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.

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.

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.