The documents list individuals previously connected to the convicted sex offender but contain no alleged misconduct so far.
Category: Legal
The CPRA Compliance Checklist Every Business Should Follow in 2023
By Adil Advani
If you run a business, it’s essential to be aware of and comply with all relevant regulations. One such regulation is the California Privacy Rights Act (
CPRA) which was approved by California voters in November 2020 and went into effect on January 1, 2023. The CPRA builds on the California Consumer Privacy Act (CCPA), which became law in 2018, and provides additional rights for California consumers regarding the collection of their personal information and how it is collected, used, and shared by businesses.
Understanding the CPRA
The CPRA applies to companies that do business in California and meet certain criteria, including having gross annual revenues over $25 million, collecting personal information from more than 100,000 consumers or households, or deriving 50% or more of their annual revenues from selling consumers’ personal information.
Personal information is defined as any information that relates to, or could reasonably be linked to, a particular consumer or household. This includes names, addresses, email addresses, IP addresses, and more sensitive information like biometric data and personal financial information.
Some of the fundamental rights that the CPRA gives to California consumers include:
- The right to know what personal information a business has collected about them
- The right to request that a business delete the consumer’s personal information
- The right to opt-out of the sale of their personal information
- The right to opt-out of automated conclusions, such as profiling for targeted behavioral advertising
- The right to know how automated decision technologies work and their likely outcomes
- The right to correction in the event the personal information is incorrect
- The right to limit the use of a consumer’s sensitive personal information
- The right to data portability where an organization share data with other entities
- The right to notify minors if the business intends to sell or share their personal data
Ensuring your business is compliant
1. Make a plan
It’s essential to have a plan in place for how your business will handle requests from California consumers, including who will be responsible for responding to them and how long it will take to respond. The CPRA mandates that these requests must be addressed within ten days and processed within 45 days.
2. Review and update your privacy policies and notices
The CPRA requires businesses to provide clear and conspicuous notice to consumers about their rights under the law, as well as information about the personal information the business collects and how it is used. This means taking a close look at the personal information that your business collects, how it is collected, and how it is used and shared. You should also review any contracts or agreements with third parties involving the collection, use, or sharing of personal information. Ensure your privacy policies and notices are up-to-date and compliant with the requirements of the CPRA.
3. Designate a data controller
Designate a contact person or team to handle CPRA-related requests from consumers. This could be a privacy officer or a
customer service team with the necessary training and resources to handle these requests.
4. Train staff
Train your employees on the CPRA and its requirements. This will help ensure that everyone in your organization is aware of the new law and knows how to handle CPRA-related requests from consumers.
5. Introduce privacy and security measures
Implement procedures for verifying the identity of consumers who make CPRA-related requests. This is important to protect the privacy of consumers and prevent fraud. Additionally, keep thorough records of all CPRA-related requests and how they were handled. This will help you demonstrate compliance with the law and provide evidence in the event of a dispute or investigation.
Consequences for non-compliance
Keep in mind that there can be financial consequences if a business is not complying with CPRA’s requirements. The severity of the offenses determines the penalties for violations, where each infraction carries a $2,000 fine, negligence-based errors are subject to a $2,500 fine per offense, and intentional disregard of the law carries a $7,500 fine per offense.
Legal Requirements for Starting a Small Business: 10 Things New Entrepreneurs Should Know
If you’re a new entrepreneur, an important task is ensuring that your business is compliant with all local, state and federal regulations.
Some legal matters require immediate consideration, and you will want to address those issues as soon as possible. To help,
Young Entrepreneur Council members share 10 essential tasks to handle right away when starting a business.
When first starting your business, it’s important to get all the legal matters in order as soon as possible. In your experience, what’s one legal consideration new entrepreneurs should be sure to handle right away and why?
1. Set up a company mailing address
It’s important to set up a company mailing address, especially if you are a remote business and don’t have a physical location. This address will be used in all of your email correspondence, legal documents, and more. You can set this up through a registered agent or through a company that handles mailboxes for businesses. Be aware you can’t use a P.O. Box to receive certain government forms and you may need a physical mailing address. —Nathalie Lussier, AccessAlly
2. Check for preexisting trademarks
One legal matter that needs to be addressed when starting a business is trademark issues. When creating your brand or developing a product, always check to see if someone has trademarked the name. If they have, you’ll need to go back to the drawing board. The last thing you want to do is infringe on a registered trademark and end up in legal trouble before you get your business off the ground. —John Brackett, Smash Balloon LLC
3. Find a good, experienced lawyer
Get a good lawyer who understands corporate law, finance, and mergers and acquisitions. It’s impossible to know what future legal matters you will face at incorporation, but good lawyers will know what’s ahead, even if you don’t. A good law firm can modify existing documents and help with negotiations. Having a good lawyer who understands how to structure legal matters is important. —Sean Adler, GZI
4. Establish the business as an LLC or corporation
When first starting out, one of the most important legal considerations to handle is establishing the business as a limited liability company (LLC) or corporation. That’s because every other step of the business-opening process will demand the legal name of the business. It’s what makes it possible to get a federal tax ID, which is also required for key financial elements like bank accounts and insurance policies. —
Richard Fong, Trustable Tech
5. Put financial agreements in writing
Always put financial agreements in writing. Money can easily break friendships and kinships, and you don’t want any misunderstandings to arise in the future. The agreement should include the nature of the return on investment. This is a serious expression of your commitment to the business and your intent to make money from it. —Bryce Welker, Crush The GRE Test
6. Publicize your company legally if necessary
One of the first things you should do before starting your business is determine if you need to publicize your company legally. Some cities and states require business owners to publicly announce that they created a company before they’re recognized. Failure to follow this step could result in hefty fines, confusion, and legal issues. —John Turner, SeedProd LLC
7. Understand your estimated tax payments
Talk to a CPA about your estimated tax payments, especially if you offer professional services. It would be unfortunate if you lost your license because of the back taxes you owe. In the first few years of business, you don’t want to underestimate your dues to the IRS or find yourself in a financial bind. Estimated tax payments per quarter are ideal. —Givelle Lamano, Lamano Law Office
8. Ensure you’re following the right payment rules
Make sure that you’re compliant with payment issues. There are many regulations that govern how you can accept payments from your clients. This is especially important if you work with clients who live in other countries, as you’ll need to consider currency exchange rates and taxes. By working with a legal professional, you can ensure that your business is following all the right rules. —Syed Balkhi, WPBeginner
9. Register your business name
Choosing the name of your company is one of the more difficult things to do when getting started. In most cases, the name you settle on will have already been taken, so this may take a few tries. But, when you’ve finally made up your mind and come up with a name that’s not taken by someone else, it’s best that you get it registered as soon as possible. —Stephanie Wells, Formidable Forms
10. Obtain any necessary licenses
In many countries, you need a license to start a business. So if you’re residing in such a country, obtaining that license is one of the first things you should do. This will prevent you from landing in any legal trouble. —Thomas Griffin, OptinMonster
How to Turn Your Freelance Business into an LLC—And Why You Should
While all freelancers are technically business owners, not everyone considers them such. In some instances, freelancers who don’t treat their endeavors professionally are partly to blame. But often, the lack of regard stems from misconceptions about freelancers.
Fortunately, by considering the suggested steps below, freelancers can turn negative perceptions around and establish a foundation for success and growth.
8 steps to make your freelance business official
1. Choose a type of registered business entity
Many freelancers (and other solo business owners) start out as
sole proprietors. In a sole proprietorship, no separation exists between the individual and the freelance business for legal and tax purposes.
While operating as a sole proprietorship is the simplest route from an administrative and business compliance standpoint, it has its disadvantages.
Sole proprietorship drawbacks:
Unlimited personal liability for the business’s debts: In a sole proprietorship, the business owner is personally responsible for all legal and financial obligations of the business. So, if someone sues the company, the freelancer’s personal assets—home, car, checking and savings accounts, etc.—are at risk. Likewise, business expenses and loans are tied to the individual. If the business doesn’t have funds to cover them, the freelancer’s personal assets could be used to settle those debts.
Lack of business name freedom and protection: States require that the legal name of a sole proprietorship include the owner’s name. For example, “Lana Juarez Website Design Services.” To use a more creative name when marketing her services, Lana would need to complete a state or county filing for fictitious name use, also called “filing a DBA” (doing business as).
Note that while an approved DBA gives a sole proprietorship the legal OK to use a fictitious name, it does not give the business owner exclusive rights to the name. Therefore, other businesses may also be able to conduct business using the same (or a similar) name.
No tax flexibility: In a sole proprietorship, all business income and expenses flow through to the owner’s personal tax return. No other options are available. In addition to income tax, business profits are subject to self-employment taxes (Social Security and Medicare). Even if the freelancer wants to keep earnings in the business rather than withdrawing them as personal compensation (known as taking an “owner’s draw”), all taxable income is generally subject to self-employment taxes.
Lack of credibility: Some prospective clients and lending institutions may be hesitant to work with someone who operates as a sole proprietorship. They may view an individual who hasn’t established an official business entity as less trustworthy or responsible.
How can a freelancer overcome these drawbacks? I encourage them to consider establishing a registered business entity, such as an LLC (limited liability company) or corporation. A corporation has a great deal more
startup and compliance formalities, generally beyond what many one-person businesses care to deal with.
Since I’m discussing freelance professionals in this article, I’ll offer details about the LLC structure, which tends to be more well-suited to very small businesses.
Pros of an LLC:
Limited personal liability for the business’s debts: By forming an LLC, a freelancer creates a separate legal entity for their company. That protects the freelancer’s personal assets because, in many instances (aside from personal negligence, harm, fraud, or illegal actions), the freelancer will not be held responsible for the business’s debts or legal problems.
Business name freedom and protection: By registering the freelance business as an LLC, a freelancer may use a fictitious name as the company’s legal name. That allows the freelancer to brand the business more creatively without needing to file a DBA. When the state approves the LLC’s formation filing, the business name is automatically registered and may be used in the freelancer’s marketing assets, bank accounts, contracts, and other documents and communications.
Generally, states will not allow another business to use an existing LLC’s name, so the freelancer gains some important brand protection when forming an LLC. Before deciding on a business name, I encourage freelancers to conduct a business name and trademark search to confirm that another company hasn’t already claimed the name they wish to use.
Tax flexibility: While a single-member LLC is by default taxed as a sole proprietorship, an LLC that meets the IRS criteria may elect for
S Corporation tax treatment. S Corp election may reduce a freelancer’s personal tax obligations because only their wages and salaries from the business are subject to Social Security and Medicare taxes.
Enhanced credibility: The formation of an LLC may give a freelancer enhanced credibility in the eyes of potential customers, project partners, and lenders. The fact that the freelancer has taken the steps to officially register their business and create an official entity can help instill trust and confidence in those who may potentially work with or loan money to the freelancer’s company.
2. Designate a registered agent
Most states require business entities to designate a
registered agent. A registered agent is an authorized party (individual or company) approved to be a business’s official point of contact with the state and will accept important notices and documents on the business’s behalf.
The types of communications a registered agent will receive for a business include:
- Regulatory and tax notices
- Service of process for legal notices (e.g., summonses and subpoenas)
- Government correspondence
- Business compliance documents
While some states allow a business owner to be their own registered agent, that may not be an ideal scenario. States have rules regarding the specific hours and days a registered agent must be available. They also have other qualification criteria that must be met to serve as a registered agent.
3. File LLC Articles of Organization
In most states, the paperwork to form an LLC is called either Articles of Organization or Certificate of Organization. The information requested and the fees associated with the filing vary by state. Business owners may complete and submit the form on their own or ask someone else to assist them (such as an attorney or online business filing company).
If a freelancer wants to be treated as an S Corporation for tax purposes, they will also need to file
IRS Form 2553 (Election by a Small Business Corporation).
4. Obtain an EIN and set up a business bank account
Most banks will require that an LLC gets an EIN (Employer Identification Number) from the IRS before they will set up a business bank account for someone. Even if a freelancer doesn’t have employees, they must obtain an EIN to open their banking accounts. They may also need an EIN for other purposes, including applying for business licenses and permits.
Fortunately, the IRS issues EINs at no charge. Obtaining one involves completing
Form SS-4 (Application for Employer Identification Number), which can be filled out and submitted online. The freelancer requesting the EIN must provide their Social Security number or Individual Taxpayer ID number.
5. Apply for business licenses or permits
Whether a freelancer operates as an LLC or a sole proprietorship, they may have to hold certain licenses or permits to conduct business legally. The requirements a freelancer needs to fulfill can depend on their work location, their industry, the type of work they perform, and other factors. It’s critical that business owners research their responsibilities at the state, local, and federal levels.
6. Use the LLC name and don’t commingle personal and business funds
Freelancers who form an LLC must keep their personal and professional transactions and accounts separate. Invoices to clients, business contracts, and other company documents should reflect the LLC name. Also, it’s critical to make sure business funds are used for business purposes, and personal funds are used for personal purposes—no intermixing the two!
Taking these steps helps preserve the legal separation, and the personal liability protection, of the LLC structure. Failure to maintain that division could result in a court determining the freelancer has “pierced the corporate veil” and holding the freelancer personally responsible for the debts of the business.
7. Notify your clients and vendors
It’s crucial for freelancers who have changed from a sole proprietorship to an LLC to notify their customers, vendors, and contractors. Anyone who pays a freelancer for services or sends bills to the freelancer should use the freelancer’s LLC name on checks and invoices.
8. Hire employees to grow your business
Freelancers start off as a one-person operation. Some may continue their entire careers as solopreneurs, while others may decide to expand their companies and onboard the talents of other individuals. Bringing employees into the fold comes with additional responsibilities, including payroll.
To hire staff, a business owner must have an EIN, the ID number the federal government uses for payroll tax purposes. Payroll tax account registration at the state (and sometimes local) level must be completed as well.
When a business has employees, it’s responsible for various employment-related taxes and fees. Some are deducted from employees’ pay, while the employer pays others.
Examples of employment taxes and payroll deductions:
- Federal, state, and local income taxes—These are deducted from the employee’s pay. Withholdings are based on the information the employee provides on their W-4 form.
- FICA tax (Social Security and Medicare taxes)—The employee’s pay deduction is 7.65%, and the employer pays the other 7.65%.
- FUTA—Federal Unemployment Tax is paid by employers. It is not deducted from an employee’s pay.
- SUTA—State Unemployment Tax (sometimes called SUI, State Unemployment Insurance) is usually paid by employers, although employees must contribute in some states.
A word about keeping your freelance business compliant
Freelancers who form a registered business entity should research their ongoing business compliance responsibilities. The IRS, state, and local government websites provide information about the obligations, and insights from an attorney,
accountant, or tax advisor can also prove valuable.
By staying up to date with any reporting and renewal requirements, a freelancer can continue to enjoy the benefits of having a registered business entity year after year.