utah

Does my business need an employee handbook?

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Short answer, yes. Every business that has more than one employee should have an employee handbook. A well-written handbook describes the expectations and legal obligations of both employer and employee. This can help avoid potential issues and arguments regarding pay, benefits, disability, sick leave, overtime, etc.

A comprehensive employee handbook typically covers employment policies such as:

  • Anti-discrimination polices
  • Compensation
  • Work schedules
  • Standards of conduct
  • Safety and security
  • Computers and technology
  • Employee benefits
  • Leave policies

If you own a business it is critical that you at least have a standard employee handbook for all of your employees. If you're on a budget, there are standard form and do-it-yourself employee handbooks available. However, these handbooks are not designed to meet your specific needs and company policies and may not be up-to-date with the latest employment laws and regulations. For this reason, it is recommended that you hire an experienced employment attorney to help you draft a fully customized employee handbook.

 

How do I start my own LLC in Utah?

 

If you are thinking about starting your own limited liability company (LLC) it is important to go over a few questions to make sure an LLC is right for your business. Once you've determined that an LLC is right for you, then there are seven steps to forming and operating your LLC in Utah. However, before we get to those seven steps, let's have a quick refresher on what is an LLC and what are its benefits.

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What is a limited liability company?

A limited liability company is a hybrid business entity, having characteristics of both a corporation and a partnership. Like a corporation, an LLC is a legal entity separate from its owners, thereby shielding its owners from any liability the LLC may incur. However, like a partnership, the LLC is managed without the formalities of corporation and without being tax separately as an LLC.

What are the benefits of an LLC?

A limited liability company is perhaps the most popular entity choice of new entrepreneurs because of the many benefits it provides. The most important being the limited liability it provides to all of the owners. This liability protection is also found with a corporation, however, an LLC is not required to hold annual meetings or comply with the many operational restrictions imposed upon corporations.

This liability protection is similar to a limited partnership, however, unlike a limited partnership, a member of an LLC will not lose the protection of limited liability by participating in the management of the LLC. Thus, business owners who want total control and management of their business, while enjoying limited liability, should choose to form an LLC.

Lastly, an LLC has its own tax benefits. For tax purposes income is only taxed once, i.e., earnings of the LLC are treated as the earnings of its owners and thus no separate tax is imposed on the LLC. 

How do I form an LLC in Utah?

Starting your own LLC can be a straightforward process. However, the State of Utah has some specific LLC requirements that are unique to the state.

  1. Decide on a name for your business. You can choose any name for your LLC as long as it is not already taken and ends with “Limited Liability Company,” “Limited Company” or any variation of its abbreviation—e.g., LLC, L.L.C., LC or L.C.
  2. Assign an agent for service of process. This can be yourself or a registered agent such as J.Cutler Law.
  3. Get an Employer Identification Number (EIN) from the IRS.  This is needed for tax purposes.
  4. Registration. You must file Articles of Organization with the Utah Division of Corporations.
  5. Fees. There is a non-refundable filing fee for Articles of Organization. 
  6. Create an operating agreement. Although it is not required to have a limited liability company operating agreement in Utah, it is recommended to have one, especially if there is more than one owner of the LLC. The operating agreement is recognized by the State of Utah as the LLC's governing document.
  7. Renew your LLC every year. Your LLC must be renewed each year on or before the anniversary date of the formation of the LLC. The renewals are done online with the Utah Division of Corporations. There is a small filing fee.

How much does it cost to form an LLC in Utah?

Currently the filing fee with the Utah Division of Corporations is $70.00. If you were to do everything yourself (register your business name, act as the agent for service of process, get your EIN number, and draft your own operating agreement) this would be your only cost - besides the time it would take you to learn and do all of the above. However, if you would prefer an experienced business attorney to take care of this for you, you can hire a local business attorney. 

At J.Cutler Law, we can form your LLC from start to finish for $400, plus the filing fee. We guarantee you will be satisfied with our service, or your money back. We also provide free lifetime revisions on your operating agreement. In other words, if the ownership or operation of your LLC ever changes, we will update your operating agreement for free. For your initial complimentary consultation, please call us at 801-285-7602 or book online.

Should I file a breach of contract lawsuit?

Everyday we enter into agreements and almost all of these agreements go according as planned. However, inevitably the situation arises where the other party has breached your contract or you have been falsely accused of breaching the contract. When such a situation arises, it is helpful to understand what a breach of contract is and whether it is worth it to pursue such a breach in a Utah court.

What is a Breach of Contract?

A breach of contract occurs when a party to a contract fails to perform to the terms of that contract. Generally a breach of contract is easy to identify but when it comes to litigation it may not be so clear. In a lawsuit the dispute usually comes down to the wording of the contract or whether the parties even entered into a contract. While a contract may have been breached, it may not be worthwhile to sue over that contract unless the breach is "material".

What is a Material Breach?

material breach is a breach so substantial that it causes great damage or justifies the other party's refusal to perform the contract. For example, if Bob agrees to buy a car from Sam for $10,000 but Sam fails to deliver the car to Bob, then Bob is justified in not paying Sam the $10,000. Sam's failure to deliver the car would be an example of a material breach.

In contrast, a non-material breach usually occurs when the damage is slight or non-existent or there is no legitimate excuse for not performing the contract. For instance, Paul agrees to finish painting the exterior of Henry's home by August 1st but only manages to finish the job by August 3rd. Here, although Paul has breached the contract, Henry's damages are minimal (assuming there was no specific reason it needed to be completed by the 1st) and Henry is not justified in refusing to pay Paul (assuming the painting was done as specified). Thus, Paul's breach is non-material.

If a breach is non-material then it usually does not make sense to pursue a breach of contract action. As a result, it is important to determine whether the breach was material and whether there are damages.

What damages can be recovered from a breach of contract?

There are generally two types of recoverable damages available in a breach of contract action: general damages, which flow naturally from the breach, and consequential damages, which are damages that were reasonably foreseeable by the parties at the time the contract was entered into.
 
General damages are usually easy to identify and recover while consequential damages are more difficult. To recover consequential damages the non-breaching party must prove: the damages were caused by the breach; the amount of damages are reasonably certain; and the damages were within the contemplation of the parties when the contract was entered into. Before pursuing a breach of contract action it is critical that the recoverable damages are identified so that it can be determined whether it is worth it to commence a lawsuit.

If you need help evaluating your breach of contract action, schedule a free consultation with J.Cutler Law.

What is probate and should I try to avoid it?

What is probate?

When someone dies, probate is the legal process that includes:

  • Filing the deceased person's will with a local court
  • Having the will examined and proved valid to the court
  • Identifying and inventorying the deceased person's property
  • Having that property appraised
  • Paying off debts, and 
  • Distributing what's left of the property as the will directs.

If the deceased person didn't leave a will (or leave in the property in any other way such as through a living trust or joint tenancy) then the property is distributed through intestate succession. Intestate succession is essentially a state's pre-determined ranking system of who is entitled to a portion of the decedent's property.

For example, in Utah the surviving spouse is in first position, followed by the children and grandchildren (if any), then the parents (if no surviving children or grandchildren), then the siblings (if no surviving parents), then the grandparents (if no surviving siblings), then the cousins (if no surviving grandparents), and so on.

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Should I try to avoid probate?

Except in a few unique situations, avoiding probate will almost always save time and money. Probate can be costly as it requires filing fees and attorney fees (In Utah a probate lawyer is not required although doing it yourself can cause more problems than solutions). Probate can also take anywhere from a few months to a few years depending on the size of the estate and whether there are any disputes over the estate property.

For these reasons, many people plan to avoid probate. Probate can be avoided by using any of the following methods:

  • Revocable living trusts
  • Joint tenancy ownership
  • "Pay on death" designations
  • Life insurance
  • Retirement accounts that go to a beneficiary
  • Having an estate of less than $100,000 (Utah Code Ann. § 75-3-1201)

While there are many benefits to avoiding probate, probate proceedings may actually be a good idea in a few situations. For example, if the estate owes a lot of debt then a probate proceeding is simpler than defending several lawsuits. Likewise, if the deceased person owned a failing business, or was involved in complicated financial transactions or complex litigation, probate provides a ready-made court procedure for resolving creditors' claims faster than by normal lawsuits.

In sum, probate is generally a process that is beneficial to avoid. In order to do so, it is helpful to talk to an estate planning attorney to discuss the methods that would be the most appropriate for you. J.Cutler Law offers free consultations and can help answer any of your estate planning questions.