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THE BENEFIT OF PASS-THROUGH ENTITIES
Why do pass-through entities such as LLCs taxed as partnerships remain the entity of choice for most closely held businesses? The primary benefit of operating a business through a pass-through entity, such as an LLC taxed as a partnership, is that the income generated by the business is not subject to double taxation. Instead, the taxable income...
APPLE’S CONCERNING NEW TEXT MESSAGE FEATURE
Apple recently released iOS16 for the iPhone. This newest release allows iPhone users running iOS16 to edit and unsend text messages sent between other iOS16 users. While this may be welcome news for those of us who make embarrassing typos or otherwise hit the send button prematurely, it opens the door for some potential legal risks and issues...
BUYER’S REMEDY IN REAL ESTATE PURCHASE AND SALE CONTRACT
In a commercial real estate transaction, just as in life, what is fair is not the same as what is equal. Generally, the remedies in a breach of real estate sale agreement are (1) return or retention of a deposit, (2) suit for damages, and (3) the right to sue for specific performance. The right to sue for specific performance allows a buyer to go...
LAST MINUTE CHANGE TO RI ADULT USE CANNABIS LEGISLATION BENEFITS LICENSED CULTIVATORS
Rhode Island appears to be on a definitive track towards legalization of cannabis and establishing a framework for its adult use industry. More than 15 years after establishing its medical marijuana program and, following years of on-and-off momentum, the Rhode Island General Assembly has given strong indications that adult use cannabis...
WORKING CAPITAL IN ASSET DEALS
In an asset sale, the buyer buys a business’ assets in exchange for the purchase price. Then the buyer gets to operate that business, simple, right? In an asset transaction, the transfer of the “business” is often not as simple as signing a document transferring title to the assets in exchange for the purchase price. Rather, a selling business...
THE TREES CAN STAY (FOR NOW) – A LESSON ON WRIT OF MANDAMUS
In a recently published opinion, the Rhode Island Supreme Court addressed when it is and is not appropriate for the court to grant the issuance of a writ of mandamus. A writ of mandamus is used to compel the performance of an act by a public officer. In the case before the Rhode Island Supreme Court, Gloria Nerney v. Town of Smithfield, Ms....
DIRECTED TRUSTS PROVIDE FLEXIBILITY FOR THE CLOSELY-HELD BUSINESS OWNER
In July 2021, Florida adopted the new Florida Uniform Directed Trust Act (“FUDTA”). Modern directed trusts are one of the best vehicles to provide intergenerational wealth preservation and flexibility. Historically, all the functions of a trustee have been handled by the same trustees. This meant that the same person(s) and/or entity was...
NUTS & BOLTS OF A ROLL-UP STRATEGY IN BUSINESS ACQUISITIONS
In a roll-up strategy, the buyer—usually a private equity fund—identifies a highly fragmented industry, which is a situation where multiple companies compete, and there is no single or small group of companies that dominates that specific industry. Subsequently, the buyer acquires one of the most prominent industry players, the...
THE SAFE BANKING ACT: WILL 2022 OPEN THE DOOR FOR CANNABIS BUSINESSES TO ACCESS COMMERCIAL BANKING?
Lawful cannabis businesses in the United States have historically and predominately relied on private funding to establish and prop up their operations until they can sustain themselves as revenue-driven enterprises. This is because cannabis remains illegal under federal law and, by extension, FDIC-insured banking institutions face substantial...
WITHHOLDING THAT EMPLOYEE BONUS CAN BE COSTLY
The law regarding an employer’s obligation to pay contractual bonus amounts received significant clarification in a recent Rhode Island case. Why this is important is that Wage Act violations are subject to mandatory double damages plus attorneys’ fees, and can even result in treble damages for egregious or repeat violations. Rhode Island’s Wage...
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