On October 12, 2017, President Donald Trump signed an Executive Order Promoting Healthcare Choice and Competition Across the United States.  The Executive Order requires federal agencies to consider rules that expand the ability of small businesses to band together to offer health care coverage that is not subject to the Affordable Care Act’s requirements.

The Executive Order highlights the ability of small businesses to join together to buy health coverage.[1]  To do so, the Executive Order contemplates the use of Association Health Plans (“AHPs”).[2]  Traditionally, AHPs are sponsored by trade organizations or interest groups.[3]  However, the Trump administration could potentially amend current rules, which means that AHPs would no longer be subject to state regulations.[4]  What does this mean for small businesses?  It means that they (small businesses and employers) may expand their ability to offer group coverage across state lines, which provides a broader range of policies at lower rates.[5]

Large group plans do not have to adhere to all of the Affordable Care Act’s provisions.[6]  This change might also allow AHPs to deny coverage to the group or set rates for the group based on medical history.[7]  The administration, however, has confirmed that employers who opt to participate in AHPs will not be allowed to exclude employees or formulate premiums based on health conditions.[8]  But, the associations could charge certain employers more than others based on their worker’s medical histories.[9]

One of the primary reasons for the Executive Order is to give small employers the same opportunity as large employers to obtain favorable terms for coverage.  The Trump Administration believes that expanding access to AHPs will help small businesses defeat competitive disadvantages.

If you are interested in discussing the Executive Order’s potential impact on your small business, please contact the clinic at (336) 279-9217 or businessclinic@elon.edu to speak with a Student-Attorney.

 

[1] Tami Luhby, What’s in Trump’s health care executive order?, CNN (Oct. 13, 2017), http://money.cnn.com/2017/10/12/news/economy/trump-health-care-executive-order/index.html.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.

At the end of the 2017-2018 legislative session, the North Carolina General Assembly adopted a bill, titled in short, “Veteran-Owned Small Business/Annual Report,” that becomes effective January 1, 2018. This bill will allow small business owners that are veterans or service-disabled veterans to voluntarily disclose their veteran status on their small business’s annual report. The North Carolina Legislature’s purpose for requesting this status is “[t]o assist the State in documenting the importance and impact of the State’s military population in our communities and on our State and local economies.” S.B. 578, 2017 Gen. Assemb., 90th Reg. Sess. (N.C. 2017).

As a result, the North Carolina Secretary of State will have to amend the annual report form by adding space so that domestic and foreign corporations, limited liability companies, and registered limited liability partnerships and foreign limited liability partnerships may voluntarily disclose this information. Also, the North Carolina Secretary of State will be required to annually report the total number of businesses owned by veterans or service-disabled veterans that report in North Carolina to the Department of Military and Veterans Affairs.

Small business owners will not have to look far to determine whether they would be subject to this voluntary disclosure option because the bill provides, among others, the following key definitions:

Service-disabled veteran means a veteran with a disability that was incurred or aggravated during the veteran’s service in the Armed Forces of the United States.

Veteran means an individual entitled to any benefits or rights under the laws of the United States by reason of service in the Armed Forces of the United States.

Service-disabled veteran-owned [or veteran-owned] small business means a business that satisfies both of the following requirements:

a.       The business’s net annual receipts do not exceed one million dollars ($1,000,000).

b.      One or more service-disabled veterans [or veterans] own more than fifty percent (50%) of the business.

Id.

These definitions, among other provisions, will be incorporated into the following sections of the North Carolina Statutes: § 55-1-40, § 55-16-22, § 55-16-22.2, § 57D-1-03, § 57D-2-24, § 57D-2-25, § 59-32, § 59-84.4, §59-84.5. To read the entire bill, a copy of it can be found by clicking this link:

http://www.ncleg.net/Sessions/2017/Bills/Senate/PDF/S578v2.pdf

If you own a small business (or plan to start one) and are a veteran or service-disabled veteran please contact Elon Law’s Small Business and Entrepreneurship Clinic at (336) 279 – 9217 or businessclinic@elon.edu if you have any questions about the status of this bill or how to file an annual report for your business.

 

 

The North Carolina Department of the Secretary of State has updated and made changes to the reporting requirements of LLC’s and Corporations that are organized or incorporated in the State of North Carolina.  Below is information from the Secretary of State’s office:

 

ANNUAL REPORTS (LLC’s) – Limited Liability Companies and L3C entities registered to do business in North Carolina must file an annual report each year. There are two options for filing, they are:

 

Electronically (real-time) at the NC Secretary of State Online website www.sosnc.com. The fee for filing the annual report is $202, and must be filed on April 15th of each year after the year of creation
Paper Form at the NC Dept. of the Secretary of State office.  Address is listed on form obtained from the website above. The fee for filing the annual report by mail or in person is $200, and must be filed on April 15th of each year after the year of creation.
Professional LLC entities are not required to file an annual report, but they are required to update information regarding their registered agent name and address along with the principal office address within 60 days of any change to the information on file with the Secretary of State’s Office. If you have any questions, please contact customer service at either 919-807-2225 or corpinfo@sosnc.com

 

 

ANNUAL REPORTS (CORPORATIONS) – Business Corporations registered to do business in North Carolina must file an annual report each year. There are two options for filing, they are:

 

Electronically (real-time) at the NC Secretary of State Online website www.sosnc.com. The fee for filing the annual report is $20, and must be filed on the 15th day of the 4th month after the first fiscal year ends. Certain corporations may get an extension on filing their taxes, in which case the annual report due date is also extended.
Paper Form – Business Corporation’s Income and Franchise tax return with the North Carolina Department of Revenue. The fee for filing the paper form of the annual report is $25.  Corporations that chose this option must file their annual report at the same time the taxes are filed.
Nonprofit Corporations and Professional Corporations are not required to file an annual report, but they are required to update information regarding their registered agent name and address along with the principal office address within 60 days of any change to the information on file with the Secretary of State’s Office. If you have any questions, please contact customer service at either 919-807-2225 or corpinfo@sosnc.com

 

 

In late June of 2016, the North Carolina General Assembly adopted a bill to make it easier for businesses to search for and file assumed business names, also called “Doing Business As” names. The new law, titled the “Assumed Business Name Act,” will create a central registry of all assumed business names registered with the Corporations Division of the Office of the North Carolina Secretary of State. While this bill has an effective date of October 1, 2017, it will only go into effect if the Secretary of State’s Office receives sufficient funding to implement the new system.

North Carolina General Statute §§ 66-68 requires that before any person or business engages in business in a county in North Carolina under an assumed name, or designation other than the name set out in the Certificate filed with the Secretary of State establishing the business, such business or person must file a Certificate of Assumed Name.

The current process for filing a Certificate of Assumed Name requires businesses to register their assumed name in each county where they do business through the counties’ respective Register of Deeds Offices. However, effective July 1, 2017, businesses that operate in multiple counties will be required to register their assumed name in only one of the counties it does business. This was amended via §§ 77-71.4, and makes it easier and cheaper to do business in counties across North Carolina.

Before filing a Certificate of Assumed Name, business owners should first search the Register of Deeds Office website of the county they plan to do business in to make sure the name is not already taken by another entity.

If you own a business (or plan to start one) and operate under an assumed name, please contact Elon Law’s Small Business and Entrepreneurship Clinic at (336) 279 – 9217 or businessclinic@elon.edu if you have any questions about the status of this Act or how to file a Certificate of Assumed Name for your business.

On December 1, 2016, a new overtime rule was scheduled to go into effect. This would have affected approximately 4.2 million workers by entitling salaried workers to overtime if they make less than $913 per week an increase from the previous $455 per week threshold. The weekly increase translates to a minimum annual salary of $47,476 for exempt employees.

 

However, on November 22nd a Federal district court judge enjoined the implementation of the new rule. Judge Mazzant who presided over the case ruled that the Federal Labor Department does not have the authority to issue this rule, according to the Fair Labor Standards Act. The Labor Department has the opportunity to appeal Mazzant’s ruling to the U.S. Fifth Circuit Court of Appeals.

 

Even if the appeal is successful, President Trump’s Labor Department may withdraw the rule, or Congress may enact a bill to retract the rule. President Trump has not indicated he is against the rule but has stated that a carve-out for small businesses would be necessary because they would be hit the hardest.

 

The Department of Labor estimates that costs will range from $150-$200 million nationwide. With professional and technical services, healthcare (not including hospitals) and retail trade as the three industries in the small business sector that would be hit the hardest.

 

If the Department of Labor were successful in its appeal businesses would be forced to adopt new employee payment regulations between any changes made by President Trump. It would be beneficial for small businesses to have new employee payment regulations in place and ready to use, just in case an appeal is successful and the new rule goes into effect. Proactive planning would go a long way to prevent lawsuits from underpaid employees if the rule goes into effect.

For both individuals and businesses, it is important to understand the risks of storing, as well as sending and receiving documents, that contain important information via cloud service platforms. While the costs associated with these programs are attractive to many individuals and small business owners, many have major security flaws.

 

Take Dropbox for example: In recent news, Dropbox reported that more than 68 million users’ email addresses and passwords were hacked and leaked onto the Internet.

 

With the recent onslaught of companies being hacked and peoples’ personal information being leaked onto the Internet, business owners should make sure the programs and networks they use are secure. Many companies have found themselves in million dollar class action lawsuits for not securing their customers’ names, addresses, credit card numbers, and bank account information.

 

The main issues arising with this type of service providers are:

1. They own their own servers, so they also own all information contained on them. Legally, these companies can access any data on their servers at any given time – virtually erasing user privacy from the service provider.

2. These companies often house their servers outside of the United States; therefore the use, operation, content, and security of these servers is often outside the protection of United States law.

3. Many of these cloud sharing companies have also disclosed that if subpoenaed, they will voluntarily disclose any of your information to a third party.

When determining what service provider to use for the transmission or storage of important information, individuals and small business owners should carefully review the company’s disclosure and privacy policies. If you have any questions or concerns about your current service provider’s policies, please feel free to contact Elon’s Small Business & Entrepreneurship Clinic at businessclinic@elon.edu or (336) 279–9217.