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Practicing Law Without A License

Practicing Law Without A License

Practicing Law Without A License

Practicing Law Without A License

Practicing law without a license is a terrible idea that happens to some professionals, consultants or real estate agents may go over the line.

Be careful when carrying out your professional relationships and know where the line is for what your jurisdiction considers the unauthorized practice of law.  

In this article – we cover when some professional may enter into the unlicensed practice of laws and how to avoid it.

Unauthorized Practice of Law

Illinois, like all states, prohibits the practice of law by individuals not admitted to practice in the state. Illinois sets this forth in the Attorney Act, 705 ILCS § 205/0.01 et seq. Section one of the Act provides that:

“No person shall be permitted to practice as an attorney or counselor at law within [Illinois] without having previously obtained a license for that purpose from the Supreme Court of this State[.]”

The Illinois State Bar Association provides a wealth of Ethics Opinions on this topic. 

The Illinois Supreme Court has long held that the practice of law involves giving advice or rendering of services which require the use of legal skills or knowledge. People ex rel. Illinois State Bar Assoc. v. Schafer, 404 Ill. 45, 87 N.E. 2d 773, 776 (1949). That is, the “practice of law” is much more than simply going to court or representing someone in litigation. Here are just a few samples of activity which constitutes the “practice of law” in Illinois:

  1. Representing someone in an arbitration, even if the arbitrators aren’t lawyers (ISBA Opinion No. 12-17)
  2. Assisting or advising someone in completing corporate documents, even documents provided by the Secretary of State (ISBA Opinion No. 95-7)

Representing someone in a property tax appeals in many Illinois jurisdictions (In re Yamaguchi, 118 Ill. 2d 417, 515 N.E.2d 1235 (1987)

What Crosses the Line for Unauthorized Practice of Law?

The line for unauthorized practice can get especially blurry with high volume practices like residential real estate and consumer bankruptcy, in which lawyers rely heavily on paraprofessionals to process a large volume of often duplicative paperwork. The important distinction for these kinds of practices is that non-lawyers can perform administrative tasks like simply filling out information (names, addresses, etc.), but once they start making changes to the forms themselves, they may be stepping over the line and into unauthorized practice. This risk is especially serious for lawyers working in high volume practices, and lawyers who work frequently with other professionals like accountants and financial planners.

Here are some simple tips for staying on the safe side of the law.

  1. ALWAYS ask first. If you have any questions as to whether sometimes constitutes the practice of law, then ask. Lawyers should foster a culture in which paraprofessionals never hesitate to err on the side of caution.
  2. Let your clients know. Make sure they are clear on what kind of services they are receiving, and make sure there’s no confusion as to who is and is not a lawyer. If you work with another professional services firm, make sure to use distinct letterhead.
  3. Create clear Roles, Responsibilities, and Expectations (RR&E, in business lingo). Administrative staff should understand that they’re doing administrative tasks. E.g., they might be filling out information in a form, but they should not be drafting forms.
David Silvers

David Silvers

Regulatory Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

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Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
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Illinois Cannabis Zoning Laws

Illinois Cannabis Zoning Laws

Illinois Cannabis Zoning Laws

Illinois Cannabis Zoning Laws

Illinois Cannabis Zoning Laws Illinois Cannabis Zoning Laws depend greatly on the local governments that are placing “reasonable” restrictions on their community’s cannabis businesses that may operated in their jurisdictional limits. Many communities require a “special use permit” for having cannabis business operations.  Then, there are certain set-backs to that limit the distance a cannabis company may be from certain sensitive businesses or schools, churches, and other things in the city that they want to keep the cannabis business away from by using their zoning authority.  Here’s a lot more on the Illinois Cannabis Zoning Laws. 

Can Your City Ban Cannabis?

At the beginning of this year, Illinois’ cannabis legalization bill, formally known as the “Cannabis Regulation and Tax Act” (the “Cannabis Act”), went into effect. The Cannabis Act creates a comprehensive licensure scheme for the cannabis industry, and allows for adult, recreational use of cannabis. Governor Pritzker kicked off the Cannabis Act by pardoning over 11,000 people convicted of marijuana crimes.

Still, plenty of local communities are approaching legalization with much more caution, and sometimes fear. Lake County, the third-most populous county after Cook and DuPage, intends to impose a one-year moratorium on cannabis in the unincorporated parts of the County. In a lengthy Report of the Recreational Cannabis Task Force, Lake County freely states that

“local government attorneys have differing interpretations of the Act on whether communities can enact separate licensing requirements. It is essential that every community consult with their own counsel prior to enacting a licensing mechanism.”

  1. WHAT DOES THE CANNABIS ACT SAY?

The Cannabis Regulation and Tax Act can be found at 410 ILCS 705/1-5 et seq. Certain parts of the Cannabis Act directly and explicitly preempt any state and local government from regulating cannabis. Section 55-90 of the Act reads:

Except as otherwise provided in this Act, the regulation and licensing of the activities described in this Act are exclusive powers and functions of the State. Except as otherwise provided in this Act, a unit of local government, including a home rule unit, may not regulate or license the activities described in this Act. This Section is a denial and limitation of home rule powers and functions under subsection (h) of Section 6 of Article VII of the Illinois Constitution.

That is, local governments are prohibited from regulating in the area of cannabis except when the Cannabis Act specifically allows it.

Illinois Cannabis Zoning Restrictions on Municipalities 

Note the reference to “home rule powers and functions” in the Illinois Constitution. Article VII, Section 6 of the Illinois Constitution sets forth the definition and rules governing home rule units. Basically, any County which elects a chief executive officer, or any municipality with over 25,000 people constitutes a “home rule” unit. Home rule units are given a great degree of authority to govern their internal affairs. If you’re reading this in Chicago or in the Chicago suburbs, you probably live in a home rule county and probably a home rule city or village as well. And as sub-section (m) of this part of the Illinois Constitution provides, “[p]owers and functions of home rule units shall be construed liberally.”

Conversely, Article VII, Section 7 of the Illinois Constitution covers non-home rule units of government. These units are essentially limited to a few fiscal powers in the Constitution, and then anything else granted to them by other laws. See, e.g., Hawthorne v. Village of Olympia Fields, 790 N.E.2d 832 (Ill. 2003) (striking down a zoning ordinance that had the effect of prohibiting an otherwise lawful home daycare center) If you are reading this from a rural, agricultural community, there is a good chance you live in a non-home rule municipality.

Need Help With Cannabis Zoning

David Silvers

David Silvers

Chicago Business Lawyer

David Silvers practices cannabis and corporate law with litigation experience and first-hand knowledge of start up operations.

LLC Operating Agreements

LLC Operating Agreements

What to Put Your Illinois Company's Operating Agreement An Operating Agreement is the contract of your Illinois company’s life – which it really does not have. However, your company is a legal fiction of a person that has a beginning, called articles of organization...

Zoning Ordinances For Cannabis In Illinois

So what is the status of zoning restrictions and moratoriums, like those out of Lake County? Section 55-25 discusses local ordinances. While Section 55-25 allows local governments to enact restrictions on the time, place, and manner of legal cannabis, they may not use zoning ordinances as a cover to effectively ban cannabis. Specifically, subsection (1) provides:

A unit of local government, including a home rule unit or any non-home rule county within the unincorporated territory of the county, may enact reasonable zoning ordinances or resolutions, not in conflict with this Act or rules adopted pursuant to this Act, regulating cannabis business establishments. No unit of local government, including a home rule unit or any non-home rule county within the unincorporated territory of the county, may prohibit home cultivation or unreasonably prohibit use of cannabis authorized by this Act.

Local governments like Lake County may be limiting cannabis under the guise of protecting the “health, safety, and welfare” of the community, or some similar phrase. Such justifications should be treated with skepticism, no matter what the issue is. But with respect to bans like Lake County’s, it’s difficult to see how they could possibly be within the bounds of the Cannabis Act.

Illinois Cities May “Reasonably” Restrict Cannabis Businesses with Zoning.

Section 55-25 limits zoning ordinances to those which don’t “unreasonably” prohibit legal uses of cannabis, and there’s nothing more unreasonable than a blanket prohibition or moratorium. For rural, non-home rule municipalities, they might totally lack the authority to enact such zoning ordinances with or without the authority granted by the Cannabis Act. See Hawthorne, supra. Municipalities that get in the way of the overwhelming public support and public demand for legal cannabis are putting themselves at a huge risk for litigation that they stand a strong chance of losing. In Lake County alone, there are roughly 700,000 residents (including your humble author), and many of them won’t be happy when they find out that the County Board is curbing their hard-won rights under the Cannabis Act.

Key Takeaways of Cannabis Zoning in Illinois

  • Illinois Zoning Changes Depending on What City Are Located
  • To find your cities zoning ordinance, Google: “(Your City) Cannabis Ordinance”
  • Illinois Cannabis Laws allow ‘reasonable’ zoning restrictions
  • Cities in Illinois cannot ban cannabis or home grow for medical cannabis patients.

How To Get Help With Your Cannabis Zoning Issues

Feel free to call our law firm with all your questions regarding cannabis zoning, there are many levels of interactions with local governments and we are experienced with assisting business clients in their real estate matters, whether related to cannabis, or not. 

Need A Business Lawyer?

Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
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Right of First Refusal

Right of First Refusal

Right of First Refusal

What is the Right of First Refusal in Real Estate Contracts

The explanation of the right of first refusal (ROFR) can be complicated sometimes, but we will discuss the term further to explain what the right of the first refusal means in the real estate business and how it applies to the holders of the right and the real estate owners.

What Is the Right of First Refusal?

The right of first refusal (ROFR) in the real estate is a contract that gives a specific right to a party to purchase a particular property. The right of first refusal must have at least three parties: the owner, the buyer, and the option holder.

The holder of the ROFR may claim the right in the case when an owner of the property sells the property on the market. If the owner sells the property to a third party without offering the holder the opportunity to purchase it first, the holder of the right has the option to sue the owner. After the process, a court can stop or reverse the sale.

One type of ROFR is essentially an option to buy a property for sale at the specific price and under specific terms. The seller and the holder may or may not agree to bind themselves to these terms. The option may end at some specific date in the future and the seller can sell the property under different terms and at a different price when the option stops to be active.

The parties can negotiate the price of the property. If the property has a value of $100,000 in the first year, the holder and the seller can agree that the price can raise each year for 3%. Under these conditions, the option price will be 3% higher, either compounded or not compounded, during each succeeding year.

Depending on the contract, the holder of the ROFR has an opportunity to suggest a sale price without worrying about competition and bidding on the market. The holder can decide to accept or refuse to buy a property. The other case allows the seller to negotiate with other buyers who are interested in the property.

When Is the Right of First Refusal Used?

The right of first refusal is used in a few situations. One of them is the situation when a property has a tenant. When a landlord (owner) decides to sell the property, he must first contact the tenant. The same applies when the tenant is interested in buying a property. An owner must consider the offer from a tenant before negotiating with other parties about the price and conditions.

Another case when the ROFR comes into use is when a family member wants to buy a property. An owner who is a relative to a potential buyer must offer the property to this party first, before offering the property to someone else.

Dealing with a homeowners association or condo board can also be the case when the right of the first refusal comes into force. Sometimes, the governing documents contain the right-of-first-refusal clause that allows the board to vet potential buyers before a seller can accept an offer. In some situations, discount sales can lower the value of the property, which is why communities use the clause to protect the value and reject the offer that is not acceptable.

How the Right of First Refusal Affects Sellers and Buyers?

If you are a seller of a property, you can benefit from the right of first refusal. In case that the market is full of similar properties that are generally low in price, you can sell the property to the holder of the right and get the price that might be higher than the price when selling it to someone else. The contract is drafted before the home hits the market and you might be able to persuade the holder of the right to buy the home at a higher price than the market value.

On the other hand, if you are a buyer, you have many possibilities to profit from the right of first refusal contract. You have the right to be informed by the owner when the owner decides to sell the property. If you are a tenant, you can prepare for the transaction before the period of actual buying of the property comes. You can have a good amount of time to save money for a down payment, or you can choose to improve your credit score. As a holder of the ROFR, you can also discuss the price before it hits the market. This gives you a significant advantage when comparing to other potential buyers.

Both parties have an interest in making a contract that declares the ROFR. The holder can pay the lower price for the property, while the owner can have cash in hand at the right time when the ROFR allows the transaction. The ROFR sets forth a future price. Both parties can have certainty about a future price, time, and other arrangements. If the holder cannot meet the terms of the ROFR in the future, the seller is free to sell the property to someone else in the future.

How Long the Right of First Refusal Is Valid?

Most contracts are made to last one or two years. This period might appear to be short, but there is a reason why both parties decide to make the contract short. The prices on the market can significantly change over a specific period of time, and the value of the property can be completely different in the long run. Both parties usually decide to set the price for a shorter period, just to ensure that the price won’t be much lower or much higher at the end of the specific period. This kind of contract duration protects both the holder of the right and the seller.

Both parties should get lawyers to make clear that each part of the right-of-the-first-refusal contract is clear and understandable. A lawyer can give the right advice to both parties about the price, conditions, and duration of the contract.

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

Need A Business Lawyer?

Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
  6. mechanic's liens

 

How to Use Options and Convertible Notes to Raise Money

How to Use Options and Convertible Notes to Raise Money

 How to Use Options and Convertible Notes to Raise Money

If you want to know how to use options to raise money for your business, you’ve come to the right place. In this article, you’ll find out how to use options and convertible notes to raise funds for your business. You have multiple solutions and one of them is trading options which is usually the most lucrative method for raising money.

How to Use Convertible Debt Notes to Make Profit

A convertible note is one form of short-term debt that turns into equity. The valuation of the convertible notes is based on financing that should not be exceeded after a certain period. During the evaluation of convertible notes, you must pay attention to the following criteria:

The discount rate is the representation of the valuation discount that investors receive in one financing round. It compensates the risk of losing invested money.

The valuation cap is a reward for bearing earlier risk. In the case of evaluation caps, you convert notes into equity and convertible note holders get the equity. This applies if the company takes off out of the gate.

Interest rate shows during lending money to a company. Here, the convertible notes will accrue interest. As opposed to being paid back in cash, the interest goes to the principal that is invested, which increases the number of shares.

The maturity date is the time when the company needs to repay the convertible note.

To understand the flexibility of convertible notes, it is important to pay attention to how the notes convert into equity. In most situations, we have the valuation cap and discount rate combined, and we can evaluate convertible notes by these two parameters. At the same time, the convertible note should not have to have a valuation cap. In this case, the discount rate determines the value of the convertible note when it becomes equity. Note holders will get a higher share price and the discount will drive the conversion

How You Can Profit from Call Options

Call options are options that are part of financial contracts that give the buyer the right to buy a stock, bond, or commodity within a specified period. All the mentioned underlying assets tend to increase in price, and that is why a buyer acquires these assets. A call option is different from a put option then the holder sells the asset before the expiration period.

Call options are in use in case of three primary purposes. These are speculation, income generation, and tax management. With all these purposes, the market price of the call option is defined as premium. A call option provides rights that have the premium or the price at the end of the specified period. One of the most profitable solutions when it comes to call options is the solution of covered calls. With a covered call strategy, you can own an underlying stock whose price rises sharply.

How You Can Profit from Writing a Call

Call writing is separated into two forms—covered call and naked call. Covered call writing is good for advanced option traders who want to generate extra income from a portfolio. With covered calls, you can write calls on stocks that are held within the exact portfolio.

Another option is naked call writing, which is for risk-tolerant and sophisticated option traders who want to get the maximum rewards. The risk profile with the naked call is similar to that of a short sale in stock. With naked call writing, your maximum loss can be unlimited, but the possible gain is the biggest when compared to other types of calls.

As you can see, you can trade options or use convertible notes as a way of raising funds for your company. No matter which methods you apply, you must be patient with results. The most profit comes from rates that are increasing over time, and that is why a good method of calculation can give you a significant advantage in the long run. Raising funds for your company is easier when you have legal support from a lawyer. At the same time, the financial support could be a real advantage if you want to collect money faster and easier. Investing money into options and convertible notes could be the best money you can invest.

Thomas Howard

Thomas Howard

Real Estate Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

Need A Business Lawyer?

Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
  6. mechanic's liens

 

RegTech – How it helps companies with compliance

RegTech – How it helps companies with compliance

Regulatory Technology

What is Reg-tech?

RegTech, short for regulatory technology, is a new industry that takes complex regulatory frameworks and creates software from them so businesses can more easily comply with the laws and regulations their industries face.

In this page, we will profile three sectors and provide examples of the new RegTech space, discuss some upcoming conventions, and provide insights on how regtech is helping everyday businesses reduce costs, while increasing compliance with complicated regulatory requirements.

Regtech Landscape

RegTech has the most practical application to industries fraught with regulations at all four levels of government – federal, state, county, and municipal.

Several RegTech companies use novel business models that create governmental relationships to save taxpayers money, and pass the cost onto their business customers that still see cost savings from reduced compliance costs internally.

If you think combining regulations and technology is boring, we will start with the most interesting, and heavily regulated, industry – cannabis.

Call tech Attorney Thomas Howard at (309) 740-4033.

Thomas Howard

Thomas Howard

Peoria Tech Lawyer

Tom Howard started his first techology company in 2014, this website was built by his current one, Stumari – ask him about your company’s technology today.

Peoria Office Address

Boston Office Address

Examples of RegTech Helping Business

Let’s get to our examples – we will throw in a bonus 4th example, which is the website that I worked on until spinning it off for helping with applying technology to immigration procedures.

Key Takeaways

  • RegTech is the subsector of technology that streamlines compliance for financial, insurance, healthcare, cannabis, or any industry that has to deal with cumbersome regulations.
  • RegTech mostly works for help companies in compliance, reports, or monitoring business practices to ensure regulations are met.
  • The internet and connected devices have spurred development in RegTech and this trend is new, fast growing and likely to continue.

How RegTech Helps Cannabis Compliance

Cannabis laws have not been as complicated as they are now in decades. Each state has its own laws, each city, and increasingly the federal government treats cannabis differently, whether it is hemp, medical, or adult use marijuana.

Long story short, cannabis is the perfect industry for RegTech.  Enter the business helping new cannabis businesses comply with the new laws the various state governments are passing, and the evolving federal landscape: Adherence Compliance.

Stared in 2014, Adherence Complaince begain as Adherence Colorado, but as legalization spread across the US, more businesses needed help complying with the various legislative frameworks.

Today, Adherence Compliance helps not only businesses, but also state and local governments, keep their license holders in compliance.  One of their business models is to get the contracts with governments, but pass the costs for their services to the cannabis-related legitimate businesses, which ends up to be a savings for their complaince.

For more, please visit their website:

How RegTech Helps Healthcare.

The Health Insurance Portability and Accountability Act, better known by its acronym, HIPAA, is a very complex and difficult system designed to help people keep their healthcare information private.

Most companies in the healthcare space fail to comply with it, or have to pay expensive lawyers, or full time staff, to comply.  Failure to comply with HIPAA carries very oppressive penalties that drive the consolidation in the industry due to the risk and the cost of the compliance.

An expensive and cumbersome regulatory framework required for healthcare providers, this is exactly the use case for RegTech.  Some compliance software helps not only what is known as a “Covered Entity” under HIPAA comply, but also what is called their “Business Associates.”

Healthcare is huge business, and gaining access to the sector often means facing HIPAA compliance. As such, what is the startup supposed to do when trying to get their company off the ground in the healthcare sector? Pay tens of thousands for a compliance officer’s salary?  Dump it onto their general counsel?  Or, pay a software company a fraction of that for a license to use their software for a year?

Companies like Compliancy Group can offer something besides the software to help keep companies in compliance with HIPAA’s regulations, it can also help optimize their offerings with the data of its users. A RegTech company has a treasure trove of data about their clients and the problems that they may face in staying compliant.  This provides the basis for new features and updates, but also leverages the best practices that humans on an individual scale simply cannot do.

A general counsel for a healthcare company that doesn’t use a RegTech company to cover their HIPPA complaince faces worse outcomes and higher costs.

RegTech Helping Governments Issue Permits

One of the startups that is trying to fix the problem of issuing licenses and permits is CivicServ.  After I made my first app, I turned toward building software for lawyers that I thought could be coded and I settled on immigration applications. When looking for examples and coders, I found the people beind DevBright, which founded CivicServ.

My Work Visas Solutions, regtech for immigration applications and compliance after the visa holder has been issued, is waiting for my practice to grow to include an immigration lawyer that can fulfill the orders we would get with our SEO services and amazing marketing.  Some of the companies miss that aspect, but their value is clear.

RegTech helps companies comply with the law so they can focus on their business.

The RegTech companies we discussed:

  • Adherence Complaince
  • Compliancy Group
  • CivicServ
  • Work Visas Solutions

If your company has compliance issues, or is facing another technology issue, feel free to call us. 

Our experience in the technology space is beyond what 99% of other business lawyers can provide – plus our SEO is way better so we can help you get more leads.

RegTech Conventions

Unsurprisingly, Germany hosts the mother of all RegTech conventions, but many popular ones are held in the US. While they tend to gravitate toward the FinTech umbrella.  Here’s a list of the industry RegTech Events.

  1. Bearing Point
  2. Comply 2019
  3. know 2019
  4. Global List

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.

R. Martindale

Need A Business Lawyer?

Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
  6. mechanic's liens