Category Archives: Corporate Law

A “Patent Troll Lawsuit” Landed In My Lap! Now What!?

patent troll lawyerThey’re baaaaaaaaaccccck. Patent troll lawsuits, that is — and they’re targeting small businesses. If one lands in your lap, stay calm and don’t rush to pay; the plaintiff may be a troll, and you may not be at all liable.

Patent Troll Lawsuit: They’re Calculating You’ll Just Pay Without Exploring The Validity Of The Claim

Naturally, it’s intimidating to get an official-looking, accusation-strewn letter, from a complete unknown, demanding that you fork over $1,000 per employee or face a protracted lawsuit. In fact, it can be so nerve-wracking that many smaller companies opt to pay without researching the issue, which is what many patent trolls count on.

Unfortunately, additional troubles may lurk around small businesses that appease. Why? Well, “trolling” companies and their lawyers tend to know each other and share information. So, parties that just pay up, wind up with more questionable lawsuits landing in their laps.

Why do Patent Trolls Target Small Businesses?

For years, patent assertion entities made money by suing large corporations across the country.

However, things changed in May 2017 when the Supreme Court ruled that claimants could only sue companies for patent infringement in their state, which made things more difficult for assertion entities to carry on business as usual. So, they went hunting for new targets — smaller companies and startups.

Patent Troll Lawsuit: It Can Happen to You

Lately, patent trolls seem to be spawning exponentially. If you’re stung, some options:

Has A Patent Troll Targeted You?

Is someone trying to sue you for patent infringement? Gordon Law Group helps entrepreneurs, startups, and businesses with so-called “patent troll” lawsuits. Succinctly stated: We know how to shake them; and under the right circumstances, patent trolls can be forced to pay your legal fees!

Get in touch today to see how we can help you fight back against a patent troll. Consultations are free.

Puerto Rico Tax Haven: Best For Internet Businesses

Puerto Rico tax havenLooking for a “tax haven”? Consider Puerto Rico. The U.S. territory passed two laws which offer significant tax benefits to lure businesses and residents to the island.

Puerto Rico is a U.S. Commonwealth; it’s part of the US, but enjoys a level of independence that includes tax breaks not available in other states and jurisdictions.

Puerto Rico Tax Haven: Act 20 Basics

On January 17, 2012 Puerto Rico enacted the “Act to Promote the Export of Services” — a.k.a., Act 20. The provision bestows tax exemptions and credits on businesses engaged in eligible activities on the island. To leverage Act 20, businesses must apply for a tax concession and obtain an exemption decree. The decree is available for 20 years, with a possible 10-year extension.

Puerto Rico offers generous tax incentives to eligible businesses. For example:

Puerto Rico Tax Haven: Act 22 Basics

At the same time, Puerto Rico enacted the “Individual Investors Act” — a.k.a., Act 22. A resident cultivation attempt, the law obliterated all manners of tax obligations. Eligible participants enjoy:

Exemptions under Act 22 are valid through December 31, 2035.

Puerto Rico Tax Haven: Act 20 and 22 for Internet Business

To make conditions even more attractive, Puerto Rico recently eliminated the five employee requirement. After moving your business to Puerto Rico, you will only pay 4% on Puerto Rico sourced business profit. And if you yourself move to Puerto Rico as well, you can then pay all the profits as dividends to yourself which are 100% tax exempted. Therefore, since many internet businesses are highly portable, relocating to Puerto Rico is relatively easy and may give you one of the most competitive tax incentives around. Besides, the year-around summer weather!

Disclaimer: This article is not intended to provide legal advice. Please consult an attorney for legal advice for your particular situation.

How to Preserve Your Wealth Before a Lawsuit

Offshore asset protection lawyerTax lawsuits are a pain. And if you find yourself entangled in one, you may want to take actions to preserve your wealth before “bad things” happen.

The goal of wealth preservation is to protect your assets before a cause of action (or “bad thing”), by moving them to a safe jurisdiction. Once authorities file a cause of action, you can no longer transfer assets offshore without violating U.S. law.

Below, we’ll discuss two of the most effective wealth preservation structures, the Cook Islands Trust and the Panama Foundation, and why the Cook Islands Trust is a better choice.

How To Preserve Your Wealth: Cook Islands Trust

Cook Islands trusts afford numerous asset protection benefits. Similar to a living trust, settlors have 100% control of the trust’s assets unless trouble strikes; and when it does, offshore trustees assume responsibility for accounts.

In the event of a hiccup, if you choose a Cook Island option, a licensed, bonded, and insured trustee in the Cook Islands will step in and manage your trust, until the issue is resolved. During this period, trustees can also facilitate overseas investments based on prior instructions.

Cook Islands Trusts Afford Mobility

Portability is another attractive aspect of a Cook Island trust. You can move the trust and its assets out of Cook Islands any time, which provides another layer of asset protection.

For instance, let’s say creditors prevail in a U.S. case and attempt to enforce the judgment in Cook Islands. Assuming the statute of limitations has not run out, to avoid the seizure of the trust and its assets, affected parties with Cook Island trusts can move them to another country.

New Zealand Courts Hear The Cases

If creditors want to bring a suit against Cook Islands trusts have to initiate the process in New Zealand, whose courts hear the cases applying Cook Islands Law. In such situations, creditors may spend many thousands of dollars bringing an action only to find nothing is left. And for the record, Cook Islands’ statute of limitations is only one year form the trust funded date or two years from the cause of action (the date the harm occurred). Once the statute of limitations runs out, New Zealand courts will refuse to hear any cases against your Cook Island trust.

Cook Islands Trusts Statute of Limitations Advantage

Moreover, even if it’s within the statue of limitation, the asset-protection-friendly Cook Islands can still protect your trust. The only feasible way creditors can enforce judgments against Cook Islands trust holders is to prove beyond a reasonable doubt that the sole reason for the offshore trust was to transfer assets away from creditors. Thus, each creditor must prove the transfer was a fraudulent transfer as to him or her — a very high legal standard.

Finally, an offshore asset protection can also facilitate your international investments, international estate planning, and general protection (not related to one particular creditor).

How To Preserve Your Wealth: Panama Foundation

Panama foundations are separate and distinct entities from their owners. To set up the Panama foundation, you don’t need members or shareholders. However, the structure requires a founder (you, the settlor), the foundation council, and a beneficiary. The council can be any three people or any one company that manages assets if you become unable. Under Panama foundations, settlors can also be beneficiaries.

As a legal entity like a corporation or LLC, the foundation must have a local address and local agent. However, foundations cannot operate active businesses. Foundations may form Panamanian corporations, but may not own businesses directly.

Be aware that parties operating businesses in Panama must pay Panamanian taxes. Moreover, you must also pay U.S. taxes on any  income generated by the foundation.

In short and generally speaking, people use Panama foundations to diversify investment portfolios and minimize U.S. estate taxes.

Connect With An Offshore Tax Lawyer

Interested in learning more about how to preserve your wealth? Considering a Cook Islands trust or Panamanian foundation? Either way, we can help. Our team of offshore tax lawyers have helped countless businesses and individuals with various international tax matters. We know how to save clients money and protect assets.

Get in touch today. Let’s start discussing your options.  The consultation is on us.

 

Disclaimer: This article is not intended to provide legal advice. Please consult an attorney for legal advice for your particular situation.

Nevis LLC Regulations Strengthen Asset Protection For Principals

Lawyer to incorporate US companies in NevisU.S. citizens can establish limited liability companies in Nevis.

In July 2015, the Nevis Assembly amended an ordinance, and in doing so improved the asset protection benefits of a Nevis LLC.

Nevis LLC Management

A single member can now hold all interests in a limited liability company, and owners of Nevis LLCs maintain control over all corporate assets. Additionally, single-member LLCs file IRS Form 8832 to qualify as “disregarded entityies” which don’t affect U.S. income tax calculations. The icing on the cake: Nevis doesn’t have any accounting, reporting, or auditing requirements for earned off-island income.

Charging Orders

The single-member management involves “charging orders,” which disallows creditors to force liquidation or seize the interests of liable parties. Creditors can only receive future distributions.

Furthermore, no adverse tax consequences will befall U.S. citizens who transfer assets to offshore single-member LLCs. Plus, U.S. creditors must solicit a Nevis court to enforce and collect judgments.

Overall, the new legislation limits fraudulent transfer claims and makes it more difficult for creditors to get their hands on Nevis LLC assets. Additionally, corporations can start new ventures without being hindered by creditors.

Nevis LLC Law Change Amendment

Foreign Judgments Not Automatically Enforced

To execute a judgment in Nevis, the creditor must first retain a Nevis attorney, who under local rules may not work on a contingency basis. That means the creditor is paying legal fees from day 1. The creditor must also post a cash bond to cover any costs incurred by potential counterclaims. Nevis is also a “loser-pays” jurisdiction; the prevailing party is generally entitled to have its legal fees reimbursed by the loser.

“charging order” Only Available Creditor Action

Creditors only have the right to future distributions made from the business to the liable member. They can’t interfere in the business or foreclose on the ownership interest. Nevis doesn’t have a winding-up mechanism for LLCs, making the charging order the only way creditors can recover assets from a Nevis LLC.

Named Defendants Limited To LLCs

A judge can dismiss lawsuits against a Nevis LLC that also names members or managers as defendants. This procedural requirement makes it more challenging to attack member interests.

Membership interest Trumps fraudulent conveyance

Under Nevis law, transferring assets to an LLC is not considered fraudulent conveyance even for single-member corporations. As long as the transferor receives a corresponding equivalent membership interest in the LLC, it’s all good.

Enhanced burden of proof For Creditors

For a creditor to prevail in a fraudulent conveyance claim, local law requires proof “beyond a reasonable doubt.”

Frivolous Litigation Protections

In the unlikely event that a Nevis court deems a money or property transfer fraudulent, creditors can only collect actual damages, not punitive ones.

Connect With A Business Law Attorney

The Gordon Law Group works with startups and established corporations on everything from jurisdictional optimization to contract negotiations, tax positioning to litigatory representation.

If you’re curious about establishing an LLC in Nevis — or if you have any other business law questions — give us a ring.

To learn more about our business law firm, start here. If you’re ready to speak with someone about your situation, get in touch.