I just wanted to recap my seminar on business partnerships from last week at the Entrepreneurs Sandbox. Entitled All is Fair in Love and War: Navigating Business Partnerships, and playing off of Valentine’s Day, my panel and I discussed the ins and outs of business partnerships. We touched upon of course my focus, business law, as well as estate and financial planning, and marketing issues. I’d like to thank John Roth, esq. of Hawai’i Trust and Estate Counsel, Kai Ohashi, AAMS of Edward Jones, and Thomas Obungen of Slug Media LLC for their participation. Further their insight, knowledge, and personal experiences helping clients in business partnerships proved to be invaluable to the audience. A thorough discussion took place on the issues facing business partners inside and out of their business. Some of the topics included:

  1. Due Diligence of Potential Partner
  2. Choice/Forming Business Entity
  3. Operating Agreements
  4. Restrictive Covenants
  5. Goals & Metrics
  6. Succession Planning
  7. Departing Partners, Death & Disability
  8. Financing a Partnership
  9. Buy-Sell Agreements
  10. Differing Generations of Partners
  11. Partners that Have Competing Marketing/Branding Visions
  12. Communicating Internally and Externally
  13. Change of Business Partners
  14. and many more!

What I Had to Say on Having Business Partners

Attorney Ryan K. Hew enjoying hosting the seminar with a doughnut!
All is fair in love and war, including eating a doughnut while presenting on business partnerships, while the litigation partner is at the office!

Talk it Out

For this recap I am not going over the whole presentation, but instead I would highlight a couple of items. I myself have a business partner, he handles the commercial litigation. So we see a lot of business partnership breakups; it says something when the transaction attorney and commercial litigator both feel the two biggest factors for business divorce:

  1. Lack of communication
  2. Differing Expectations

If you think about it, number 2 is an off-shoot of number 1. If you and your partner have differing goals and fail to talk about those issues, then over time the gap in goals widens. This gap is sometimes too wide to overcome. For example, money issues tend to be the biggest source of complaint. Of course they are, as profit is the nature of what a partnership. If you don’t know what the law defines as a “partnership” check my other post here. Frequently, partners that contribute different amounts of capital have differing exit strategies. Also know that even when the company is making money partners fight. Yes, I’ve seen arguments over profitable businesses because the partners failed to talk about what they would with their success. Distribute? Reinvest?

Then Write it Down

Even if you and your partner have discussed the issues, if you fail to formalize those discussions that is still a lack of communication. The reason being is memories fade, goals change, and in general life happens. What happens is the partners remember conversations differently. Then law firms, like mine, spend countless hours sifting through emails, texts, and images, trying to piece together what could’ve been the agreement. So the next thing to do after discussing and agreeing is writing it down. One of the activities that separates us from other animals is our desire (some more than others) to record things. Mark Kurlansky an author that focuses on interesting history topics, talks about this in his book Paper: Paging Through History.

Not every documentation needs to be a book, but having the formalities is crucial for a healthy business partnership. This is especially true for big ticket items. Consider items such as capital contributions, members’ interest, distributions, profit/loss allocation, and member’ responsibilities and duties. With a professional’s assistance, partners can discuss what they want and then document in a legally, binding enforceable agreement. For LLCs and their members, that is an Operating Agreement. Note: I am mostly sticking to limited liability company (LLC) language just due to the nature of my practice. For partners forming a corporation these items will be discussed, but will have differing terms and restrictions due to the choice of entity.

Operating Agreements & Employment Agreements: Separated or Incorporated

One other thing about why using a professional to assist in drafting your formal agreements is best. The advice on whether to separate or incorporate several relationships and arrangements in one document as opposed to several. The reason I bring this up as an audience member had an excellent question. Their question was:

Should an Operating Agreement contain the members’ employment duties and obligations?

Generally, an Operating Agreement is used to outline the LLC’s financial and functions processes as it relates to the LLC and its members (the owners of the LLC). It acts an internal governance document of the operations with respect to the way the owners interact with each other and the entity as a whole. Yes, in an Operating Agreement duties and obligations can be placed on the members, such as a restrictive covenant for non-competition. However, employment duties and benefits, such as position/title and duties under that position, compensation, vacation may be considered in a separate arrangement, an Employment Agreement. Why?

Consider a partnership were there are multiple members, the membership may elect one of them to be the Manager in a Manager-Managed LLC. Therefore, management authority would reside in the Manager and would be spelled out in the Operating Agreement. However, for their day-to-day tasks, compensation package and benefits, and termination provisions, those may be considered under an Employment Agreement. The reason for this separation is what if the membership wants to “fire” the Manager under the Employment Agreement, but there is an understanding that individual remains a member under the terms of the Operating Agreement. Having one giant document where duties and rights are confused or entangled may be problematic in enforcement or trying to carry out, especially in tense situations. Separation sometimes provides flexibility. Obviously, the trade-off is more documentation.

Last Words: Get it Signed

That was a brief recap of some of the interesting discussions that took place at the seminar. Hopefully, this will prompt you to consider your own business partnerships and what you need to do to improve their health. One last consideration: if you get a formal agreement, then get it signed! There is no point in engaging a professional to draw up a mutually agreed upon contract to then not execute it. It is worst, to then later to get into a dispute over the very subject matter in that formal agreement. Obviously, please speak to your advisers, including an attorney in your relevant jurisdiction. While, it may be costly, consider the costs of miscommunication, then the potentiality of lawsuits due to your business partnership dispute.

I know somber last words, but cheerfully check back for future seminars and similar content.

Thanks for reading!

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Hey everyone, Happy Lunar New Year!

Lunar New Year and New Seminar

Yes, there’s a delay on my traditional post on laws related to the animal of the year. However, check out last year’s How Can I Hunt Boar in Hawaii? or 2018’s Can a Landlord Charge a Tenant Extra for a Dog? In the meantime, I’ve been busy with a number of projects. First, I’ve been putting together another seminar and panel similar to last year’s Non-Profit November: Formation & Compliance. For this February, it is All is Fair In Love and War: Navigating Business Partnerships.

This seminar will be on dealing with business partnerships, such as formation issues, estate planning and finance, and in general what it is like having a business partner. Joining me will be a panel of subject matter experts. John Roth of Hawaiʻi Trust and Estate Counsel, Kai Ohashi of Edward Jones, and Thomas Obungen of Slug Media LLC. If you are in Honolulu the day before Valentine’s Day, February 13th, 11:30 AM – 1:30 PM HST, then come to Kakaʻako’s Entrepreneur Sandbox. For more information and to buy tickets for this seminar go to Eventbrite.

Web Search Autocomplete Questions Video

So that’s one project. The other project is my staff and social media consulting friends and clients all have been urging me to do more video content. So the staff came up with this fun project.

In the video below, I answer questions to a web search’s autocomplete function. If you’ve ever started typing into an internet search bar, then there are suggestions on what the most common web searches for the word or phrase. In this case, to plug the seminar my, the staff gave me the following web search autocomplete questions:

  1. how are business partnerships |
    • how are business partnerships formed
    • what are business partnerships
    • how business partnerships work
    • how do business partnerships work
  2. why are business partnerships |
    • why are business partnerships important
    • what are business partnerships
    • why business partnerships fail
    • why business partnerships don’t work
    • why do business partnerships fail

For my answers watch the video:

HRS Definition of “Partnership”

By the way, in the video you see me try and quote what the Hawaii Revised Statutes (HRS) definition of the word “partnership.” Well, here is the specific definition in the law:

“Partnership” means an association of two or more persons to carry on as co-owners a business for profit formed under section 425-109, a predecessor law, or comparable law of another jurisdiction.

HRS §425-101

Obviously, that is the legal definition of partnership, but as you may know (or maybe not, thus the seminar and video) is business people use the term “partnership” very loosely as opposed to the legalese. For instance, someone may say, ” My partner in my LLC.” Technically, “members” is the term for a multi-member limited liability company, that is the owners of the LLC. However, the person would be indicating “partner” as their business partner within the LLC. This is just one example how legal definitions differ from everyday use of words and terms. This post, the seminar, and the video is concentrated dealing with the many issues associated with business partnerships, including definition/use, forming them, and of course, when an attorney is involved, fighting in them!

Thanks for watching and reading. Until next time!

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

The Problem and Statistics to Prove It

I just wanted to take this time to make you aware of a problem that we need to confront. Sex assault is a harm that not only impacts the victims, but society as a whole.

Consider these sobering statistics for the United States:

  • One in five women and one in 71 men will be raped at some point in their lives
  • In the U.S., one in three women and one in six men experienced some form of contact sexual violence in their lifetime
  • The lifetime cost of rape per victim is $122,461
  • Annually, rape costs the U.S. more than any other crime ($127 billion), followed by assault ($93 billion), murder ($71 billion), and drunk driving, including fatalities ($61 billion)
  • One in four girls and one in six boys will be sexually abused before they turn 18 years old
  • 30% of women were between the ages of 11 and 17 at the time of their first completed rape
  • Rape is the most under-reported crime; 63% of sexual assaults are not reported to police

These statistics and their references can be found here with other heart-wrenching data: https://www.nsvrc.org/statistics.

April is Sexual Assault Awareness month. Help us help others through supporting the SATC.

So What Can You Do About this Crisis?

First, did you know that every April, the National Sexual Violence Resource Center puts together the National Sexual Assault Awareness campaign, in honor of Sexual Assault Awareness Month (SAAM)? SAAM started in 2001 and as an annual campaign its goal is to increase public awareness and educate individuals and communities on how to prevent sexual assault.

Second, for us here in Hawaii, our firm supports the Sex Abuse Treatment Center (SATC). The SATC’s mission is to support the healing process of those assault in Hawaii AND most importantly here increase awareness. Education helps combat and reduce these terrible incidences. However, the SATC just like any organization needs help, and yes, that includes monetary donations. Every bit counts to address this issue.

So here is the thing. Even a small firm like ours can help.  We’ve decided to pledge matching donations (up to $500.00) for SATC in the hopes that people join us in giving money to SATC. We hope this shows you can do your part by joining us and organizations like SATC fight against sexual assault.

Mahalo for your consideration and please find the donation link down below.

Trejur P. Bordenave

To help this cause, please visit: https://giving.hawaiipacifichealth.org/make-a-gift/honor-memorial-giving/hew-bordenave-llp/

Riding a bike on a sidewalk can negatively impact a person’s personal injury claim and could your chances of recovery.

I enjoy walking around our office neighborhood a lot, and watching the protected bike lane on King Street & Punahou brings a couple thoughts to mind. Personally, I am glad to see the number of bike share users increasing. I also wish the City and County of Honolulu would add more bike lanes. I’ve also hear  from many friends, clients, and neighbors about bike users on the sidewalks.  On the flip side, traffic congestion  explains the desire to ride on the sidewalk. The streets in Honolulu (and in Hawaii) are scary for bike riders!

However, as a personal injury attorney, I am concerned for the general public, and particularly motor vehicle accident (MVA) clients. Why? Because where you ride your bike matters. If you ride your bike on the sidewalk, and are hit by a car, that may impact your ability to seek recovery. Compensation from insurance is often determined by variables.  One important variable is what you chose to do to contribute to the accident. Like the choice of where to ride your bike.

Why Does It Matter Where A Bike Is Ridden?

The State of Hawaii and the City and County of Honolulu put a lot of energy into encouraging alternative transportation. More bikes, buses, and walking are all goals for a livable community.  The City and County even has a dedicated page to a Bicycle program here.

These efforts are made with safety in mind.  Protected bike lanes, enlarged sidewalks, and clear street signs makes streets and sidewalks safer. If you follow the traffic laws, then getting around is predictable for all.  However, when a person walks down the middle of the street, or a rides their bike on the sidewalk, it creates an unsafe situation.  Why?  It makes traversing the area unpredictable. Additionally, it can create animosity between the various roadway users.

Most drivers, or pedestrians, do not expect to see bikes on the sidewalks.  If a bike user rides on the sidewalk and is involved in an accident, they could be deemed more at fault than the other person involved. This could mean a bar to recovery for the bike rider.  Putting it another way – it may be found that it was the bike rider’s choice to ride on the sidewalk, and getting hurt was their fault, and thus, no recovery.

What Does Honolulu Law Say About the Situation?

Following the law and knowing where you can ride your bike is critical to everyone’s safety.

Specifically, City and County provides the following on their FAQ page:

Q: Are bicyclists allowed to ride on the sidewalk?

A: The City and County of Honolulu prohibits bicyclists from riding on sidewalks within business districts or where prohibited. In all other areas, bicycles may be ridden on sidewalks provided the speed is 10 mph or less. The bicyclist must yield the right-of-way to pedestrians, giving an audible signal before overtaking them. ROH 15-18.7 

The State of Hawaii defines business districts as “the territory contiguous to and including a highway when within any six hundred feet along such highway there are buildings in use for business or industrial purposes, including but not limited to hotels, banks, or office buildings, and public buildings which occupy at least three hundred feet of frontage on one side or three hundred feet collectively on both sides of the highway.” HRS 291C-1

The Government Should Continue Their Effort To Better Educate Tourists

You can park your bike on sidewalks, but you cannot ride it in certain areas.

Many people ride bikes on the sidewalks.  My understanding, from transportation specialists, is that in many other countries riding on the sidewalk is the norm.  My business partner, Ryan, recently attended the Honolulu Society of Business Professionals (HSBP) Multimodal Transportation Luncheon.  The attendees and presenters echoed the same in their experiences. Todd Boulanger, the Executive Director of Biki (Honolulu’s bike share service) understands this issue as well. Biki  is working on ways to educate their customers, so they do not hurt themselves by riding on sidewalks when they should not. Perusing Biki’s website, I see they provide information in other Japanese about Biki services.

However, the government can and should continue to better educate the public about where to legally ride their bike. Ideally, this will help prevent accidents, whether riding on sidewalks is due to this cultural difference or not. Further, for educated bike riders that do get into accidents, at least they were following the law, and the path to recovery is more predictable.

Honolulu’s roads will likely become more busy and crowded as additional alternate means of transportation become available. There will be cars, bikers, rider sharers, bus riders, rail users, and pedestrians.

What Else Do You Think Can Be Done: Improving Cyclists’ Safety And Transportation Means

What can Honolulu do to alleviate these problems?  Please email me your thoughts. I am happy to discuss this issue with you. Or if you have ideas, maybe we can approach a legislator to introduce a bill for the legislative process. I think there are opportunities to make Honolulu a safe bike riding city for all.

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Happy Lunar New Year!

As some of you know I do a post every year related to the Chinese zodiac animal of the New Year. Last year it was about landlord’s charging extra rent for dogs. The year prior to that one was, can you keep chickens in your backyard. Going to back when I started this tradition, in 2016, I wrote about can you own a monkey in Hawaii. Thank goodness dragon is still five years away! I have no idea what I am going to do that year …

2019 is Year of the Boar, so we are going hunting. Well, not literally, but I am going to cover the general basics for legally hunting feral pigs (sus scrofa scrofa) in the State of Hawaii.

Sus scrofa scrofa.

What do I Need to Hunt Legally?

Before getting to the paperwork, in general you should understand that hunting animals in Hawaii is largely regulated by the Department of Land and Natural Resources (DLNR).  DLNR is responsible for the management of public lands and all the interests therein, including the animals. So if you are planning to hunt and have further questions, DLNR is likely who you will be contacting.

With regard to the paperwork, a hunting in Hawaii requires a hunting license. A hunting license is necessary whether you are going to be hunting on public or private lands. In order to purchase a hunting license though you must either possess:

  1. a Hawaii Hunter Education Wallet Card; OR
  2. a Letter of Exemption.

In case of 1., you’ve passed the Hawaii Hunter Education Class, then received a Hunter Certification Card. In the case of 2., that means you have received an out-of-state hunter education card or obtained a Hawaii Hunting License prior to July 1, 1990. Specifically, for non-residents you will need complete the non-resident Letter of Exemption Form and submit it as an application to DLNR. Obviously, once you submit your application the government will review, process, and ideally approve it. Like any government process, there will be additional procedures after approval. However, with approval you should be able to purchase a Hawaii hunting license. If you are a nonresident, then you will likely have to work with your local hunter education office to get certification or proof to be submitted to DLNR to obtain the Letter of Exemption.

Go Hunt, Hawaii, a DLNR website is the State’s official hunting resource and provides a schedule of classes to take basic Hunter Education as well as an easy to follow flowchart on the basics of hunting.

What if I am a Nonimmigrant Alien?

If you are coming to the United States and temporarily bringing firearms and ammunition into the United States, then the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has a FAQ to address these issues. Obviously, this is just a general FAQ and any specific concerns may require more planning and communication with the agency or others involved, such as your travel arrangements.

What About Bringing Firearms and Ammunition Into Hawaii?

Firearms and ammunition being brought into the state must be registered.

Firearms and ammunition brought into Hawaii must be registered within 48 hours after their arrival with the Chief of Police of the county of one’s residence, business or sojourn. So whatever islands you are heading to, you have to register your hunting weapons and ammunition. Understand that while DLNR regulates public lands, the regulation and enforcement of firearms happens at the county-level, so the police chiefs of the various counties have control. So you will want to contact the district police station on the island you are heading to or an office of the Division of Conservation and Resources Enforcement (DOCARE).

What About Minors and Firearms?

Minors, those who are 15 years and younger, that are hunting with a firearm must obtain a permit from the county police department.

What if I am Disabled Hunter?

Those with disabilities are suggested by DLNR to review the vehicle permit application and the cross-bow permit application. There may be additional requirements and issues. Therefore, it would probably be best to contact DLNR.

Where Can I Hunt Boar in Hawaii?

Each island has different zones, animals, and other variables to go hunting. Check the DLNR rules and regulations.

Ok, once you’ve squared away your hunting license where can you go to hunt boars? Well, in terms of public lands feral pigs may be hunted on Hawaii (also known as the “Big Island”), Maui, Molokai, Oahu, and Kauai. There are special zones for public lands hunting. It is best to check maps and understand the terrain. To be specific DLNR provides the Game Mammal Hunting Rules as a downloadable PDF. If you go through these Hawaii Administrative Rules you will see a number of maps, charts, and exhibits that discusses each of the islands zones, hunting units, means of hunting, bag limits, open hunting periods, open hunting days, and special conditions and restrictions. It is quite explicit. In addition, they provide many of these charts and tables for each of the islands as follows:

Yes, Lanai has a page as well, but this post is concentrated on feral pig hunting.

What about Private Lands?

In addition to everything indicated prior, that is having a valid hunting license, doing your hunting during limited hours, you obviously need the permission of the landowner. The exception as to what is okay to hunt with, that is setting weapons and method, hunting fees, and special prohibits are set by the landowner. More on those topics ahead.

Whoever Goes Hunting Are They Required to Have Special Clothing?

Blaze orange garment is a must for anyone part of the hunt. Hawaii rules specific what is a must for this garment.

Yes, any person who goes on the hunt in a public hunting area basically needs to wear something specific. Think orange. That is whether the person is serving as a guide, accompanying or assisting the hunter, and the hunter themselves needs to be wearing an exterior blaze orange garment. The rules on this blaze orange garment are very specific, the point being safety. So the blaze orange garment while engaging in any of those hunting activities:

  1. may be a shirt, vest, coat or jacket;
  2. the material must be commercially manufactured and may be either solid or mesh with a maximum mesh size of one-eighth inch; and
  3. the use of camouflage orange is PROHIBITED.

Finally, these blaze orange garments are not required on designated archery only public hunting areas.

When Can I Hunt Boar? What Times During the Year and Day?

Game mammals (which includes feral pigs) may only be hunted from one-half hour prior to sunrise and until one-half hour after sunset. This is year-round. It is prohibited by law to hunt during one-half hour after sunset and one-half hour before sunrise. Basically, after the sun goes down and until rises again hunting is illegal. Again, much like the orange clothing requirement, safety is an issue.

How can I Hunt Boar? What Tools and Methods are Okay?

What about Using Flashlights?

So from the prior question and answer, you may be thinking what if we lit up the area? DLNR prohibits the use of any form of artificial light for hunting.

What about Dogs, Firearms, Bows and Crossbows or Melee weapons?

From DLNR’s Game Mammal Hunting page:

When hunting with dogs where permitted, hunters may use any muzzeloading rifle with a minimum of 0.45 caliber bore diameter; any rifle using at least a 0.22 caliber magnum load or center fire cartridge; shotguns loaded with slugs or 00 or larger buckshot or spears or knives. When hunting without dogs, hunters may use any rifle with a muzzle energy rating of 1,200 foot pounds or more; shotguns loaded with 00 or larger buckshot and muzzleloader rifles with a minimum of 0.45 caliber bore diameter (Breech loaders may not be used during muzzleloader only designated hunts). When hunting with a bow, the following drawing tension requirements are applicable: Long bows must have a minimum of 40 pounds at a 28-inch draw; Recurved bows must have a minimum of 35 pounds; Compound bows must have a minimum of 30 pounds.

Last Reminder: General Information and On Feral Pigs Only

Remember, we are only talking about feral pigs in this post, which falls under game mammals. Also much of this is general information provided on DLNR’s webpages, but when dealing with activities, such as hunting, then there are a lot of safety issues to deal with.  Additionally, for this post everything discussed here is on feral pigs. While some of these rules and regulations apply to other animals, such as feral goat – there are slightly different permit requirements for other game mammals. For example, deer, wallabies, and wild cattle are protected. Further, game birds are regulated both on public and private lands. So again, you are going to have to do some homework for those animals. Many people get turned away at the license agent’s counter due to being unaware or requirements. Research and plan ahead!

Good luck and good hunting! May you find the Year of the Boar prosperous and full of bounty!  As always, thanks for stopping by and reading.

-RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Dear Hawaii Small Business Owner I reach out to you on this post as …

A Small Law Firm Owner that Has Legislative Experience and Works with Businesses

I am letting you know that the Hawaii legislature has a number of minimum wage bills introduced this legislative session (2019). I am an owner and Managing Partner of a small law firm here in Honolulu, and of course any legislation that may impact my operations and my clients then I do have concerns. It is not only as business attorney, but as an owner as well. Additionally, I spent 4 legislative sessions as a legislative aide, committee clerk, and then attorney for the Hawaii House Labor, and then the Judiciary Committees. So therefore, I am in a unique position to share my concern via legalese, but also educate others as to the legislative process.

The Hearing Information and the Minimum Wage Bills

Having communicated that, I share the following:

  • The Hawaii Senate Committee on Labor, Culture and the Arts has scheduled a hearing. It is on Thursday, January 31 at 3:00 p.m. The following bills related to minimum wage are being heard: (A) SB 789; and (B) SB 1248. These two bills, as currently drafted, would: (A) increase the minimum wage to $12.00 per hour beginning 1/1/2022; and (B) provide an income tax credit for qualifying small businesses to offset the increase in the minimum hourly rate that employers must pay employees, and increase the minimum wage rate each year from 2020 through 2024.
  • Here is the Hearing Notice.

Note that the submitting of testimony for the hearing of bills may impact some legislators’ decisions on how to vote or recommend changes to a piece of legislation. As a constituency, Hawaii small business owners should be heard on matters that impact them. However, you have to write and submit the testimony to them to have it part of the process. Further, if you have time, then appearing in-person at the hearing may also be impactful. If you have questions on drafting and submitting testimony online, and/or testifying in person, then feel free to ask or email me at ryan@hewbordenave.com.

Thanks for reading this, now go submit some testimony and be a part of the Hawaii legislative process!

-RKH

Your Personal Resolutions vs. Corporate Resolutions

So we are midway through January 2019 as of this post. How are your New Year’s Resolutions coming along? Are you preparing for your 2018 tax returns? Government shutdown or no the IRS will still be collecting taxes, so that’s always a struggle. In particular keeping your accounting and records in order to help yourself or your accountant.  So working on your taxes and helping out your accountant, whether you own a business or not, may be a personal resolution.

If you are responsible for a corporation’s records you probably want to make it a personal goal to make it the corporation’s goals to be prepared and organized for corporate meetings and docs.

For businesses though, another issue they may struggle in trying to do better each year is in their record keeping. Particularly, a problem acute to corporations, is documenting a corporate board’s decision-making process. Sometimes for corporate compliance concerns documenting the board’s decisions is crucial. It might be what is at issue in an IRS audit or an investigation by a licensing/permitting government agency.

From following the Articles of Incorporation, By-laws, calling meetings, setting agendas, sending notice, etc … there is a lot of keep track of for corporate formalities. One of the important documents in the corporate governance and record keeping process is the corporate resolution.

Understanding Corporate Resolutions

Corporate resolutions should be stored with other records like minutes.

Good record keeping, including documenting resolutions is key for corporate governance and compliance.

So what is a corporate resolution exactly? Corporations are legal persons. While, they are not living, breathing people like you and me they are persons under the law. They can own property, sue others, and be sued themselves. However, in order to do something, that is take action, corporation’s have boards that make decisions. In that way, corporate resolutions are like personal resolutions. Where you are resolved to accomplish something, like eat better or exercise more, a corporation is resolved to take out a loan or buy a piece of property.

For more information on corporate resolutions download and read the following One-Sheet. It is meant to answer the basic questions of corporate resolutions: ONE-SHEET: WHAT ARE CORPORATE RESOLUTIONS?

Many corporations spend a lot of money on their corporate formalities and governance items, such as:

  1. Proper notice and running of meetings;
  2. Timely annual filings and tax returns;
  3. Well-draft resolutions and minutes; and
  4. Documenting decision-making processes.

With so many stakeholders interested in corporate actions, such as shareholders, directors, officers, executives, IRS agents, licensing boards, regulators, environmentalists, and social activists corporate resolutions are just one of the many records that need to be maintained.

Resolutions Used in Other Organizations

Other organizations also use resolutions.

A variety of organizations and associations also use resolutions. They just do not call theirs “corporate resolutions”.

Finally, realize that for-profit corporations’ boards are not the only boards that should be documenting their actions and decision-making. That is resolutions are not only for them. Consider these situations:

  1. legislative bodies, their committees, and boards/agencies showing how they met and discussed the passing of laws or changing of regulations;
  2. nonprofit boards should avoid self-dealing, conflicts of interests, and the like as certain actions may be perceived abusing their charitable and tax exemption status for 501(c)(3) corporations, thus answering inquiries by the IRS and state regulators;
  3. homeowners’ and condo association boards where the decision to implement house rules, policies, and/or improvements could be challenged by owners or by injured parties for liability purposes; and
  4. yes, even LLCs and partnerships may use resolutions, they just do not call them “corporate resolutions”.

Resolutions in general are just a document of an action to be taken. Whether they pass or not a corporate board is something else. Corporate resolutions is just one of the tools in the corporate governance and compliance process. So anyone forming a corporation, serving as an officer/director, or becoming a shareholder should familiarize themselves with corporate records.  If your new to proper corporate governance and drafting of resolutions, then you may want to consider a lawyer’s help.

Finally, for your personal resolutions good luck!

-RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Thank you to all our veterans! Happy Veterans Day!

Support for Veterans Through Business Ownership

Happy Veterans Day and thank you to all the people who have enlisted to serve our country. I thank all veterans, but this post is mainly for highlighting those resources available to vets for small business ownership. As it is a topic that I care about and my personal sentiment is if you as a vet have taken the sacrifice in defending our country, then we can sacrifice some time to educate and help the transition to successful civilian life.

One path can be owning your own business.  I find that here in Hawaii, so many military personnel consider settling down in the islands after they are done with their military service. Then the question turns into opening a business due to the opportunities of being a contractor.  However, unfortunately business law tends to be abstract and also given the way the islands tends to do business and regulation that adds to their complexity. So hopefully if you, as a vet (or their spouse) are reading this, you find it helpful as a start.

Getting ready to become a business owner as a Veteran means educating yourself on aspects of small business ownership life. Fortunately, there are a lot of resources.

What a Vet Should Learn Prior to Starting a Business

In the past have had the fortune of conducting one of my favorite seminars as a part of the Boots 2 Business (B2B) program. More on that down below. Specifically, entity formation, but as an attorney I would stress understanding more than just choosing between LLC or corporation. If opening a business as a vet consider the following:

  1. forming a business entity;
  2. differences between LLCs and corporations;
  3. structuring and governing the entity you choose;
  4. tax and accounting issues;
  5. basics of contract law;
  6. understand local and state regulations;
  7. applying to be a government contractor;
  8. if you have a service-related disability, then understanding the program requirements for the Service-Disabled Veteran-Owned Small Business Program;
  9. moving your business and/or operating in multiple states; and
  10. if you are going to have a partner, then really understanding what a business partnership entails.

This is not an exhaustive list, but what I’ve come across in terms of frequently asked questions or issues. There are many other aspects such, as operational, marketing, human resource, and financial concerns for business ownership. In terms of where to get that education the B2B program is an educational and training program offered by the U.S. Small Business Administration (SBA). It is put out under the Department of Defense’s (DOD) Transition Assistance Program (TAP) and basically gives a survey course of business ownership. Note that it is open not only to Veterans, but also Active Duty Service members, and their spouses. Definitely worth a check out if you are considering opening a business an eligible.

Other Resources

In addition to the US SBA’s main website, if you are in Hawaii, then consider the following:

  • The SBA local office
  • The Veteran’s Business Outreach Center of the Pacific (VBOC)– The VBOC is a program of the University of Hawaiʻi at Hilo and funded partly by the SBA. It is committed to assisting veteran entrepreneurs by providing access to advisers on business and strategic planning, marketing, financial decisions, and starting, running, and exiting a small business.
  • Hawai’i Small Business Development Center (SBDC)– The SBDC is also funded in part through the SBA, but also by the State of Hawaii. The SBDC provides advice, research, and training for business owners.
  • SCORE Hawaii– is an organization dedicated to helping small businesses via education and mentorship. So they offer a varieties of educational activities, such as low-cost workshops or access to *mentoring.

*Note: whenever counseling with a new potential business owner client, I always tell them the biggest thing you can do for yourself is finding a good mentor.

Final Words

Sometimes closing down isn’t permanent. Sometimes you need a change of plan to reopen. The main goal is having a plan to execute.

Usually, military people transitioning to civilian life or vets have saved enough come to me when starting a new business. I would say that energy and enthusiasm is always enjoyable to work with, but as any small business owner can tell you there are other stresses. The stress of making it work. Stress of work-life balance. The stress of moving out of state. Sadness of closing down.

Just remember that there are all these resources not only to help start the business, but helping you move through your life of owning a business. For an attorney’s part, we do help with the formation, but also advising strategic decisions, which may or may not be tied to the business. One particular situation I see is military families starting a business here and then moving back to their home state. The question is what to do with the Hawaii-based business. This one-sheet should answer some preliminary questions, but as always you probably want to speak directly to an attorney for planning. Why? There is no one size fits all plan for every type of business owner. However, gaining key advice helps with strategic planning and I feel that veterans know the value of having a plan.

Finally, I would like to extend a big mahalo to all of the veterans (and to the family members that support them) for your dedication and service to your country. Thank you.

– RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

2nd Anniversary

What’s Going On with Our 2nd Anniversary

It is our 2nd Anniversary and we are celebrating by inviting you to our Open House! If you are in the Honolulu area on Thursday, November 1st then stop by our offices to meet with us, our staff, and learn something. We will be conducting five (5) free seminars throughout the day. I, Ryan K. Hew, will be doing various business law topics meant for small business owners. My partner, Trejur P. Bordenave, will be going over the basics of personal injury and making a claim.

2nd Anniversary

Join us on November 1st for our free seminars!

Sign Up at EventBrite

So if you are interested in:

  • Internet and Social Media Law for Small Business Owners
  • Contracts for Small Business Owners
  • Forming a Business Entity
  • Plaintiff’s Injury Claims: What to do if you get hurt

Then please find the details and sign-up at Eventbrite. Also throughout the day, if you want to swing by and say hi or sign up for an initial consult for another date and time that would be great too.

Thanks and see you around!

-RKH

2018 Oahu pedestrian deaths on the rise

The Rise In Pedestrian Fatalities Is Shocking.

As a father with a young daughter, and someone who enjoys walking around our office and neighborhood, it is shocking to read about the rise of pedestrian accidents leading to fatalities here on Oahu. The Department of Transportation reports that Oahu has gone from 3 recorded deaths from January to September 2017, to 19 pedestrian-related fatalities for the same period in 2018. This 525% increase is disheartening to say the least. There are some reports, primarily in the news, that fault lies in part to people crossing the street where there is no crosswalk. However, make no mistake, drivers should always be vigilant even where no crosswalks are present.  Also, but for the two that occurred this past Tuesday, they all happened at night.

S. Beretania crosswalk

I walk around the office on S. Beretania to grab a bite and sometimes even I can’t help but feel anxious about crossing the street.

Is Enforcement The Answer?

Is there something that we can do to address this problem on the systemic level? The Honolulu Police Department recently issued a mandate to increase enforcement for both pedestrians and drivers.  However, the question remains, is it really an enforcement issue? As highlighted above, sometimes it is not solely the driver’s fault, but what about other facts? Does the government need to rethink the  streetlights and road markings?

An important part of my job is to ask questions. I spend a lot of time reviewing the facts of our personal injury  cases. I often focus on how my client came to their injures.  If there is a trend in similar cases, I begin to wonder what environmental commonalities are present, and if there is something that can be done. When this logic is applied to societal problems, such as a dramatic rise in pedestrian accidents, there may be outlier problems, but there are always underlying root causes. in the end, enforcement is part of the resolution, but this prompts the question of why is it happening, and at such an increase year-to-year?

Send Me Your Thoughts And Stories.

What do you think is going on? Let me know your thoughts and stories. I bet some of you have had some close calls, and I would like hear from you. Soon, I plan to compile the information and send a letter to the City and County of Oahu and the State Legislature to consider commissioning a study to take a look at this issue, particularly if the trend continues. You can email me at trejur@hewbordenave.com.

Stay safe!

UPDATES TO THIS POST

Update to this post, KHON2 reports (10/5/2018): HPD cracks down on violators to prevent more deaths on the roads

Update to this post, in the Star Advertiser (10/10/2018): Pedestrian Hit By Truck On Pali Highway Dies From Injuries, which is just one day after a similar report of 2 different pedestrian hit-and-run accidents, resulting in the tragic death of one.

Update to this post, KHON 2 reports (2/23/2019): Mayor unveils pedestrian safety measures.

The 7 measures are specifically as follows:

  1. “Look All Ways” Stencils – This effort will begin with stencil installations at 20 locations where pedestrian traffic incidents have occurred (see attached picture). For future installations, locations will be determined by incident occurrence and community need. The initial installation of stenciling will be performed by the Department of Facility Maintenance (DFM). The city will also work with community service organizations (i.e. Boy Scouts/Girl Scouts; Lions Clubs; Hawai‘i Bicycling League; etc.) to assist in stenciling community crossing areas. These group stenciling efforts will be supervised by workers with the Department of Facility Maintenance.

  2. In-Road Pedestrian Safety Delineators – The Department of Facility Maintenance will install 100 in-road pedestrian safety delineators at locations where pedestrian traffic incidents have occurred, and where in-crosswalk installation makes sense. These locations will be determined in conjunction with the city’s Department of Transportation Services (DTS).

  3. Pedestrian Safety Flags – Two hundred high visibility pedestrian safety flags printed with a “Look All Ways” logo will be distributed across urban Honolulu. The priority will be at high traffic intersections, or intersections with recent incidents. Community input will also be taken into account. More pedestrian safety flags will be ordered as the need arises.

  4. O‘ahu Pedestrian Plan – The City and County is currently developing an O‘ahu Pedestrian Plan, which is scheduled to be completed in the spring. The plan will define the steps needed to make Honolulu a more walkable, livable, and healthy city. Walking is the oldest and most efficient, affordable, and environmentally-friendly form of transportation; it’s how transit riders reach their destinations, how drivers get from the parking lot to the front door, and how cyclists get from the bike rack to a place of business. The O‘ahu Pedestrian Plan will evaluate existing conditions and propose/prioritize pedestrian improvement projects and programs facilitating multimodal travel consistent with the city’s Complete Streets Ordinance. The plan will complement the Statewide Pedestrian Master Plan that the State of Hawai‘i Department of Transportation (HDOT) prepared for the state’s highway system in 2013.

  5. Proposed State Legislation – Two proposed bills have been submitted to the state Legislature as part of Mayor Caldwell’s legislative package. One bill focuses on not allowing right turns on red. The second bill discusses red light photo enforcement. While the city hopes both pieces of legislation are passed, the introduction of these measures also help raise awareness about pedestrian and cycling safety. Meanwhile, City Council Chair Emeritus Menor has introduced a bill at the city level that would allow drivers to use their hazard lights when stopped at a mid-block crosswalk.  “Government needs to implement a multifaceted approach that involves a range of solutions,” said City Council Chair Emeritus Ron Menor. “State and City government need to be proactive in exhaustively exploring any and all strategies and measures to reduce or eliminate pedestrian fatalities in the City and County of Honolulu.” Menor has also secured Mayor Caldwell’s agreement to support Resolution 19-32, which asks the administration to work jointly with the City Council to organize a conference, open to the public, focusing on pedestrian safety. 

  6. HPD DUI Enforcement – The Honolulu Police Department is continuing to perform DUI roadblocks, but is also committing to more roving DUI patrols, where officers use patrol cars to pull over suspected drunken or drugged drivers.

  7. New “Look All Ways” PSA Campaign – As part of this larger pedestrian safety initiative, the City and County of Honolulu will be creating a “Look All Ways” PSA that will air on local television and radio.

You can also find a copy of Mayor Caldwell’s announcement of the 7-point package “Look All Ways” on the City and County’s website here.  I want to hear your thoughts and comments, so please feel free to email me at Trejur@hewbordenave.com!

STAY SAFE EVERYONE AND LOOK ALL WAYS!