Historically Underutilized Businesses: Certification, Networking and Opportunity
- By Cody R. Loughridge
As the business environment of North Carolina continues to shift from its agrarian past to a high-paced, competitive business environment, it is becoming more important for businesses, bothlarge and small, to gain every advantage possible. While the business “playing field” between the genders and races has narrowed over the years, unfortunately certain businesses, particularly those owned by women or minorities, still find it difficult to keep up with their competition. Over the past decade, the State of North Carolina has taken affirmative steps to level that “playing field”;most notably, the development of the Office for Historically Underutilized Businesses.
The official movement to recognize and promote minority, women and disabled-owned businesses began by an executive order of then Governor, James B. Hunt in 1999. By 2001, the General Assembly had codified, established and provided funding for what became the Office of Historically Underutilized Businesses (HUB). The role of HUB is to advocate and promote increased opportunities for historically underutilized businesses and promote diversity and inclusion in state government procurement and contracting. Ultimately, HUB is designed to achieve the goal of a verifiable 10% participation by minority businesses in the total value of work for each State building project, including building projects done by a private entity on a facility to be leased or purchased by the State. N.C.G.S. § 143-128.2.
How Will North Carolina Achieve This Goal?
In order to accomplish this objective, the State of North Carolina has created a vehicle to increase exposure and participation of these traditionally overlooked and under-included businesses;namely a database that can be consulted and utilized by State and private entities seeking to include these businesses.
How Do I Know if I Qualify For HUB Status?
The North Carolina General Assembly has defined a minority, woman, disabled or disadvantaged owned business as one that is at least 51% owned and controlled by one of the aforementioned groups. Specifically, North Carolina has determined the following groups are qualified for HUB status: Black, Hispanic, Asian-American, American Indian, Female or a Socially and\or Economically Disadvantaged person or a disabled-owned or disabled business enterprise.
How Do I Get Certified as a HUB?
In order to qualify for HUB status, a business must be certified by the State of North Carolina. Prospective firms must provide documentation that demonstrates that the business is owned, controlled and managed by a minority, disabled or disadvantaged individual or individuals. A copy of the HUB Certification Manual can be found on the State of North Carolina, Department of Administration’s website, www.doa.state.nc.us/hub. Once an entity is certified as a HUB, a certification is valid for two years, presuming the business retains the proper qualifications.There are no costs or fees associated with applying and receiving HUB certification.
What Does Being a HUB Do For My Business?
Once a business entity is certified as a HUB, the business is registered with the Division of Purchase and Contract’s HUB Vendor Directory/Vendor Link. After being listed with the HUB VendorDirectory/Vendor Link, State agencies, including universities, community colleges,local schools and local governments and institutions will look to the directory to solicit bids from the certified entities for state purchasing and public works contracts. Additionally, private entities, notably general contractors, can also access the directory for purposes of notifying and soliciting proposals from the qualified businesses.
While being a certified HUB business entity does not guarantee the receipt of a State or private contract, it does guarantee free exposure to the business community at large. If you have any questions about HUB qualification or certification, please feel free to contact our office. We will happily help answer any of your questions.
Collecting Accounts Receivable in a Difficult Economy
- By James Vann
Most businesses may face challenges in the near future in collecting past due accounts receivable. Being persistent generally will increase your productivity in collection and remaining positive will certainly help you stay in a better frame of mind!
Statistics support the idea that most customers want to pay their past due accounts. Thus, being persistent in asking for payment generally will result in recovery of the account. The following are a few tips which may help in collecting the accounts:
• Call your customer often to ask for payment; be the squeaky wheel
• Visit the customer for a face to face meeting to ask for payment
• Ask for details from your customer regarding their cash flow
• Use others within your company (the Owner or others) to ask for payment
• Use your Attorney to demand payment in a timely manner
Normally, the faster you act on collecting a past due account, the better the overall result will be.
Please feel free to contact us when we can be of service to you or your business in collecting past due accounts. We will be happy to talk with you to develop a specific plan to attempt to recover what is owed.
Identity Theft: How to “Freeze” Access To Your Credit
- By Richard Prosser
Are you concerned about identity theft?
The answer is straightforwardly simple:“Absolutely and wholeheartedly,YES!” And if anyone has ever taken your credit for a spin, you are likely to follow with, “And you just can’t imagine how awful it truly is.”
If there is one thing that can’t be said enough, it is that no matter how many safeguards you put in place, and no matter how careful you are, your information is vulnerable. One incident alone in 2005 exposed the financial data of as many as 40 million credit-card holders of various brands – that’s right, “40 million!” For the mathematically disinclined, that’s approximately one in seven Americans.
As most of you are aware, the aforementioned incident – although perhaps of the greatest magnitude – is far from isolated. You, have probably received a letter from either your mortgage lender or your credit-card company informing you of a security breach. If you have not, it is safe to say that you are part of a relatively small minority.
Fortunately, both Congress and your State legislatures have responded to the problem, introducing new measures aimed at keeping your confidential information safe. If you were in attendance at either of the recent Hot Legal Topics Seminars hosted by Vann & Sheridan, you will likely remember James Vann’s discussion of a new tool that allows you, as consumers, to “freeze” your credit – in other words, a device by which you can place a password protected lock on your credit information.
Below, we have outlined precisely how a “freeze” — or perhaps more aptly termed,“security freeze” — works, so that you will have a more precise understanding should you decide to implement this device yourself. Also, I hope to have anticipated some of your questions by providing answers to a few of the most commonly shared concerns. Should you have additional questions, accurate and reliable information can be located online at www.ftc.gov, and for North Carolina residents, www.noscamnc.gov.
What is a security freeze?
Security freezes have been described as one of the most effective tools against economic identity theft. In essence, they offer an additional layer of protection from identity thieves. The way they work is simple. At your request, each of the three major credit bureaus will place a password protected lock on your credit.Without access to your unique password, your credit is locked from outsiders. As a result, creditors will refuse to extend new credit in your name until you have either removed the freeze or placed a temporary “thaw” on your credit.
How do I put my security freeze in place?
Just a few years ago, only actual victims of identity theft could implement a security freeze; however, such is no longer the case. In 2005, individual states began enacting so called “security freeze laws” – among those presently included are North Carolina, Tennessee and Virginia. These laws allow residents to initiate a security freeze by sending a certified letter with the following information to each of the three major credit bureaus (a sample letter can be found at http://noscamnc.gov/toolkit.html):
• Full Name;
• Addresses for the past five years;
• Social Security Number;
• Date of Birth;
• Two proofs of residence (e.g., driver’s license, utility bill, or
bank statement); and
• Payment by check, money order, or credit card ($10 in North Carolina)
The pertinent addresses information is as follows:
Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
Experian Security Freeze
P.O. Box 9554
Allen, TX 75013
Trans Union Security Freeze
P.O. Box 6790
Fullerton, CA 92384-6790
Note to South Carolina residents: Until recently, South Carolina was part of the minority of states without a security freeze law. This changed in April of 2008, when South Carolina enacted its “Financial Identity Fraud and Identity Theft Protection Act”. This Act, said to be some of the most comprehensive legislation of its kind, makes South Carolina one of only two states to allow residents to initiate a credit freeze free of charge.
How can I remove or “thaw” my security freeze?
Within ten days of each credit bureau putting a freeze in place, you can expect to receive by mail your unique password accompanied by instructions for removing the freeze both temporarily and permanently.Be aware that the credit bureaus are permitted by law in many states to charge you an additional $10 fee for each freeze removal – be it either permanent or temporary. Should you need to remove the freeze, the credit bureaus are expected to act within three business days of your request.
How will my credit freeze impact by credit score? Credit report?
Placing a security freeze has no affect on your credit score. Further, you remain free to purchase your credit report or utilize a credit monitoring service. Along those same lines, do not forget that you are entitled to a free copy of your credit report once a year from each of the three credit bureaus. To access your free annual report, go to www.annualcreditreport.com.
Succeeding in a Tough Economy
- By Jim Beck
In these difficult and volatile economic times, it may feel like you are not in control of your business. It is important, therefore, to make sure that the things that you can control are working in your favor and that you are taking advantage of the resources and tools that you have at your disposal.
First, make sure that your contracts and related documents are drafted in a manner that allows your business the best opportunity to succeed. In other words, your business relationships should be guided by documents that are consistent, effective and favorable to your interests. For example, the terms of a contract should be clearly defined, setting out your rights upon default by the other party. If you have a customer relationship that is governed by multiple documents, such as an open account agreement and a promissory note, it is imperative that the terms are consistent. In that example, the promissory note is often executed as a way to set out a payment schedule. However, if the promissory note does not provide for interest and attorneys’ fees upon default, then you may forfeit the right to collect them, even if those terms are in the open account agreement.
Another way in which your business can improve its chances for success is to decrease risk. In the credit context, the best way to do this is to be meticulous and cautious when issuing credit. In all ikelihood, your customers need credit just as badly as you need their business, if not worse. Take a close look at the potential customer’s credit and be conservative in the amount of credit to extend. Set credit limits and abide by them. Personal guaranties are essential in this market and your business should be in a position to demand that your customers sign one in order to obtain credit. Personal guaranties should be signed by the principals of the business and their spouses. Spouses are vital because in most instances individuals own all of their personal and real property jointly with their spouse. A judgment against a defaulting guarantor is nice but if you do not have their spouse on the hook, the judgment will be difficult to collect. However, please note that the Fair Debt Collection Act limits your ability to require the guaranty of a spouse. Make sure your salespeople understand what is expected with regard to all of these issues, so that the processes and policies are enforced.
At Vann & Sheridan, we aspire to help our clients make cost effective decisions when it comes to pursuing legal claims. It is important to us and to our clients that we make efficient use of the legal process and that we are efficient and effective in providing legal services especially in today‘s economy. Your lawyer, accountant and financial professionals can help you with these issues and with developing a strategy for dealing with not only the current economic crisis but other obstacles and adversity that your business may face. The key is to be prepared by taking control of those aspects of your business that you do have control over and to set out a plan.
Title Insurance: The Basics and the Benefits
“Take calculated risks. That is quite different from being rash.” – Gen. George S. Patton
- by Chad Cochran
Two young couples, one rich and one poor, decided to buy their first homes.After saving their pennies for years, the poorer couple found a modest home,obtained a 30-year loan from their local bank, and closed on the new home shortly thereafter. The couple was disappointed to see all of the closing costs tacked onto their HUD-1 Settlement Statement, including a $300 fee for title insurance. However, being the cautious type, they paid it anyway.
At the same time, the rich couple decided they did not want the hassles of modern real estate transactions – complete with inspections, appraisals and all those other “headaches”. Instead, they emptied their trust fund and paid cash at closing. The rich couple was convinced they could spot a “con” from a mile away and refused to pay for the $350 title insurance policy their real estate attorney suggested.
A couple of months later, both couples received bad news. The young couple was shocked to learn of a family dispute involving their new property. Apparently, an elderly woman previously deeded several parcels of land to each of her children. The woman had recently passed away, her youngest son claimed he was the rightful owner of the poor couple’s new home and brought a lawsuit against them claiming they were trespassing on his land. At the same time, the rich couple discovered that the large development corporation who had built their new mansion (finishing it days before their closing) had filed for bankruptcy leaving several unpaid subcontractors and suppliers. The subcontractors and suppliers desperately needed the funds to meet their own payroll. As such, the subcontractors and suppliers hired attorneys who filed statutory liens on their real property.
As one might guess from the tone of this story, the poor couple turned out just fine. They contacted their title insurance carrier, who hired an attorney, responded to the lawsuit, and paid a sizeable settlement such that the poor couple could keep their home. On the other hand, the rich couple received several lawsuits and soon realized that they had no defenses to the developer’s failure of payment. Their mansion was placed for public sale and the proceeds were used to pay most of the subcontractors and suppliers outstanding balances. The rich couple is now penniless.
As individuals and businesspeople, we may find ourselves in several roles in a real estate transaction over time – a buyer, seller, lender, contractor, supplier or creditor. Title insurance is often the dark matter which few notice during the actual transaction. However, when problems arise and finger pointing begins, a fundamental understanding of the following title insurance basics can prove invaluable in evaluating your exposure:
Typical Areas of Title Insurance Coverage for an Owner
1. Protection for the purchaser who does not legally own the property;
2. Protection against title defects such as liens, transfer restrictions or other encumbrances;
3. Lack of a Right of Access to the Property; and
4. Unmarketable title (i.e., one cannot sell the property)
Typical Exclusions / Uncovered Events
1. Events Which Occur After the Policy is Issued;
2. Government Condemnation or Seizure of Land (i.e., eminent domain);
3. Action of the Owner (e.g., owner receives a tax assessment the day of
closing); and
4. Knowledge of Defect (e.g., an owner should know an easement likely exists if a high power utility line crosses through the property).
Required Title Searches – In North Carolina, title policies may only be issued when a North Carolina attorney has granted an opinion of title. The standard title insurance company requires a 30-year search of deed dating back to general warranty deeds. This basic search should identify the recent ownership history of a parcel, but it can often miss atypical recordings such as restrictive covenants, easements and railroad rights of way.
Role of Mechanics Liens – Title insurers find that mechanic’s liens are one of the most costly risks they face. The relation back principle results in a blind spot in the public record such that those involved in a real estate transaction should be very cognizant of services or materials which were provided to a property within the 120 days before closing. Title insurers will sometimes require lien waivers and subordination agreements at closing. Lien rights often times survive regardless.
Title insurance is not “free money”for lien claimants but does provide an open opportunity for recovery when a builder or developer closes without paying its suppliers and subcontractors.
LEGAL GLOSSARY
Lien – An encumbrance upon property. May be the result of a contract or occur by operation of law, but it gives a party a legal interest in property that otherwise belongs to another.
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