner, and LLC lawyer signed the Indemnity Agreement which makes the owners liable for the damages. The insurance already sent... Read more »

Arnab Kumar Banerjee
Arnab Kumar Banerjee answered on Jan 29, 2019

i need some more information. what are the terms of indemnity agreement your mother signed ? are they hold her liable ? can you share me the indemnity contract ?

without knowing the exact terms i cannot give you any advice.

1 Answer | Asked in Business Law for Maryland on
Q: What do I need to do to keep my company TM but have it revert from a federally registered one to just a regular TM?

I'd like to do this as cheaply as possible.

Mark Oakley
Mark Oakley answered on Jan 24, 2019

The federal trademark is a nationally recognized trademark that allows you to potentially block users anywhere from using it under the federal law. However, nobody can block you from using the mark that you have been using prior to any other party's adoption of it. For most small businesses... Read more »

1 Answer | Asked in Copyright, Business Law and Intellectual Property for Maryland on
Q: I am starting my own business. I came up with the name in 2008, but there's a 2017 tv show with the same name...

I invented the name for my business back in 2007-2008 and want to use this name as I am starting my own consulting business. However, in 2017 there was a documentary/TV series created with the same name. Is this copyright infringement if I go forward using the name I'd come up with? It's... Read more »

Mark Oakley
Mark Oakley answered on Jan 2, 2019

As long as you are not creating written or media pieces (film) with the name as a title (assuming the name is unique and identical to the TV show) then there is probably neither copyright nor trademark infringement. But without reviewing the specific title and nature of your business it is... Read more »

1 Answer | Asked in Consumer Law, Contracts and Business Law for Maryland on
Q: I paid a contractor for home repair services and he declared bankruptcy. What laws do I cite in an MHIC hearing?

The contractor promised to perform repair and renovation services promptly and failed to do so. After completing only the demolition portion of a major project, he declared personal and business bankruptcy. He owes 89 creditors over $1M. DLLR has referred the case to the Office of Administrative... Read more »

Mark Oakley
Mark Oakley answered on Dec 27, 2018

You really need to talk to a lawyer. Your question is too broad and general to allow an answer in the space available. I assume you have made a claim against the Guaranty Fund. You need to prove your monetary damages using one of the three formulas allowed under the statute and regulations, and... Read more »

1 Answer | Asked in Business Law and Animal / Dog Law for Maryland on
Q: Can a pet store refuse to sell me a puppy just because I have children?

I drove 2 hours (From centeral VA to MD, to a pet store we've prevuously been to and took our children to) to see a puppy we had our hearts set on only to have the pet store deny us the sale just because we have chikdren. Is that legal? I understand screening potential byers for things like... Read more »

Mark Oakley
Mark Oakley answered on Dec 11, 2018

It’s a private company so they can do what they want. You’ll find it much easier to adopt the same day at the county animal shelter or the local humane society, who have many rescues looking for a home.

1 Answer | Asked in Business Law for Maryland on
Q: Can I charge anything I want for no-show appointments or is there a limit?
Mark Oakley
Mark Oakley answered on Nov 30, 2018

The no-show charge policy must be communicated and agreed to up-front (or implicitly agreed to based on clear notice at the time of making an appointment). Only then will you have a legal basis to charge the fee. As far as the amount, there is no stated law on this, but as a rule of thumb most... Read more »

1 Answer | Asked in Business Law and Employment Law for Maryland on
Q: Maryland sick/safe law, can you be forceto use your accrued PTO?

Is it permissible for an employer to only allow you to use your sick and/or safe leave if you have the PTO hours to cover said leave? Thus then charging you PTO hours in addition to your sick and/or safe leave hours? This is a job place where the employees are paid predominantly tips, the the tip... Read more »

Joseph D. Allen
Joseph D. Allen answered on Nov 12, 2018

As long as the employer's overall PTO policy provides the minimum sick/safe leave, they can require the employee to use earned PTO. However, if the employer does not set aside leave that can only be used for sick/safe purposes, the DLLR guidance states that it "strongly encourages such... Read more »

1 Answer | Asked in Business Law for Maryland on
Q: Dissolving of LLC partnership

Hello,

I have a question regarding dissolving of LLC partnership.

We have LLC with 4 members registered in Maryland. We don’t have operating agreement signed despite the fact that company operates for 3 years already. Recently, we had a conflict situation with one of the members,... Read more »

Mark Oakley
Mark Oakley answered on Nov 8, 2018

No, dissolution on your facts (no operating agreement providing otherwise), requires either unanimous agreement of the members, or a judicial dissolution upon filing a petition to dissolve the LLC on the grounds that it “is not reasonably practicable to carry on the business in conformity with... Read more »

2 Answers | Asked in Business Formation and Business Law for Maryland on
Q: Dissolving the partnership

Three years ago three of us made a gentleman verbal agreement and open LLC in a software business. All three of us contributed equally and got the equal shares. We didn't sign any operating agreement at the beginning and wanted to do it later down the road. There weren't any reasons to... Read more »

Mark Oakley
Mark Oakley answered on Oct 25, 2018

Because you have no written operating agreement, your rights are governed by statute as they relate to your ownership interests, rights and possible dissolution of the LLC. Separately, the LLC may have a civil cause of action against the one owner relating to usurpation of Company business... Read more »

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