independent contractor agreement

6 Mayıs 2012 Pazar

New Laws for Illinois in 2012

To contact us Click HERE

Illinois will add 200 new laws on January 1, 2012. This article by Christen Drew of WSILTV.com provides an alphabetical list of the new laws. We hope you find it helpful!

Thanks to our friend, Caryn Coyle, for asking us about this topic on our facebook wall.

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

How to Transfer Your Assets to a Revocable Trust and Save on Legal Fees

To contact us Click HERE

In our previous article, "Crash Course in Wills and Trusts: Part I," we discussed the importance of a good estate plan and introduced you to the basic elements of such a plan. In "Trusts and Wills: Which is Right for You?," we generally recommended a revocable living trust over a will as the primary vehicle for your estate plan. This week, we will explain the trust funding process. Hopefully, we will be able to help you determine which parts of the process you can accomplish without an attorney, with the aim of reducing your legal fees.

As we explained in the above articles, trusts are legal instruments that direct how certain property will be distributed and maintained. However, your property must generally be transferred to a trust before it will be subject to the trust's provisions. In this respect, trusts differ from wills, which must merely describe the property in question and indicate how you wish the property to be distributed.
Before we dive into how to fund your trust, a few notes:

You Retain Control: If you are worried about transferring title to your property to your revocable living trust, never fear. In most cases the creator of a revocable living trust is also both the trustee and beneficiary of the trust during his or her lifetime. This means that if you transfer your assets into a revocable living trust, you will retain the same amount of control over those assets during your lifetime that you had prior to the transfer. You will always have the ability to revoke or amend the trust.

You Don't Have to Transfer All of Your Assets: If certain assets totaling less than $100,000 have not been transferred into your trust at the time of your death, the executor can file a small estate affidavit. This affidavit will act to sweep up to $100,000 of personal property (i.e. property that is not real estate) into your trust, allowing this property to avoid probate. For this reason, we generally do not recommend transferring your primary checking account into your trust. The small estate affidavit can also cover your cars and furniture so long as the total amount of personal property that you leave out of your trust totals less than $100,000.

You Must Transfer SOME Property to Your Trust: Trusts are not legally effective until they have been funded with at least SOME property. This means that you cannot rely on the small estate affidavit to sweep ALL of your property into the trust upon your death. If your trust is drafted, but does not possess title to any property at your death, your estate will be treated as if no trust was in place at all.

So, once your trust is drafted, how do you go about transferring your property to the trust, and how much of this process can you accomplish on your own? The answer to this question depends on the type of property you are trying to transfer, the amount of time you are willing to personally allocate to trust funding, and your comfort level in dealing personally with financial institutions and forms. Your attorney should provide you with an outline of the steps necessary to fund your trust, based on your particular asset structure, at which point you will be able to decide which steps you would prefer to handle on your own.
Below is a list of the steps necessary to transfer particular types of assets to your trust:

Retirement Accounts: The institution that manages your accounts can provide you with forms to change the beneficiary designation for your account. We generally recommend that if you are married, you name your spouse as the primary beneficiary and the trust as successor beneficiary.

Stocks and Mutual Funds: In order to transfer stocks or mutual funds, you should fill out a stock assignment form supplied by your brokerage company.

Bonds: Savings bonds can be transferred to your account by filling out form PD F 1851 E, which can be obtained from www.savingsbonds.gov.

Life Insurance: Your insurance provider will be able to provide you with change of beneficiary forms. Like your retirement account, you should generally name your spouse as the primary beneficiary and the trust as the successor beneficiary.

Business Interests: If you are the owner or part owner of a closely held corporation or LLC, you should either transfer your shares of the company to the trust or amend the company's bylaws or operating agreement to deal with succession of shares upon your death. The most effective way to accomplish your goals with respect to your company will depend on your individual circumstances. This process should be handled by your attorney.

Real Estate: Generally, you should execute a deed transferring your real estate to the trust. Again, the best way to handle this process will depend on your individual circumstances and goals. This is another step that should always be handled by your attorney. Once drafted, you or your attorney must record the deed with your county's Recorder of Deeds.

Bank Accounts: Depending on the amount of personal property you possess, it may be advisable to transfer your savings accounts, and possibly even your checking accounts, to the trust. This can be accomplished by delivering a letter of instruction to the bank retitling such accounts so that they are held by the trust.

Remaining Personal Property: Again, depending on the amount of personal property you own, it may be advisable to transfer all of your personal property (e.g. furniture, art, heirlooms, etc.) en masse, to the trust. To accomplish this, your attorney should draft a quitclaim bill of sale.

Even the most savvy individuals should leave real estate transfers, business asset transfers, and quitclaim bills of sale to their attorneys. However, depending on your tolerance for dealing with financial institutions, you may be able to save on legal fees by personally handling, after consultation with your attorney, the transfer of your retirement accounts, life insurance policies, stocks, mutual fonds, bonds, and bank accounts.
Although the trust funding process may seem like a lot of effort, the time and attorney fees that you spend properly funding your trust will pale in comparison to the time and money that you will ultimately be saving your loved ones.

O'Flaherty Law is based in Downers Grove and Chicago, Illinois. Our attorneys have expertise in Corporate Representation, Commercial Litigation, Divorce, Bankruptcy, Estate Planning, and DUI defense. Please visit our website at www.oflaherty-law.com for more information and resources or e-mail us at info@oflaherty-law.com with any questions or suggestions for future articles.

How to Get Out of a Contract - Defenses to Breach of Contract Explained

To contact us Click HERE

That contract you signed with Oppressive Corp. seemed like a pretty great deal at the time, but no your circumstances have changed and you are looking for a way out; or maybe you didn't read the fine print before signing on the dotted line. Are you still bound by the contract? Maybe not.
The following contract defenses provide an arsenal of not-so-secret weapons that you can use to get out of an unfavorable contract. This article will provide you with a basic understanding of these defenses, enhancing your understanding of the contracts you sign as well as your ability to identify the situations where an attorney consultation may be useful.
Defenses to breach of contract:

Material breach by the other party: If the person that you contracted with has himself breached the contract, then you are no longer bound by it, so long as the breach is material. A breach is material if it is the type of breach that defeats the purpose of the contract. In other words, a minor deviation from the terms of the contract by the other side does not absolve you of your duty to perform.

Anticipatory Repudiation: If the other party represents or takes action to indicate that he does not intend to perform his obligations under the contract, you are absolved of your own obligation to perform. This defense would arise if, for example, you contract to buy a television from a friend only to discover that, between the time of contracting and the exchange, your friend has put the television up for auction.

Duress: If you were forced to sign the contract against your will, you are not bound by it. This defense includes not only physical duress (the proverbial gun to your head), but also economic duress. Economic duress is defined as the unlawful use of financial or economic pressure or threats to force a person to contract.

Unconscionability: An unconscionable contract is one that is extremely one-sided in favor of the party with superior bargaining power. An example of an unconscionable contract is an unfair contract that exploits a poorly educated or impoverished consumer. Individual clauses within contracts have also been held to be unconscionable. This usually occurs in the context of a take-it-or-leave-it contract, called an adhesion contract, where the party with superior bargaining power drastically limits the rights and remedies of the other party without significantly limiting its own.

Mistake: Courts will not enforce a contract where there is a material mistake regarding the subject matter, so long as the mistake is mutual. If only one party is mistaken, courts will not enforce the contract if the other party knew of the mistake and should have acted to prevent it.

Fraud: If you entered into a contract because of a material misrepresentation of fact by the other party, the contract is not enforceable against you. It will, however be enforceable against the party committing the fraud. Bear in mind that failure to disclose material information (omission) also qualifies as fraud.

Undue influence: A contract will not be upheld where one party exercises control over another party so as to overcome that party's independent judgment. The definition of undue influence includes, but is not limited to, exploitation of a vulnerability, such as a mental deficiency; exploitation of a confidential relationship; blackmail; bad faith threats of criminal prosecution; or extortion.

Impracticability: If an unexpected event makes performance of the contract impossible or impracticable, neither party will be bound by the contract. Examples of impracticability include the death of an individual who is to provide a service; destruction of property that is the subject of the contract through a natural disaster, or a new law that renders the contract illegal.

Some other considerations:

Loopholes: The terms of the contract may provide you with a loophole that provides you with an out. Be sure to have your lawyer review your contract.

Statutes: State or federal statutes may invalidate your contract or certain clauses within it.

One-sided clauses: Many states will interpret a one-sided contract clause as reciprocal. For example a provision requiring only one party of a contract to pay attorney fees if it loses in litigation may be applied to both parties by the courts.

Ambiguities: Ambiguities in the contract will be interpreted against the drafter, especially where the drafter has superior bargaining power.

Modification: Often the other party will be willing to renegotiate and modify the contract based on changed circumstances.

Non-compete Agreements

To contact us Click HERE

As part of your employment contract, you may have signed an agreement not to compete. These agreements give employers the protection they need to prevent employees from jumping ship to a competitor and bringing along any skills, information, client lists, and secrets they may have obtained from their previous employer. Employers need not worry about competitors poaching their most valuable employees to their detriment. However, these agreements inhibit an individual’s freedom to choose their own place of employment, and are oftentimes harsh or overly broad. As a result, such agreements are frequently contested in court. How do you know if your non-compete agreement is enforceable?
Primarily, a non-compete agreement must be reasonable in scope. This is determined by whether it protects a legitimate business interest, doesn’t place an undue hardship on the employee, and doesn’t violate public policy.
A business that has a near-permanent relationship with its clients, such as physicians or insurance companies, has an interest in protecting their continued business with the client and may restrict an employee from attracting their clients to their new employer. Similarly, if an employee has learned trade secrets or confidential information, their employer may restrict their freedom to work for a competitor in order to protect this information. A clause that prohibits a former employee from doing any activity with a competitor, even activities that aren’t a threat to their interests, may be considered too broad to be enforceable.
For example, an enforceable agreement may prevent a salesman or a researcher from taking a job with a competitor for the same position, and bring his clients or expertise to his new job. However, an agreement that prevents a salesman or a researcher from going to a competitor to work as a mechanic may be unenforceable, as the expertise he will be applying at his new job wasn’t acquired at his old job and isn’t a threat to his former employer’s interests.
Additionally, the agreement not to compete must not impose undue hardship on the employee. A clause prohibiting the employee from working for a competitor in a 10 mile radius may be acceptable, but one that prohibits him from working for any competitor in North America may not.
Finally, the agreement must not go against public policy. Agreements that are illegal, give employers virtual monopolies on the workforce in that field or location, or unduly deprive an employee from choosing to go work elsewhere may be unenforceable.
All agreements must be supported by independent consideration—in other words, getting something in return for your promise to adhere to the agreement. Most of the time, the offer to hire in return for accepting the non-compete agreement is sufficient. If you are already hired and are offered a non-compete agreement, continued employment with the employer or a monetary payment can also be acceptable.
Though it may seem like non-compete agreements are easily contested, in reality most agreements are upheld. Contracts in general are highly valued by the courts, as they are hesitant to override an independent agreement between two private entities. Determining whether an agreement is reasonable is done on a case-by-case basis and you should contact an attorney before deciding to leave an employer with which you have a non-compete agreement.
-- Submitted by Eric Z. Turner

March 22: Open Bar and Small Business Primer at Shanahan's in Woodridge

To contact us Click HERE

O'Flaherty Law and DDZ Accountng invite you to join us on Thursday, March 22, 2012 for an informative and fun evening at Shanahan's pub (1999 W. 75h St., Woodridge, Illinois). Open bar and free appetizers will run from 7pm to 9pm.

Attorney Kevin P. O'Flaherty, accountant D Zorea, financial adviser Justin J. Villanueva, and commercial real estate broker Troy Golden will discuss strategies for small business success. Whether you are just starting your business or an experienced business owner looking for a tune-up, this event will provide you with a road map to keep your business legally and financially secure.
After the presentation we hope you will stick around and get to know the speakers as well as the O'Flaherty Law staff.
If you have any questions about this event or any other topic, pleas feel free to give us a call at (630)324-6666, drop us an e-mail at info@oflaherty-law.com, or check out our website. We look forward to seeing you there!

Videoblog: O'Flaherty Law Small Business Seminar

To contact us Click HERE

Please enjoy part 1 of the Small Business Primer seminar presented by O'Flaherty Law and DDZ accounting. Parts 2 and 3 of this seminar can be found on our youtube channel along with our previous seminar on wills and trusts and all of our informational videoblogs.

The topics discussed in our Small Business Primer seminar include:

I. Entity Selection - how to choose between S Corps, LLCs, C Corps, and Partnerships

II. How to get your business up and running

Incorporation and maintenance of your corporate book
Quickbooks
The initial meeting with your accountant
Insurance
How to obtain an EIN (Employer Identification Number)
Contacting the Illinois Department of Revenue for a Tax Identification Number
Dealing with special licenses and regulations that are necessary for your particular business

III. How to make the transition to being an employer

Hiring a payroll service
Dealing with benefits - steering clear of ERISA problems
Obtaining Department of Labor posters
Registering with the Illinois Department of Employment Security & Dealing with Unemployment Insurance
Worker's Compensation insurance
The elements of an employment agreement

Non-compete clause
Confidentiality of trade secrets and other info
Enforcement clause
Probationary period

Creating an employee handbook for systematized and documented expectations and discipline
The importance of termination letters
Considering independent contractors as an alternative

IV. Finding space for your growing enterprise.
If you are a small business owner, please do not hesitate to contact us with any questions you may have, or to set up a free consultation.

"I'm a new business owner -- how many different types of taxes do I need to pay?"

To contact us Click HERE
Today, our friend, D Zorea of DDZ Accounting Group, submits the following article:

If you're a new business owner and are feeling overwhelmed by the prospects of paying too many taxes, it might be because there are so many different types of taxes for which to account. Depending on your type of business, an Illinois business owner will be liable for different taxes including (but not limited to):

Sales: Does your business sell widgets, or food products? You are responsible for collecting the state (and sometimes local municipality's) Sales and Use Tax and remitting these back to the appropriate taxing agencies. Sales tax rates can range around 7.5% to 10%.
Payroll: Do you have employees? You will be matching your employee's payroll withholding taxes, as well as contributing to federal and state unemployment insurance premiums based on your employees' earned wages.
Franchise: The state of Illinois charges a Franchise tax of 1.5% for corporate business owners. This includes LLC, C-corporations and S-corporations, but not sole-proprietors or unincorporated partnerships.
Income: Similar to sole-propietorships, S-corporations and LLC's are considered "pass-through" entities. In other words the net profits of those businesses "pass-through" to their owners and are taxed at the business-owners' individual tax rates. The income tax returns for S-corps and LLC's generate a K-1 form for each shareholder or LLC member; these are the business owner's equivalents to an employee's W-2 form. However, different from a W-2 which typically already includes income tax withholding, a business owner with net-income from his/her business can either file and pay quarterly estimated taxes throughout the year or pay the lump-sum with the year-end income-tax return.

For the above taxes, the IRS and Illinois state agencies may apply late file or late-pay penalties; so work with your tax-professional to calculate the correct taxes due, maximize your tax return, file on time, pay on time, and save all that time and headache of doing it alone. For other questions, please contact D Zorea at DDZ Accounting -- e: d@ddzgroup.com, p: 630-368-0183, other client-testimonials at www.facebook.com/ddzaccounting.