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Orange County Business & Commercial Law Blog

Restrictions on natural gas may make construction harder

Not in my backyard. Zero population growth. Fight climate change. California is aflutter with buzz words like these as politicians, citizens and builders work out the state's future while development continues at a breakneck pace. Decisions can bring new laws that construction companies and contracts must know, and disputes can land unprepared parties in court.

Many new laws regarding construction make a slow start in the Golden State, with one or two prominent municipalities setting the tone for the future with an innovative law. Other cities or towns may adopt similar regulations, with some statewide laws growing out of these developments.

Why does it matter how a business is legally organized?

When it comes to starting a construction business, Californians are going to have a lot on their minds. Where should the headquarters be? What is your operating capital? If a question about the form of the business is not one of your first few questions, however, it may be best to stay home.

  • Why does it matter what kind of company you form?

It may matter a lot immediately but it will almost certainly matter more in the future. Some of the first concerns are how a company is managed and who owns it. Later, people may want to transfer or sell their interests. If the company is named in a lawsuit, it will certainly matter who may hold financial liability and how it is structured.

  • How are companies formed to shield owners from liability?

Labor contract ignites lawsuit in San Diego public works project

It's not easy to go to court over any issue. Contractors and other construction professionals often roll their eyes when injunctions and other legal instruments show up over a dispute because it means more time and money spent on something other than the project at hand.

Contractors often have to adhere to specific labor regulations within the state of California or one of its municipalities with its own laws. One example is San Diego's massive project to reclaim drinking water from recycled sewage, which included a requirement for builders to accept union-friendly contracts.

How do builders adjust to the new realities in California?

Builders know they may run into a variety of legal challenges, from zoning issues to breaches of contract with subcontractors. California communities have caused some recent trouble with new restrictions that aim to reduce the number of new stand-alone housing units and increase the stock near transportation hubs to reduce pressure on expanding towns and cities.

  • How can builders respond to legal issues?

Retaining legal counsel for businesses is often a good idea. Lawyers who are more familiar with specific business entities as well as the legal background of commerce may fare better defending their interests. Otherwise, legal advice is often helpful with specific types of construction litigation.

  • How can builders manage costs as profit margins shrink?

California adopts a strict definition of independent contractor

Construction is big business in California, and that leads to a lot of legal requirements for large companies to do business in development. Fortunately, that is nothing new, as California has been experiencing construction booms for more than a century. New conditions are always arising, however, like the push to build more multifamily units near transit hubs to reduce urban sprawl.

One factor that has always interested construction managers and their lawyers is who is a legal employee and who is not. This is important because firms hired to build large-scale projects or even individual homes often have contractors and subcontractors doing large parts of the work, like plumbing and electrical installations.

Partnerships can help businesses expand

Starting your own business is one of the best ways in California to declare your independence. It is one of the most American acts to take on all of your own potential while also taking on all of the risk in a business venture. Therefore, it's very important to plan a business' creation or expansion carefully to avoid failure.

Many industries offer more risk to entrepreneurs than others. Products and services with extra regulation are often the ones that may pose the greatest dangers to consumers if they are badly planned or misused by the people who buy them.

Contract disputes are getting harder and longer to solve

From marriages to car purchases, people are always looking for the security of legal contracts. When parties back out of arrangements that have not yet been made official, there is little recourse except to learn a lesson and move on. When it comes to massive projects like building a skyscraper, contracts are usually signed before the work is even planned, adding a layer of protection for builders.

Contract disputes are mostly settled out of court, with options for mediation with a conflict resolution professional or a settlement out of court before a jury would render a verdict. But a recent study shows that contract disputes in construction cases are getting longer and harder to solve.

Lawsuit stalls construction in historic California neighborhood

From plumbing to landscape architecture, few ventures bring together more disparate industries and professionals than construction. Contractors and management firms often have to put their money forward while getting projects off the ground, which can cause problems during sudden delays or cancellations.

Many types of construction are subject to delays that are not part of most long-term project planning. For example, a Santa Clara construction project is temporarily coming to a halt over its possible effect on a property with historic claims. A preservation society has filed a lawsuit against the city until it completes an environmental impact report on the project's plans.

Prospective law may change the face of California construction

California is on the rise. In fact, conditions for many people in the Golden State have been so good for so long that it seems its rise will never stop. But the growth of the economy is bringing its own problems, and construction may be the solution once the government in Sacramento makes changes.

A bill in the state Senate is designed to encourage home building by requiring cities to relax any zoning restrictions within a certain distance of mass transit stops and terminuses. Another provision would require wealthier communities to allow for more apartments regardless of proximity to mass transit.

How does the type of corporation affect taxes?

When someone is pursuing a dream, she or he is more likely to succeed if planning is involved. It is the same when someone is chasing a good business opportunity, and it is especially true when both are the case. Although it may seem insignificant for small businesses, the type chosen for a company or corporation can save vital assets and resources from taxes and liability.

How has 2018 affected the taxation of corporations?

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