New California Laws for 2008

During the 2007 legislative year, 964 bills were passed by the California legislature and 750 were signed into law. There are 167 changes just to the California Vehicle Code. Except as otherwise noted below, the following list is a sample of just a few of the laws that go into effect in California tomorrow:

• Beginning July 1, 2008, California will prohibit drivers from using wireless telephones without a hands-free device while driving. A separate will law prohibits all drivers under the age of 18 from using a cell phone even with a hands free device. Both laws have exceptions for emergencies.
• Bicycle riders must have some sort of illumination devices while riding on a highway, street or sidewalk at night. The law is not clear if riders will be required to have headlights or if reflectors will be enough. Failure to have to have illumination devices could result in a ticket that requires the rider to attend a bicycle safety class.
• Smoking will not be allowed in any vehicle if minor children are inside. The prohibition applies regardless of whether the vehicle is in traffic or parked. Police will not be able to stop a car just to check for smoking, but then can cite the driver if they pull them over for another reason. Drivers could face fines of up to $100.
• The California minimum wage will increase by 50 cents to $8 per hour. California workers will have one of the highest minimum wages in the country.
• A new law will allow consumers to redeem gifts cards with balances of less than $10 for cash.
• Cities and counties will now be required to designate areas where homeless shelters can be constructed without the requirement to obtain a conditional use permit. The law is designed to remove zoning ordinances that block construction of homeless shelters.
• Courts will now be able to require parents or guardians of gang members to attend parenting classes. The classes are designed to prevent first-time offenders from committing additional crimes.
• Cities and counties will not longer be allowed to require landlords to verify the citizenship of their tenants. This law was a direct result of an attempt by a city in Southern California to require landlord to screen the citizenship status of potential tenants.
  

The information provided in this article is general information only and is not intended as legal advice. DO NOT use this information as a substitute for obtaining qualified legal advice or other professional help.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Do I Really Have to Pay Calfornia's Minimum Corporate Tax?

Question: Suppose I live in California, and I want an LLC in Nevada or Colorado. Is there a way to set it up so that I don't have to pay the idiotic $800 California fee?

Answer: I often hear radio commercials advertising the purported benefits of incorporating in states like Nevada. Before do that, you should consult with legal counsel and a qualified tax advisor before making any decisions. You mentioned forming and LLC, but many small business owners find that forming an S corporation is better for income tax purposes.

Whether you have to pay the minimum California franchise tax depends upon whether you are doing business in California. Even if you form an LLC or corporation in another state, you still have to register and pay the taxes on your California income if are regularly doing business in California. If you have an address, employee, inventory, bank account or significant business contacts in California, you are probably doing business here as defined in the law.

One advantage to forming a new California is that the corporation does not pay the $800 minimum for its first tax year. While it is called a "minimum franchise tax", it is really a minimum income tax payable in the first quarter of each taxable year (except for the first taxable year. By the time your corporation is in it's second taxable year, you will hopefully be making enough money so that you tax bill is higher than just the $800 minimum anyway. New California LLCs do not receive this benefit.

If you are going to incorporate in California and do business primarily in California anyway, there are few reasons not to form a California corporation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

The Lender Foreclosed, Now What?

Question: My landlord's bank foreclosed on the house I am renting and he didn't tell me. What happens next?

Answer: According to RealtyTrac, a company that tracks foreclosures across the country, nearly 1.8 million foreclosures have been filed nationwide so far this year. Foreclosures in October 2007 were up 94% over the same period last year. Though no firm statistics are available, renters are increasingly left without a place to live through no fault of their own. In many cases, a financially troubled landlord will pocket the rent and stop making the payments while the bank takes back the property.

Once a foreclosure sale takes places, the tenant has no guarantee of a place to live. You should contact the lender or new owner right away to discuss a possible rental agreement. The new owner might want to begin collecting rent right away, but bank-owned properties often are easier to sell when vacant. If you cannot reach an agreement with the bank, begin looking for a new place to live immediately.

If you do not leave voluntarily, California law allows the bank or new owner can serve you with a 30-day Notice to Quit. If you do not leave voluntarily, the bank can file an eviction lawsuit against you. You have no legal right to remain in the property and even the mere filing of an eviction lawsuit against you can damage your credit rating, so moving out voluntarily is your best option.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.