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How Can I Hunt Boar in Hawaii?

Happy Lunar New Year!

As some of you know I do a post every year related to the Chinese zodiac animal of the New Year. Last year it was about landlord’s charging extra rent for dogs. The year prior to that one was, can you keep chickens in your backyard. Going to back when I started this tradition, in 2016, I wrote about can you own a monkey in Hawaii. Thank goodness dragon is still five years away! I have no idea what I am going to do that year …

2019 is Year of the Boar, so we are going hunting. Well, not literally, but I am going to cover the general basics for legally hunting feral pigs (sus scrofa scrofa) in the State of Hawaii.

Sus scrofa scrofa.

What do I Need to Hunt Legally?

Before getting to the paperwork, in general you should understand that hunting animals in Hawaii is largely regulated by the Department of Land and Natural Resources (DLNR).  DLNR is responsible for the management of public lands and all the interests therein, including the animals. So if you are planning to hunt and have further questions, DLNR is likely who you will be contacting.

With regard to the paperwork, a hunting in Hawaii requires a hunting license. A hunting license is necessary whether you are going to be hunting on public or private lands. In order to purchase a hunting license though you must either possess:

  1. a Hawaii Hunter Education Wallet Card; OR
  2. a Letter of Exemption.

In case of 1., you’ve passed the Hawaii Hunter Education Class, then received a Hunter Certification Card. In the case of 2., that means you have received an out-of-state hunter education card or obtained a Hawaii Hunting License prior to July 1, 1990. Specifically, for non-residents you will need complete the non-resident Letter of Exemption Form and submit it as an application to DLNR. Obviously, once you submit your application the government will review, process, and ideally approve it. Like any government process, there will be additional procedures after approval. However, with approval you should be able to purchase a Hawaii hunting license. If you are a nonresident, then you will likely have to work with your local hunter education office to get certification or proof to be submitted to DLNR to obtain the Letter of Exemption.

Go Hunt, Hawaii, a DLNR website is the State’s official hunting resource and provides a schedule of classes to take basic Hunter Education as well as an easy to follow flowchart on the basics of hunting.

What if I am a Nonimmigrant Alien?

If you are coming to the United States and temporarily bringing firearms and ammunition into the United States, then the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has a FAQ to address these issues. Obviously, this is just a general FAQ and any specific concerns may require more planning and communication with the agency or others involved, such as your travel arrangements.

What About Bringing Firearms and Ammunition Into Hawaii?

Firearms and ammunition being brought into the state must be registered.

Firearms and ammunition brought into Hawaii must be registered within 48 hours after their arrival with the Chief of Police of the county of one’s residence, business or sojourn. So whatever islands you are heading to, you have to register your hunting weapons and ammunition. Understand that while DLNR regulates public lands, the regulation and enforcement of firearms happens at the county-level, so the police chiefs of the various counties have control. So you will want to contact the district police station on the island you are heading to or an office of the Division of Conservation and Resources Enforcement (DOCARE).

What About Minors and Firearms?

Minors, those who are 15 years and younger, that are hunting with a firearm must obtain a permit from the county police department.

What if I am Disabled Hunter?

Those with disabilities are suggested by DLNR to review the vehicle permit application and the cross-bow permit application. There may be additional requirements and issues. Therefore, it would probably be best to contact DLNR.

Where Can I Hunt Boar in Hawaii?

Each island has different zones, animals, and other variables to go hunting. Check the DLNR rules and regulations.

Ok, once you’ve squared away your hunting license where can you go to hunt boars? Well, in terms of public lands feral pigs may be hunted on Hawaii (also known as the “Big Island”), Maui, Molokai, Oahu, and Kauai. There are special zones for public lands hunting. It is best to check maps and understand the terrain. To be specific DLNR provides the Game Mammal Hunting Rules as a downloadable PDF. If you go through these Hawaii Administrative Rules you will see a number of maps, charts, and exhibits that discusses each of the islands zones, hunting units, means of hunting, bag limits, open hunting periods, open hunting days, and special conditions and restrictions. It is quite explicit. In addition, they provide many of these charts and tables for each of the islands as follows:

Yes, Lanai has a page as well, but this post is concentrated on feral pig hunting.

What about Private Lands?

In addition to everything indicated prior, that is having a valid hunting license, doing your hunting during limited hours, you obviously need the permission of the landowner. The exception as to what is okay to hunt with, that is setting weapons and method, hunting fees, and special prohibits are set by the landowner. More on those topics ahead.

Whoever Goes Hunting Are They Required to Have Special Clothing?

Blaze orange garment is a must for anyone part of the hunt. Hawaii rules specific what is a must for this garment.

Yes, any person who goes on the hunt in a public hunting area basically needs to wear something specific. Think orange. That is whether the person is serving as a guide, accompanying or assisting the hunter, and the hunter themselves needs to be wearing an exterior blaze orange garment. The rules on this blaze orange garment are very specific, the point being safety. So the blaze orange garment while engaging in any of those hunting activities:

  1. may be a shirt, vest, coat or jacket;
  2. the material must be commercially manufactured and may be either solid or mesh with a maximum mesh size of one-eighth inch; and
  3. the use of camouflage orange is PROHIBITED.

Finally, these blaze orange garments are not required on designated archery only public hunting areas.

When Can I Hunt Boar? What Times During the Year and Day?

Game mammals (which includes feral pigs) may only be hunted from one-half hour prior to sunrise and until one-half hour after sunset. This is year-round. It is prohibited by law to hunt during one-half hour after sunset and one-half hour before sunrise. Basically, after the sun goes down and until rises again hunting is illegal. Again, much like the orange clothing requirement, safety is an issue.

How can I Hunt Boar? What Tools and Methods are Okay?

What about Using Flashlights?

So from the prior question and answer, you may be thinking what if we lit up the area? DLNR prohibits the use of any form of artificial light for hunting.

What about Dogs, Firearms, Bows and Crossbows or Melee weapons?

From DLNR’s Game Mammal Hunting page:

When hunting with dogs where permitted, hunters may use any muzzeloading rifle with a minimum of 0.45 caliber bore diameter; any rifle using at least a 0.22 caliber magnum load or center fire cartridge; shotguns loaded with slugs or 00 or larger buckshot or spears or knives. When hunting without dogs, hunters may use any rifle with a muzzle energy rating of 1,200 foot pounds or more; shotguns loaded with 00 or larger buckshot and muzzleloader rifles with a minimum of 0.45 caliber bore diameter (Breech loaders may not be used during muzzleloader only designated hunts). When hunting with a bow, the following drawing tension requirements are applicable: Long bows must have a minimum of 40 pounds at a 28-inch draw; Recurved bows must have a minimum of 35 pounds; Compound bows must have a minimum of 30 pounds.

Last Reminder: General Information and On Feral Pigs Only

Remember, we are only talking about feral pigs in this post, which falls under game mammals. Also much of this is general information provided on DLNR’s webpages, but when dealing with activities, such as hunting, then there are a lot of safety issues to deal with.  Additionally, for this post everything discussed here is on feral pigs. While some of these rules and regulations apply to other animals, such as feral goat – there are slightly different permit requirements for other game mammals. For example, deer, wallabies, and wild cattle are protected. Further, game birds are regulated both on public and private lands. So again, you are going to have to do some homework for those animals. Many people get turned away at the license agent’s counter due to being unaware or requirements. Research and plan ahead!

Good luck and good hunting! May you find the Year of the Boar prosperous and full of bounty!  As always, thanks for stopping by and reading.

-RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Hawaii Senate Committee Hearing Increase on Minimum Wage Bill

Dear Hawaii Small Business Owner I reach out to you on this post as …

A Small Law Firm Owner that Has Legislative Experience and Works with Businesses

I am letting you know that the Hawaii legislature has a number of minimum wage bills introduced this legislative session (2019). I am an owner and Managing Partner of a small law firm here in Honolulu, and of course any legislation that may impact my operations and my clients then I do have concerns. It is not only as business attorney, but as an owner as well. Additionally, I spent 4 legislative sessions as a legislative aide, committee clerk, and then attorney for the Hawaii House Labor, and then the Judiciary Committees. So therefore, I am in a unique position to share my concern via legalese, but also educate others as to the legislative process.

The Hearing Information and the Minimum Wage Bills

Having communicated that, I share the following:

  • The Hawaii Senate Committee on Labor, Culture and the Arts has scheduled a hearing. It is on Thursday, January 31 at 3:00 p.m. The following bills related to minimum wage are being heard: (A) SB 789; and (B) SB 1248. These two bills, as currently drafted, would: (A) increase the minimum wage to $12.00 per hour beginning 1/1/2022; and (B) provide an income tax credit for qualifying small businesses to offset the increase in the minimum hourly rate that employers must pay employees, and increase the minimum wage rate each year from 2020 through 2024.
  • Here is the Hearing Notice.

Note that the submitting of testimony for the hearing of bills may impact some legislators’ decisions on how to vote or recommend changes to a piece of legislation. As a constituency, Hawaii small business owners should be heard on matters that impact them. However, you have to write and submit the testimony to them to have it part of the process. Further, if you have time, then appearing in-person at the hearing may also be impactful. If you have questions on drafting and submitting testimony online, and/or testifying in person, then feel free to ask or email me at ryan@hewbordenave.com.

Thanks for reading this, now go submit some testimony and be a part of the Hawaii legislative process!

-RKH

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A Board’s Resolve to Act: Corporate Resolutions

Your Personal Resolutions vs. Corporate Resolutions

So we are midway through January 2019 as of this post. How are your New Year’s Resolutions coming along? Are you preparing for your 2018 tax returns? Government shutdown or no the IRS will still be collecting taxes, so that’s always a struggle. In particular keeping your accounting and records in order to help yourself or your accountant.  So working on your taxes and helping out your accountant, whether you own a business or not, may be a personal resolution.

If you are responsible for a corporation’s records you probably want to make it a personal goal to make it the corporation’s goals to be prepared and organized for corporate meetings and docs.

For businesses though, another issue they may struggle in trying to do better each year is in their record keeping. Particularly, a problem acute to corporations, is documenting a corporate board’s decision-making process. Sometimes for corporate compliance concerns documenting the board’s decisions is crucial. It might be what is at issue in an IRS audit or an investigation by a licensing/permitting government agency.

From following the Articles of Incorporation, By-laws, calling meetings, setting agendas, sending notice, etc … there is a lot of keep track of for corporate formalities. One of the important documents in the corporate governance and record keeping process is the corporate resolution.

Understanding Corporate Resolutions

Corporate resolutions should be stored with other records like minutes.

Good record keeping, including documenting resolutions is key for corporate governance and compliance.

So what is a corporate resolution exactly? Corporations are legal persons. While, they are not living, breathing people like you and me they are persons under the law. They can own property, sue others, and be sued themselves. However, in order to do something, that is take action, corporation’s have boards that make decisions. In that way, corporate resolutions are like personal resolutions. Where you are resolved to accomplish something, like eat better or exercise more, a corporation is resolved to take out a loan or buy a piece of property.

For more information on corporate resolutions download and read the following One-Sheet. It is meant to answer the basic questions of corporate resolutions: ONE-SHEET: WHAT ARE CORPORATE RESOLUTIONS?

Many corporations spend a lot of money on their corporate formalities and governance items, such as:

  1. Proper notice and running of meetings;
  2. Timely annual filings and tax returns;
  3. Well-draft resolutions and minutes; and
  4. Documenting decision-making processes.

With so many stakeholders interested in corporate actions, such as shareholders, directors, officers, executives, IRS agents, licensing boards, regulators, environmentalists, and social activists corporate resolutions are just one of the many records that need to be maintained.

Resolutions Used in Other Organizations

Other organizations also use resolutions.

A variety of organizations and associations also use resolutions. They just do not call theirs “corporate resolutions”.

Finally, realize that for-profit corporations’ boards are not the only boards that should be documenting their actions and decision-making. That is resolutions are not only for them. Consider these situations:

  1. legislative bodies, their committees, and boards/agencies showing how they met and discussed the passing of laws or changing of regulations;
  2. nonprofit boards should avoid self-dealing, conflicts of interests, and the like as certain actions may be perceived abusing their charitable and tax exemption status for 501(c)(3) corporations, thus answering inquiries by the IRS and state regulators;
  3. homeowners’ and condo association boards where the decision to implement house rules, policies, and/or improvements could be challenged by owners or by injured parties for liability purposes; and
  4. yes, even LLCs and partnerships may use resolutions, they just do not call them “corporate resolutions”.

Resolutions in general are just a document of an action to be taken. Whether they pass or not a corporate board is something else. Corporate resolutions is just one of the tools in the corporate governance and compliance process. So anyone forming a corporation, serving as an officer/director, or becoming a shareholder should familiarize themselves with corporate records.  If your new to proper corporate governance and drafting of resolutions, then you may want to consider a lawyer’s help.

Finally, for your personal resolutions good luck!

-RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Happy Veterans Day: Resources for Veterans Owning a Small Business in Hawaii

Thank you to all our veterans! Happy Veterans Day!

Support for Veterans Through Business Ownership

Happy Veterans Day and thank you to all the people who have enlisted to serve our country. I thank all veterans, but this post is mainly for highlighting those resources available to vets for small business ownership. As it is a topic that I care about and my personal sentiment is if you as a vet have taken the sacrifice in defending our country, then we can sacrifice some time to educate and help the transition to successful civilian life.

One path can be owning your own business.  I find that here in Hawaii, so many military personnel consider settling down in the islands after they are done with their military service. Then the question turns into opening a business due to the opportunities of being a contractor.  However, unfortunately business law tends to be abstract and also given the way the islands tends to do business and regulation that adds to their complexity. So hopefully if you, as a vet (or their spouse) are reading this, you find it helpful as a start.

Getting ready to become a business owner as a Veteran means educating yourself on aspects of small business ownership life. Fortunately, there are a lot of resources.

What a Vet Should Learn Prior to Starting a Business

In the past have had the fortune of conducting one of my favorite seminars as a part of the Boots 2 Business (B2B) program. More on that down below. Specifically, entity formation, but as an attorney I would stress understanding more than just choosing between LLC or corporation. If opening a business as a vet consider the following:

  1. forming a business entity;
  2. differences between LLCs and corporations;
  3. structuring and governing the entity you choose;
  4. tax and accounting issues;
  5. basics of contract law;
  6. understand local and state regulations;
  7. applying to be a government contractor;
  8. if you have a service-related disability, then understanding the program requirements for the Service-Disabled Veteran-Owned Small Business Program;
  9. moving your business and/or operating in multiple states; and
  10. if you are going to have a partner, then really understanding what a business partnership entails.

This is not an exhaustive list, but what I’ve come across in terms of frequently asked questions or issues. There are many other aspects such, as operational, marketing, human resource, and financial concerns for business ownership. In terms of where to get that education the B2B program is an educational and training program offered by the U.S. Small Business Administration (SBA). It is put out under the Department of Defense’s (DOD) Transition Assistance Program (TAP) and basically gives a survey course of business ownership. Note that it is open not only to Veterans, but also Active Duty Service members, and their spouses. Definitely worth a check out if you are considering opening a business an eligible.

Other Resources

In addition to the US SBA’s main website, if you are in Hawaii, then consider the following:

  • The SBA local office
  • The Veteran’s Business Outreach Center of the Pacific (VBOC)– The VBOC is a program of the University of Hawaiʻi at Hilo and funded partly by the SBA. It is committed to assisting veteran entrepreneurs by providing access to advisers on business and strategic planning, marketing, financial decisions, and starting, running, and exiting a small business.
  • Hawai’i Small Business Development Center (SBDC)– The SBDC is also funded in part through the SBA, but also by the State of Hawaii. The SBDC provides advice, research, and training for business owners.
  • SCORE Hawaii– is an organization dedicated to helping small businesses via education and mentorship. So they offer a varieties of educational activities, such as low-cost workshops or access to *mentoring.

*Note: whenever counseling with a new potential business owner client, I always tell them the biggest thing you can do for yourself is finding a good mentor.

Final Words

Sometimes closing down isn’t permanent. Sometimes you need a change of plan to reopen. The main goal is having a plan to execute.

Usually, military people transitioning to civilian life or vets have saved enough come to me when starting a new business. I would say that energy and enthusiasm is always enjoyable to work with, but as any small business owner can tell you there are other stresses. The stress of making it work. Stress of work-life balance. The stress of moving out of state. Sadness of closing down.

Just remember that there are all these resources not only to help start the business, but helping you move through your life of owning a business. For an attorney’s part, we do help with the formation, but also advising strategic decisions, which may or may not be tied to the business. One particular situation I see is military families starting a business here and then moving back to their home state. The question is what to do with the Hawaii-based business. This one-sheet should answer some preliminary questions, but as always you probably want to speak directly to an attorney for planning. Why? There is no one size fits all plan for every type of business owner. However, gaining key advice helps with strategic planning and I feel that veterans know the value of having a plan.

Finally, I would like to extend a big mahalo to all of the veterans (and to the family members that support them) for your dedication and service to your country. Thank you.

– RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Celebrating Our 2nd Anniversary

2nd Anniversary

What’s Going On with Our 2nd Anniversary

It is our 2nd Anniversary and we are celebrating by inviting you to our Open House! If you are in the Honolulu area on Thursday, November 1st then stop by our offices to meet with us, our staff, and learn something. We will be conducting five (5) free seminars throughout the day. I, Ryan K. Hew, will be doing various business law topics meant for small business owners. My partner, Trejur P. Bordenave, will be going over the basics of personal injury and making a claim.

2nd Anniversary

Join us on November 1st for our free seminars!

Sign Up at EventBrite

So if you are interested in:

  • Internet and Social Media Law for Small Business Owners
  • Contracts for Small Business Owners
  • Forming a Business Entity
  • Plaintiff’s Injury Claims: What to do if you get hurt

Then please find the details and sign-up at Eventbrite. Also throughout the day, if you want to swing by and say hi or sign up for an initial consult for another date and time that would be great too.

Thanks and see you around!

-RKH

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Oahu Pedestrian Fatalities in 2018 Increases: What is Going On?

2018 Oahu pedestrian deaths on the rise

The Rise In Pedestrian Fatalities Is Shocking.

As a father with a young daughter, and someone who enjoys walking around our office and neighborhood, it is shocking to read about the rise of pedestrian accidents leading to fatalities here on Oahu. The Department of Transportation reports that Oahu has gone from 3 recorded deaths from January to September 2017, to 19 pedestrian-related fatalities for the same period in 2018. This 525% increase is disheartening to say the least. There are some reports, primarily in the news, that fault lies in part to people crossing the street where there is no crosswalk. However, make no mistake, drivers should always be vigilant even where no crosswalks are present.  Also, but for the two that occurred this past Tuesday, they all happened at night.

S. Beretania crosswalk

I walk around the office on S. Beretania to grab a bite and sometimes even I can’t help but feel anxious about crossing the street.

Is Enforcement The Answer?

Is there something that we can do to address this problem on the systemic level? The Honolulu Police Department recently issued a mandate to increase enforcement for both pedestrians and drivers.  However, the question remains, is it really an enforcement issue? As highlighted above, sometimes it is not solely the driver’s fault, but what about other facts? Does the government need to rethink the  streetlights and road markings?

An important part of my job is to ask questions. I spend a lot of time reviewing the facts of our personal injury  cases. I often focus on how my client came to their injures.  If there is a trend in similar cases, I begin to wonder what environmental commonalities are present, and if there is something that can be done. When this logic is applied to societal problems, such as a dramatic rise in pedestrian accidents, there may be outlier problems, but there are always underlying root causes. in the end, enforcement is part of the resolution, but this prompts the question of why is it happening, and at such an increase year-to-year?

Send Me Your Thoughts And Stories.

What do you think is going on? Let me know your thoughts and stories. I bet some of you have had some close calls, and I would like hear from you. Soon, I plan to compile the information and send a letter to the City and County of Oahu and the State Legislature to consider commissioning a study to take a look at this issue, particularly if the trend continues. You can email me at trejur@hewbordenave.com.

Stay safe!

Update to this story KHON2 report (10/5/2018): HPD cracks down on violators to prevent more deaths on the roads

Update to this story in the Star Advertiser (10/10/2018): Pedestrian Hit By Truck On Pali Highway Dies From Injuries, which is just one day after a similar report of 2 different pedestrian hit-and-run accidents, resulting in the tragic death of one.

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Ryan Responds: What’s the Difference Between a Trade Name and Trademark?

Ryan Responds trade name vs trademark

Is a Trade Name and a Trademark the Same Thing, or are They Different?

In this Ryan Responds video, what are the differences between a trade name and a trademark. Short answer: they are different. Much of the confusion comes up nowadays when people are registering their business and trying to come up with the marketing and advertising for it. This is especially true when you add in the registration of domain names and social media accounts; this shall be a future post when it comes to branding strategy and protection in our interconnected world. However, for today’s topic we are focused on just trade names and trademarks.

Critical for Business Owners to Understand for their Marketing and Branding Strategy

If you are launching a new business, then you really need to grasp the difference between these abstract legal terms. It will impact your naming and registration strategy for the business and its brands before you launch. Why? Because you will do a lot of market research prior to registering your business and applying for trade names and trademarks.

I’ve seen many new business owner fail to grasp these intellectual property and business registration issues; they then go through all this energy and expenditure planning for the naming and marketing of their business, only to pay the price in changing registrations and applications, taking down their advertising, and basically upending their whole marketing strategy. They have to rethink their branding. As always it is best to do some research and speak to an attorney prior to taking any action that could make you liable, especially if you are unclear about intellectual property infringement.

Finally, in addition to the video below we provide a one-sheet on the same topic for your reading.

 

If You have a Question for Future Ryan Responds Videos …

Finally, if there is a short question you want the answer to submit them to admin@hewbordenave.com with the Subject line “Ryan Responds”. Please keep your questions short, general, and related to a business topic. Please do not provide specific details of  your matter or attempt to seek direct and specific legal advice through this format. If you need assistance and legal services, then please schedule a consultation with an attorney in your relevant jurisdiction.

If your matter is located in the Hawaii or California jurisdictions, then feel free to reach out to us to schedule an initial consultation here.

Thanks for watching!

RKH

Disclaimer: The content of this video is for general information purposes only. Nothing should be taken as legal advice for an individual cases or situations. The viewing of this video does not create an attorney-client relationship. If you need legal advice, please contact an attorney in your relevant jurisdiction.

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A Chef’s Work-Life Balance: Closed for Dinner, but Open to Subleasing or Partnering?

Between work and life.

Chefs and their Work-Life Dilemma: Dinner Service vs. Quality of Living

A friend and a client recently shared a Food & Wine article on their social media. It was entitled “Why So Many Top Restaurants Are Closing for Dinner“. The article was about how restaurateurs and chefs were seeking better work-life balance by opting not to provide dinner service. Instead they would focus on higher quality breakfast and lunch and that would be it.

Closed restaurant.

Can a restaurant owner afford not to be open for dinner?

I love food and of course, as a small business attorney, I like finding new spots to eat. Networking, meeting clients for lunch, and yes, sometimes picking up the owner as a client. Shouldn’t chefs and lawyers be friends? I often joke that I would trade services for food. Legalese in exchange for pasta bolognese! So as a fellow small business owner I do get the appeal of setting your own work hours, especially for the tough life of restaurant owners and chefs. The desire to spend quality time with friends and family, but of course there is a catch – is it cost effective?

Throughout the article there are comments about the economic realities of this operational decision:

“Though it seems like these breezy cafés should allow their owners and chefs to live breezier lives, many struggle to earn a decent living. Diners who don’t blink at a $100 dinner for two balk at lunch tabs that are half that. Lower price-points make it tough for even the busiest daytime restaurants to pay the bills.”

“Nicholas Morgenstern, owner of New York City’s vegetable-centric cafe El Rey, has been avoiding dinner service, but says it’s not sustainable.”

You Not Being Open for Dinner Might Create Opportunities

While I read through this article, I constantly wondered are there missed opportunities or creative solutions? My practice resolves around assisting business partners formalize their relationships. I also review commercial leases for food service and retail clients. So my feeling was: wow, no dinner service?! That is a lot downtime and an empty space not being utilized!

The following ideas are not complete solutions to the work-life balance equation. However, they do give restaurateurs and chefs, or any businesses in a commercial lease setting some options to consider. They may not be suitable for every business owner that is chasing that work-life balance.  Further, they do require a lot of planning and communicating. Executing them also requires all the right pieces, but they may be worth considering if you are a chef (or an overworked small business owner) trying to get to that magical work-life balance ratio.

Ways to Make Full Use of a Space, While Not Being There: Sublease or Partnering

So what struck me about this article is that these restaurants all likely have a lease; it is rare for a new restaurant business owns the property and building. Meaning the restaurateur is entitled to the premises which they are leasing. Kind of obvious, yeah? But, if they choose not to open for dinner, then that creates a possible opportunity, as they are not maximizing the use of the leased space. What do I mean?

Retail and restaurant space for lease.

A tenant that leases a space has a lot of control over the space. When to open, when to close.

In a lease situation, the renter has property rights. While, the tenant does not have superior ownership rights with respect to the property owner, they do lease the premises. Obviously, there the space comes with restrictions and requirements, such as insurance, indemnification, specific-use, rent, but as the business tenant can use the space as they see fit  Therefore, by shutting the space down for dinner, that means the space is down to 2/3rds of its total use time, that is breakfast and lunch. Granted operating for dinner has costs and expenses, but as pointed out in the article dinner service can be a huge revenue generator with higher ticket food items and alcohol sales.

So how do you operate in a space when you do not want to be there? Why not consider subleasing or partnering. Have someone else make use of the premises for the evening, while you are having dinner with your loved ones. Of course this is easier said than done. I will run through the differences between the two and some of the issues, but if all parties involved can come to terms either one may be a workable solution for the chef that wants to go home for the night.

Subleasing: Becoming the Landlord to Your Own Tenant

Subleasing is a situation where there is a lease in place and the tenant leases out the space to another tenant below them. The legal relationship would look like this: landlord <– (lease) –> primary tenant <– (sublease) –> subtenant.  The primary tenant acts like a mini-landlord to the subtenant. This would mean that the primary tenant, who only wants to operate for breakfast and lunch would lease out the space for dinner time to another business. Thus the premises are used throughout the day and everyone is happy, right?

Issues with Subleasing: Caught in the Middle

Hold on! It is not that simple. Remember I mentioned there is a lot of planning and communicating? First, is there even a market for another business who wants to sublease the space? Sometimes. Obviously, it depends on your city, but consider that there are food truck owners who may want to test out their food in a restaurant setting and they need a certified kitchen in some cities because of food safety laws. Other times newly-minted chefs want to do pop-ups or pastry chefs would like to focus on doing a dessert bar.  You will have to ask around. Time to use those networking skills of yours!

Second, is the landlord even going to go for this? Depends. Commercial leases almost always have anti-assignment, subleasing, etc … clauses. These provisions make it so that the tenant cannot convey any property rights (such as the act of leasing and using the premises) to another party without the consent of the landlord. It would violate the lease if the tenant did entered into the sublease without the landlord’s approval. So if you did find another party willing to sublease, then you would need to work with your landlord first before formalizing with your subtenant. Sometimes the landlord would make you co-tenants or have the subtenant make a personal guarantee; for them it is all about the risk.

Even if your landlord lets you sublease are you ready to manage your own tenant?

Other issues with commercial leases and subleasing are where is your restaurant located? Often times for malls there are certain operational hours that a business can be open for. If you are intending to sublease for dinner service and that subtenant wants to sale alcohol, they will have to get a liquor license which are often tied to zoning laws. In addition, if the subtenant is going to do a food service that is different than yours, like I mentioned the dessert bar, are there specific-use clauses in the lease? Mall owners tend to want to limit the kind of services depending on size and location as they do not want their businesses to directly compete with each other. Other times large national brands force the mall owner to allow them to be the only type located at the mall.

Finally, you are acting as a landlord to this subtenant. They are a separate business. So that means they have to get their own insurance. Furthermore, as the middle person between your landlord and them, you are responsible to both of them. If your subtenant messes up, say missing rent to you or they burn down the kitchen, then you still will be on the hook to your landlord. On a personal note too, I know with many chefs if it is their kitchen it is their rules. If you are leasing out your kitchen to another how will you tell them to use your equipment and tools? Will you even allow them to? Again, lots of planning and communicating.

Partnering: Two Chef Owners are Better than One

So maybe subleasing is not for you, as you do not want to be a landlord. What about having a partner? Maybe you have an upcoming protégé or work well with someone who want to focus/specializes in dinner, but does not want to manager their own independent business.

Partnering, when you have a business entity, a LLC or a corporation, means having a business partner join in as an equity partner by offering them ownership/membership interest or stocks/shares, respectively.  Especially, with LLCs, members (the owners of the LLC) have a lot of flexibility in designing the partnership arrangement.

Two chefs back-to-back.

Two chefs might mean that the restaurant stays open, that is if they can come to terms of agreement.

Consider that for some doctors’ groups that operate as a partnership they cover each other;  say one doctor wants to go on vacation, well then the others would cover their work thus guaranteeing continual operation and coverage for medical services. Similarly, for the restaurant, one chef partner agrees to provide breakfast and lunch, while the other does dinner. Another option may be it is on an alternating basis, where one chef does breakfast, lunch, and dinner for one week and then it changes to the other partnering chef the next. There are a lot of options to the division of labor.

What about the money? With LLCs, they are flexible in having the “keep what you kill method” via their Operating Agreements. Each member would take a share of the money based on how much they brought in. Partnering lawyers sometimes consider this method when they just want to share in the expenses of the firm, but would like to be responsible for how much they bring in. So for a chef working only during the day, then they would get the money from the sales of breakfast and lunch. So course the chef who opens for dinner gets the profit from the dinner service. Even if they are 50/50 members in the restaurant LLC that does not mean they have to split the profits 50/50. LLCs are flexible business entities. Obviously, for this method to work, you need a good accountability system.

*While a corporation remains a possibility, usually much more goes into such a relationship, such as tax and accounting planning, use of employment agreements, and drafting of specific corporate governance documents.

Issues with Partnering: Are You Ready for Business Divorce?

So again, just opening your business entity and suddenly having a partner is not at all what it is cracked up to be. First, often times when launching a food business many chefs do not have the funds to open their restaurant. They need a financial backer. Whoever is funding them, is either a formal partner already or have a loan to the restaurant. Either way, adding a new person to the mix is something a financial backer may be concerned about.

Second, even if you get the money situation squared away to what is deemed “fair” between the partnering chefs there are still a host of other issues. They may or may not have an equal say in running the business. Even if you are majority partner and they are the junior partner, how long will they keep working with you if you keep overriding all their decisions or input? Can there two chefs use the same kitchen? What about branding? In this scenario, you do not have two separate businesses, but just the one. So personalities, visions, goals, and even styles of may not be aligned. Even if you both have a unified vision, what about consistency and quality? If the breakfast and lunch food items are awesome, but dinner services are subpar, you can only imagine what the Yelp reviews will say …

Partnering is not for everyone and is not someone should do seeking a quick fix for business issues as business divorce is not pretty.

If clients come to me and they want to talk to me about partnering, then my first question to them is: are you ready to be married? Having a  partner means making a lot of decisions together. Decisions where money is involved, how to split it up profits or how much to contribute to pay for expenses. You will be discussing marketing, finance, accounting, and HR issues. So if work ethics and personalities clash, then you will be looking at business divorce. Your pursuit of a work-life balance may turn into a nightmare if nothing is in writing. Business divorces can be costly in terms of time and money. I’ve seen situations where it takes months (years) before former partners even agree to the value of their contributions and the business itself; this says nothing of the payment process of a buyout. Again, planning/communicating is key, then documenting it.

One Last Bite on this Topic

Sometimes going out and networking is best to float ideas and opportunities, especially with a trusted adviser or mentor.

All of this is not to frighten off a chef making the personal decision of limiting their operating hours. However, like the article points out dinner is a revenue generator. So then the question becomes is there another way to maximize the leased space? I’ve offered a sampling of some creative solutions, but yes, subleasing may not be an option with a stringent landlord. For partnering, maybe you are seeking work-life balance to spend more time with your spouse, but you may be getting a business spouse. Can you juggle both?

Consider that closing down for dinner service might be a business opportunity for another who wants a shot at it. While there are no free lunches in these scenarios, try sharing a meal with a trusted adviser or two, or maybe a mentor or peer. It never hurts to ask, especially when your goal is to spend time with loved ones. Cheers and bon appétit!

-RKH

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Ryan Responds: “What should go in your Operating Agreement?”

Ryan Responds trade name vs trademark

What Should go in your Operating Agreement?

In this Ryan Responds video, I go over some of the more important items that an Operating Agreement should cover. While, not an exhaustive list, it is illustrative of the conversations LLC members and managers should have with one another. Business partners should strive to have this organizational document meet their expectations. It is a contract after all.

We also provide a one-sheet if you would like to read more about Operating Agreements. Finally, if you have any questions about reviewing, drafting, or even disputing an operating agreement please contact us or an attorney in your relevant jurisdiction for an initial consultation.

If You have a Question for Future Ryan Responds Videos …

We launched this on a YouTube channel, as we hope to publish educational videos on other topics in the future. Finally, if there is a short question you want the answer to submit them to admin@hewbordenave.com with the Subject line “Ryan Responds”. Please keep your questions short, general, and related to a business topic. Please do not provide specific details of  your matter or attempt to seek direct and specific legal advice through this format. If you need assistance and legal services, then please schedule a consultation with an attorney in your relevant jurisdiction.

Thanks and Cheers!

RKH

Disclaimer: The content of this video is for general information purposes only. Nothing should be taken as legal advice for an individual cases or situations. The viewing of this video does not create an attorney-client relationship. If you need legal advice, please contact an attorney in your relevant jurisdiction.

Can a Landlord Charge a Tenant Extra for a Dog?

Happy Lunar New Year all! It is that time of year again. Like last year, where I covered chickens for Year of the Rooster, and monkeys for Year of the Monkey prior to that, I will be talking about laws related to dogs here in Hawaii. I am not going to cover dog bite law for this post. I think that would be too obvious and simple even though we do personal injury cases at this firm. Further, it probably is best a discussion to have with my litigation partner, Trejur. If you are curious though about the dog bite laws for Hawaii, consider reading the following: 663-9, 663-9.1, 142-74, and 142-75. Those are the most relevant to that subject matter.

Anyway, with regard to this post’s discussion, let’s get to it.

Can a Landlord Charge Extra for a Dog?

Sometimes, I work with landlords who want to review/update their leases or consider forming LLCs for rental properties. When assisting them, they want to know their rights with respect to tenants. As a fellow landlord, I understand you want to be informed when dealing with tenants, especially given the law. A question about Hawaii rent law I get now and then is: “So I have a potential renter, but they have a dog. Can I charge them more?” My lawyer response is: it depends.

The Pet Deposit

Generally, with regard to the landlord’s question, what they can do is ask for more of a deposit. Obviously, their concern is that when tenants have animals they, the landlord, might be stuck with additional cleaning costs and fees after that tenant leaves. Hawaii does allow landlords and property managers to collect an additional security deposit to address this issue.  In the past, the were not able to do so. Prior to November 1, 2013 landlords could only collect a maximum of one (1) month’s rent to cover any damages by the tenant, and that amount included pet damage. So the Hawaii State Legislature amended the law* so that after November 1, 2013, landlords and property managers could collect an additional security deposit on top of that one (1) month’s rent.

Except …

So if you noticed, I said, “It depends.” Why? Well, because you cannot collect this additional security deposit in two instances. One, if the tenant does not have a pet animal that resides in the rental unit. Second, when the pet is an assistance animal that is a reasonable accommodation for a tenant with a disability. Some times dogs are assistance animals for people with disabilities and in those cases the landlord will be unable to collect this additional pet security deposit.

Other Things to Consider

So if you have a potential tenant with a dog, then yes, you can ask them for an additional deposit. This additional deposit is on top of the one (1) month’s rent deposit and can be a condition of the rental agreement. However, if that dog is an assistance animal, then you are prohibited. Even if you can extract this additional pet security deposit, as a landlord, you may wish to consider other aspects of allowing dogs into your rental units. For example, if it is a condo situation and you as the owner are a part of a condo association are you violating the house rules? Or in general, consider your insurance policy, does it cover pet allowances in your rental units? Along this insurance questioning, remember not all dog breeds are the same, and you as the landlord may be liable for injuries due to the animal. The costs and damages associated  with the animal may exceed your deposits. So best to be thoughtful in your consideration and plan ahead.

Random Facts

*Interesting fact, I worked for the Hawaii State Legislature during the year the law was amended and a part of the drafting process. If you want to read the law, please click here. Another interesting fact, I’ve had six dogs throughout my life time. So I’ve definitely seen this law from a variety of points of view.

Thanks for reading and have a Happy Lunar New Year celebrating the Year of the Dog!  新年快乐!

-RKH

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.