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Kraftful raises $1M to help smart home companies make better apps – TechCrunch

If a thousand companies make their own smart light bulb, do a thousand companies also have to design a light switch app to control them?

Kraftful, a company out of Y Combinator’s Summer 2019 class, doesn’t think so. Kraftful builds the myriad components that an IoT/smart home company might need, puzzle piecing them together into apps for each company without requiring them to reinvent the light switch (or the padlock button, or the smart thermostat dial) for the nth time.

Because no company wants an app that looks identical to a competitor’s, much of what Kraftful produces is built to be tailored to each company’s branding — all the surface-level stuff, like iconography, fonts, colors, etc. are all customizable. Under the hood, though, everything is built to be reusable.

This focus on finding the parts that can be built once makes sense, especially given the team’s background. CEO Yana Welinder and CTO Nicky Leach were previously head of Product and a senior engineer, respectively, at IFTTT — the web service made up of a zillion reusable, interlinking “recipe” applets that let you hook just about anything (Gmail, Instagram, your cat’s litter box, whatever) into anything else to let one trigger actions on the other.

Kraftful founders Nicky Leach and Yana Welinder

So why now? More smart devices are coming onto the market every day, many of them from legacy appliance companies that don’t have much (or any) history in building smartphone apps. Good apps are the exception — the Philips Hue app is one of the better ones out there, and even it’s a little wonky sometimes. Many of them are… really bad.

Bad apps get bad App Store reviews, and bad reviews dent sales. And even for those who dive in and buy it without checking the reviews first, bad apps means returned devices. According to this iQor survey from 2018, 22% of smart home customers give up and return the products before getting them to work.

“We kind of looked around and realized that 80% of all smart home apps have zero, one or two stars on the App Store,” Welinder tells me.

Knowing what’s working and what’s not with buyers is a strength of Kraftful’s approach; behind the scenes, they can run all sorts of analytics on how users are actually interacting with components in the apps they’re powering and adjust all of them accordingly. If they make a tweak to the setup process in one app, do more users actually get all the way through it? Great. Now roll that out everywhere.

“If you look at some of the leading smart lock apps, they all have very… very similar interfaces. They’ve basically gotten to a standardized user experience, but they’ve all be developed individually,” says Welinder. “So all of these companies are spending the resources designing and developing these apps, but they’re not getting the benefit of being standardized across the board and being able to leverage data from all of these apps to be able to improve them all at once”

Kraftful builds the app for both iOS and Android, tailors it to the brand’s needs, offers cloud functionality like push notifications and activity history, provides analytics for insights on how users are actually using an app and keeps everything working as OS updates roll out and as device display sizes grow ever larger.

Of course, the entire concept of a dedicated app for a smart home device has some pretty fierce competition — between Apple’s HomeKit and Google Home, the platform makers themselves seem pretty set on gobbling up much of the functionality. But most buyers still expect their shiny devices to have their own apps — something branded and purpose-built, something for the manual to point them to. Power users, meanwhile, will always want to do things beyond what the all-encompassing solutions like HomeKit/Home are built for.

Folks at Google seem to agree with Kraftful’s approach — the team counts the Google Assistant Investments Program as one of the investors in the $1 million they’ve raised. Other investors include YC, F7 Ventures, Cleo Capital, Julia Collins (co-founder of Zume Pizza and Planet Forward), Lukas Biewald (co-founder of CrowdFlower), Nicolas Pinto (co-founder of Perceptio) and a number of other angel investors.

Welinder tells me they’re already working with multiple companies to start powering their apps; NDAs prevent her from saying who, at this point, but she notes that they’re “some of the largest brands that provide smart lights, plugs/switches, thermostats and other smart home products.”

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16 Considerations When Choosing a Business Filings and Compliance Provider

Entrepreneurs cannot succeed in business completely on their own. Yes, they leverage their talent, expertise, and skills. But they also recognize when to delegate tasks and responsibilities to others with the knowledge and proficiencies they lack. For example, not very many business owners know all the ins and outs involved preparing and submitting the paperwork involved in setting up a business entity and keeping it compliant. Rather than trudge through the process and hope for the best, it’s wise for business owners to enlist the help of a business filings and compliance service fulfillment partner.

But how can you know which online document filing service to trust with your critical business filings?

I realize it can be overwhelming when comparing your options. So, I’m going to share some of the most significant factors that are behind why successful business owners rely on CorpNet.

You can also review a quick comparison matrix to see how CorpNet compares to five business formation companiees.

1. Access to Personalized and Live Assistance

Just because you’ve chosen to work with a company online doesn’t mean you should have to forfeit excellent customer service. The partner you choose should have an account manager available to talk with you by phone to answer your questions and assist you with any issues.

At CorpNet, we can’t imagine doing business with our clients any other way. When you call us to learn more about our services, you get a live person eager to discuss your needs. As a CorpNet customer, you get a dedicated, USA-based representative to handle your account as you start, manage, and grow your business.

2. Years of Experience Serving Entrepreneurs’ Needs

Your secretary of state filings are too mission-critical to hand over to someone that does not have years of experience. Beware of fly-by-night websites that make too-good-to-be-true promises or that don’t provide the breadth of services you require.

My husband Phil and I have been helping companies with our formation and compliance services for nearly 20 years. With the assistance of our knowledgeable team, we’ve helped over 100,000 businesses form their LLCs and corporations! All of our filing experts pay unparalleled attention to accuracy, and they know the intricacies involved in handling business registration and compliance paperwork.

3. Representation in Every State

Forms and deadlines vary from state to state. It’s important to have a partner who understands the differences. From articles of incorporation in Alaska to articles of organization in Wyoming and other state filings everywhere else in the US, you want to have the peace of mind that you’re dealing with experts.

CorpNet’s team has extensive experience doing state filings in all 50 states. No matter where you desire to register and operate your company, we are prepared with the knowledge and technology to assist you.

4. Support for a Full Range of Entity Types

Also, look for a partner who can handle filings for a variety of entity types. Sure, most of the filing resources support LLCs and C Corporations, but there are other entity types, too. After discussing the ideal business structure with your attorney and accountant, you may find that some online business formation and compliance services don’t offer what you require.

With CorpNet, that won’t be an issue! We help business owners form and maintain compliance for:

We also handle DBA (Doing Business As) filings for Sole Proprietorships, Partnership, and other entities that want to do business under a fictitious name.

5. Support for Out-of-Country Applications

If you’re located outside of the United States and wish to start a business within the U.S.A., you will want to find a partner who can assist you in the process. As you can imagine, there are some additional details involved. And not all online business filings companies offer support for foreign entrepreneurs.

CorpNet DOES support individuals outside of the U.S. in starting their corporations and LLCs within any of the 50 states. We handle the required business registration applications, obtain a tax ID for you (as long as you have a valid passport), and provide ongoing support. We are your partner throughout the lifetime of your business—from formation and beyond—with our business filing services that keep your business in compliance with state laws.

6. Provide Registered Agent Services in all 50 States

Staying on top of ongoing compliance requirements is a must for your business. Maintaining a registered agent in the states where your business is registered is one such requirement. If you want to expand your business into more than one state, consider looking for a registered agent who is authorized to provide their services in all 50 states.

Fortunately, Corpnet provides registered agent services in every state, so no matter where you want to conduct business, we have you covered! As your registered agent, we will keep you in the know about all of your upcoming compliance obligations. Why is that so important? Failure to submit state reports, renew licenses and permits, and take care of other compliance filings on time can result in penalties, fees, legal troubles, and even administration dissolution of a business.

7. Economical Services with No Hidden Fees

Look for a business filings and compliance service fulfillment partner who understands that you have a budget to meet. Are their standard rates affordable, and do they clearly define what those rates include? Surprises may be welcome at a birthday party but not when paying for filing the important forms necessary for starting a business and keeping it compliant.

At CorpNet, we display our pricing clearly with itemized details. You never have to worry about unwanted subscriptions or surprise charges. We save you time and ensure your filings are done accurately and on time. You get optimal value on every service that we provide.

8. Support for Expedited Service

When you need your filings done quickly, standard processing intervals may not cut it. To move things forward fast, it requires a partner who can effectively expedite your requests.

CorpNet has three levels of expedited service for an additional service fee plus any applicable state expedite fees:

  • Express Processing Speed – CorpNet processes your request on the same day that we receive it (provided it arrives before 4 pm PST Monday through Friday). Then, we instruct the state office to process your request as an “expedited” filing. The state’s processing time may vary, but we estimate that you will have your documents delivered to you within approximately five to seven business days.
  • 24 Hour Processing Speed – CorpNet processes your request on the same day that we receive it (provided it arrives before 2 pm PST Monday through Friday). Then, we instruct the state office to process your request as a “same day” filing (in states where this is an available option). The state’s processing time may vary, but we estimate that you will have your documents delivered to you within approximately two to three business days.
  • SameDay Processing Speed – CorpNet processes your request on the same day that we receive it (provided it arrives before 12 pm PST Monday through Friday). Then, we instruct the state office to process your request the same day (in states where this is an available option) so that you will have your documents delivered to you within 24 hours.

Standard processing requires 30 to 40 business days, so the above options significantly quicken the process!

9. Reasonable Shipping and Handling Fees

Who wants to pay a fortune for their formation paperwork to be shipped?

CorpNet offers a flat $29 shipping and handling fee. That fee includes multiple shipments of your documents to and from the state office during the formation process of your company. Also, we ship your final package, including your company’s state-approved documents, using U.S. First Class Priority Mail service.

10. Support for Obtaining EINs

Businesses that hire employees or form a business entity (e.g., LLC, corporation) must obtain an Employer Identification Number (EIN), also known as a Federal Tax ID Number. If you have a business filings partner that will prepare and submit the required form to the IRS for you, you can save precious time.

Along with handling all of the other paperwork associated with starting a business, CorpNet also can obtain your company’s EIN from the IRS.

11. Business Licenses and Permits at the State, Local, and Industry Level

Like most businesses, yours may need one or more types of business licenses or permits to operate legally. Check to make sure you’re dealing with a company that has a full suite of business license services.

At CorpNet, we can help you identify the licenses and permits you need, and we also provide services to apply for and obtain the necessary licenses and permits.

12. Bylaws Templates

Another helpful service that a business filings partner should offer is a template to streamline creating corporate bylaws. Bylaws are the rules a corporation’s founders agreed upon for running the affairs of the business.

CorpNet saves entrepreneurs time and hassle by providing a customizable bylaws template that C Corporations, nonprofit corporations, S Corps, and Professional Corporations can use to develop their detailed document. We also provide a customizable template for corporate minutes—another way we offer convenience and free up your time to concentrate on building your business!

13. Custom Operating Agreements

Although an LLC operating agreement isn’t required by the state, it serves as an important tool for keeping all stakeholders on the same page in a limited liability company. Find out if the business filings and compliance service fulfillment partner you’re considering provides a template for creating your unique LLC operating agreement.

With CorpNet, you can order a customized LLC operating agreement that you and your other LLC members can use as your roadmap for managing your business.

14. Ongoing Business Management Support

As your business evolves and grows, you’ll want a partner who will be by your side when you need to make changes and updates.

At CorpNet, we provide top-notch support to help you with an array of entity filings. Some examples include S Corp election, conversions, business name changes, articles of amendment, DBAs, dissolution, trademark applications, and license and permit renewals.

15. Ongoing Online Access to Compliance Details

Ultra-important is to have your compliance information at your fingertips at all times.

With CorpNet’s free Business Information Zone (B.I.Z) secure portal, you can view all of your LLC or corporate documents and track all of your compliance requirements and due dates online. Plus, you get email notifications to alert you as deadlines are approaching.

16. Stellar Online Reputation

What customers are saying matters! Check out reputable online review websites to learn about entrepreneurs’ experiences working with business filings and compliance service providers. Trustpilot, Google, and Facebook are good places to get a pulse on who’s reliable and reputable.

I think you’ll be pleased to discover how happy CorpNet’s customers are with our services!

We’d Love to Work With You

Contact CorpNet today to help you with your business formation and ongoing compliance needs. You can count on us every step of the way as you start, grow, and succeed!

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Kathy Cano-Murillo Shares 4 Things To Keep In Mind If You’re Starting A Second Career

Kathy Cano-Murillo has been committed to debunking that opportunities for growth disappear after you’ve grown out of your first career. Through her example she’s underscoring that there’s always room for a second one.

Cano-Murillo was an established writer when she spotted a gap in the craft industry that was too big and too obvious for her not to try to fill and so began her second career.

“I loved writing feature stories about other people accomplishing their dreams,” shares Cano-Murillo. “One day I realized I wanted to be the one to be written about. To do that, I knew I had to do something bigger and better than my current situation. I had to trust my skills and talents to make the leap. Being the main breadwinner in my family and with two kids — it was scary. But I knew I had to follow my gut instinct. I knew I was meant for a bigger life.”

Cano-Murillo started Crafty Chica with a dream of carving out a voice and a presence in an industry that lacked diversity. Through her site and her brand partnerships — like her latest collaboration with Spiritu, a seasonal subscription box – Cano-Murillo has been able to do just this and inspire others’ creativity with a Latinx twist.

“My Latinidad is always first on my mind for all I do and create,” shares Cano-Murillo. “I want to show a positive representation and spread those good vibes with others. I love how our community is very supportive, not just with words, but with actions. They have always shown up for me in my career, otherwise, I wouldn’t have been doing this for so long. My Latinidad gives me purpose and motivation.”

Through the iterations of her own career, Cano-Murillo notes that the best advice she can give to anyone at any point in their career is to learn how to trust their gut.

“Keep moving, keep evolving, keep seeking new ways to grow,” suggests Cano-Murillo. “Have a strong business strategy to keep growing your business if that is what you want. Don’t be afraid to make a mistake or have a beloved idea fail — that’s part of the process of success.

Figure out gaps you can (and want to) fill 

When you do reach a point of inflection and are trying to figure out where to go next, Cano-Murillo suggests taking a hard look at the gaps that you can and want to fill. For Cano-Murillo it was looking at the size of the industry and what she could bring to it that made the real difference.

“I’ve always been an artist, maker, and crafter,” shares Cano-Murillo. “I learned the craft industry rings up more than 23 billion dollars a year, yet Latino culture is not often represented. [Latinos are] not only [missing] in craft tutorials online and in magazines, but also from inside the industry [in] designing products for consumers. I decided rather than complain to do something about it.”

Set your own benchmarks for success 

Instead of letting others decide what the narratives of your success should be, set your own benchmarks.

“When national press took notice, like The New York Times, USA Today and The Washington Post! I knew I was doing something special, powerful and meaningful,” notes Cano-Murillo about the benchmarks that made sense for her. “Then when I launched my first product line in a national craft chain, I knew I found my lane.”

Second careers are just an opportunity you are better prepared for

“My advice is to think really big with a specific goal and then create a task roadmap to get there,” encourages Cano-Murillo to all those who are exploring a second career. “Get excited, make a plan, follow through! Aim to serve your community [and] connect with them. Know that anything and everything is possible, but you have to put in the research and work. If something doesn’t work out, figure out why and if you are still dedicated, try a different angle.”

Zero in on time and energy management 

“My biggest growing pain has been managing opportunities,” shares Cano-Murillo. “In the early days, I said yes to everything and it worked great because I wanted my brand out there far and wide. But now, I really have to stay focused on my end goal, so I make sure to evaluate every opportunity to make sure it moves me closer to my goal – or see if I can make it work for my goal, if not, then I’ll pay it forward to someone else.”

Understanding how to best manage your time and energy are pivotal as you work to reset and launch a new career, whether it’s a passion project or an iteration of your current full-time gig.

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Five Things To Watch in Cannabis In 2020

5 min read

This story originally appeared on Benzinga

2019 was a hard year for cannabis stocks. As the industry struggled to start showing profitability, companies tried their best to strengthen their presence in the U.S. with a great wave of consolidation through M&A.

Although the impressive market potential of cannabis remains undisputed, hurdles along the way have caused many cannabis investors to become disenchanted with the industry and its short-term yields. 

RELATED: Cannabis Is Taking Away From Beer Market Share Following Legalization

In 2020, expect many of those same issues to continue — but the new year could also bring new opportunities that could turn the tables for some sectors in the industry.

1. SAFE Banking Act Goes To Senate

The SAFE Banking Act is a piece of legislation that, if signed into law, would help cannabis businesses obtain services from banks and other financial institutions.

In today’s industry, cannabis companies are often denied banking services and accounts from major banks that turn their backs in fear of federal prosecution given cannabis’ designation as a Schedule I narcotic.

As a result of this, most cannabis companies are forced to deal in all cash, forfeiting the security and convenience of banking services. This poses a major hazard to the physical safety of staff, forces extra spending on security and makes the handling of routine accounting tasks like payroll a nightmare.

The bill passed a House vote by a landslide in September 2019 and is expected to reach the Senate sometime this year. 

It’s uncertain whether the bill will hit the president’s desk in 2020. Major roadblocks could be ahead, as both Senate Majority Leader Mitch McConnell (R-Kentucky) and Senate Banking Committee Chairman Mike Crapo (R-Idaho) expressed disagreement with the version of the bill that passed the House.

RELATED: 5 Safe Banking Alternatives For Cannabis Companies

Key issues that Crapo said were missing include marijuana potency, marketing tactics, research and the risks of money laundering, according to a a report by financial services firm Cantor Fitzgerald

The mere presence of a standalone marijuana reform bill in the Senate for the first time would be a major landmark on the road to federal cannabis legalization.

Don’t miss out on the top cannabis stories of the day. Click here to sign up for our daily insider newsletter.

2. More States Allowing Medical, Recreational Cannabis

2019 ended with Michigan entering the legal recreational market on Dec. 1.

2020 opened with Illinois following the same path, registering its first adult-use sale on Jan. 1. Many other states including Georgia, Hawaii, New Mexico and Texas saw legal developments too. 

2020 is expected to follow this trend. Last year, New Jersey lawmakers approved a ballot for adult-use legalization that will be voted on 2020 and is likely to pass. A similar initiative is currently gathering signatures in Florida to become a referendum that is just as likely to go through.

Alabama will be voting on a medical marijuana bill. 

Further developments for either decriminalization, medical marijuana or adult-use are expected in Arizona, Connecticut, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, and Oklahoma in a domino trend that could put pressure on Congress for full federal legalization in 2021 or 2022. 

New York is the last big candidate for legalization, but it isn’t clear if 2020 will be the year.

3. Difficulties Raising Capital Give Way To More Consolidation

Mergers and acquisitions were the norm for the cannabis industry in 2019.

As investors become disillusioned with an industry that is not yielding what the “Green Rush” mentality advertised, smaller- and medium-sized companies will have a harder time raising capital. As a result, many companies might choose to be absorbed by larger players in an effort to remain afloat.

From the perspective of the giants, consolidation is a way to secure ground for the competitive market of the future. Expect more M&A in 2020 from companies like Aurora Cannabis ACB 5.13 percentCanopy Growth Corp CGC 1.89 percentCuraleaf Holdings Inc CURLF 2.88 percentHexo Corp HEXO 3.25 percent and Tilray Inc TLRY 6.84 percent both in the U.S. and abroad.

4. Tighter Regulation On CBD Products

With CBD taking over the wellness markets, online and brick-and-mortar shops became filled with CBD products that don’t always have the ingredients their labels claim.

RELATED: 5 Highlights From Green Entrepreneur’s First-Ever CBD Saturday Farmers Market

In the meantime, although the 2018 Farm Bill opened the way to four times as many hemp plantations, producers are having trouble allocating their products in store shelves.

For these reasons, according to Cantor Fitzgerald, market experts are expecting Congress to pressure the FDA into developing a clear set of guidelines on CBD production and retail, including manufacturing and supply chain standards.

A measure of the sort could benefit big companies with the resources to follow GMP — and take smaller, artisanal producers out of business.

5. Harder Crackdown On Vaping Could Affect Sales

In 2019, the vaping crisis got out of control. In 2020, local, state and federal authorities are likely to try to regain control of the situation.

With more states pushing for an all-out vaping ban, the fight on bootleg vaping products is likely to continue. Licensed and original products could be affected by bans, and even those that remain legal could have their sales affected as more consumers start to perceive vaping products as hazardous.

With over 2,500 cases of hospitalization as of Dec. 27, the FDA is also expected to increase its vigilance and regulatory efforts.

A drop in vaping sales could mean a good year for competing products in the recreational market, like extracts and cannabis flowers.

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Israel’s cybersecurity startup scene spawned new entrants in 2019 – TechCrunch

As the global cybersecurity market becomes increasingly crowded, the Start Up Nation remains a bulwark of innovation and opportunity generation for investors and global cyber companies alike. It achieved this chiefly in 2019 by adapting to the industry’s competitive developments and pushing forward its most accomplished entrepreneurs in larger numbers to meet them.

New data illustrates how Israeli entrepreneurs have seized on the country’s reputation for building radically cutting-edge technologies as the number of new Israeli cybersecurity startups addressing nascent sectors eclipses its more traditional counterparts. Moreover, related findings highlight how cybersecurity companies looking to expand beyond their traditional offerings are entering Israel’s cybersecurity ecosystem in larger numbers through highly strategic acquisitions.

Broadly, new findings also reveal the Israeli cybersecurity market’s overall coming of age, seasoned entrepreneurial dominance and greater appetite for longer-term visions and strategies — the latter of which received record-breaking investor backing in 2019.

Breaking records

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What California’s AB 5 Means for the Gig Economy

In 2020, the hot topic is California’s Assembly Bill 5, often called the “Gig Economy Bill.” This is because AB 5 makes it difficult to be an independent contractor in California.

Before we examine AB 5 in detail, let’s understand why California legislators passed the bill in their own words:



The Legislature finds and declares all of the following:

(a) On April 30, 2018, the California Supreme Court issued a unanimous decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex).

(b) In its decision, the Court cited the harm to misclassified workers who lose significant workplace protections, the unfairness to employers who must compete with companies that misclassify, and the loss to the state of needed revenue from companies that use misclassification to avoid obligations such as payment of payroll taxes, payment of premiums for workers’ compensation, Social Security, unemployment, and disability insurance.

(c) The misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality.

Source: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5


This certainly promotes a world view that is very pro-government regulation and pro-union; and arguably anti-business.

Just for fun, let’s take the liberty of editing out a few words from the above act:

“Obligations such as payment of payroll taxes, payment of premiums for worker’s compensation, Social Security, unemployment, and disability insurance…[have] been a significant factor in the erosion of the middle class and the rise of income inequality.”

Pretty interesting, eh?

I would hate to suggest that onerous employment laws and high taxes could possibly hurt businesses and squeeze out the middle-class.

Alas, as an Enrolled Agent, licensed by the Internal Revenue Service, my job is to understand the rules, and help my clients stay compliant…regardless of my personal opinions.

Thus said, let’s dive into AB 5, and evaluate how to navigate the road ahead.

The Root of the Controversy – Taxes & Misclassification

For every $1,000 you earn as an employee, you’ll notice $62 withheld for Social Security and $14.50 withheld for Medicare taxes.  Total is $76.50, or 7.65% of wages.  The Social Security portion falls off after $137,700, but the Medicare portion has no limit.

As an employee, you’ll never see that your employer has to match your Social Security and Medicare Tax withholdings – your $1,000 wages cost your employer $1,076.50, another 7.65%.

Source:  https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf

In addition to payroll taxes, employers incur additional costs – including worker’s compensation, employee benefits – (health insurance, retirement, etc.), and compliance expenses.

According to the Boston Business Journal, actual employee costs can range from 125% to 140% of actual compensation.

Source:   https://web.mit.edu/e-club/hadzima/how-much-does-an-employee-cost.html

As a result, there is a large temptation for a business to contract with independent contractors, as opposed to having employees.

When you pay someone as an independent contractor, they take on the burden of the 15.3% self-employment tax (7.65% employee plus 7.65% employer payroll taxes).

However, they then get to deduct reasonable business expenses.

The net result is less total payroll taxes paid, no worker’s comp premiums, and usually less overall income taxes paid.

AB 5 & the Dynamex decision focus on “misclassification: – paying someone that would ordinarily be an employee as an independent contractor.

The reason the business community is up in arms is that there were already well-established rules for determining whether someone was an employee or an independent contractor.

The general consensus among employers is that AB 5 reaches too far and makes employees out of legitimate independent contractors.

Old Rules

Since 1989, the Borello test has been used to determine if services provided are in the realm of employee duties or that of an independent contractor.  The “control of work” test is of primary importance, where an evaluation is made of how much control is exerted over your time, tasks, techniques & training.  In other words, does the hiring agency control what you do, when you do it, and how you do it, and have they shown you how to do it?

The easiest example of this is an independent insurance agent.

Independent Insurance Agents contract with multiple insurance carriers, and are responsible for generating their own leads, paying their expenses – i.e. office space, staffing, software, computers, and state licensing, and most importantly, they are free from quotas from insurance carriers.

If you present a qualified, willing and able consumer to the carrier, you’ll then earn a commission.

If not, well, keep prospecting.

The insurance carrier exerts very little control over the agent, aside from mandated minimum training standards and compliance guidelines set forth by the Department of Insurance.  Thus said, the independent insurance agent maintains a high degree of freedom and control over their business, and is considered an independent contractor using the Borello test.

Please note, that insurance agents can also be employees.  For example, if instead of being an independent agent, if a given licensed agent works for an insurance agency that controls their activities, handles the marketing, and generally treats the agent as an employee, then even under Borello, this agent would be an employee.

The key take-away from Borello is control – the more control a hiring entity exerts on time, task(s), and technique(s), the more likely it is that an independent contractor is actually an employee. 

New Rules

In addition to the Borello control tests, AB 5 changes Section 2750.3 of California’s Labor Code to read:

(a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

What does this mean in plain English?  It means that in order to be considered an independent contractor, one must satisfy the “A-B-C Test,” which has the following 3 components:

  • Control of Time, Tasks, and Techniques
  • Separate Industry
  • Established Business Operations

Tests 1 and 3 are fairly easy to satisfy, but the Separate Industry component will bedevil a lot of small businesses.

Thus said, AB 5 does reward licensed professionals – including:

  • Insurance Agents
  • Real Estate Agents
  • Investment Advisors and Broker-Dealer Representatives
  • Medical Professionals – Physicians, Dentists, Surgeons, etc.
  • Specified Professionals – Lawyers, Accountants, Engineers, Private Investigators and Architects
  • Sub-Contractors in Construction Industry (assuming licensed with own E&O insurance)

The above professionals are exempted from the more restrictive AB 5 requirements and continue to fall under the Borello test.

AB 5 also has exceptions for “Professional Services,” where a laundry list of professions must comply with the “A-B-C Test,” industry-specific licenses and/or requirements, and an additional 6 point filter, summarized as follows:

  • Separate Business Location
  • Business License and Professional Licenses
  • Can Negotiate Own Rates for Services
  • Can Set Own Hours and/or Schedule
  • Have Multiple Clients (or could have)
  • Control of Time, Tasks, and Techniques (Borello test)

There are also exceptions for Business to Business relationships, Direct Sales Organizations, and Referral Agencies.

Additionally, the California Trucking Association received a temporary restraining order to stop AB 5 from applying to the trucking industry (which means they are currently covered under Borello).

Options for Staying Compliant and Independent

Instead of dwelling on these exceptions, I am going to discuss what existing independent contractors can do to stay compliant – and independent.

Strategy #1 – Setup a Corporation

If you just set up a corporation, will you be automatically exempted?  No.

The Separate Industry aspect of AB 5 will apply regardless of whether the performer of the work is incorporated or not.

However, incorporating may be part of the solution – here’s how:

  • An S-Corporation allows you to take control of the amount of Social Security and Medicare taxes that you pay.
  • You pay yourself a reasonable salary, and remaining profits are not subject to payroll taxes.
  • An LLC taxed as a Partnership can be owned by multiple S-Corporations.***

***This is the key to beating AB 5 – Strategy 2.

Strategy #2 – Form a Partnership

Partners in a Partnership do not receive salaries, but rather share in profits, and can be either individuals or entities (C-Corp, S-Corp, etc.).

If you find yourself as an independent contractor that provides a substantial amount of services to another business, you may want to approach them about forming a partnership.

The partnership will allow you to retain your independence while keeping the other business from incurring the additional costs of hiring you as an employee.

Further, partnerships split profits based on ownership percentages (i.e. 50/50 or 70/30) and can provide for guaranteed payments for either partner.

Here’s a real-world example:

A California engineering firm (unincorporated) uses an unlicensed but very experienced independent consultant for project review work.  Let’s assume that this arrangement is acceptable under Borello.

Even though the independent consultant is incorporated, she will fail at least one of the 6 professional services filters.

In lieu of hiring an independent consultant as an employee, the engineering firm could set up a partnership with the contractor’s corporation, and use guaranteed payments in lieu of salaries.

The consultant would still pay themselves a salary (from their own company), and the owner of the engineering firm would have the option of owning the partnership individually, or by setting up their own entity.

The key to this strategy is the ability to legitimately partner with another entity and/or person.

It won’t work if you find yourself in an abusive employer and/or employee relationship, where you are being paid as an independent contractor simply because your employer is trying to reduce costs to the bone or avoid taxes.

This is a potential win-win strategy for two small business owners looking to retain their independence while working with other professionals on a regular basis.

AB 5 Summary

AB 5 is far-reaching, and unless you are a licensed professional (insurance agent, CPA, etc.), it is very likely that you will find it difficult to be an independent contractor in California.  The law is often referred to as the “Gig Economy Bill,” because there is a belief that independent contractors representing Lyft and Uber are being exploited.  Sadly, there are many independent professionals – including barbers, travel agents, and graphic designers that may soon find themselves as employees, instead of independent contractors.

Compliance testing will undoubtedly lead to additional costs to those businesses that continue to use independent contractors, as penalties for misclassification can range from $5,000 to $25,000 per violation.

If you find yourself as an independent contractor in a professional relationship with another business, you may want to pursue the opportunity to partner with them…or get ready to call them “boss.”

If you need to establish a corporation or form a partnership, CorpNet can help. You can call the CorpNet team at 888.449.2638 or form your new company right online via the following links:

CorpNet’s formation experts can help you do what you love while still remaining your own boss.

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4 Ways Tech Can Improve Your Investment Strategy

Innovations have radically democratized investing, making it more transparent and easier to engage in.

4 min read

Opinions expressed by Entrepreneur contributors are their own.

Investing has always had the feel of being a traditional affair that’s done by older people or the extremely wealthy, and it’s often an intimidating activity for many people to consider getting into. That has been changing in recent times, and one of the most important factors is the attention that has come from the tech industry.

From new fintech innovations like blockchain to apps that help people make myriad investment decisions, you can now proceed with full confidence that there are several tech aids to help you navigate the markets and come out unscathed and with a fuller pocket. Here are a few of the options you have and how to leverage them properly.

Financial-Planning Software

When it comes to investing, there is nothing as important as comprehensive knowledge of your portfolio and cash-flow situation. If you don’t have that knowledge at hand, you’ll find it difficult to monitor your stocks or other investments, and you might make decisions that are harmful to your overall portfolio.

With the financial-planning software now available, that information is literally at your fingertips. You can access budgeting tools, market and volatility analyses and other features with apps on your phone or computer.

Related: The Case for Tech Investing in Emerging Markets


If you want to maximize your profitability, you’ll need to work with a competent financial advisor, especially if you’re dealing with a lot of funds. One of the ways to make sure you’re getting the most from that relationship is by ensuring that you keep in touch as much as you have to. That way, you’ll be up to date on what’s happening in the market and with your portfolio specifically.

According to Umesh Agarwal, CEO of Credit 101, “It’s important to ask your advisors what communication channels they use and incorporate social media, VOIP or any other solution that’ll help you get updates and relay instructions almost instantly. In today’s world of split-second happenings on various markets, close communication will prove to be crucial for profitability and loss avoidance.”


If you’re like most people, the vast majority of your financial transactions are conducted online. While that’s a great thing that makes life and investment much more convenient, it also exposes you to attacks by hackers and other security breaches that could lead to financial loss if you don’t protect yourself well enough.

You’ll need to go beyond the usual precautions for keeping data safe. It might be worthwhile to consider using a hard token or biometric verification to further secure your transactions. Don’t forget the basics though. Use secure password managers to keep your sensitive details locked away, and make sure your software is updated to reduce the risk of intrusions.

Situational Awareness

Before you can make the right deals, you have to know that the opportunities exist. With information overload nowadays, it’s very easy to lose track of important news that might be useful. It’s even possible to miss news that could have a major impact on your portfolio.  

To fix that, you can use news-aggregation apps that use AI to track headlines in sync with your interests. With the recent advances in machine learning, those apps can help you identify opportunities automatically without your having to spend as much time scouring the internet or newspapers yourself.

Related: 3 Tech Trends to Help Bring New Investors to Real Estate

In all, the potential of technological innovation in revolutionizing investment is great and will probably have markets looking completely different a few years down the line. But even today, there are a variety of tools in the categories above that can help you get ahead of the curve and reward your investment strategy.

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Young entrepreneurs pay it forward – Here’s how!

Fact or fiction? One day, when I grow up, I will pay it forward. Well, the answer is in your hands already. As a budding entrepreneur, you can decide if you want to gift others who are merely getting by, now or later or both.

Forget the socially established notion that paying it forward is only reserved for grown-ups. It’s not! You too, young as you are, can make a huge difference. Here’s how students can get involved in their personal and collective stance.

Charity begins at home

If “charity begins at home”, then let’s do so, literally. Set up a family meeting to come up with a New Year project that you can collectively add value to as a family. This does not need the bells and whistles to validate its worth. It can be cooking an extra plate for an elderly neighbour once a week (or even once a month), donating your clothes to a struggling member of the community or volunteering at a charity organisation that you are passionate about.

Each one, teach one

It’s no secret that peer pressure is a reality. Fortunately, this is also true for positive peer pressure. One way of showing independence and reclaiming your space is by gathering up your pals to positively influence each other to give back. Just by merely sharing with your friends how much joy one can get from reading books to the elderly at an old age home to teaching orphans a new bicycle trick; your word of mouth can put a flame in your fellow peers to also pay it forward.

As seen in Mzansi and abroad

Whether locally or internationally, there are many examples of young peeps who used their entrepreneurial ideas to give back. Take for instance Noa Mintz, who started her first business at the age of eight, when she offered art classes during the summer for a small fee, and several years later as a teen, she founded Nannies by Noa which helps families in New York. From starting out with an extramural activity to unleashing a budding young entrepreneur.

Closer to home, there’s Clement Pilusa, an entrepreneur who is now creating jobs and adding solutions to the global challenge on food security. He does this by farming vegetables and chickens – ensuring affordable and accessible poultry to local communities. He also gives up his time to undertake school visits, where he talks to scholars about the importance of agriculture and entrepreneurship.

You don’t need a special event to pay it forward. Simply begin where you are passionate and give it your all. It starts with the heart set in the right place. Do what you can with what you have. And, who knows, perhaps from your passion and voluntary service, an entrepreneurial niche can emerge. As you work and serve, a Teen Boss could emerge out of you to take your impact to a higher level.

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Save over $200 with discounted student tickets to Robotics + AI 2020 – TechCrunch

If you’re a current student and you love robots — and the AI that drives them — you do not want to miss out on TC Sessions: Robotics + AI 2020. Our day-long deep dive into these two life-altering technologies takes place on March 3 at UC Berkeley and features the best and brightest minds, makers and influencers.

We’ve set aside a limited number of deeply discounted tickets for students because, let’s face it, the future of robotics and AI can’t happen without cultivating the next generation. Tickets cost $50, which means you save more than $200. Reserve your student ticket now.

Not a student? No problem, we have a savings deal for you, too. If you register now, you’ll save $150 when you book an early-bird ticket by Feb. 14.

More than 1,000 robotics and AI enthusiasts, experts and visionaries attended last year’s event, and we expect even more this year. Talk about a targeted audience and the perfect place for students to network for an internship, employment or even a future co-founder.

What can you expect this year? For starters, we have an outstanding lineup of speaker and demos — more than 20 presentations — on tap. Let’s take a quick look at just some of the offerings you don’t want to miss.

  • Saving Humanity from AI: Stuart Russell, UC Berkeley professor and AI authority, argues in his acclaimed new book, “Human Compatible,” that AI will doom humanity unless technologists fundamentally reform how they build AI algorithms.
  • Opening the Black Box with Explainable A.I: Machine learning and AI models can be found in nearly every aspect of society today, but their inner workings are often as much a mystery to their creators as to those who use them. UC Berkeley’s Trevor Darrell, Krishna Gade of Fiddler Labs and Karen Myers from SRI International will discuss what we’re doing about it and what still needs to be done.
  • Engineering for the Red Planet: Maxar Technologies has been involved with U.S. space efforts for decades and is about to send its fifth robotic arm to Mars aboard NASA’s Mars 2020 rover. Lucy Condakchian, general manager of robotics at Maxar, will speak to the difficulty and exhilaration of designing robotics for use in the harsh environments of space and other planets.

That’s just a sample — take a gander at the event agenda to help you plan your time accordingly. We’ll add even more speakers in the coming weeks, so keep checking back.

TC Sessions: Robotics + AI 2020 takes place on March 3 at UC Berkeley. It’s a full day focused on exploring the future of robotics and a great opportunity for students to connect with leading technologists, founders, researchers and investors. Join us in Berkeley. Buy your student ticket today and get ready to build the future.

Is your company interested in sponsoring or exhibiting at TC Sessions: Robotics & AI 2020? Contact our sponsorship sales team by filling out this form.

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Tax Savings Features of Corporations, S Corps and LLCs Under TCJA

The Tax Cuts and Jobs Act (TCJA), made tax law changes that affected every business. Deductions, depreciation, tax credits, and corporate tax rates will make filing taxes different for you and your clients this year. Generally speaking, most of your business clients will do well under the TCJA, but there are a few tax breaks that have been lowered or eliminated. Here’s what you need to know.

Changes for Corporations

Corporations will feel the biggest impact from TCJA, primarily in a positive way. Pre-TCJA, corporate tax rates were similar to individual tax rates, in that the rate depended on profits and income. Back in 2017, corporate rates ranged from 15% to 39% (except for personal service corporations, which were taxed at 35%). Under TCJA, C Corporations are now taxed at a flat rate of 21% (including personal service companies). In addition, corporations are no longer required to calculate alternative minimum tax rates, however, they may be able to use AMT credit carryovers until 2021.

If your corporate clients received dividends from other corporations, they are still allowed to partially deduct those dividends, however not as much as before TCJA. If a corporation owns at least 20% of the stock of another corporation, the deduction is lowered from 80% to 65%. Likewise, deductions for less than 20%, reduce the deduction from 70% to 50%.

Changes for Pass-through Businesses

Before TCJA, taxable income from sole proprietorships, partnerships, S corporations, and LLCs were simply passed through to owners and taxed at those individuals’ standard rates. Under TCJA, pass-through businesses will still be taxed at individual rates, minus a deduction of up to 20%. The deduction was created to lower the tax rate for these non-corporation businesses, but there are some stipulations.

The deduction must be equal to 20% of the “qualified business income (QBI)” earned from the business, however, much of the business’s income is excluded from QBI which gives your clients a smaller deduction. QBI is considered income from sales minus expenses which includes salaries paid to owners. Also, QBI doesn’t include interest, dividends or capital gains from property sales. The deduction is also restricted to the lesser of 20% of QBI, or 50% of the total W-2 wages paid by the business.

In addition, 20% may not apply for businesses where “the principal asset is the reputation or skill of one or more of its employees or owners.” Per, the IRS that includes services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, and trading. These businesses are limited by specific threshold amounts depending on how individual taxes are files.

Other Changes for All Businesses

  • For certain business assets that depreciate over time, such as equipment, computer software and buildings, the TCJA allows 100% expensing for business property acquired and placed in service after Sept. 27, 2017 and before Jan. 1, 2023. According to the IRS, the 100% allowance mostly decreases by 20% per year in taxable years beginning after 2022 and expires Jan. 1, 2027.
  • Under Section 179, business owners can deduct the cost of certain property as an expense when the property is placed in service. The TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The TCJA also expanded the definition of what qualifies under Section 179 and now includes improvement property and some improvements to nonresidential property, such as roofs; heating, ventilation and air-conditioning property; fire protection and alarm systems; and security systems.
  • Although the TCJA eliminates most deductions for entertainment expenses, business owners can still deduct 50 percent of the cost of business meals only if the actual taxpayer or employee of the taxpayer is present and the food or beverages are not lavish or extravagant. Meals must be provided to a current or potential business customer, client, consultant or similar business contact and are not allowed if the meals are purchased separately from the event.

Understanding the tax saving potential for corporations and pass-through business entities can help your clients make smarter business decisions year-round. Reach out now with a quick reminder email or letter about the new tax laws, so they’re better prepared come April.

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