There are many reasons and motivations for selling a business. On this list somewhere towards the top is the idea of cashing out and making money. Part of this is concern over how much money you will actually keep and how much you will need to give to the government in taxes.
Continue Reading...As a small business owner, you have several different ways to form your business in the U.S. Virgin Islands. The type of business entity that you select will hinge on numerous factors and conditions. It is always best to seek the counsel of a corporate attorney who is familiar with business formation,such as those in the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC.
Continue Reading...The Consumer Financial Protection Bureau (CFPB) recently proposed a rule that would allow the agency to manage the oversight of nonbank student loan servicers. This growing market affects tens of millions of consumers and has experienced an increase in borrower delinquency in recent years.
Continue Reading...Are you trying to avoid foreclosure? Are you unable to maintan your home as you don't qualify for a modification? Are you unable to sell you home?
A deed in lieu of foreclosure may offer you the solution. A deed in lieu of foreclosure or "DIL" is a way that a mortgagor (you the borrower) can voluntarily deed the property as collateral in exchange for a release from all of your mortgage's obligations. The Department of Housing and Urban Development (HUD) and many others lenders have strict qualifications and pre-requisites, so you want to make sure that a DIL applies to your situation.
Continue Reading...Auto loans are the third largest source of outstanding household debt after mortgages and student loans. Those loans should be administered fairly without discriminatory practices.
The Consumer Financial Protection Bureau (CFPB) recently gave notice to lenders that offer auto loans through dealerships that they are responsible for any unlawful or discriminatory pricing. The CFPB reported that discriminatory markups in auto lending may result in tens of millions of dollars in consumer harm each year.
Continue Reading...The Federal Deposit Insurance Corporation (FDIC) and U.S. Small Business Administration (SBA) recently announced new resources to support small businesses across the nation and the U.S. Virgin Islands. FDIC Director for Depositor and Consumer Protection Mark Pearce and SBA’s Deputy Associate Administrator for Entrepreneurial Development Michael Chodos released Money Smart for Small Business, a training curriculum for new and aspiring business owners. Developed in partnership between both agencies, this curriculum is the latest offering in the FDIC’s 10 year old award-winning Money Smart program.
Continue Reading...As of the first day of 2012, U.S. Virgin Islands domestic corporations can have fewer than three directors, making it easier for smaller companies to establish themselves, the Office of the Lieutenant Governor announced Monday. V.I. law's previous requirement of a minimum of three directors has historically placed a burden on some smaller companies, especially where there is a single owner who must coordinate management decisions with directors who have no financial stake in the enterprise.
Continue Reading...One place, known for its Appalachian Mountains and rich coal supply, was immortalized in John Denver’s 1970s hit, “Take Me Home, Country Roads.” The other has white sandy beaches, rum distilling and an average January high temperature of 86 degrees that attracts millions of tourists each year. From economy to climate, West Virginia and the U.S. Virgin Islands are as different as any two places in the United States. But that hasn’t stopped them from discussing whether to work together to form a health insurance exchange under the federal health care law, say officials in West Virginia and the U.S. Virgin Islands.
Continue Reading...With the holidays over and a new year upon us, it is a natural time for business owners to map out strategies and goals for the next twelve months. Doing so allows businesses a chance to focus their energies on having a successful 2012 and gives them a metric by which to measure their successes and locate opportunities for improvement at the end of the year. Here are three suggestions that will assist businesses in planning for the year ahead
Continue Reading...The regular observance of corporate formalities is an important aspect of maintaining the protections and advantages of being incorporated, not the least of which is the protection of shareholders against personal liability for the financial obligations of the corporation.
Continue Reading...Most small business owners in the Virgin Islands are too busy building and maintaining their businesses to devote much time or energy to planning for their disposition. The difficulty with this approach is that the decision to sell the business is often made under circumstances, such as physical or fiscal illness, “battle fatigue,” or other circumstances that require a prompt disposition. Year after year, as the tourist season draws to a close, many local businesses consider their options. As a rule of thumb, the more promptly your business has to be sold, the less likely it is that you, the owner, will receive a price commensurate with the asset you are selling – and for many of us – our business represents the sum of our life’s effort.
Continue Reading...There are significant legal restrictions on how you can solicit investors. Federal and U.S. Virgin Islands securities laws require that any stock, limited liability company membership interest, note, or similar investment that you sell to raise capital for your business must be either registered with the Securities and Exchange Commission and the Virigin Islands Division of Banking & Insurance or be exempt from registration.
There are limitations on how you can solicit investors and who may invest if you are relying on an exemption from registration. So your first step before talking to any prospective investors should be to meet with your legal counsel to learn the rules of the game.
Continue Reading...First BanCorp (the “Corporation”) (NYSE: FBP), the bank holding company for FirstBank Puerto Rico (“FirstBank” or “the Bank”), announced earlier today that it has entered into an agreement with two funds managed by Oaktree Capital Management, L.P. (together “Oaktree”) under which Oaktree would purchase an aggregate of approximately $175.5 million of common stock of the Corporation at a per share price of $3.50. The Oaktree investment will represent 24.9% of the outstanding shares of the Corporation’s common stock upon completion of the capital raise and the conversion into common stock of the $424.2 million of Series G Mandatorily Convertible Preferred Stock (“Series G Preferred Stock”) held by the United States Department of the Treasury.
The USVI attracts many businesses to its shores by offering generous tax incentives to qualifying companies that are approved by the Economic Development Commission (“EDC”). However, fewer people seem to be aware that those same benefits—90% reduction in income tax liability; 100% exemption on real property taxes, gross receipts taxes, and excise taxes, and a reduction in customs duties—are available to technology-based businesses through partnership with the University of the Virgin Islands Research and Technology Park the (“Technology Park” or “Park.”)
Continue Reading...The Uniform Debt-Management Services Act (UDMSA) was signed into law by Governor John P. deJongh Jr. of the Virgin Islands last Wednesday. The act sponsored by St. Croix senators Terrence Nelson, Neville James and Samuel Sanes was drafted and approved by the Uniform Law Commission (ULC). The UDMSA, approved by the ULC in 2005 and amended in 2008, was the result of a multi-year study into debt relief options for consumers. It is the first national effort at providing uniform rules to govern both consumer credit counseling services and debt settlement services.
“In today's economic climate, we are finding more and more consumers turning to debt management companies, which have tripled in number over the past few years,” said Tom Bolt, Chair of the Virgin Islands Uniform Law Commission. “There have been frequent instances or accusations of abuse by consumers who utilize these services. This legislation regulates the industry in uniformity with other jurisdcitions, while protecting our Virgin Islands consumers.”
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The Internal Revenue Service has released an internal memorandum indicating that it will give close audit scrutiny to offshore hedge funds that engage in lending activities with U.S. residents. A number of hedge funds have relocated to the U.S. Virgin Islands to take advantage of the Territory's Economic Development Commission (EDC) Program which exempts such funds from 90% of the federal income tax liability. Although owner of EDC beneficiary companies can similarly exempt their income from the company from federal income tax if they are Virgin Islands residents, past practice has led to the hedge funds providing loans to owners who are not Virgin Islands residents. Hedge funds that engage in direct or indirect lending activities involving U.S. borrowers are impacted by this IRS action and should immediately review their lending practices in light of the IRS's indication that it will pursue vigorous enforcement in this area. |
On June 29, 2009, the United States Supreme Court decided Cuomo v. Clearing House Association which invalidated, by a vote of 5 to 4, a regulation issued by the Comptroller of the Currency that broadly preempted the states and territories from enforcing their fair lending laws against national banks. Under the broad language of the majority opinion, the Virgin Islands Division of Banking & Insurance and its sister state regulators now implicitly have the authority to enforce other consumer protection laws against national banks.
Continue Reading...Tom Bolt & Associates, PC, one of the U.S. Virgin Islands' leading full-service law firms, has announced that it has formed a Asset Stabilization and Strategic Economic Response Team (ASSERT) to assist its clients in addressing business challenges posed by current economic conditions. The multi-disciplinary team consists of attorneys who bring a wide range of practice proficiencies and insights to help local businesses weather the rapidly changing economic climate in the Territory.
“Our closely integrated practice groups have enabled us to formalize this team and align our service offerings with the needs of our clients,” said Tom Bolt, Managing Attorney of the Firm, and Chair of the Firm’s Real Estate & Financial Services and Government Relations Practice Groups. “Our firm is dedicated to our clients and helping them meet the challenges they face. ASSERT evolved as our greatest resources—our legal talent—came together to tackle the complex challenges that the current economic conditions are posing for Virgin Islands businesses.”
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St. Thomas based Merchants Commercial Bank has refused a $1.2 million investment from the U.S. Treasury, saying the bailout money was not needed and involved a commitment to rules that could be changed down the road.
The bank’s board of directors turned down the Treasury’s offer in a unanimous vote, said Tom Bolt, General Counsel for the bank.
Continue Reading...One of President Barrack Obama's principal communications policy objectives is to "encourage diversity in the ownership of broadcast media . . . and clarify the public interest obligations of broadcasters who occupy the nation's spectrum." This has not been the case in the United States Virgin Islands where Jeffrey Prosser of Innovative Communications Corporation owned all locally produced TV stations, the local telephone company, a local cellular telephone company, all cable television stations and the local newspaper. The monopoly is ending, however, with Mr. Prosser’s ongoing bankruptcy, where the Trustee intends to sell the ICC family as a unit. While the president's website offers no more in the way of specificity, it is commonly understood to be referring to measures that would constrain further consolidation of media ownership, and enhance broadcasters' local service obligations.
Continue Reading...Attorney Rosh D. Alger, Chair of the Tom Bolt & Associates, PC Corporate and Tax Practice Group recently returned from Pasadena, California where he attended the ALI-ABA Forum on "Representing the Growing Business: Tax, Corporate, Securities, and Accounting Issues."
In recapping the the three day seminar, Alger noted that during the forum, a panel of seven tax and corporate law specialists voted, under a certain fact pattern for a growing business model, to choose the LLC structure. When asked why, six out of seven panelists who voted in favor of the LLC said that they appreciate the flexibility of the LLC.
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Yesterday, in its last business decision of the term, the Supreme Court overruled a nearly century-old rule treating resale price maintenance agreements as per se violations of the antitrust laws. In Leegin Creative Leather Products, Inc., v. PSKS, Inc., a 5-4 decision written by Justice Kennedy, the Court ruled that minimum resale price maintenance agreements—agreements between manufacturers and distributors to resell a product at or above a set price—will now be examined under the “rule of reason,” a method of analysis that weighs procompetitive benefits against anticompetitive effects. In reaching this result, the Court expressly overruled its 1911 decision in Dr. Miles Medical Co. v. John D. Park & Sons. "This new ruling could have a tremendous impact on Virgin Islands businesses particularly in the liquor and cosmetics industry." Tom Bolt, Managing Attorney at Tom Bolt & Associates, P.C. noted. "Many manufacturers have controlled enforced strict pricing of products in the liquor and cosmetics that are widely sold in the United States Virgin Islands and has been the subject to a subtantial amount of litigation. With the Leegin decision, these pricing controls will need to be reviewed." |
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The Virgin Islands business community is about to get its first locally owned and operated commercial bank providing local decision making and responsive service from its headquarters on St. Thomas.
In action before the Virgin Islands Banking Board earlier today, licensing was approved for Merchants Commercial Bank which had submitted final documentation to the Division of Banking and Insurance to obtain a Virgin Islands banking license after having completed all requirements to obtain FDIC insurance from the Federal Deposit Insurance Corporation.
Continue Reading...Merchants Commercial Bank, the newest bank in the Virgin Islands, recently achieved is capitalization as required by the FDIC and anticipates opening its doors in late October. The bank which is lead by island banking stalwart Jim Crites has secured offices in Port of Sale Mall in Havensight on St. Thomas and will concentrate its business activity in business and commercial loans. Merchants will be the only locally governed financial institution in the District of St. Thomas-St. John.
Virgin Islands consumers have grown frustrated at lack of commercial loan capacity in the United States Virgin Islands capital city. .Merchants joins St. Croix based Bank of St. Croix and Virgin Islands Community Bank as the only Virgin Islands chartered banks.
Choosing the right entity for your small business is a critical decision, both professionally and personally, but understanding and evaluation the nuances of each business type can be daunting. To begin, tackling the process, consider two primary issues that often control the entity selection process: potential personal liability of the business owner and tax consequences to the business owner.
Five business entities are commonly used by today’s small-business owners, including the sole proprietorship, partnership, C corporation, Subchapter S corporation and the limited liability company. Each of these entities has its benefits and drawbacks that, when evaluated in light of liability and taxation issues, will guide you in choosing the right entity for your needs.
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