Proposed Law Would Allow Doctors/Physicians to File Mechanics Liens Against Real Estate in CT

While more people now have health insurance under the Affordable Care Act, many of their policies came with large deductibles. These deductibles are commonly between $2,500.00 and $6,000.00. Any deductible amount is due from the patient to the doctor or physician providing the healthcare services.

It is mandatory for the doctors to attempt to collect these fees, and necessary for them to so for the health of their business. For patient this creates financial strain beyond the monthly payments they are already making.

The Connecticut General Assembly is now considering a Bill which would greatly expand the range of materials and services for which a mechanic’s lien could be filed. Currently, the law allows a mechanic’s lien to be filed for materials and services in connection with site development of land or construction of a building.

The proposed law, SB887, would expand the services to include “any other service rendered to an owner of land.” Under this proposed law, a doctor rendering medical services to a person owning land could file a mechanic’s lien against the land if the doctor’s bill was not paid. The doctor would have 90 days after treating the patient to file the lien, and the lien would take priority over any mortgage or transfer which occurs within that 90-day period.

When buying a home or commercial property, it is common for the Seller to sign an “owners affidavit”, stating that no work had been performed on the property in the last 90 days that could lead to a claim against the property. This was done to provide the Buyer, and their Lender, with assurances that the no fresh liens would arise against their interest in the property once it was conveyed. Now, with doctors and other service providers being able to file mechanic’s liens, there would be no way to protect purchasers and mortgage lenders against claims by service providers for services that are not related to improvements on the property.

Building Wealth with a Property Holding LLC

Create a Property Holding LLC and Invest in Real Estate

Real Estate Wealth Building Strategy

Investing in real estate is nothing new. However, there are smarter ways than others to own property. One of the common services we offer to our clients is to create a property holding LLC.

An LLC, or limited liability company, can be organized under the Connecticut Limit Liability Company act for almost any legal purpose. A limited liability company shields it’s members from liabilities associated with the the actions of the LLC (with some exception). Therefore, instead of holding the property as an individual or individuals, and exposing themselves to liability, property investors can minimize liability by owning the property under an LLC.

Property can either by transferred directly into an LLC via Deed, or the LLC can be funded and then purchase property. The LLC can then sign leases with tenants to rent the property, creating income while paying off equity. Any fees such as taxes, sewer or water use, insurance, maintenance, etc., can all be paid out of the LLC as an expense of doing business. The LLC members can chose to reinvest any income, or pay themselves a salary from the LLC.

At any time, property from the LLC can be sold by the members. Also, the LLC can be sold in whole as a business entity, along with all of the property. If the LLC is creating income from it’s rentals the value of the LLC can be significant.

At the Law Office of Eugene Glouzgal we help our clients form and fund their LLCs, we can help draft and records deeds to transfer property into the LLC, we can handle all of their required filings with the State, we perform the closings on the properties they want to purchase or sell, we draft custom lease agreements, we can handle evictions for non-paying tenants, and we can handle the sale of the LLC when they ant to make their exit.

Contact us today for a free consultation on how we can help you build wealth by creating a property holdings LLC so you can invest in real estate while being protected from personal liability.

Connecticut Regulation of LLC’s Rendering Professional Services

Professional Limited Liability Company Members Limited to Those Licensed in that Profession

Generally, a limited liability company, or “LLC”, may be formed in the State of Connecticut for the transacting of any business or promotion of any purpose which is lawful. Due to the exposure for liability of a partner in a partnership, many professionals choose to create a limited liability company when joining with other professionals to render professional services. However, Connecticut has placed additional regulations on the formation of an LLC that is to provide professional services.

A limited liability company may only be formed to render professional services if (1) each member of the limited liability company is licensed or otherwise authorized by law to render the professional service involved, (2) the LLC will render only one specific type of professional services and services ancillary to that purpose, but may not engage in any business other than the rendering of the professional service for which it was formed, and (3) the LLC can only render its professional services through members, managers, employees and agents that are licensed or otherwise authorized by law to do so.

What does the State of Connecticut consider to be a “professional service”? A professional service is one that requires a member of that profession that wishes to render those professional services to first obtain a license or legal authorization. Currently this list includes:

  • Dentists
  • Naturopaths
  • Chiropractors
  • Physicians and Surgeons
  • Doctors of Dentistry
  • Physical therapists
  • Occupational therapists
  • Podiatrists
  • Optometrists
  • Nurses
  • Nurse-midwives
  • Veterinarians
  • Pharmacists
  • Architects
  • Professional engineers
  • Landscape architects
  • Real estate brokers
  • Insurance producers
  • Certified public accountants and public accountants
  • Land surveyors
  • Psychologists
  • Attorneys-at-law
  • Licensed marital and family therapists
  • Licensed professional counselors
  • Licenses or certified alcohol and drug counselors and
  • Licensed clinical social workers

The law does allow certain professions to form an LLC together if (a) each member of the limited liability company is licensed or otherwise authorized by law to render any of the professional services involved, (b) the limited liability company will only render the types of services involved and those services ancillary to that profession, and (c) the LLC only renders it’s professional services through members, managers, employees and agents who are licensed or otherwise authorized by law to render the professional services involved. Psychology, marital and family therapy, social work, nursing and psychiatry professions can be combined. Medicine, surgery, occupational therapy, social work and alcohol and drug counseling professions can be combined. Medicine, surgery and chiropractic professions can be combined.

If a member of an LLC that renders a professional service loses their license or authorization to render that professional service, they are deemed to be disassociated from the LLC as an operation of law.

It should be noted that a limited liability company rendering professional services is liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its members, managers, agents or employees who are engaged in rendering professional services on behalf of the LLC. Members, managers, agents and employees engaged in rendering professional services on behalf of the LLC are only personally liable for the negligent and wrongful acts or misconduct committed by himself or herself or any person directly under his or her supervision. However, as is the entire point with forming limited liability companies for rendering professional services, individual members are only responsible for the liabilities of the LLC to the extent of their interest in the LLC, unless it is their wrongful conduct that led to the liability.

If you are looking to form an LLC for the purpose of rendering a professional service, you will need the help of an experienced business attorney. Forming an illegal LLC or failing to think through the business organization process can create civil and potentially criminal liabilities for its members, cost the members a lot of money, and eventually lead to the downfall of the organization. The regulations discussed in this article are only some of the regulations imposed on professional services by the State of Connecticut, and every profession will have its own specific regulations. The Law Office of Eugene Glouzgal offers a range of business services including LLC formation. Contact us today for a free consultation by phone at 203-794-6691, by e-mail at Glouzgal@CTAttorney.us or by using our interactive messaging and scheduling assistant.

Connecticut Increases Filing Requirements for Hospitals and Large Medical Groups

Hospitals and Large Groups Must File with Attorney General

In a new law that came into effect on October 1st, the State of Connecticut is increasing filing requirements for hospitals and large medical practices of eight or more physicians. Public Act Number 14-168, titled “An Act Concerning Notice of Acquisition, Joint Ventures, Affiliations of Group Medical Practices and Hospital Admissions, Medical Foundations and Certificates of Need.”, will require incidence and yearly filings for hospitals and medical practices that are making changes to their business or corporate structure.

First, the law requires that any group or hospital given written notice to the Attorney General within 30 days of any change in corporate or business structure if:

  1. The merger, consolidation or affiliation of a group practice with a hospital or another group practice resulting in a group of eight or more doctors;
  2. The acquisition by one group of all or substantially all of the property, assets, stock or membership interest in a hospital or another group resulting in a group of eight or more doctors;
  3. The employment by one group of all or substantially all of the physicians of a hospital or another group resulting in a group of eight or more physicians; and
  4. The acquisition of an insolvent group practices by another hospital or another group practice resulting in a group of eight or more doctors.

The written notice shall identify each party to the transaction and explain the material change in the business or organizational structure. More specifically, the notice must include a description of the nature of the proposed relationship, the names and specialties of each physician, the names of the business entities under which medical services will be provided after the change, the address of each location at which the medical services will be rendered, a description of the medical services that will be provided at each location, and the primary service area that will be covered by each location.

The new law also demands a yearly follow up filing, to be filed no later than December 31 of each year, detailing the same information as is required on the initial filing. However, the follow up filings are limited to hospitals and group practices of thirty or more physicians only.

Due to the recent changes in the medical industry, many physicians have joined hospital systems or formed medical groups, to share risk and expenses. This new law seeks to gain information on these larger medical service providers, and to keep updated records on their hospital or group size, the services they render, and the areas they cover, by placing the burden of providing this information on the medical service providers themselves.

The Law Office of Eugene Glouzgal is proud to specialize in the legal business needs of Connecticut’s medical services providers. If you are a medical services provider in Connecticut and need assistance in creating your business entity and acquiring licenses and/or staying current with the mandatory filings of the State of Connecticut, please contact us today to discuss our legal consulting services.

Connecticut Law Places Additional Burdens on Scrap Metal Industry

New Connecticut Law Places Additional Burdens on Scrap Metal Industry

Violation Can Result in Criminal Action Against Business Owner

Starting October 1, 2014, a modification to Connecticut law regarding the scrap metal industry will place new burdens on scrap metal processors. Replacing Section 21-11a of the Connecticut General Statutes, the bill entitled “An Act Concerning Scrap Metal Sold On Behalf of Municipalities” is aimed at preventing the unauthorized sale of municipal property.

What will now be section (e) of the law,  states that “no scrap metal processor…may purchase or receive property from a municipality unless the person delivering such property presents at the time of delivery a letter from the chief executive officer on the letterhead of such municipality authorizing such purchase or receipt” and “send any moneys paid for such municipal property to the chief executive officer of the municipality by first class mail.”

This law seems to make perfect sense. It is aimed at stopping the theft of municipal property, that is then scrapped for the financial benefit of the thief, and has to be replaced at a cost to tax payers. But what does it mean for the scrap metal processors?

If an item is brought for scrapping that reasonably seems to belong to a municipal department, for example a guard rail, they must request a letter from the chief of that department, for example the transportation department. If the vehicle delivering such scrap is a municipal vehicle, they must request a letter from the chief of that department which is marked on the vehicle.

Failure to request the authorization letters can result in criminal penalty. The first offense is a Class C misdemeanor, second offense is a Class B misdemeanor, and the third and any subsequent offense is a Class A misdemeanor. In Connecticut, a Class C misdemeanor is punishable by up to 3 months in prison and/or up to a $500 fine, a Class B misdemeanor is punishable by up to 6 months in prison and/or up to a $1000 fine, and a Class A misdemeanor is punishable by up to 1 year in prison and/or up to a $2000 fine.

The law also keeps all of the old requirements for the scrap metal industry, including:

  1. Recording a description for all loads of scrap metal purchased;
  2. Recording the weight of such metal;
  3. Record the price paid for such metal;
  4. Record the identification of the person delivering such metal;
  5. Take a photograph of the motor vehicle delivering such metal;
  6. Take a photograph of the license plate of the vehicle delivering such scrap metal.
  7. Maintain such records in good condition for no less than two years;
  8. Make the records open to inspection by law enforcement officers upon request during business hours
  9. Notify the local law enforcement of any person trying to sell a bronze statue, plaque, historical marker, cannon, cannon ball, bell, lamp, lighting fixture, lamp post, architectural artifact or similar item; and
  10. Not take in any keg with markings of ownership by anyone other than the person delivering it.

The punishment for violating any of these other requirements is identical to those for buying municipal scrap without proper authorization.

The requirements by this law increase the administration and fill storage costs of metal scrappers, affecting their bottom line, as well as the amounts of money they are willing to pay for scrap metal. Will these requirements meet the intended purpose of preventing unauthorized sale of municipal property? Only time will tell. In the mean time, owners of scrap metal processing stations need to educate their employees and have set procedures for the intake of scrap metal. Failure to do so could have drastic consequences.

 

A copy of the Bill that is to become this new law can be found here: http://www.cga.ct.gov/2014/TOB/H/2014HB-05506-R00-HB.htm

Conditional Considerations for Business Purchase Contract

Common Conditions for the Sale and Purchase of an Existing Business

A sale and purchase of an existing business can be mutually beneficial for both the selling and buying parties. Owners sell business so that they can retire or to free up time and money for other ventures. Buyers purchase businesses so that they can have an established business with good will and name recognition.

The first step in purchasing a business is usually a purchase contract. The Seller wants to lock the Buyer if they are going to turn down further offers. The Buyer wants to make sure the business will be theirs before they start to get the necessary documentation together. However, the purchase of a business needs to be made conditional on a few very important occurrences. It will be the job of the Buyer, or their attorney, to make sure the purchase contract contains these conditions and that if the conditions are not met, that the purchase of the business will not be binding.

Some of the common conditions contained in a Sale and Purchase Contract are:

  1. Condition on Lease of Premises: When one business owner is moving out and another moving in, it will be necessary for the business to make sure the business location will be available to them. Many commercial leases have non-assignment clauses, so a separate lease will need to be executed. This condition can also be modified to include “or other suitable premises” if the Buyer would consider moving the business location.
  2. Financing: The purchase of a business may require funds that the Buyer does not have immediately available. They may need to seek investors or take out loans. The purchase contract should be made conditional on securing the financing.
  3. Securing of Suppliers: When purchasing a business that needs to source either raw resources or product, the purchase contract should be made conditional on securing such suppliers, as without them, the business may be essentially worthless.
  4. Non-Compete: A common condition of purchase is a promise by the Seller not to compete with the buyer. This condition is usually limited in scope by geography or time frame. For example, the Seller won’t compete in the same county for a minimum of 2 years.
  5. Training: Sometimes, it is necessary for the Seller to stick around and train the Buyer in the operation of the business. The length and degree of training should be clearly identified.
  6. State Licensing: for many industries, the State the business is located in will have licenses and permits that must be applied for and issued before business can be conducted. If the licenses are not issued, the business cannot operate and may be deemed worthless.

The above conditions are just some of the considerations involved in the purchase of a business. Depending on the business and industry, each condition will be more or less necessary. Sellers and Buyers alike need to seek counsel from a business attorney so they can rest assured that their interests are protected.

At The Law Office of Eugene Glouzgal, we review the business and industry and make sure that the contracted is drafted so that the terms which are important to our client are enforceable. If you are looking to sell or purchase a business, contact us today for a free consultation.

Start a Business in Connecticut for $875 – CT LLC Formation Package

Connecticut LLC Formation Package – Start a Business in Connecticut for $875

We want to write this post to bring more attention to a flat fee service we offer to the those looking to start a business in Connecticut, our LLC Formation Package. We believe that there are two things holding people back from starting a business: cost and “the unknown”. Our LLC Formation Package is meant to address both of those roadblocks.

The LLC Formation Package is $875 and includes the State and Federal paperwork you need to begin a limited liability company, including State filing fees with expedited service. Just register in the town the business is in and the business is ready to go. We even help the partners/members draft the Operating Agreement. This makes legal services for business formation affordable for most business budgets.

We eliminate the unknown by making sure our clients are properly registered with the Secretary of State, the CT Department of Revenue Services, and everybody’s favorite, the IRS. We also make sure that you know of any business licenses you will need to conduct business in CT, depending on your industry. We review local zoning laws to make sure your business can operate  where you need it to.

Business owners need to focus their time and energy on running the business. Have piece of mind that your business is compliant and that your paperwork was coordinated by a trained and experienced legal professional.

Click for more information on our Connecticut LLC Formation Package.

Click for more information on our Attorney Fees.

How Can Business Owners Limit Personal Exposure for Business Liabilities?

Shield Yourself from Personal Responsibility for Business Liabilities

In the business world, liabilities can arise in many forms and at any time; liability on long term leases, business loans, costs of inventory and accidents that injure clients, just to name a few. One of the common goals of entrepreneurs is to limit their personal exposure to such liabilities. That is, they don’t want their pockets emptied due to mistakes by the business. So, how can an individual limit their personal liability when opening or buying a business?

There are a number of ways a human owner can gain personal protection against the liabilities of a business of which they are an owner. Some of these strategies include, but are not limited to, the following:

  1. Make sure your business is owned by some type of corporate entity. The most common type is a Limited Liability Company. In Connecticut, with some exception, “a person who is a member or manager of a limited liability company is not liable, solely by reason of being a member or manager, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise or for the acts or omissions of any other member, manager, agent or employee of the limited liability company.” You need to contact your attorney and accountant to make sure you are complying with all laws and requirements to reduce the chances of an injured party piercing the corporate veil;
  2. Speak to your insurance agent about purchasing large limits of liability insurance and strongly consider adding an umbrella policy or obtaining excess liability insurance. Contact your attorney for a review of the insurance policy;
  3. Constantly inspect your real property and perform all required maintenance, cleaning and repairs in a timely manner. Correct situations that create health and safety risks to avoid injuries. If you are not sure which maintenance, cleaning or repairs are required, or which situations create risk of injury, contact your attorney;
  4. Immediately notify any third parties of any problems, conditions or defects that are the responsibility of that party, such as your landlord or tenants. Be sure to comply with the terms of any lease in how notice is provided. If you are not sure which party is responsible for which problems, conditions or defects, or how to provide them notice, contact your attorney; and
  5. For advanced asset management, consider shielding personal assets from potential lawsuits by holding assets in other corporate entities or by transferring them to other family members. This should be done only after meeting with an attorney and a tax professional. If you wait until after a liability arises, then this transfer could be viewed as a fraudulent conveyance.

Limited personal exposure for business liabilities is not a trick, it is a shrewd business technique employed by many successful entrepreneurs. At The Law Office of Eugene Glouzgal, LLC, we help our clients reach their goals in limiting personal liability while staying compliant with all laws and regulations within their industry. If you are starting a business or buying an existing business, contact us to discuss how you can proceed to better limit you personal exposure.

Which Services Are Subject to Sales Tax in Connecticut?

Taxable Services in the State of Connecticut

If You are Having Issues with the DRS
Click to Call Attorney Glouzgal

1-203-740-1400

Do I need to charge sales tax for my services?

One of the obligations when setting up a new business is registering your business with the State of Connecticut Department of Revenue Services. Business owners will then need to remit tax payments to the State through the online portal. The two most common taxes that business owners are responsible for remitting are 1) the entity tax and 2) quarterly sales tax. It is common knowledge that any business that sells goods (for example books, cars, clothing, etc.) needs to charge sales tax. What about businesses that offer services? What about Doctors, Repairmen, house keepers and dog walkers? Below is a list of taxable services in the State of Connecticut which should help business owners answer the common question: “Do I need to charge sales tax for my services?”

Your business must register for a Sales and Use Tax permit and remit sales tax on a quarterly basis if your business provides:

  • Advertising;
  • Business analysis and consulting;
  • Cable and satellite services;
  • Computer and data processing;
  • Contractor services;
  • Cosmetic medical procedures;
  • credit information and reporting;
  • Employment agencies;
  • Extermination services;
  • Flight instruction and chartering;
  • Furniture repair;
  • Health and athletic club services;
  • Intrastate transportation services (taxis, limos, etc.)
  • Janitorial services;
  • Landscaping and horticultural services;
  • Lobbying or political consulting;
  • Locksmith services;
  • Maintenance services on real property;
  • Manicure, pedicure and other nail services;
  • “Miscellaneous personal services” including Babysitting bureaus, Bartering services for individuals, Birth certificate agencies, Buyers’ clubs, Car title and tag services, Checkroom concessions or services, Coin-operated service machines, Comfort station operations, Consumer buying services, Dating services, Debt counseling to individuals, Depilatory salons, hair removal or hair waxing, Diet workshops, Escort services, Genealogical investigation services, Hair weaving or replacement services, Locker rental, Marriage bureaus, Massage parlors, Porter services, Quilting for individuals, Rest room operations, Scalp treatment services, Shopping services for individuals, Steam baths, Tanning salons, Tattoo parlors, Turkish baths, and/or Wedding chapels;
  • Mooring and storage;
  • Motor vehicle repairs;
  • Motor vehicle towing and road side service;
  • Packing and crating;
  • Painting and lettering;
  • Parking;
  • Personnel training;
  • Pet grooming, boarding and obedience training;
  • Photographic studio services;
  • Piped-in music for businesses or professional establishments;
  • Prepaid telephone calling;
  • Private  investigation, protection, patrol, watchman and armored car services;
  • Radio or television repair;
  • Refuse removal on commercial or industrial property;
  • Renovation or repair to commercial or industrial property;
  • Repair of electrical or electronic devices;
  • Repair or maintenance of personal property, or sale of warranties/guarantees to repair;
  • Sales agent for the sale of tangible personal property;
  • “Services to industrial or commercial real property” including management, repair, renovation, and/or voluntary evaluation, prevention, treatment, containment or removal of hazardous waste or contaminants;
  • Sign painting and lettering;
  • Spa services;
  • Stenographic services;
  • Storage and mooring of non-commercial vessels;
  • Storage space;
  • Swimming pool cleaning and maintenance;
  • Telecommunications services;
  • Telephone answering services;
  • Warranty and service contracts for tangible personal property; or
  • Window cleaning.

The above list is based on information obtained from the CT DRS website as of the date of this article (March 7, 2014). The laws governing the taxable services in Connecticut are constantly changing. There are also additional regulations imposed by the State on many industries. Therefore, any new business should seek the assistance of an experienced Connecticut business attorney to make sure they are fully compliant with State Tax as well as all other regulations of that business.

If you are being audited by the DRS, or if DRS is threatening to close down your business, contact our law office for a Free Consultation. We can discuss your issues and advise you on how we can help you or your business moving forward. You can contact us by phone 1-203-740-1400 to discuss your options.

What Information is Needed to Start a Limited Liability Company in CT?

Necessary Information for Starting a Limited Liability Company (“LLC”) in CT

Created by the Connecticut Limited Liability Company Act (Chapter 613 of the Connecticut General Statutes), a limited liability company offers it’s members and/or managers a level of protection from the liabilities of doing business. The “limit” on liability is defined in CGS § 34-133 titled “Liability of members and managers to third parties”. In general, the liability of the members or managers is limited to the money already invested in the company.

Even with the obvious benefits of limited liability, the most common form of business organization is still the sole proprietorship, which offers absolutely nothing in the area of limiting owner liability for actions of the business. If you are starting a new business, you should seriously consider forming a Limited Liability Company.

What information is necessary to start a Limited Liability Company? We created a worksheet for our clients to help them provide us with all of the information we need for filing the Articles of Organization in the State of Connecticut. Click here to download our CT LLC Formation Worksheet. Please note the worksheet does not cover Agent for Service or the drafting of an Operating Agreement for multi member limited liability companies, both of which we handle on behalf of our clients.