There are four main types of business entities you can choose from: sole proprietorship, partnership, corporation, and limited liability company (“LLC”). In determining which entity is best for you, there are numerous things you should consider, such as, legal liability, tax implications, cost of formation and ongoing administration, flexibility, and future needs. There are advantages and disadvantages to each.
The COVID-19 pandemic has caused a crisis for both landlords and tenants in New York State. Given the government-levied pause on evictions, landlords have effectively been unable to collect rent for more than one (1) year and tenants, due to illness and unemployment, have fallen behind on regular rent payments.
A Criminal Record Can Block You From Living Your Life.
A conviction for even a minor criminal offense (like marijuana possession) can mean a life sentence of sorts. Your criminal record can block you from getting a job, attending school, voting, borrowing money, obtaining certain licenses, and qualifying for certain services for your family.
It is a real problem, affecting many people. In 2018 alone, 663,367 people were arrested for cannabis-related offenses (40% of all U.S. drug arrests). But relief is on the way for some under New York’s new Marijuana Regulation and Taxation Act (MRTA), recently signed into law by Governor Andrew Cuomo. A somewhat overlooked provision of the MRTA provides for automatic expungement (erasing) of records for individuals with previous convictions that are no longer crimes. Additionally, the MRTA provides the ability to reduce certain sentences, meaning an individual’s felony conviction can be reduced to a misdemeanor.
NYS HERO ACT
On May 5, 2021, Governor Cuomo signed the Health and Essential Rights Act (NYS HERO Act) into law, which requires all employers composing the state’s private-sector to implement workplace safety plans to prevent the spread of airborne infectious diseases, including COVID-19. This legislation was conceived to address the return of private-sector employees to in-person work across a broad cross-section of industries, as NYS begins to gradually reopen following a period of decreased business activity during the COVID-19 pandemic.
A New Landscape
On March 31st, 2021 New York State passed the Marijuana Regulation and Taxation Act (“MRTA”) which legalized the use of cannabis recreationally for adults over the age of 21. It’s also legal in a similar capacity in 17 other states and is legal for medical use in 36 states. But under the Controlled Substances Act of 1970, it is still illegal in the eyes of Federal Law. You can’t grow it, smoke it, or make gummies out of it. If you do, you may face serious consequences, including the loss of Federal contracts or even jail.
Some say the Federal law will change soon, but no big changes are imminent. So, what do you do if you are an employer trying to avoid liability? Or what do you do if your boss is trying to fire you for using marijuana legally? We are in the twilight zone, that space between what was, what is, and what will be. It’s sure a bit hazy. Let’s clear things up.
On December 21, 2020, the U.S. Congress passed an appropriations bill which continues the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program, and provides other forms of assistance for small businesses impacted by Covid-19.
In a move sure to further strain the relationship between landlords and tenants in the COVID-19 era, it has now been reported that the New York State Senate is close to finalizing a bill enacting a blanket moratorium on evictions for an indefinite period, after the expiration of the current protections at the end of this month. State Senator Brian Kavanagh has stated, “It’s important we put a blanket moratorium in place that prevents all residential evictions. At a time when we are curtailing so many activities, we certainly shouldn’t be letting eviction marshals come to people’s homes and forcibly remove them.”
The U.S. Treasury Department and Internal Revenue Service (“IRS”) released guidance which reiterates and clarifies the tax treatment of expenses where a PPP loan has not been forgiven by the end of the year the loan was received. Taxpayers cannot claim a deduction for any deductible expense if the payment of the expense results in forgiveness of a PPP loan because the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) specifically excludes income associated with the loan forgiveness.
Individuals suffering financially during the current COVID-19 pandemic can avoid tax penalties by accessing their retirement savings. Typically, taxpayers who withdraw funds from a standard retirement account before age 59½ are subject to a 10% additional tax for early withdrawal, barring other qualifying circumstances. To financially survive the pandemic’s impact, the Coronavirus Aid, Relief, and Economic Security (CARES) Act permits taxpayers to make early withdrawals in 2020, which will not be subject to the 10% additional tax under Sec. 72(t) or the 25% additional tax on SIMPLE IRAs under Sec. 72(t)(6) if certain conditions are satisfied.
COVID-19’s Impact on Contractual Relationships and Obligations
In follow up to a previous discussion on force majeure provisions, we reviewed how Coronavirus will affect contractual relationships and obligations. The unique nature of the COVID-19 pandemic has thrust all of America into uncertainty. Relying on Act of God language to exempt you from your legal responsibilities might not be a sure bet, even if you believe you have a convincing case. Taking steps to connect with contract partners might be a better way to reach a resolution that recognizes the harm that was done and modifies certain rights and obligations. By working with a skilled business lawyer, you might be able to avoid a significant conflict over how force majeure is defined in your situation. If a compromise cannot be reached, your attorney can assist you in ascertaining whether you might succeed in a legal action.