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With a check of the box, business owners can choose a tax structure with enormous financial repercussions both now and in the future. Or, they can find themselves in a situation where corporate formalities were not observed, thereby opening the door to personal liability. The choice of business entity is clearly very important. So, is there an easy answer to which entity would be best from a legal, tax, and business standpoint? Unfortunately, no. Which entity to select will depend on a plethora of factors, including the decision to issue securities, the desire to attract investment, the business' management structure, estate planning goals, the number and type of employees, the forms of employee...

You and your long time friend have developed a great business idea, obtained financing, hired employees, and are planning to open the doors to your business in two weeks. The business is set up as an LLC using a software program that you purchased at an office supply store. The program is user friendly and prompts you to enter the names and addresses of the owners and a beautifully polished LLC operating agreement is produced. You purchase the building in which the business is housed using your credit and provide $50,000 of operating capital to the business. You and you friend agree that he will be the full-time manager of the business in lieu of providing capital to the business. Your friend...

An LLC operating agreement is an agreement that lets you configure your financial relationships as well as your business relationships with the co-owners to establish the way your business will be run. In the operating agreement, your co-owners will establish each owner's percentage of ownership, their share of profits (or losses), responsibilities and rights, and what will happen if anyone ever leaves the organization. It is not legally necessary in all states to form a limited liability company. It is, however recommended to protect your and partners' personal assets. It ensures that your business is governed by your rules and not the rules of the state you reside in. First and foremost, you want...

LLC is an acronym for Limited Liability Company. Setting up an LLC is a rather short process with exacting requirements that may be different from state to state. The Process Setting up an LLC is a 7 step process. To get the ball rolling the first thing you need to do is get a copy of your states LLC Articles Of Organization Form and find out if you are required to post your intent in the newspaper. Then you have to decide upon a name for your company, careful to follow the states prohibited words list. When choosing a name for your company, LLC must come at the end of the company name. Going back to the LLC Articles of Organization Form, and fill this out to be filed. Note: If your state requires...

As our population ages more and more wealth will be passed between generations. In fact there will be more wealth transferred over the next twenty years than in anytime in our country's history. IRA assets will comprise a large portion of the dollars transferred. Many will pass IRAs with balances of $100,000+ to their children. Many will transfer balances of $1,000,000+. So why should you care? What do you think your children will do with $100,000 - $1,000,000+ cash in an IRA after you have passed on? Will your children continue to invest the money wisely and save it for their retirement? A major concern should be the reality that your children will do things with that money that you would not...

Vacation homes are the most widespread use of the fractional ownership model. After growing in popularity in Europe, the system first spread in the U.S. to ski resorts, and after that to the East and West coasts. Now fractional vacation homes are being developed throughout the country, chiefly in Florida, in golf developments and in other resort areas. In addition, fractional ownership is offered at destination or residence clubs currently being built and managed by various key players -- Ritz Carlton, Starwood, Four Seasons, Hyatt and others. These corporations administer sizeable resorts in California, Florida, and the East Coast. Residence clubs also exist on a reduced scale, frequently as a...

The limited liability company is touted for its tax flexibility and asset protection benefits. While valid, single member limited liability companies are ripe for alter ego claims, which means the owner losses the asset protection benefit and becomes personally liable for the debts of the company. Let's start with the basics. What is a single member LLC? Well, the person that has an ownership interest in an LLC is called a member. This is the equivalent of a shareholder in a corporation. As the name implies, a single member LLC is a company that has only one owner. It is legally viable and protects that owner from the debts of the company, but many owners are waiving this protection because of...

A limited liability company ("LLC") shall not be subject to federal income tax. Persons carrying on their business as members shall be liable for income tax only in their separate or individual capacities. Computing the LLC's amount of profits or losses is important in determining how much profits or losses should flow through to the members, thus, it is extremely important that every LLC have an LLC Operating Agreement. Once the LLC's amount of profits or losses has been determined, the profits or losses can then be allocated proportionally to the members according to the allocation determined by the LLC's Operating Agreement. In general, LLC taxable income is computed in the same manner as an...

When setting up a Self Directed IRA care must be taken in the documentation. The most important of these documents is the Operating Agreement used in governing your limited liability company. Limited Liability Companies are required to have an Operating Agreement - the rules by which the limited liability company is governed. Most LLC's that are formed by incorporating companies will provide a kit that includes a generic Operating Agreement. This generic agreement will not meet the requirements of your self directed IRA. You will need to customize this agreement to fit the needs of your LLC. A copy of the Operating Agreement will be required by the Custodian and also by the bank where you will have...

The Operating Agreement is the fundamental document that establishes how much you get from an LLC and how the limited liability company operates on an internal basis. If you use an incomplete, unprofessional or improper document, you are setting yourself and your business up for major problems. Obtaining a Sample Operating Agreement is Just the First Step The LLC agreement for your business should be a tailored document for your particular situation. There is no such thing as a one size fits all sample operating agreement that can just be purchased and signed by all limited liability companies. The failure to understand this can cause significant disputes and issues later. DETERMINE THE POWERS OR...

When starting an LLC in Georgia, there are 4 initial areas which require sufficient thought and decisions. Without properly addressing these 4 things, there is the risk of an improper or incomplete formation of your Ga limited liability company. NAME ACCEPTABLE IN GEORGIA The first matter is deciding on a proper name for your LLC in Georgia. The regulations require that a name of a new entity cannot be the same as or too similar to another name being used by a business registered in Georgia. Unfortunately, it is not always clear when a name is too similar to another name that is already registered with the state. You can call the Georgia state agency to check on names or a reputable online formation...

Starting a new business is a challenging endeavor - it's essential to be prudent about the risks involved. Often times, one of the first questions business owners will ask themselves is what type of business entity they should form. Many choose to incorporate, because of the distinct advantages these entities (Corporation, S Corporation and LLC) offer business owners. These types of business entities can protect your personal assets by legally declaring them separate from your company's assets. This means that if your company is sued or in debt, only business-related assets are at stake. When it comes to incorporation, if you are not entirely sure of the process, doing it yourself can be a huge...

Wanting to start a business in an exotic tropical environment, either to supplement a part-time or full-time retirement, regardless of your age? Retirement is not a matter of age, it is a matter of money - having enough ongoing money coming in to give one the freedom of shedding a job. If this has been a hunger and passion of yours, having your own business, and especially a business located in Southeast Asia, then you are looking in the right place in the Philippines. I have personally started six businesses in the Philippines over the past 20 years, and find it exciting each time. Over the years three of these businesses were sold or closed down, as I moved away from asset based businesses towards...

If you have ever seen the initials LLC after the name of a company, you may have wondered what it means. LLC, or limited liability company, refers to a form of business in which owners have limited liability. An LLC is a cross between a corporation, which has limited liability, and a partnership, which has tax advantages and greater flexibility than a corporation. A company with a single owner can benefit most from the LLC designation. You can form a corporation or an LLC online at very reasonable costs that will save you money and problems in the long run. A properly run corporation or LLC protects the personal assets of owners from debts or court judgments against the company. If your business...

I have talked to a lot of people who have bad credit. I always begin by asking them if they know what they did (interpreted - are responsible for) to get in the mess they are in? You should hear some of the answers, my wife left me, my wife spends too much money, I don't make enough money (then why do you have so many credit cards?), to a whole host of other excuses for the problem. Notice I said excuses and not reasons. My next question is; well, have you a plan to get out of the mess you are in? Some do and some don't. If you are one of the latter let's see if we can help you. Let's start by saying that if you are disciplined (and really, really want to) there is no reason you can't get back on...

The limited liability company has surpassed the corporation as the most popular business vehicle for small business. Why? Because it was created to provide all the advantage of other business entities but without their disadvantages. The Ga LLC is such a simple entity to understand and maintain but at the same time it gives the owners many options when it comes to tax structures, how the business will be owned and how it will be operated. LIMITED LIABILITY The main reason to form a Ga LLC is to protect yourself and other owners from being personally liable for business debts and obligations. Without a limited liability legal entity such as a Georgia company LLC, you will be placing everything you...

A number of factors are converging to prompt people to start their own businesses. First, the Internet has opened a floodgate of opportunities, both in terms of business and promotional opportunities. People are no longer restricted to setting up shop in their neighborhoods, or forced to compete with local companies. Instead, they can have access to a global marketplace and use the power of the Web to promote their products and services. Second, the nature of the job market is such that people no longer expect to work for one company for life; instead, they can pick up the experience they need at a variety of companies and use that as a springboard to launch their own entrepreneurial effort. Third...

Benefits of Incorporating in Nevada Once you've decided to incorporate, the question becomes, “Where?” For many, the best choice is Nevada . Why? The corporate veil in Nevada has only been pierced twice in the last 29 years, and both cases involved outright fraud. In fact, there were other Nevada cases where the corporation did not do resolutions, minutes and meetings, they had thinly capitalized the company, commingled funds — and still Nevada protected the corporate veil! Nevada is a pro-business state, meaning they strongly protect the business owners. “But My Business Is Halfway Across The Country…” You may be wondering how this applies to your business when your business operations...

If you are starting a new business, you are likely looking for an online incorporation service to form a corporation or limited liability company for your business. Given the risk of liability in today's business world, having a limited liability entity for your business vehicle is a must. As Internet use has become so widely accepted for commerce, online incorporation services have become the most efficient way to acquire these services. However, if you do any kind of research in this area, you will find hundreds of companies offering this. How do you know which one to choose? This article provides 5 tips that should narrow all the options down and make your decision easier. Tip #1: Teaser Rates As...

Starting a business means a lot of great things. You are following your passion and taking that first step toward financial independence. But, starting a Virginia business is not without risks. You can reduce those risks significantly if you form a Virginia LLC as your business vehicle. Forbes and other major sources have ranked Virginia as the best state for business. This is because the Virginia government has always actively promoted small business growth through incentives and protection in its laws. The Virginia Limited Liability Company Act is no exception and is one of the most business friendly laws out there. The Virginia LLC's main benefit is liability protection but the legislature went...

Businesses for kids are cropping up all over. Before your child actually starts a business, make sure that liability issues won't surprise you. No matter what age you are when you start a business, laws need to be followed to avoid any possible problems that might arise. Get in the Zone Local zoning regulations must be followed, especially if your child's business is based in your home. Check with city officials to determine if your child's business can legally operate from your home. If not, your child may need to acquire a permit to operate the business. Since your child is under age, you will have to apply for any necessary permits on her behalf. Failure to comply with local zoning regulations...

The different types of investment properties that real estate investors consider vary in many different ways. We'll identify the different types in this article and briefly discuss each one. We'll also discuss the different ownership structures available. The basic types of investment properties include retail, office, apartment, mixed developments, and hotel/motels. Retail properties include freestanding buildings and shopping centers. A freestanding building is one where it stands alone, not connected to any others. Shopping centers range from strip malls to super regional malls with many stores located in one area. Office properties can be small (one, two or three tenants), office parks...

What is a Joint Venture? When two entities enter into an equal partnership, this is a joint venture. The essential defining factors of this union are equal risk and equal reward. That means that each party will divide the costs evenly, and will also share the profits. The parties may enter into a legally binding agreement that covers the responsibilities and expectations of each. Later, we will discuss the different forms a joint venture can take. First, we will get a more complete understanding of a joint venture. When is the right time to partner? You will have to take a good honest look at your company. Consider the timeline of your success. Where did you begin? Where are you now? Where do you...

Anyone out and about in public these days has probably noticed a change in his/her respective community. More homes are sporting for rent or for sale signs, restaurants are practically empty, and even malls and shopping centers are much for vacant than in more recent years. The economy is definitely in a pinch and we are all feeling it. The real estate market is also experiencing many changes due to this economical recession. Investors are turning to more creative ways of financing than the traditional bank loan. One such method is syndication. A real estate syndicate is formed in order to create, sell, and operate a specific real estate investment. This type of union can be established in different...

> This article talks about the benefits of business incorporation. Owning a small business is something almost everyone would like to do.  Sometimes however you want something bigger and better for your business, and you want more benefits that come with it.  You are probably considering turning your small business into a corporation, and in doing that you can gain several benefits.  These benefits can deal with taxes, liability and company operations. Possibly the main reason people decide to incorporate their business is the tax benefits.  Having a corporation allows you to earn assets and wealth with a special tax rate that is specifically made for corporations.  This special tax rate is...

Setting up a business - and the future running of that business - is something that is generally aimed at creating the conditions whereby one can make as much money as possible. Although there may be any number of other, more high minded and well intentioned reasons for creating a company, the fact of the matter is that when a company is judged externally, the first instinct of most people will be to take into account how much money it made. This is affected by many things. If the management of the company has done its job correctly, the company will in all likelihood have made a great deal of money. Not all of that money is profit, however, and before you arrive at the bottom line there is more to...

When you begin a new business with a partner, no matter what the form of the business, you should have a "prenuptial agreement" for your business. In a marriage, you cannot predict how long the relationship will continue and how it will end. The same is true in a business context. People do not know if their business partners will leave them for another business opportunity, have a problem that interferes with their ability to do their job, or retire or die while still in partnership. Decide the basics Because you cannot predict the future, it is important to have such an agreement in place once your new business is formed. If you form a corporation, you will want a shareholder agreement. If you...

Bad things can happen to good entrepreneurs with fantastic ideas. This statement is not meant to burst your bubble - it's meant to nudge you in the direction of being realistic about your planning efforts long before you're left with nothing but a soapy residue on the floor because you failed to implement the best practices for protecting your personal assets. Take the Proper Steps It's all too easy to get carried away with the thrill of being your own boss and finally pushing the results of your hard work onto the marketplace. There isn't any serious entrepreneur that at some time has not put their own money on the line, but the cold, hard fact is you can lose your investment if something goes...

If you follow my other articles and writings, you know I have strongly suggested that businesses avoid the use of Internet forms or Internet-based document services. It is a fair rejoinder that, as a lawyer, I have an economic interest running counter to such services. As a litigator, however, I have often had to try to clean up legal messes caused by homemade agreements, misuse of forms, or, in some instances, the failure to document agreements. Cleaning things up on the back end, particularly through litigation, is always more expensive. Further, cleanups rarely achieve the same results that could have been achieved by doing things right on the front end. A specific example of that graphically...

Incorporation is the term denoting the formation of a new corporate firm, whether business or non-profit. It is a legal procedure that involves registering a company name and logo. Incorporation of a company has lots of benefits when compared to a company run by an individual or group of individuals. The first benefit, of course, is that your assets are in stocks owned by the public, and you hold a comparatively lower personal liability. This also reduces the personal risks for company owners when somebody decides to sue the company. Owners can also cut down on the income taxes they pay as the sole owners of their company, and also prevent the possibility of a personal bankruptcy by incorporation...

If you're a business owner with a sole proprietorship, you might be wondering whether it's time to incorporate your business. Lots of sole proprietors crave adding the coveted title of 'corporation' to their business, but few understand the advantages and protection they can enjoy from incorporating their business. When you form a legal entity for your business, sometimes in the form of a corporation, you're taking your business to the next level. Not only are you showing the world that you're a serious business person, you're showing them that you are here to stay. And stability in a challenging economy is just what everyone is looking for. There are several different legal entity options and it's...

Incorporating a business means separating the business entity from the owner. A legal entity separate from its owner and authorized to have much number of shareholders is called a corporation. It is a form of business in which the owner has limited liability and the business entity has unlimited life, extending it beyond the life of the owner. Unlike sole proprietorship and partnership it protects the owner from having his private properties at risk if anything goes wrong with the business. There are three incorporation options available for a business owner: (a) C - corporation: A regular corporation or C-corporation facilitates limited personal liability to the owner and he doesn't use his...