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Recap: Horrors of Business Ownership Part I

Horror Stories of Owning a Business and How to Deal with Them

The seminar focused on stressful situations encountered by business owners and how to deal with them.

Horror Stories of Business Ownership: Recap of Seminar

How is the beginning of your November 2017 going? Are you scared there are only 2 months left till the end of the year? Well, speaking of frights, I did a seminar with the Better Business Bureau of Hawaii (BBB) this past Monday celebrating Hallloween. We told spooky stories, well sort of. We discussed the horrors of business ownership. Specifically, I talked about these broader topics:

  1. structure of entity – failing to plan properly;
  2. disputes with business partners and managers;
  3. government regulations – the revoking of permits and licenses; and
  4. intellectual property infringement.

Lisa Nakao,Director of Operations of the BBB, discussed the resources the BBB offers and how to deal with reviews and complaints by customers hosted on the BBB’s website (I will cover some of this in a Part II to this post). If you could not make it to this seminar do not worry. I will continue presenting seminars aimed at educating business owners about the legal issues. So be sure to check back and follow us.

Some of the Horrors of Owning a Business – Highlights

I’d like to take this time to discuss some highlights of the seminar. While, I will not cover everything from the seminar, as you will  just have to come to the next one, this post will touch upon a couple of issues. Particularly the ones that gave good discussion or attendees asked a lot of questions.

1. Managerial Authority in a LLC: Friends, Family Members, and/or Relatives of Friends as Your Manager

I’ve discussed in the past of business partner disputes, but this following scenario is derived on a similar theme. Consider the situation where many small and medium-sized business owners rely on family or friends to help run their business, including relatives of friends. This tight-knit network can be a boon or a misfortune. Especially, here in Hawaii where people tend to rely on local connections the trust and reliance can run high and sometimes too quickly. Specifically, I refer to hiring someone as a manager of your LLC or corporation and giving them access to the company’s bank account and credit cards. Then the business owner discovers the person they thought they could trust is gone the business account is empty and the credit cards are over extended. Worst yet, there is no written management agreement.

Don't lose your business account.

Be careful of giving your manager too much access to your finances.

Is there Nothing that Can be Done? 

While, legally there is a lot to do, such as suing them or attempting to report them to the police for theft – the reality is proof and evidence issues. Many times business owners in this situation rely on a handshake, only talk to their manager on the phone, and their emails and texts refer to managerial duties/obligations obliquely. There is no writing of the contract. Further, consider even if you have a good case, you have to find them and force them to give back the money, which by the time you get the the lawsuit filed, served, and litigated, they’ve probably spent it.

So again, this is an urging to slow it down and think methodically. I get it. Small business owners are trying to get help and tread water. However, consider the following ideas:

  1. conduct due diligence – find out more about them before you hire them;
  2. limit their access to the business bank account and credit cards – you do not need to give them unfettered access;
  3. if you cannot do a full-blown management agreement, then at least tackle the main terms in some of memorandum, letter, or lengthy email;
  4. as to point 3 make sure you get their signature, acknowledgment, and confirmation!

While, those things will not always save you, the point is getting you into the habit of preparing, doing your research, and record keeping when you finally decide to take an action that may be risky.

2. Shutting Down Business Operations Due to Lost of License or Permit

So I told a story during the seminar of a business owner who relied on their accountant to do the business entity’s Annual Filings with the State of Hawaii’s Department of Commerce Affairs (DCCA). Only problem with that was the accountant was not actually doing the filings; it was not a part of their services. So the DCCA administratively terminated the corporation’s existence. So leaving the account and taxation issues aside, the main focus of this section I want to focus on is government licensing and permitting. See LLCs and corporations are legal persons. They may not be a living, breathing individual like you and me, but they are persons under the law. So often time government licenses and permits, for example liquor licenses, issues to the business entity itself and not the individual owners of the business.

So when the DCCA administratively terminated this corporation the business owner also lost their government license. In this instance, they could not operate the business because it would be illegal to operate without a license. So they had to shutter their business and form a new corporation, then reapply for a completely new government license.

Did they Really have to Close Their Business?

Yes, unfortunately in this case they did. However, sometimes the government fails to follow proper procedure when revoking or suspending a business owner’s license or permit. If the government does not follow its own rules and regulations there may be opportunity to stop the government’s action. However, it depends on the type of permit or license being revoked and the applicable laws and regulations surrounding it.  In this instance, the business owner could have saved themselves by routinely checking the DCCA and communicating with their accountant. Finally, catching the administrative termination of their original corporation earlier could’ve resulted in a successful petition to reinstate it.

You should know the filings you need to make with the government and calendar them into your schedule. Further, consider an annual business checkup to assist you in navigating your business’s compliance requirements. If you are interested in an initial consult to begin the process of an annual business checkup contact us today!

Be vigilant in your compliance.

Keep your business compliant or you may be forced to shut it down by the government.

There will be a Part II to this post; it will focus on the BBB Reports and Complaints and resources/information they shared. So check back!

DISCLAIMER: This post discusses general legal issues, 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.

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Can Social Media Impact My U.S. Immigration?

keyboard immigration law
keyboard immigration law

Should a person’s social media data lock them out of the U.S. immigration process ?

Is the U.S. Government Really Going to Collect Immigrants’ Social Media Data?

In recent news, the Department of Homeland Security (DHS) has received the green light from President Trump to move forward with a new policy. Specifically, the collecting of the social media handles of visa applicants dating back five years.  For further information see Buzzfeed’s full article here.

Part of this change in process will include a new new questionnaire form. The implementation date is scheduled for October 18, 2017.  The policy change is supposed to help the government determine whether immigrants qualify for certain immigration benefits.  From a fiscal viewpoint, it makes sense that government would want to verify the assets of applicants in order to prioritize benefits for those who truly need it.

However, Opponents to this new policy quickly point out that pilot programs that tested out the practice of examining social media accounts of immigrant applicants proved unsuccessful.  In fact, determining that an applicant did not qualify for immigrant benefits came from sources unrelated to social media.

What are Some of the Concerns due to this Social Media Data Gathering?

Discrimination could become an issue. Depending on the type of social media gathered from an applicant’s social media data, government agents could be screening an applicant’s based on religious and political views. Their screening based on one-off comments and pictures shared.  Government’s ability to ask applicants about their religious and political views is a longstanding tradition.

For example, a person in the past simply needed to state whether or not they supported a Communist regime.  However,  an applicant for a student-visa may face discriminatory scrutiny for his Facebook post critiquing his own government. This in turn resulting in problems for their application.

Consider a tech worker raised in a Muslim family, revealed in pictures with her father and mother. What if she did not share or practice her family’s faith, but due to her family’s religion she faced a harder review process?

These merely are examples of the questions and concerns of collecting social media data of immigrant applicants. It is without a doubt not all government agents reviewing this data will receive training and education in all the nuances of religions and cultures around the world. Therefore, personal biases could seep into the decision-making process.

Social media can be unreliable information and should not be used against a person immigrating to the U.S.

Other Attorneys’ Comments

César Cuauhtémoc García Hernández, assistant professor at the University of Denver Sturm College of Law raises a point on the reliability of social media. How many times have you seen a post from someone that’s not entirely representative or accurate of that person? Mr. Hernández states, “The fact that information gleaned from Facebook or Instagram or other social media networks might not be reliable doesn’t mean that it will preclude DHS from using it as a basis for excluding people from the United States.”

Adam Schwartz, attorney with the Electronic Frontier Foundation, points out that non-immigrants (U.S. citizens) may also be impacted. They may self-censor their social media posts and interactions. Why?  The fear of those acts being evidence against their immigrant loved ones.

Do You or Your Loved One Have Questions?

If you or a loved one have any questions about visa applications, do not hesitate to contact our firm for an initial consultation.  We can also discuss with you about what happens what a visa application is denied.  There are often options to overcome a visa denial.  However, certain other ineligibilities are permanent; this means you will always be denied due to some aspect of U.S. law.  Still, there are special circumstances in which applicants could apply for a waiver.

Adam R. Chang practices immigration law.  In the past, Adam worked with skilled immigrant professionals from across the country, including many Iraqi refugees, and helped them find work in their professional fields through resume development and job interview training.  When in law school, Adam volunteered to help green card holders apply for citizenship.  In his career, Adam has assisted many clients with employment-based immigration cases, including National Interest Waiver petitions.

DISCLAIMER: This post contains comments and opinions of potential impacts of policy changes and news items.  It does not constitute as legal advice to any particular person in any respect.  If the reader feels they have need of specific advice based on the information contained in this post, then they should seek the advice of  an attorney in their 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.

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High Profile Sexual Abuse Allegations Tied to a Longstanding Reality

Opening door.

Opening door.

Sexual Abuse Suits: A Change in Society or Exposing Institutional Problems?

Recently, there have been high profile sexual abuse lawsuits making headlines across the nation. In light of this, people often ask, “Is something happening to our society causing this increase in harm to children?” Based on statistical analysis it would seem it is more of an unmasking of longstanding problems.

For instance, in 2016, lawsuits were brought against MJJ Productions, a multimedia creation and distribution company founded by the late singer Michael Jackson. One lawsuit accuses MJJ Productions of negligence in the handling of sexual abuse allegations. While it is impossible to predict the outcome of pending litigation, the available evidence and allegations of “businesses [designed] to operate as a child sexual abuse operation, specifically designed to locate, attract, lure and seduce child sexual abuse victims” are disturbing at the very least.

More recently, lawsuits were filed against several prominent members of United States Gymnastics, as well as the governing body itself. The lawsuits allege negligence on the part of the USA Gymnastics. Specifically, it had a pattern of harboring, concealing, and promoting abusive behavior; this is in addition to other claims of action against the athletic organization. The civil action centers around the criminal prosecution of USA Gymnastics’ former team doctor, Dr. Lawrence Nassar.  He faces over 100 complaints of sexual abuse and sexual assault from the athletes that were under his care. According to one complaint, the USA Gymnastics failed to take measures to adequately protect its young athletes from him. The reason: they chose to handle the sexual abuse allegations against the doctor internally, rather than reporting these potential crimes to the appropriate authorities.

The Statistics Show that this is Not a New Problem

These headline cases should motivate people to be more sensitive and handle situations properly. Those in authority sometimes fail to properly react. They can often mismanage or mishandle reported abuse. All jurisdictions mandate reporting of potential sexual abuse of a minor to the proper authorities. The goal being to prevent persons and organizations from covering up the problem.

No one should sweep abusive conduct out of the public eye. Criminal prosecutions might initially stop a perpetrator, and civil cases might deter organizations, but public admonitions, settlements, and convictions make communities safer. This is unlike what happens when childhood sexual abuse remains hidden behind a veil of shame and secrecy.

While, headline cases might shake our belief in the people and organizations we trust, the unfortunate reality is this behavior has persisted. It lurks beneath the surface and research confirms as much. According to the National Center For Victims of Crime, 1 in 5 girls and 1 in 20 boys will be a victim of child sexual abuse. If that is not sobering, consider the further following statistics:

Reporting Sometimes Not Enough

Further sobering statistics highlight the realities of this problem. First, reporting the suspected abuse may not be enough. Even if holding perpetrators responsible, but not the those responsible for victims’ safety, may ultimately hide the problem. Those in power may know about patterns of abuse, but do nothing about it, or worst, turn a blind eye. News stories, reports, and studies bring light to an ongoing situation. However, the unfortunate reality is that the news does not cover less sensational stories, even while these victims’ pain is just as real.

Further Information

For more information on the cases discussed in this post you can visit:

  1. the Hollywood Reporter for updates on the MJJ Productions case; and
  2. the L.A. Times for the USA Gymnastics case.

If you or someone you know is a victim of sexual abuse, please seek help. You are not alone in this situation; there are people and organizations that can help. In Hawaii, there is the Sexual Abuse Treatment Center. For California, there are variety of resources, not only for sexual abuse victims, but many other kinds of problems, consider the California Victim Compensation Board’s Victim Resources page.

Lastly, if you are seeking legal representation to handle your matter, or a loved one’s matter, with diligence and compassion, please consider contacting Hew and Bordenave.  We assist clients both in Hawaii and California and diligently protect the identities of our clients.

DISCLAIMER: This post contains comments and opinions of cases in the news as well as factual data.  It does not constitute as legal advice to any particular person in any respect.  If the reader feels they have an injury or need specific advice based on the information contained in this post, then they should seek the advice of  an attorney in their 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.

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Part II, Communicating with Unpleasantness: Demand Letters

Demand letter.
Demand letter.

Demand letters are usually the start of unpleasant communications. Not the end.

What are Demand Letters for?

Usually, it is a demand on the other party take some corrective action or to stop doing something. It could be demanding payment because it is late. It could be demanding interest on top of the principal due to the lateness of the payment. Other times, if you are the customer and the service provider’s job remains undone, then you want specific performance. You are asking them to finish the job.

What about Cease and Desist Letters?

These letters are demanding that the other party stop doing something, such as Intellectual Property matters. Specifically, there is an infringing action that going on or about to happen and the owner of the IP wants the infringer informed of their rights. It could be an infringer’s use of an unauthorized copy of an image on their website and social media.

Sometimes the government uses cease and desist letters as a part of their enforcement powers. Agencies will indicate to the person that they are doing some type of illegal activity that should stop immediately. If not, and they ignore the notice of the letter, then they could face penalties, fines, or being charged with a crime.

Does it Need to be Drafted by an Attorney?

No. Attorneys don’t always draft them, but having them may help. You should consider the nature and context of the dispute. For instance, demanding a customer pay you $200.00 for kitchen supplies because the are past the due date might not be a good use of an attorney. However, if your client is not paying you $200,000.00 in consulting and construction fees and you have an obligation to continue working on the project, then are a lot of factors to take into consideration when making the demand.

Insurance Claims

Trejur will likely provide posts in the future that are more in-depth on this topic. However, for the discussion purposes of this post just know that for personal injury claims, the injured person usually starts the process by submitting a demand letter to the insurance companies. Further consider that negotiating and settling insurance claims may be aided by a lawyer’s counsel. The reason is there are certain structures and contents that go with the initial demand letter.

Examples include: describing the accident, medical treatments to treat the injured, and accompanying evidence and supplemental documents, such as police reports and medical bills. The initial demand letter is probably just the start; insurance companies tend to lowball their initial offer. A personal injury attorney’s knowledge and experience may assist in getting a higher settlement when communicating to the insurance companies.

What Goes into Demand Letters?

It depends. Every situation is unique. This includes drafting a demand letter for clients. Sometimes, short and sweet is perfect because the facts are simple, and the law is easy to understand. Other times, lengthy explanations are necessary. Such as when the legal rights and concepts are abstract. These include citing to the actual law, explaining case law, and providing some evidence to show the other side there is a provable case. At a minimum, a demand letter usually explains the situation, a view of the law that is favorable to the demanding party, and the demands. Money and/or taking an action (or stopping one) and deadlines to respond or comply.  Finally, consider lawyers communicate to other attorneys via these demand letters as well as laypeople, so they legal ethics applies.

I will say from an attorney’s perspective we, just as much as laypeople, enjoy creative demand letters. Demand letters don’t always have to be mean in tone. “Nastygrams” are not always effective. Consider many content providers realize that fans who are business owners flatter them through creative endeavors, but these actions may infringe on their copyright, trademark, and trade dress rights.

However, sometimes you do get a mean and unreasonable demand letter. The question then becomes how do you respond? Ridiculous cease and desist letters sometimes also open themselves to cheeky responses like this one.

Other than the Creative Way, How Should I Respond to One?

The opportunity to dare the writer of the demand letter to start a lawsuit by offering lollipops to the process server is not a frequent one. However, a lot of people feel that ignoring a demand letter is a reasonable response. It might not be, as sometimes silence may be viewed as an admission. The demanding party may just send another letter.

A strongly worded response letter may be able to dissuade the other side. Attorneys frequently engage in letter writing contests back-and-forth without even filing a claim because litigation can increase the costs dramatically. The hope is there is a resolution at some point, but a demand letter is not usually the end of the legal process. It starts a communication process.  So how you choose to respond sometimes requires a careful analysis of all factors:

  • What are the demands? What does it cost to comply with the demands?
  • Do you have any rights or claims?
  • What are the facts?  Are they verifiable?
  • How much would it cost to litigate? Take it through trial?
  • What are you willing to settle for?

Analyzing these factors sometimes helps clients make valuation decisions, especially for business owners. Sometimes it might be worth it to settle, other times not. The key is to understand the contents of the demand letter, and then the circumstances that surround it. It is the start of a communication process, not the end.

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their 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.

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Introduction to Adam R. Chang: Immigration Of-Counsel

Immigration law book and gavel

Immigration and the U.S.A.

immigrants usa flag

The USA is a multiethnic nation due to its diverse set of immigrants.

 

 

 

 

 

 

 

 

People come to the United States for a variety of reasons.  Young students often pursue increased opportunities by enrolling as a student at an American university.  Others long to be reunited with loved ones in their new home country. While, U.S. companies seek to employ the best talent they can find across the globe.

Whatever the reason, many immigrants and visa holders have stress from the ever-changing rules and regulations. They wade through legalese of immigration paperwork. This may be daunting even for those who are proficient in English. Therefore, it can be difficult to immigrate to the U.S.

However, we recognize the contributions immigrants have had on our country, especially both in Hawaii and California and in our own lives. From around the world, immigrants bring their ideas to start businesses, their culture influences our arts, outlooks, and foods, and their spirit adds to the American dream.

So it was an easy decision for Trejur and I to bring on an immigration attorney.  Whether it is trying to bring a skilled worker over for a new company or assisting an individual in navigating the application for citizenship, it was clear that we needed someone with passion and who also cared about the subject matter deeply.

Therefore, join the rest of the Hew & Bordenave team in welcoming our new of-counsel, Adam R. Chang.

Who is Adam?

Adam R. Chang

Adam R. Chang, Immigration Attorney.

Adam graduated from the University of Hawaii’s William S. Richardson School of Law. Adam is a published writer (see here and here), a vocal diversity proponent and an advocate for under-represented communities.  Adam spends as a Project Director for Social Change Consulting with various immigration and social justice nonprofits.  Before moving to San Francisco, Adam externed with Hawai`i Supreme Court Associate Justice Sabrina McKenna, and was a Human Rights Fellow with the National Network for Immigrant and Refugee Rights.  Additionally, Adam spent time serving on the Board for the American Civil Liberties Union of Hawai`i.

Questions

immigration paperwork

There is a lot of paperwork to fill out to immigrate to the U.S.

 

 

 

 

 

 

 

 

Given the current state of immigration in the United States you may have questions and concerns. It can be alarming to hear about new regulations or potential changes in the system. Therefore, if you do have questions on immigrating to the United States for you or a loved one, short or long-term visas, or citizenship, consider scheduling an initial consult with Adam. Let him provide the formalities for your immigration needs. You can contact us by clicking this link.

Mahalo and we look forward to assisting you with your immigration needs!

-RKH

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Business Partners Should Talk About Breaking Up First

Handshake between business partners.

Talk about your business relationship, reduce it to a written agreement, sign it, then get to work with your partner.

When assisting business partners form their entities or when my litigation partner is consulting with me on a case I see the following scenario often:

A business partnership starts with a money person and an idea person. The idea person has a fantastic business plan and the money person has the cash. They think it is perfect. They rush to form a LLC or corporation, downloading an Operating Agreement or Bylaws from the Internet. It even might be worst, they do not even bother with a document. After that, they are running their business, but then several months into it they are fighting.

What do Business Partners Fight About?

Usually, they do not see eye-to-eye on major business decisions.  Decisions like:

  1. how much money should each person contribute;
  2. who has the authority to sign checks or what is the dollar limit each partner has for contract obligations;
  3. where should we locate our offices;
  4. when do we pay ourselves;
  5. what happens when one of us wants to leave; and
  6. so many other issues …

Business owners hate hearing this from their attorneys: slow down! They should be deliberative in their collaboration with their business partner. I sometimes remind people that getting a business partner is basically getting married. Also partnering with a friend is different than being a friend, you sometimes do not know their work ethic. This is why we urge business owners to get things in writing with their partners.

The goal when drafting Operating Agreements, Bylaws, and employment agreements* should be what are the processes that governs decision-making, what happens when there is disagreement, or if an owner wants to leave, etc. … Basically, preempt the fights by setting up contractual arrangements. *By the way, if an owner of a business wants to contribute work instead of capital, then the partners should consider an employment agreement. It is solely not just for contract law purposes, but for tax and accounting issues.

Business partners think that their idea will be a money-maker and that their partner is going to make it happen.  They fail to calculate that even in success that their business partner may have other ideas on the direction of the business.  There is nothing wrong with differences of opinion, but when decision-making is paralyzed it could stop the business from moving forward. Further, for its employees, vendors, and service-providers, knowledge of an ongoing dispute amongst the business owners can make them question the survivability of the business.

Protect your Business Relationship by Communicating

It is easy. Talk about it, come to an agreement, and then get it in writing before the business starts. Many people just want us attorneys to give them their documents or download their own forms for the Internet. They think it saves them time and money.  I’d contend that is the wrong way to look at it. The time and money spent on your governing documents is an investment in the relationship. They are a contractual foundation.

If not, you are just pushing disputes to a later date. Consider that when the money has been spent, you’ve worked countless days and nights, and now you are arguing.  Then you realize all you have for your contract rights is a poorly drafted document … or worst yet, you don’t have one at all.  So do yourself a favor, have the conversation now and plan for the future.  Communicating when you are on good terms with a partner is easier, then when you are fighting.

DISCLAIMER: This post discusses general legal issues, 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.

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Can You Keep Chickens in Your Backyard?

Chinese Rooster

I’m sure you’ve seen the odd chicken or two crossing Honolulu’s roads!

Happy Lunar New Year All!

If you’ve been following me, you may recall I did a blog post on my old website (also found here) celebrating last Lunar New Year’s animal, the monkey. It was a post about “Can You Own a Monkey in Hawaii?” Keeping with that theme this post discusses the laws of the City and County of Honolulu related to this Lunar New Year’s animal, the Rooster. Or more precisely, chickens.

Can You Keep Chickens?

This post is limits discussion to the jurisdiction of the City and County of Honolulu (the island of Oahu).  Additionally, the post focuses on residential areas only. If you are raising chickens for commercial purposes you have compliance issues regarding zoning and permitting, which is a different discussion then today’s post.

Nuisance Law

When keeping chickens, the law is not related to the animal itself, but more has to do with the City government’s ability to regulate nuisances. Old English common law had it that when some type of action by a defendant was either causing a substantial and unreasonable interference with people’s use and enjoyment of the land (private nuisance) or the action had a materially affect the reasonable comfort and convenience of life of the people (public nuisance). Flash forward to today, our city government has the ability to regulate nuisances, in our case for this post, Animal Nuisances. You can find it in Chapter 7, Article 2 of the Revised Ordinances of Honolulu.

So the laws approach to the situation is to make it unlawful to own poultry, which includes chickens, pigeons, turkeys, geese, ducks and peafowl so long as they are an “animal nuisance”.  See Sec. 7-2.3.

Short answer: yes, you can keep chickens if you are in Honolulu.

Slightly longer answer: yes, you can keep chickens in Honolulu, so long as they are not a nuisance. If they are a nuisance, then you cannot keep them.

So What’s an “Animal Nuisance”?

Article 2 also defines “animal nuisance.” There are three (3) definitions, but I’m going to focus on the first two definitions which is:

  • Makes noise continuously and/or incessantly for a period of 10 minutes or intermittently for one-half hour or more to the disturbance of any person at any time of day or night and regardless of whether the animal, farm animal or poultry is physically situated in or upon private property;
  • Barks, whines, howls, crows, cries or makes any other unreasonable noise as described in Section 7-2.4 (c) of this article;

See Sec. 7-2.2.

So it is clear that a chicken making noise continuously for 10 minutes or intermittently over one-half hour (30 minutes) is a nuisance, but what is that second definition about?

Again, we are now defining another concept, which is what constitutes “unreasonable noise”. Sec. 7-2.4(c) says that:

Noise is unreasonable within the meaning of this article if considering the nature and the circumstances surrounding the animal nuisance, including the nature of the location and the time of the day or night, it interferes with reasonable individual or group activities such as, but not limited to, communication, work, rest, recreation or sleep; or the failure to heed the admonition of a police officer or a special officer of the animal control contractor that the noise is unreasonable and should be stopped or reduced.

What does this Mean for an Owner of a Rooster that cock-a-doodle-doos at 11:00 p.m. in an Apartment Building?

If we consider the nature and the circumstances: (a) it is a building where everyone is close by; (b) the rooster’s noise is at night; and (c) that most people are sleeping at that time; and (d) that the neighbors would likely call the police or animal control personnel. Then the likely outcome is those officials would instruct the owner to have the animal stop. If the owner did not stop the problem, then it would be deemed as “unreasonable noise.” See Sec. 7-2.4. This turns into an “animal nuisance” and then the owner would be prohibited from keeping the rooster.

What Could Happen if you Violate the Law?

Generally, a monetary fine. If you keep stacking offenses within a certain time frame you actually be imprisoned. Additionally, you can be ordered to go to a training program or retain a contractor to help you train the animal to stop the nuisance. Further, such training programs or contractors are paid for by you. See Sec. 7-2.10

How Many Chickens can I Have?

Sec. 7-2.5(d) states that for chickens and peafowl: “The number of chickens or peafowl shall not exceed two per household.”

So yes, while you can keep a couple of chickens in Honolulu residential areas, they better be quiet chickens!

How do I Handle Chicken Noises Bothering Me?

If you have an animal noise complaint for Oahu, then contact the Honolulu Police Department or the Hawaiian Humane Society. The Hawaiian Humane Society recently has started responding to chicken noise complaints: http://www.kitv.com/story/34311091/hawaiian-humane-society-now-responding-to-chicken-noise-complaints

If you want to find more about Honolulu’s Animal Nuisance law, click here.

Thanks again for stopping by and I hope this is a fortuitous and good year for you!

-RKH

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their 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.

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Martin Luther King, Jr. on Leadership & Consensus

Aloha and thank you for continuing to visit this blawg, I hope your 2017 continues to be off to a great start.

If you are reading this post hoping it is a continuation from last week’s post on communication it is not directly related, but will still follow in the vein on the topic of communication.  Instead, this week, I would like to briefly turn your attention to one of America’s great leaders, Martin Luther King, Jr. as we head into the long weekend celebrating his contributions to the Civil Rights movement.

Read more

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Communicating With Your Business Partners

communicating in contracts

A New Year, A New Business, and A New Of Hope Of Communication

Aloha and Hau’oli Makahiki Hou!

I hope this finds you all well, and I thank you for visiting our legal blog or blawg. How has your first week of 2017? Ready to dive into new projects?  For those of you thinking this is the year or the time to start a business, well then today’s post and the couple of posts that will follow are for you. Specifically for those of you interested in starting a business, especially with business partners who will own the business with you. The overall theme of these posts is about communicating.  The source of this inspiration for the theme? My own partnership with Trejur launched last year my lecturing for a communications class at HPU, and I always get this question: Can my business partner do that?

Part I, Communicating With Your Business Partners

So today’s post is on communicating with your business partners, the one following this post will be on communicating with third-parties outside of the business entity you form with said partners, such as clients, customers, vendors, suppliers, contractors, etc …, and finally, the last post shall be about communicating with the government and various agencies.

Where it All Begins: Communicating, Not the Paperwork

So many of you that know me or have followed me, know that I started out as a solo practice working with small and medium-sized business clients on contracts and compliance work, such as forming limited liability companies. Over the years, as my workload increased I took on other contract attorneys to assist with the workload. Along the way, I met my commercial litigation partner, Trejur P. Bordenave. Trejur and I worked well together, and a lot of it was based on effective communication. This is the foundation that led us to the partnership we have today. In fact, he and I spent a good portion of the early part of 2016 discussing the partnership before formally launching the partnership itself.

Why am I telling you this?

One of the biggest issues I see when clients come to me to form a LLC or a corporation is they just want the documents. Yes, as a business attorney, absolutely I can draft your Operating Agreements or Corporate Resolutions, file your Articles of Incorporation, and/or obtain your Federal Employment Identification Number, and so forth, but typically, when someone like Trejur is called up to represent someone the dispute stems from a breakdown in communication and trust, amongst the business partners. There is not necessarily anything wrong with the paperwork, but the business partners did something, not necessarily maliciously or with intent to deceive, but their expectations about how the business would work, how they would get paid, reimbursed, when that would happen were all at different levels.  Let me use two examples of how this can play out to illustrate.

Example Stories

So these following examples are fictional, but they are issues I have seen before in a wide-variety of starting businesses or in the midst of a business dispute. Again, the point here is to illustrate that good communication is the foundation of a good business relationship, which in turn drives the drafting of the legal documentation.

Example One: Majority Member and Unfair Distributions

Kai and Russell open a new restaurant business. They organize a LLC. The LLC Membership Interest (or Ownership Interest) is divided 60% for Kai and 40% for Russell that is because Kai has contributed more cash and equipment (valued at $60,000.00) into the LLC as his Initial Capital Contribution than Russell. Russell just agrees that he will bring some of his old recipes from a prior business with him and agrees to work for the LLC for the value of his Initial Capital Contribution because they are in a rush to open the restaurant they draw up a generic Operating Agreement that recognizes the 60/40 split and that everything from that, including voting, profit/loss allocation, distributions, etc . . . will be 60/40.

Five months later, after the restaurant has been up and running, Russell quits and wants to terminate the LLC. Why? Well, he feels that Kai treats him more as an employee because he feels he owns the majority of the LLC and that Russell needs to work off $40,000.00 or what Kai believes Russell’s fair share of the contribution should be. Further, due to the majority position Kai takes his cash distributions at the beginning of the month, and gives Russell his distributions at the end of the month and if there is not enough for budgeting purposes states the LLC will just owe him later.

Example Two: Discussing Officer Duties Prior to Incorporating

Lisa and Jessie want to start a solar design and installation business. They intend to incorporate a corporation, which shall issue 1000 shares, where Lisa would own 550 shares and Jessie would have 450 shares. Lisa would like to be President as she has more local connections and is the one who can bring in more clients whereas Jessie will likely do the grunt work. However, Jessie is concerned that Lisa is President and has more shares so as a minority shareholder she fees unprotected. Lisa and Jessie meet and discuss this issue.

They decide that through their Articles of Incorporation, Bylaws, and Resolutions that the corporation shall only have the offices of President, Secretary, and Treasurer and that Jessie shall be both Secretary and Treasurer. Further, that Lisa as President must submit a marketing budget for the next fiscal year to Jessie as Treasurer on the June 20th before Jessie will cut checks from the corporation’s expense account to where she will have sole authority to cut checks from. They also agree that all 1000 shares (unanimous consent) must vote in favor of declaring dividends before money is paid out as such.  Finally, both agree to sign Employee Agreements stipulating to what their compensation, benefits, work hours, etc . . . on top of their rights and obligations as shareholders of the corporation.  Both are satisfied with this arrangement and move forward to incorporate.

So What Happened? What Should You Consider for your Business Partnership?

In my first example, the business partners were in a rush, failed to communicate expectations, and felt that once they had the paperwork everything would resolve itself. But as trite as it may seem, they did not talk about their feelings and by signing an Operating Agreement that just split everything according the Ownership Interest percentage it did not really reflect on how they were going to do business with one another. In the my second example, discussing how Jessie felt about her worries and concerns allowed them to create a process, a mechanism of a check and accountability that they discussed and agreed to.

At this point, I’d like to put in your mind a lot of people think that once the file their Articles of Organization or they come up with the Bylaws these are set in stone. That is not necessarily the case, the owners of the business can always amend them if they are in agreement. Also consider if you and your partners are not sure what the final arrangement will look like, that is you are in an ongoing negotiations, but you have stipulated to some terms or have an inkling about where your arrangement is heading, you can always use a Memorandum of Understanding or Letter of Intent or whatever document applies to stipulate to what has already been discussed or agreed to, and agree to return to the matter at a later time to finalize. Communicate and trust each other, but keep a record of it.

Often times, people do not slow down to consider how they want to structure their decision making processes, their rights and duties to each other, to the business. Their feeling is that making money will resolve all that, but then the issues come up overtime like . . . Why do you get reimbursed for parking when I take the bus? I bring in all the clients and you do all the work, and marketing and networking is work. The recipes I brought with me are the value of the food company so I should get a majority interest. I’m the older brother so I dictate the operations just like the way our father and grandfather did it. And so on and so forth . . . if you thing your dispute is ridiculous with your business partners, I’m pretty sure there are ones even more crazy.

Sit Down and Discuss Expectations

What isn’t crazy is sitting down and discussing what you expect out of the business relationship and what you expect out of your business partners before forming the business entity and doing business. In many ways having a business partner is like getting married it is for better or worst, and business divorces are ugly affairs like regular divorces. Therefore, it is worth the time to sit-down and talk it out, and then if you are wondering can we arrange our business partnership according to what was discussed that’s when you can give me a call and we can work out . . .

What is the difference between a Member-Managed and Managed-Managed LLC? Can I contribute services in exchange for stock ownership? What are the differences in liabilities for a General Partner versus a Limited Partner? Can we have percentages of Ownership Interests that do not match Distributional Interests? What about having two-levels of Ownership Interests? Should we limit the powers and authority of the President?

Mahalo for reading this post. I hope you have a Happy and Fortuitous New Year! See you next time!

-RKH

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their 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.

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Old Posts: From Ryan K. Hew, Attorney at Law, LLLC

Formalities

From: “Let me provide the formalities.”

Hew and Bordenave

To: “Let us provides the formalities.”

From Old Solo to New Partnership

Hey everyone, thanks for visiting our Blawg. I am just letting you know that all the posts prior to January 1, 2017 are from my solo practice. They are from Ryan K. Hew, Attorney at Law, LLLC. In particular, the old: hawaiiesquire.com. I brought the posts to our new site because a lot of the legal information is helpful for business owners and truth be told I loved doing Draw the Law, Boilerplate Blurb, and all the other content. So please continue enjoying them, but I do hope you like the new content from Trejur and me. Mahalo!

-Ryan K. Hew