FinCEN has kindly extended some filing deadlines for BOI reports, as detailed on their website. Reporting companies created or registered prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. These companies would have otherwise been required to report by January 1, 2025.

Reporting companies created or registered in the United States on or after September 4, 2024, with a filing deadline between December 3, 2024, and December 23, 2024, also have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.

Additionally, reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have been granted an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.

Reporting companies that qualify for disaster relief may have extended deadlines beyond January 13, 2025. In such cases, they should adhere to the later deadline.

Reporting companies established or registered in the United States on or after January 1, 2025, have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice of their effective creation or registration.

We had previously advised that, unless you have specific circumstances, you should proceed with the filings despite the temporary injunction. Please allow at least four business days to review and prepare the necessary information for the filing.

Remember that Lloyd & Mousilli has successfully handled hundreds of these filings on behalf of our clients and is available to assist you with your corporate governance compliance requirements.

The ongoing legal battle surrounding the potential ban of the popular app TikTok highlights critical issues that could reshape the digital marketplace and create new challenges for businesses. With the Supreme Court now set to hear the case, the stakes are high—not just for TikTok, but for companies that rely on the platform for marketing, engagement, and revenue generation. This article explores the potential implications of a TikTok ban and the mitigating steps businesses can take to shield themselves from the potential fallout. Whether your business is currently using TikTok or is interested in growing its digital presence, this decision is likely to have an impact on how consumer engagement looks in the future. Is your business and brand prepared to engage with consumers in the ever-changing digital space?

The TikTok Case and Its Potential Implications

The central issue in this case is determining the balance between national security concerns and free speech rights. Back in March of 2024 the U.S. government enacted legislation banning TikTok, citing national security concerns relating to potential data security risks posed by TikTok's Chinese ownership. TikTok ownership has challenged this ban as unconstitutional, suing the federal government on behalf of its users, arguing a ban would infringe on First Amendment rights and harm American businesses.

The Supreme Court's decision to hear the case indicates the high stakes involved and the potential far-reaching constitutional implications of the ruling. This case could set a precedent for government regulations on foreign-owned technology companies and how to balance national security interests with individual rights in the coming future. Businesses will also be affected by this ruling as it disrupts their access to consumers and limits their ability to market.

The Far Reaching Implications on Businesses if the Ban is Upheld

The impending Supreme Court decision on the constitutionality of a congressional ban on TikTok carries significant implications for businesses across various industries. This decision very well has the potential to reshape the digital marketplace in a number of unexpected ways. Businesses would be wise to consider the implications of a ban and mitigate any potential fallout following the decision. 

In today's technological age, many businesses rely on TikTok as a major platform for revenue generation, client engagement, and marketing to a younger demographic. TikTok's algorithm is designed to amplify content, making it a powerful tool for brand awareness. Companies spread brand awareness through the app’s various advertising options on TikTok—such as influencers, content creators, sponsors, and advertisers. Businesses also leverage the app for revenue generation, as the app has emerged as a significant e-commerce platform, especially for small businesses. 

 If the court rules in favor of the government and the ban goes into effect businesses would likely experience a significant reduction in a brand's visibility and engagement. This would likely result in an immediate disruption of current marketing efforts, void content creation agreements, and result in the loss of revenue due to the lack of marketing exposure.

Companies using TikTok for marketing and advertising campaigns may need to consider diversifying their marketing efforts across multiple platforms to reduce reliance on any single platform. The sudden loss of such a popular platform could harm brand reputation and weaken customer engagement. With TikTok's future hanging in the balance it creates an environment of uncertainty for businesses as they begin to plan for the coming fiscal year and how to market to consumers. Businesses should refocus their efforts to build a strong brand identity and foster consumer loyalty to ensure a strong structure is in place to better weather similar disruptions. One such way of ensuring a strong brand is established and protected is to file for a trademark registration. While the outcome of the case cannot be predetermined, any decision from the Supreme Court is poised to have profound and far-reaching implications on the digital marketplace and those businesses that depend upon it. 

Additional Impacts Businesses May Need to Consider Based on this Supreme Court Case

The TikTok case serves as a wake-up call for businesses navigating today’s complex regulatory and geopolitical landscape. Increased scrutiny around data privacy and security means companies managing large amounts of user data may face stricter regulations, necessitating significant investments in cyber security and compliance. Additionally, the case raises questions about international data transfers, particularly with countries that maintain differing privacy standards, potentially requiring businesses to adjust their data management practices.

Social media platforms are also under the microscope. Enhanced platform regulation and content moderation could lead to greater oversight of algorithms and policies, exposing businesses to increased liability for user-generated content. For some companies, bans or restrictions on key platforms could disrupt marketing strategies and customer outreach.

Beyond regulatory concerns, the case highlights geopolitical risks tied to US-China relations, which could result in supply chain disruptions and trade restrictions. Businesses may need to diversify supply chains and reduce reliance on specific regions to remain resilient. Lastly, consumer behavior and market dynamics could shift dramatically. If TikTok is restricted, users may migrate to alternative platforms, creating both challenges and opportunities for businesses to adapt their advertising and engagement strategies to stay ahead of the curve.

Preparing for the Future

The implications of the TikTok case demonstrate how rapidly evolving legal and regulatory landscapes can impact businesses across a variety of industries. Whether it’s ensuring compliance with data privacy laws, mitigating liability risks, or adapting to shifts in consumer behavior and marketing dynamics, these challenges require a proactive and informed approach.

At Lloyd & Mousilli, we have the experience and expertise to guide businesses through complex legal issues. Our team understands the unique challenges companies face in today’s environment and we are dedicated to providing tailored legal solutions to help you stay ahead. If your business is looking for strategic advice or legal support in these areas, we’re here to help. Reach out to us today to schedule a consultation and learn how we can assist you in protecting and growing your business.

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The CCPA’s Annual Update Requirement

The California Consumer Privacy Act (CCPA), effective since January 1, 2020, has set a new standard for data privacy in the United States. Among its many provisions, one key requirement is the obligation to update privacy policies at least once every 12 months. This mandate is more than a mere formality—it’s a crucial step in ensuring transparency and responsible data management.

The rationale behind this annual update is simple yet significant. The ways in which personal data is collected, used, and shared are constantly changing due to technological advancements and shifts in consumer behavior. By requiring businesses to update their privacy policies annually, the CCPA ensures that consumers are kept informed about the latest practices and technologies that impact their personal information. This not only helps protect consumer rights but also fosters trust between businesses and their customers.

Key Elements to Include in Your Privacy Policy

When updating your privacy policy, it’s essential to reflect any changes in your business operations that could affect data privacy. Here are some critical elements to include to ensure compliance with the CCPA and other emerging privacy regulations:

• Categories of Personal Information Collected: Clearly outline the types of personal information your business collects. This may include identifiers such as names and addresses, commercial information, biometric data, and internet activity. If your business has begun collecting new types of data, ensure these are incorporated into your policy.
• Purpose of Data Collection: Explain the reasons behind your data collection practices and how the information will be used. This transparency is vital in building consumer trust. If new products or services have been introduced, ensure that these purposes are updated in your policy.
• Consumer Rights: Detail the rights consumers have under the CCPA, including the right to know, the right to delete, and the right to opt-out of the sale of their personal information. Any changes in how these rights are facilitated should be clearly communicated.
• Data Sharing Practices: Disclose whether personal information is shared with third parties and, if so, identify the categories of those third parties. Updates should reflect any new partnerships or changes in data-sharing practices.
• Contact Information: Provide clear instructions on how consumers can contact your business to exercise their rights or ask questions about your privacy practices. Ensure that any changes in contact details or procedures are reflected in the policy.
• Jurisdiction and Country Expansions: If your business has expanded into new jurisdictions or countries, or if your user base has become more international, your privacy policy must reflect compliance with all relevant regulations. This is particularly important as different regions have varying privacy laws.

By addressing these elements, your business can mitigate the risks associated with non-compliance and ensure that your privacy policy accurately reflects your current data practices. Taking a proactive approach not only helps in maintaining compliance but also strengthens consumer trust in your brand.

Staying Ahead of Emerging Privacy Laws

While the CCPA is a cornerstone of U.S. data privacy regulation, it is not the only law that businesses must consider. Other states, such as Virginia with its Consumer Data Protection Act (CDPA) and Colorado with its Privacy Act (CPA), have enacted their own privacy laws. Additionally, the European Union’s General Data Protection Regulation (GDPR) continues to influence global privacy standards.

Looking ahead, several new privacy laws are set to come into effect in 2024 and 2025, including the EU’s Digital Services Act (DSA), which imposes new obligations on online platforms and intermediaries. To ensure your privacy policy remains compliant with these evolving regulations, consider the following steps:

• Regular Legal Reviews: Conduct regular reviews of your privacy policy with the assistance of legal experts. This will help you stay informed about new laws and amendments to existing ones, such as the upcoming EU DSA and other state-specific regulations.
• Cross-Jurisdictional Compliance: If your business operates in multiple states or countries, ensure your privacy policy addresses the requirements of all relevant jurisdictions. This may involve creating separate sections for different regions or a comprehensive policy that covers all applicable laws.
• Technological Advancements: Stay informed about technological advancements that may impact data privacy, such as the increasing use of artificial intelligence and machine learning in data processing.

Conclusion

Updating your privacy policy annually is not just a legal obligation under the CCPA—it is a critical practice that demonstrates your commitment to protecting consumer privacy. With new privacy laws emerging, staying informed, and regularly reviewing your privacy practices is more important than ever. Failure to comply can result in severe penalties and damage to your reputation.

As privacy laws continue to develop, businesses must remain proactive in their approach to data protection. An up-to-date privacy policy is essential to safeguarding consumer rights and maintaining the integrity of your business operations. Don’t wait until it’s too late—ensure your privacy policy is compliant and reflects the latest legal requirements.

Contact us today to review your legal documents and stay ahead of the regulatory curve. Let us help you navigate the complexities of data privacy and protect your business from potential risks. Your commitment to privacy starts with a comprehensive and current privacy policy. Reach out now to secure your compliance and build trust with your consumers.

What steps should you take next?

Your initial priority should be promptly retaining experienced legal counsel. Although there are procedural avenues available to challenge the default judgment, demonstrating to the court that you took swift action upon learning of the lawsuit is imperative. Moreover, the intricate legal procedures necessitate the expertise of a qualified attorney to navigate effectively. Notably, in court, corporate defendants are required to be represented by licensed attorneys and cannot proceed without one.

Once legal representation is secured, your attorney should provide tailored guidance specific to your case. Typically, they will enter an appearance on behalf of your company in the lawsuit and promptly file a motion seeking to set aside the default judgment, as permitted under the Federal Rules of Civil Procedure.

District courts have discretion to set aside final default judgments on various grounds:

• A common basis is demonstrating “mistake, inadvertence, surprise, or excusable neglect.” Often, companies default not out of willful disregard but due to administrative errors, such as misplacing summonses or oversight by responsible employees. Providing evidence to the district court explaining the circumstances and requesting the default judgment be vacated is essential. Establishing that the default resulted from a genuine oversight, prompt action was taken upon discovery, and the plaintiff would not suffer undue harm from reversing the judgment is crucial.

• Another common basis is failure to receive proper service. If your company never received proper service of the summons, it is imperative to raise this issue as it violates fundamental due process rights.

• Other grounds for setting aside default judgments include the discovery of new evidence, as well as demonstrating fraud, misrepresentation, or misconduct by the opposing party. However, these grounds are more challenging to establish. 

• In cases where the plaintiff's complaint lacks sufficient factual allegations to support the default judgment, this deficiency can also be raised. Although a default may occur due to failure to respond, the district court cannot issue a judgment unless the plaintiff's pleadings adequately support it.

• This is not an exhaustive list. It is important to note that, upon motion of the defaulting party, Courts can set aside a default judgment for “any other reason that justifies relief.”

Ultimately, if the district court declines to set aside the default judgment, you may consider challenging this decision through an appeal. However, the feasibility of this recourse depends on the potential liability at stake and whether the district court erred in its decision-making.

Escaping a default judgment post-issuance is challenging, emphasizing the importance of responding to lawsuits before the deadline. Nevertheless, if your company discovers the lawsuit after a default judgment has been entered, acting promptly by engaging competent legal representation and presenting your case for setting aside the default judgment remains the most viable option.

The Future is Uncertain

Equity, or ownership, is a company’s most expensive and most valuable asset. When splitting ownership, it is important to keep in mind that no one knows what the future may hold. You might expect that if you and your partner have equal ownership, that your work, time, or financial contributions will be equal. The reality, however, could be very different. You may end up bearing more of the workload than your co-founder and still have the same equity split. As the startup grows, each of your commitments and life priorities may change and your share of the equity split or your partners’ may no longer be representative of each of your contributions to the company. 

Founders also have different ideas about the types of contributions they will be making, and this vision changes over time as the company grows. Some may envision taking an active role in daily operations and management, while others want to handle marketing, and some may prefer a more passive style of investment. It is important that the split in ownership be reflective of these styles. It takes time to understand these differences and how to work with them, and most startup founders do not have that degree of familiarity with each other, thus making a 50/50 ownership split a risk. Startup founders that negotiate longer are more likely to decide on an unequal split, as they have been able to discover and address important differences in their expected contribution levels.

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Higher Chance of Splitting Faster

Another risk with a hasty 50/50 ownership split is that it can lead to your startup falling apart fast. Compared to founders who took the time to establish a well thought and calculated equity split, those who neglected to have this discussion and chose to split equally shut down their companies significantly faster due to a fallout amongst the founders. This also applies to startup founders who are related to each other- they are more likely to spend less time negotiating equity, and in turn are also more likely to share equally and end up splitting faster. The consequences and tension of an ill established ownership split can be devastating for a startup. 

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More Difficulty Bringing in Investors

A major consequence of implementing an equal ownership split is that it makes bringing in investors a lot more difficult- equal splits are sometimes seen as a sign of bigger issues within the startup. Investors tend to pay attention to the way co-founders divide ownership because it tells a lot about their experience level and engagement within the company. They may find an equal split to be impractical, and see it as an inability to negotiate seriously within and outside the company. Teams who quickly establish an equal ownership structure may face significant difficulty in raising their first round of financing, either in reduced ability to raise or in lower average valuations.

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Stalemates on Key Issues

An equal ownership split between startup founders means that both partners have equal control and voting power. This inevitably leads to deadlocks and an inability to move forward on key issues, which at best could end up stalling the business. These stalemates can easily be avoided by having one founder maintain majority control, even through an almost-even split. This ensures one founder has majority voting power when it comes to important business decisions. Startup founders need to be able to compromise and negotiate for the good of the company.

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Conclusion

Making these decisions can be overwhelming. Lloyd & Mousilli can help you implement the right ownership split for your startup. Our firm has the experience necessary to set your company up for success.

Scope and Applicability

The Texas Privacy Law aims to protect the privacy rights of individuals residing in Texas. It applies to businesses that collect, process, store, or disclose personal information of Texas residents, regardless of the business's physical location. This broad applicability underscores the commitment of the state to safeguarding personal data and ensures that both local and global organizations must comply with the law.

Consumer Rights and Control

One of the notable aspects of the Texas Privacy Law is the emphasis on consumer rights and control over personal information. The law grants Texas residents the right to know what personal information businesses collect and how it is used, as well as the right to access and delete their personal data. This increased transparency empowers individuals to make informed decisions about their privacy and exercise greater control over their personal information.

Consent and Opt-Out Mechanisms

The law introduces stricter consent requirements for businesses, mandating that they obtain affirmative consent from consumers before collecting or processing their personal data. It also strengthens opt-out mechanisms, enabling individuals to easily withdraw their consent for data processing at any time. These provisions reinforce the principle of consent as a cornerstone of privacy and give individuals more agency in determining how their personal information is managed.

Data Breach Notification

To ensure timely and effective responses to data breaches, the Texas Privacy Law establishes stringent requirements for data breach notification. Businesses are now required to promptly notify affected individuals in the event of a breach that poses a significant risk of harm, allowing them to act appropriately to protect themselves from potential harm resulting from the breach. The law also imposes reporting obligations on businesses, mandating them to inform the Texas Attorney General of certain breaches.

Compliance and Penalties

To enforce compliance, the Texas Privacy Law provides the state Attorney General with authority to investigate and enforce violations. Non-compliant businesses may face substantial penalties, including fines and injunctive relief. Compliance with the law necessitates the implementation of robust privacy practices, including privacy policies, data protection measures, and mechanisms for addressing consumer inquiries and requests.

Conclusion‍

The introduction of the new Texas Privacy Law marks a significant step forward in enhancing privacy rights and data protection for residents of the Lone Star State. By granting individuals greater control over their personal information and imposing obligations on businesses to ensure transparency and accountability, the law aligns Texas with the global privacy movement. Companies operating or having customers in Texas  must now prioritize privacy compliance to maintain consumer trust, avoid penalties, and demonstrate their commitment to protecting personal data.

While the implementation of the Texas Privacy Law may require businesses to adjust their data handling processes, it serves as a reminder that privacy is not just a legal obligation but a fundamental right that deserves respect and protection in the digital age. By embracing these privacy-enhancing measures, organizations can foster a culture of trust, establish a competitive advantage, and contribute to a more privacy-conscious society. If you need a review of your existing privacy compliance, please reach out to Lloyd & Mousilli to help. 

Your business name is not just a label; it's the beacon of your brand's identity, guiding consumers to the unique products and services you provide. In the entrepreneurial journey within the United States, where your brand essence is crucial to your market presence, the protection of your name isn't just an option—it's essential.

However, the formation of an LLC, just like a Corporation or Sole Proprietorship, while providing a foundation for your business structure, does not automatically shield your name from potential infringement.

Without robust intellectual property safeguards, your cherished business name remains exposed to risks that could undermine your brand and reputation, or even lead to a costly lawsuit.

No, an LLC doesn't protect your business name, and neither does a C-corp, S-corp or sole proprietorship. But trademark registration does. Read on to find out how your business name can be protected from legal risk and what you can do about it—starting today.

Your business name is not just a label; it's the beacon of your brand's identity, guiding consumers to the unique products and services you provide. In the entrepreneurial journey within the United States, where your brand essence is crucial to your market presence, the protection of your name isn't just an option—it's essential.

However, the formation of an LLC, just like a Corporation or Sole Proprietorship, while providing a foundation for your business structure, does not automatically shield your name from potential infringement.

Without robust intellectual property safeguards, your cherished business name remains exposed to risks that could undermine your brand and reputation, or even lead to a costly lawsuit.

Trademark protection is vital for business owners seeking to secure their brand identity against infringement, as LLCs and other legal entities do not offer this safeguard inherently. For entrepreneurs considering forming a business entity, understanding the trademark process and consulting with a trademark law firm for legal advice can greatly enhance their assets' security and ensure comprehensive brand protection.

What Is an LLC?

An LLC, or Limited Liability Company, offers a blend of flexibility and protection, shielding owners from personal liability for business debts and offering favorable tax treatments, much like other corporation structures but with distinct advantages.

While essential, forming an LLC through filing a Certificate of Formation with your Secretary of State is merely the first step. Here at Lloyd & Mousilli, we dive deeper, preparing all vital corporate documents to ensure your business is a well-constructed fortress from the start.

Trademark protection is essential for any business, regardless of its structure, to safeguard its valuable assets and branding. Understanding the intricacies of trademark rights and the implications of trademark infringement is crucial for entrepreneurs and LLC owners looking to effectively shield themselves from potential legal challenges and liabilities.

How do I protect my brand name in the USA?

But what about protecting the very essence of your identity—the name of your LLC, or your product or service? This is where trademarking, guided by the United States Patent and Trademark Office (USPTO), shines as your safeguard. Registering your business name as a trademark solidifies your claim over it, marking it as uniquely yours in the commercial arena.

A trademark not only includes the name of your LLC, but it also extends to the logo that represents your brand, ensuring you have exclusive rights to it. For many entrepreneurs, securing federal trademark protection through the United States Patent and Trademark Office (USPTO) can be a crucial step in safeguarding their legal name and preventing other companies from infringing on their ownership rights.

What is a trademark and how is it important to my LLC?

A trademark is a word, phrase, symbol, and/or design that distinguishes one company's products and services from a competitor. Trademarking empowers you to take decisive legal action against any misuse of your brand name, preserving the integrity of your brand.

A trademark is more than just legal protection; it is a declaration of your brand's uniqueness, differentiating your offerings from competitors', enforced by the stringent laws of the United States.

A trademark serves as a vital tool for new business owners, offering important legal reasons to protect their chosen business name and brand identity. By filing trademark applications with the US Patent and Trademark Office and conducting a comprehensive trademark search, small businesses can significantly lower the risk of litigation and safeguard their interests against competitors who may attempt to steal their business money or reputation.

How do I register an LLC trademark?

With Lloyd & Mousilli's expertise in intellectual property, we guide you through the nuances of trademark registration with the USPTO, ensuring your business name commands the respect and recognition it deserves within your industry.

Our specialized team is ready to navigate you through the intricacies of trademark application. From identifying the appropriate goods and services class to crafting a comprehensive trademark strategy, our hands-on approach simplifies the process, giving you peace of mind and more time to focus on what you do best—growing your business.

By partnering with us, you ensure that your trademarks are legally secured, providing you and your limited liability company (LLC) with the necessary legal entity protections. Our approach not only clarifies whether an LLC can shield its owners from bankruptcies and lawsuits but also prepares you to combat scenarios where a business steals your intellectual property rights.

In short, Does an LLC Protect Your Business Name?

No. Granted, forming an LLC does offer a solid foundation for protecting your business identity. The structure of an LLC shields personal assets in legal situations. It also clearly separates the organization from its owners in the eyes of the law. However, forming an LLC alone does not guarantee automatic protection for your trademark or business name. To ensure your business name is fully safeguarded, you must undertake trademark registration at state or, ideally, federal levels for nationwide protection against infringement.

Advantages of an LLC for Business Protection

Forming an LLC protects your business in many ways:

1. Liability Protection: Unlike a sole proprietorship, an LLC offers liability protection. It separates personal assets from business liabilities. This legal structure positions you as the clear legal owner of the business name, essential for sustaining a robust brand identity.
2. Enhanced Credibility: An LLC enhances credibility with clients and partners. This provides a layer of legitimacy and safety. Such a structure is especially beneficial in competitive markets, indicating a formal commitment to business operations and reputation management.

The Risks of Neglecting LLC Name Protection

Without appropriate steps to protect your LLC name, you may encounter legal challenges and brand recognition issues. Competitors might register similar names, potentially compromising your unique market identity and leading to disputes. Proactive methods like securing patents and trademark registration are vital for maintaining your LLC's distinctive character and preventing conflicts.

Key Steps to Protect Your Business Name

1. State-Specific Registration: Registering your business name as part of your LLC formation establishes your rightful ownership and deters potential infringements. This is crucial in maintaining brand integrity.
2. Diligent Monitoring: Pay attention how your business name is used in the marketplace to catch any unauthorized use early. Prompt action against infringements helps maintain your brand’s integrity.
3. Understanding Trademark Protection: Acknowledge that LLC formation is just one step. Comprehensive brand protection requires a trademark strategy to fully secure your business name against misuse.

Conclusion: LLCs and Business Name Protection

In summary, LLCs don't automatically secure your company name against competition or misuse. The power's in your hands to protect it. And how do you do it? Actively managing your brand, applying for trademark registration, and complying with relevant legal requirements. Only through these efforts can you realize the full benefits of an LLC in protecting your business name. That's the sure way to reap the rewards of long-term brand credibility and market position.

How Can Lloyd & Mousilli Help with My LLC?

Take the first step in fortifying your brand's legacy. Schedule a free consultation with a Lloyd & Mousilli expert today. Or, if you're ready to propel your trademark journey forward, our straightforward trademark intake form awaits your key details to kickstart the process.

Let Lloyd & Mousilli be your companion in transforming your brand from vulnerable to invincible. Your business name, whether tied to an LLC, Corporation, or Sole Proprietorship, is the cornerstone of your identity. Protect it with the vigilance it deserves, under the vigilant eyes of the United States Patent and Trademark Office.

What is the Metaverse?

The metaverse is essentially an immersive experience that integrates the virtual world and reality, allowing users to interact with one another even if they are not physically in the same space. People can work, shop, and socialize in the metaverse the same way they do in real life. This inevitably translates to a digital economy; users can sell and purchase virtual products, like clothes and real estate, that only exist in the metaverse. 

‍Who is trademarking in the Metaverse?

Major brands are preparing to enter the metaverse by trademarking their logos and products. 

• Nike has filed seven trademark applications with the USPTO in which the company indicated its intent to make and sell virtual apparel. 
• CVS Health filed to trademark its pharmacy and health clinics with the USPTO, intending to patent sales of virtual goods like wellness and beauty products, prescription drugs, and non-emergency medical services.
• Walmart has filed several trademarks that indicate its intent to market virtual goods. In a separate filing, Walmart specified that it would offer customers NFTs and a virtual currency. 
• Most notably, Facebook has dedicated itself to total immersion in the metaverse. Last year, the company officially changed its name to Meta. 

‍Why are trademarks in the Metaverse important?

Your intellectual property is valuable and should be protected- both physically and virtually. Creators are already taking advantage of the unprecedented circumstances created by the introduction of the metaverse. For example, third-parties filed two trademark applications last year to use Prada and Gucci logos on “downloadable virtual goods” on metaverse platforms. The third parties are unaffiliated with the real Prada and Gucci, but their attempt to capitalize on  major brands in the metaverse marketplace is an indication of what is to come.

 Shielding your brand’s name and image in the virtual world is crucial. Lloyd & Mousilli can guide you through the complexities of obtaining a trademark for use in the metaverse to ensure you are afforded the protection your brand is entitled to. 

‍What protections does a trademark in the Metaverse offer?

Fraudulent use of your intellectual property by unaffiliated third parties can be detrimental to your brand’s image. The last thing you want is your customers being exposed to confusingly similar products being sold by infringers. A trademark will legally protect your brand in the event that your products or intellectual property are infringed upon. Even if your brand has already obtained trademark registrations for the “real world,” you should consider filing separate applications for those existing trademarks that cover distinct virtual goods and services. This will ensure that such rights are recognized and protected in the metaverse virtual marketplace. 

‍How are trademarks in the Metaverse enforced?

The first course of action to enforce a trademark is typically to send a cease and desist letter to the infringer. If this is unsuccessful in stopping the infringement, the next step is to file a lawsuit. Trademarking in the metaverse is a relatively new concept so it is still too early to say exactly how trademark enforcement in the virtual world will unfold, but the general process of stopping an infringer will be the same. Lloyd & Mousilli is prepared to preserve the integrity of your brand by counseling you in the event of trademark infringement.

You Want In: Where Do You Start?

Filing a trademark application for your brand is the first step. Lloyd & Mousilli's trademark attorneys understand the complexities of intellectual property, as well as the intersection of technology and law. Book a consultation to discuss more in depth about the trademark process as it pertains to the metaverse.

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Think About Equity from the Start

When incorporating a start-up company, founders are typically concerned with growing their company and bringing in capital to execute their vision. To properly set the company up for growth, the company needs to have a sound policy for allocating equity. There is not just one correct way for all start-ups to allocate their stock. Rather, there are many considerations that founders must address. The path to a sound corporate equity structure starts from the very beginning. Even before incorporation, meet with your co-founders and discuss these issues to ensure you start the right way.

Dividing Stock Among Founders

After determining the amount of stock your company will authorize, which is the total amount of issuable stock, you will decide how much stock each founder will receive. The number of stock issued to each co-founder should be catered to each co-founders’ involvement and relationship with the company. If one of the co-founders has a passive role in the company’s business operations, it may not make sense to issue them the same amount as someone more involved. Although this may be a difficult discussion to have with your co-founders, it ensures that the ownership of the company rests with the members closest to it.

Executing Stock Purchases and Investments

After determining the appropriate amount of stock each founder should receive, founders will need to execute some form of a stock purchase agreement. This agreement will dictate the terms of each founders’ ownership in the company. The value of each share at an early-stage company will likely be very low, so the purchase price will be small, but it is integral to enter into this agreement.

In these agreements, companies should consider whether they want to include provisions like right of first refusal, IP rights, limitations on transfer, vesting schedules, and other language that will solidify the boundaries of a given shareholders’ interest. A right of first refusal provision will give your company the initial right to buy stock from an existing stockholder that is planning to sell their interest before they can sell it to any other buyer. IP rights provisions will dictate what intellectual property will belong to the company after a stock purchase. Limitations on transfer can include many different provisions that essentially prevent the purchaser from selling their stock unless certain conditions are met. Vesting schedules are discussed below.

Vesting Schedules and Other Restrictions

Founders should determine whether to implement a vesting schedule into their issued stock. A vesting schedule is a time-based restriction to issued stock, typically applied to founders’ and employees’ stock. It incentivizes critical members of the company to stay for the long-term by preventing the member access to all their issued stock until they have been at the company for a certain amount of time.

Founders may feel like a vesting schedule is an unnecessary restriction on their interest in the company but there are a few reasons that implementing a vesting schedule is a good idea. First, potential investors love, and often request vesting schedules. From the investor’s perspective, a vesting schedule provides some assurance that the company’s key members are in it for the long haul. Second, a vesting schedule also provides an assurance to co-founders. It may seem unlikely that any of your fellow founders would abandon the company, but it is helpful to provide an extra incentive to make sure.

Option Pools for Future Use

It is also important to decide how many of the corporation’s authorized stock will be available to issue and how many will be saved for later issuance. As your company grows, you may want to offer employees some type of equity package as compensation. To do so, you would want to set up an option pool that you can eventually pull from. Typically, an option pool should make up about 10-20% of total authorized stock, with the remaining stock allocated among founders, advisors, and investors. It is crucial to decide on an option pool early on because it will dictate your corporation’s total available stock.

Compensate Advisors with Equity

Start-up companies usually benefit from hiring advisors or consultants that are not typical employees but have some sort of expertise that brings value to the company. Allocating equity to advisors is a practical consideration because the start-up may not have enough money to pay a typical compensation and it can be attractive to investors. Since advisors will usually not be involved with the management of the company, they will not be issued a large portion of the company’s stock. When deciding to bring on advisors, consider the value that they are adding and how much time they will be dedicating towards the company, and allocate stock accordingly.

Use a Capitalization Table

A capitalization table, or cap table, is a document (usually on a spreadsheet) that provides a layout of the company’s ownership distribution. After tackling the equity issues raised in this article, it is important to keep an updated cap table that documents how your company has allocated its stock and to whom they allocated it to. Therefore, the table will include all the stockholders, how much they own, what type of stock they own, how much stock the company has issued and how many are still available for issue.

There are several different software platforms that you can use to store your equity documents and produce a cap table for you. Carta and Pulley are two examples of commonly used platforms. The best way to make sure your cap table is properly constructed and regularly updated is to hire a law firm to manage this platform for you. Hiring a law firm administrator is especially helpful for start-ups engaging in multiple financing rounds because expressing the specific terms of each financing instrument can be difficult.

Lloyd & Mousilli is Here to Help

You should consider hiring Lloyd & Mousilli to successfully implement your company’s equity allocation plan. Our firm has helped form hundreds of startup companies, and we have the experience and expertise necessary to set your company up for past, present, and future equity allocation.

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Established in 2015 and founded by two young, creative entrepreneurs, Instafuel is an innovativecompany that delivers fuel directly to customer vehicles, eliminating the need for consumers tospend time at gas stations. While there are a number of competitors in the mobile fuel deliveryindustry, Instafuel has successfully differentiated themselves by taking several measures to createa unique business model.

Similarly, Booster Fuels is a mobile fueling company that began with an initial business model ofdelivering fuel to single customers. However, recently, Booster Fuels pivoted its business modelto more closely mirror Instafuel’s practices of delivering fuel to commercial fleets.

In 2015, Instafuel engaged with an investment entity interested in a potential businesspartnership. This partnership included the disclosure of trade secrets and confidential informationpertaining to Instafuel’s business model and company practices. In 2019, it was later discoveredthat these investors were strategic investors with Booster Fuels.

After further review, an internal audit and competitive analysis of Booster Fuels’ business modelwas conducted by Instafuel, only to discover that Booster Fuels implemented Instafuel’s sensitiveand confidential information directly into their own business model. This would allow BoosterFuels to secure funding faster and expand into competitive markets ahead of Instafuel.

Shortly after Instafuel filed suit against Booster Fuels in late 2019, Booster Fuels moved to dismiss the claims based on Texas’s Anti-SLAPP statute. In motions filed with the trial court, Booster Fuelsclaimed Instafuel’s suit should be dismissed because it was filed “with the intent to impedeBooster Fuels’ exercise of its First Amendment rights, specifically its rights to freely associate andfreely speak with whomever it so chooses...”

In responding to Booster Fuels motion to dismiss, Instafuel asserted that communicationsbetween co-conspirators to steal confidential and proprietary information was not the kind ofspeech protected by the First Amendment.

The trial court found in favor of Instafuel and denied Booster Fuels’ motion to dismiss. BoosterFuels then immediately filed an interlocutory appeal, effectively staying the entire case. After twoyears, on January 11, 2022, the Fourteenth Court of Appeals issued a decision affirming the trialcourt’s denial of Booster Fuels’ motion to dismiss.

Discontent with the appellate court’s ruling against it, Booster Fuels appealed the appellatecourt’s decision to the Supreme Court of Texas on March 28, 2022.

The latest ruling from the Texas Supreme Court on August 2, 2022 comes as a huge relief toInstafuel’s Co-Founder, Wisam Nahhas. “This has been a very long process and Booster Fuels hastried their best to constantly delay our lawsuit. We hope to see an end to their delay tactics andhope we can get the justice Instafuel deserves.”

Litigation Partner, Lema Barazi, serves as lead counsel in this matter with Feras Mousilli serving as strategic counsel. Llyod & Mousilli is proud to serve as counsel for companies like Instafuel to prevail against egregious and predatory business practices.

Lloyd & Mousilli is a boutique firm specializing in trademark, copyright, trade secret, and patentlitigation and transactional matters and represents numerous startups around the world.

“We are proud to be the law firm clients call on when David is bullied by Goliath-sized companies.Our expertise in intellectual property matters rivals the best in the nation and we arestaunch advocates of protecting small businesses,” said Feras Mousilli, managing partner at Lloyd & Mousilli.

Can I Form an LLC in Any State? Exploring Your Options

Can you form an LLC in a state you don't live in? The answer is yes. Companies have flexibility when choosing where to establish their domicile. An LLC formed out-of-state is also known as a foreign entity.

Several states actively compete for new business formations; in particular, limited liability company (LLC) formation. The most popular, in no particular order, are New Mexico, Nevada, Delaware and Wyoming. Each state competes for a different part of the market. Unfortunately, there are many misconceptions about the benefits of registering legal entities in each.

Can I Form an Out-of-State LLC? Understanding Your LLC Rights

Yes. That said, each state's corporation law differs in how you're protected, and the way state income tax is applied, so the goal is to find the state which works for you and form your legal entity there. Below is a guide to how the states differ when it comes to LLC price, privacy and asset protection.

Is it Possible to Form an LLC in Any State? Exploring the Best State to Register an LLC

Every state is different and you can form LLC in the state where you reside, but we find the low cost and simplicity of a New Mexico LLC often make the difference for business owners.

Here is a brief overview of your options with a lengthier analysis further down:

Navigating the LLC registration process requires careful consideration of business licenses and legal frameworks that vary by state. If you're seeking to establish an LLC outside your home state, it’s prudent to engage with qualified business attorneys who can guide you through out-of-state business requirements and ensure compliance with both federal law and local state laws.

1. Can I Form an LLC in New Mexico? Your Guide to Registration

With New Mexico, you enjoy all the benefits of an LLC at a fraction of the usual cost. New Mexico acknowledges the corporate veil and provides the same limited liability as other jurisdictions. There are no annual fees or annual reports. In other states, periodic reporting is really just an excuse to collect fees on businesses. New Mexico skips this step, saving you time and money.

Establishing an LLC in New Mexico is not only affordable, but it also streamlines the process by eliminating the need for annual fees and reports, which can burden businesses in other states. The pro-business environment and the flexible business regulations make New Mexico a favorable choice for those looking to form an LLC out-of-state, while ensuring that the corporation's veil is respected for maximum liability protection.

2. Can I Form an LLC in Any State? | Exploring Delaware

Delaware is most famous for its Corporations. The Delaware General Corporation Law offers hundreds of years of well-defined corporate case law to act as precedent.

For large corporations, such formalities are important. This is why many Fortune 500 companies are incorporated in Delaware. Small businesses do not benefit from these corporate laws, however. The only difference most owners will notice are the significantly higher fees that Delaware levies on its companies. Delaware LLCs offer privacy, too, but are simply not worth the extra cost versus the other three states we cover. See Why Do Startups Incorporate in Delaware?

While Delaware is a prominent choice for many corporations due to its established legal structure, small business owners may find that states with lower LLC formation costs provide a more advantageous environment for forming LLCs. By opting for an LLC in one of the other states suggested here, even if not a domestic LLC, business owners can benefit from lower fees and a straightforward business entity structure while still ensuring effective liability defense against potential lawsuits.

3. The Benefits of Forming an LLC in Wyoming

Wyoming is a haven for asset protection. If personal liability is a top concern, Wyoming's business entities offer a number of debtor friendly laws for those seeking protection from personal creditors. These protections come at a price, however. Wyoming’s filing fee is twice that of New Mexico’s, plus there is a $50 annual report which must be signed by someone. This means if you want true anonymity, then you are stuck paying for an additional nominee service to handle the filing each year.

Wyoming offers unique protections for LLC members, primarily shield individuals from pursuing personal liabilities. While considering out-of-state LLC formation, it's vital to evaluate how the state's legal framework, including court structures and regulations, may affect your business operation and asset protection strategy.

4. Choosing Nevada for Your LLC Formation

Nevada is similar to Wyoming in being a haven for asset protection. They have a well-developed brand and their Secretary spends considerable sums on advertising the benefits of moving your company to Nevada. They have leveraged this brand value by increasing fees for eight straight years. This makes Nevada’s LLC one of the nation’s most expensive to start and maintain, just behind California. The Secretary also requires a list of members and managers which they do not publish… yet. In short, Nevada is not the best state for LLC privacy; it is the worst among these four.

Which of the above states appeals to you will depend on your situation. You may even select different states for different companies and operations. Large corporations will enjoy the familiarity of Delaware, asset protection specialists will utilize Wyoming, and those wanting a simple and inexpensive solution should choose to form an LLC in New Mexico.

Establishing an LLC involves understanding various complexities, including initial filing procedures and ongoing compliance requirements in different states. For business owners contemplating the question, "can I form an LLC in any state," it’s pivotal to consider the associated benefits of low LLC formation costs and the legal protections provided by each jurisdiction, including how home state court systems may influence business operations.

Why Form an LLC in New Mexico?

New Mexico is best suited for small businesses, cost conscious investors and privacy minded individuals. They are a good fit for internet businesses, consulting, real estate and other location independent businesses.

New Mexico's favorable conditions for business formation include the absence of annual fees and a lack of extensive regulatory requirements, making it a prime location for new LLC entities. Business owners seeking privacy protection for LLC owners, benefit from the pro-business state’s advantages can streamline their LLC formation process, ensuring compliance while safeguarding their business assets effectively against potential legal action.

Price of New Mexico LLCs

New Mexico LLCs are the cheapest anonymous LLC in the USA. There are no annual reports which saves hundreds of dollars over the life the company. You only need to maintain a registered agent in New Mexico.

Privacy Options for New Mexico LLCs

Members and Managers are not listed. Only the Organizer (us) has to list their name. With no additional annual reports, there are also no additional chances for your name to be exposed or nominee services to pay for.

Online business formation services like Lloyd & Mousilli streamline this filing process, help you maintain and enforce your privacy, and navigate state regulations.

Asset Protection in LLC Formation

New Mexico companies offer the same corporate veil as other states. This means you are not personally liable for the company’s debt - hence the “limited liability” in limited liability company.

With New Mexico, you enjoy all the benefits of an LLC at a fraction of the usual cost. In other states, periodic reporting is really just an excuse to collect fees from businesses. New Mexico skips this step, saving you time and money.

New Mexico LLCs are suitable for small-business owners most of all due to the lower entry fees and protections—plus, your ownership is protected and private if you desire privacy. The state is not well suited for large corporations, however. If you are a large company, then you should consider Delaware or Wyoming.

Establishing an LLC in New Mexico provides a straightforward path to enjoy the advantages of a traditional limited liability company while benefiting from low entry costs and privacy. And if you are in New Mexico and considering in-state LLC formation, you may find the absence of annual fees appealing, alongside the strong business asset protection that helps mitigate exposure to creditors and lawsuits.

Why Choose Delaware for Your LLC Formation?

Delaware offers over a hundred years of well-defined corporate case law to act as precedent. They also have a dedicated court system for hearing business disputes called the Court of Chancery. This court system which ensures cases are heard quickly. However, if your creditor is pursuing you, then the last thing you generally want is a fast track trial, let alone constant litigation. They also do not have as favorable of asset protection laws. This combination makes Delaware ideal for large corporations, but not for small business.

For large corporations such formalities are important. It is also important to have a dedicated court system for complex matters. The only difference most small business owners will notice are the significantly higher fees that Delaware levies on its companies.

If a Delaware entity is a fit for your company, engaging with an LLC formation service can ensure that all necessary legal documents, such as operating agreements, are correctly prepared. Unsure? Lloyd & Mousilli attorneys determine what's best fit for your LLC size.

Price of Delaware LLCs

Delaware LLCs command several hundred dollars in fees, including a $300 annual franchise tax. The Secretary fee to change registered agents is $50. Again, large companies may not notice these register fees, but small companies certainly will.

Privacy

Delaware allows anonymity and nominee officers. There are cheaper ways to obtain anonymity, though, like New Mexico.

Asset Protection for Your LLC Formation

Delaware companies offer the same corporate veil as other states.

You can obtain the benefits above for a much lower price elsewhere. Delaware has obtained a certain mystique because of the large corporations which reside there. However, you should not believe that Bank of America has the same needs as an entrepreneur. Find out more on Delaware Post Incorporation and Checklist here.

Overall, forming an LLC in Delaware might appear advantageous due to its established corporate system, specifically its Chancery Court; however, small business owners may find that business-enabling states with simpler regulations offer comparable benefits.

Why Choose Nevada for Your LLC Formation?

Nevada limited liability companies are among the nation’s most popular. This is due to their great asset protection features and even better marketing. Nevada remains one of the most popular states, but their sky-high fees have many second guessing—turning to other states offering similar LLC benefits.

Price of Nevada LLCs

There are several fees to start an LLC, not all of which the Nevada Secretary of State is up front about. You may be mistaken into thinking they only charge $75, but within 30 days of filing you must pay additional fee, e.g. members/managers list and a business license tax.

Hidden fees do complicate foreign LLC registration somewhat for the unaware. That's why an out-of-state LLC attorney can advise you on any hidden fees before they ever appear, starting with a free consultation. We deal with such matters all the time.

Privacy Options for Your LLC

Just like the other states, Nevada allows anonymity. However, the Nevada Secretary of State still requires a list of Members and Managers in your LLC filing.

Because they will have your Members and Managers on record, there's nothing to stop the State of Nevada from later releasing this information if legally required to do so. And if the state suffers a data breach or hack, your Members and Managers may be disclosed inadvertently.

Therefore, if you really need to register your LLC in the State of Nevada, be careful. Your information is not truly anonymous.

When establishing an LLC, maintaining anonymity is an attractive feature for many business owners, though it requires some disclosure of LLC members and managers. It is crucial to utilize an online filing system that can facilitate the necessary legal documents and ensure compliance with various licensing and initial LLC filing requirements to avoid unwanted public LLC information exposure.

Asset Protection in LLC Formation

Nevada became popular state because of its asset protection. They provide the same corporate veil as other states, but also provide asset protection from personal creditors. Assets inside the LLC are not as easily accessible to creditors as personal assets.

The Nevada LLC certainly earned its popularity early on. Years of continual price increases have eroded its value however. Having to spend money before registered agent fees is an expensive pill to swallow. With Nevada's history of rising fees, those needing personal asset protection are often advised to consider Wyoming.

Why Select Wyoming for Your LLC?

Wyoming companies have become popular as Nevada became less competitive. Wyoming does not market as extensively and is less well known. They also have a less developed financial system which can make establishing a bank account difficult, especially for cash-strapped new business owners.

Price of Wyoming LLCs

Wyoming charges $100, twice New Mexico, to form an LLC. They also charge $50 each year after and there has been talk of raising it. Plus, there is a tax on annual reporting variable on the company's assets located and employed in the state of Wyoming.

When forming your LLC in a different state, you should carefully consider the long-term implications of these costs and how they compare to the other states, especially those offering more favorable financial conditions for LLCs.

LLC Privacy

Wyoming does not list owners, managers, directors, etc. There is an annual report which asks the name of the filer, thus necessitating the use of a nominee – further raising costs.

Business owners must be mindful that while Wyoming offers advantages like privacy, it also requires navigating its annual report requirements, which can add to costs through the need for nominees.

LLC Asset Protection

Wyoming offers asset protection similar to Nevada.

Next Steps: Forming an LLC in Your Ideal State

While the choice of which state to form your LLC in is personal, you can always seek advice from an attorney experienced in LLC registration.

Book a 15-minute strategy call here with the Lloyd & Mousilli team to discuss your situation and we'll recommend the business structure & state legislations best fit to your business. As a client, you'll get help with drafting & filing LLC formation documents and an operating agreement specific to your company.

Our corporate lawyers have counseled numerous clients, from startups to the Fortune 500, on business entity structuring matters, including foreign entity formation when necessary. We also specialize in other categories of legal advice for startups including securing funding and protecting intellectual property.

Prior to selecting the state of incorporation, entrepreneurs should take into account factors such as the size of their business, the market for their product or service, the jurisdiction, business licenses required, and future goals.

Startups and large corporations have traditionally preferred Delaware to register their LLC, since Delaware law provides businesses greater flexibility in their corporate structure and stock options. In recent years, Texas has emerged as an attractive alternative to California for startups, particularly those managing rental properties or planning to form a holding company.

So, if I live in California, can I start an LLC in another state?

Yes. Here are some of the different states California companies can incorporate in and the pros and cons of each:

Texas

• Price: The cost of registering an LLC in Texas is more than three times the cost of registering an LLC in California. The Texas LLC Certificate of Formation has a one-time cost of $300 for filing through mail or $308 for online filing. Texas also requires the designation of a Registered Agent with a Texas address to receive legal documents for the LLC. California residents planning on registering an LLC in Texas should expect to pay about $125 per year for a Commercial Registered Agent.
• Ease of Registration: Like most states, Texas allows online filing and filing through the mail.
• Privacy: Texas does not maintain any public information on the LLC owners, except records of the LLC’s registered agent and registered office address.
• Asset Protection: Texas is an exception to the traditional corporate veil rules, and instead follows the 'actual fraud rule.' Under this rule, owners or members of the LLC cannot be held liable for corporate obligations unless they used the LLC to commit actual fraud.
• Business Licenses and Jurisdiction: When considering Texas, it is crucial to ensure that your business complies with local business licenses and jurisdictional regulations, especially if your company engages in sales or income-generating activities within the state.

Delaware

• Price: Between Texas, California, and Delaware, Delaware is the most expensive state to register an LLC. The costs of registering an LLC in Delaware often outweigh the benefits a smaller business can expect to receive. The initial one-time filing fee is $90 ($99 for a 24-hour turnaround). Like Texas, California residents can expect to pay up to an additional $100/year for a Commercial Registered Agent. Delaware also requires all Delaware LLCs, regardless of their principal place of business or size, to pay an additional $300/year for the Delaware Franchise Tax.
• Ease of Registration: Like most states, Delaware allows online filing and filing through mail.
• Privacy: Delaware allows anonymity and nominee officers.
• Asset Protection: Delaware companies offer the same corporate veil as other states.
• The high costs associated with registering and maintaining a Delaware LLC often make it a less-than-ideal choice for new entrepreneurs. If you are considering forming a holding company or dealing with public LLC information, Delaware might be suitable, but weigh this against the cost.

California

• Price: The cost of filing articles of organization in California is $70. There is an additional $20 fee to file a Statement of Information, which needs to be filed every two years. California residents can appoint themselves as registered agents for the LLC instead of paying for Commercial Registered Agents.
• Ease of Registration: Like most states, California allows online filing and filing through the mail.
• Privacy: California allows anonymity and nominee officers.
• Asset Protection: California companies offer the same corporate veil as other states.
• Real Estate and Rental Properties: California is often considered a favorable location for LLCs involved in real estate or managing rental properties due to its established market and regulatory environment.
• Business Licenses and Jurisdiction: Ensure your LLC complies with California’s specific business licenses and jurisdictional requirements, particularly if your company is engaged in extensive commercial activities within the state.

Will an LLC registered in Texas/Delaware still need a foreign qualification in California if most of the staff and customer meetings will be in California?

Any LLC registered in a state other than California is a foreign LLC and would need a foreign qualification in California to transact intrastate business in California.

California law classifies transacting intrastate business as the physical presence of company officers, employees, offices, or other facilities within California, or if the business plans to develop extensive commercial relations within the state over a long period of time. However, your business does not need to be registered in California if your only connection to California is hiring independent contractors located in California.

You may not have any option other than registering your LLC in California or registering it as a foreign LLC in California if your online business hopes to solicit customers in the state. Failure to register in California can bar businesses from bringing lawsuits in the state.

The inability to utilize California's court system can be particularly detrimental to online businesses with valuable intellectual property prone to infringement. If you wish to register as a foreign LLC in California, then you must provide the same information needed to create an LLC in your state of incorporation and pay all the fees required to register and maintain LLCs in California.

Unsure of where to go next? Lloyd & Mousilli provides startup legal advice and functions as your Registered Agent. Schedule a free strategy session to kick off the process. We help you navigate the new LLC registration process, regardless of your jurisdiction, and set up a solid legal framework for your startup. Read the case studies of numerous small business owners who had our help in finding the best fit entity structure for their company.