LLC Vs S Corporations

The LLC vs S Corp argument that you will hear the most is about taxes. This argument is so often heard because most business owners are concerned about how much they will have to pay in taxes. Nobody wants to pay a lot in taxes. The LLC vs S Corporation argument shows how sometimes choosing to form an LLC with the Corp taxation is the best route to go, rather than choosing one or the other. The LLC is not a federally recognized business entity for tax purposes, so you have to choose another business entity to file your income taxes. Choosing the S Corporation for tax purposes allows you to benefit from the pass through taxation, but allows you the simplicity of forming and running an LLC. If you elect to form an LLC but be taxed as an S Corp, you need to file the IRS Form 2553 and have it filed with the IRS before the 16th day of the third month of the current tax year.

With both an LLC and an S Corporation, you will be able to benefit from pass-through taxation. Any profit or loss that your business has will be passed onto your personal income taxes, with both the LLC and an S Corporation. This is where the S corporation differs from regular corporations, with a regular corporation there is the issue of double taxation. With both an LLC and an S Corporation having, the same tax advantages many people elect to form an LLC that is classified as an corporation for tax purposes because it's easier to setup and maintain.

For more information on the topic of LLC vs S Corporations please visit our website. We specialize in educating entrepreneurs on the topic of entity formations.

Article Source: http://EzineArticles.com/?expert=Michael_Barnson

Santa Claus LLC Challenged by Nuclear Proliferation and Threats From Iran

The Santa Clause Factory may have to close its doors after 90 years. It turns out they can no longer get insurance for their facilities. The missile defense shield has been cancelled and Iran's President has threatened to "blow Christmas off the map." Unfortunately, "Christmas is right here, this is where it all starts, we make toys here 10-months out of the year for the big day, and we are also contracted to do Hanukkah now and that means December is a big business month."

As you might recall last year Santa Claus LLC beat out both FED EX Home Delivery and UPS for the Hanukkah contract, which is worth $310 of millions and it covers some 8.5% of the World's Children. FED EX lost the bid due to a dispute with the IRS over the "independent contractor" or employee issue (that case was reversed, but Santa Corp has the contract. As you know all of Santa's elves and rain deer are actual employees of the company. UPS failed to meet the contract because the Unions would not work holidays without triple overtime pay.

Both FED EX and UPS have since raised prices, and both have posted some of the largest corporate losses on record in the last year. "It's been a tough year on us as well," said Mrs. Claus the comptroller and official board member;

"This year none of us have taken corporate bonuses, and we can't operate without our insurance. "AIG the company's previous insurer was under government scrutiny, and the Geiko gecko salesman didn't even want to come up here to talk to us; "It's too cold up there for me," and so they are without insurance."

All this due to unresolved diplomatic talks on Iran's nuclear weapons and uranium enrichment facility, so Santa offered to pick up the already enriched uranium and deliver it to Russia, so it could be stored and used only for peaceful nuclear power generation, but the IAEA, said they can't find it, and Iran continues to make threats. Meanwhile, the Obama Administration would not return Mrs. Claus phone call because Mr. Obama was busy doing a late night talk show interview to boost his slipping poll ratings.

There will be no Christmas this year.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in Santa Corp.

Article Source: http://EzineArticles.com/?expert=Lance_Winslow

Santa Claus LLC Challenged by Venezuelan President Hugo Chavez

Santa Claus is really getting tired of rogue nation-states and socialist leaning leaders. Not long ago, President Hugo Chavez took over and nationalized most all of the media, especially those TV, radio, and newspapers which did not say nice things about his political posturing. Now most of it is all state owned media. On the radio and TV stations, he told kinds that it was decided that every kid must have the same state-sponsored toys for Christmas.

Apparently, this was so some kids do not get better toys than others. Unfortunately, this has been very hard on the company and Santa Claus fears his factories cannot meet its delivery promises as they just cannot get all those toys, which are identical made in time, because they do not have enough supplies and raw materials. Santa is also worried about landing in Venezuela and having his sleigh nationalized and taken.

Santa fears this might happen because Venezuela doesn't have much of an air force and his sleigh is very fast and supersonic. He is deeply troubled with Hugo Chavez's latest demands for toy orders.

Santa Claus LLC was barely able to deliver last year due to the financial economic meltdown and number of foreclosures, as everyone had change of addresses and he couldn't track everyone down. The same problem will be a challenge this year too. And now this issue with Venezuela could really hurt the corporation's fourth quarter profits, and stock price in the first quarter of 2010.

Santa Corp was going to outsource the Venezuelan toys to China, but Santa is still worried about the Lead Based paint issue, and he says lead paint weighs too much anyway and the rain deer have a tough enough time carrying the load. Those toys with lead are much better transported by cargo container ships from China direct, even if they don't get there until after Christmas.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in Santa. Article Source: http://EzineArticles.com/?expert=Lance_Winslow

An Arbitrator's Powers Are Limited

There are differences between arbitration and litigation: An arbitrator has no authority to order an in camera review of information protected by the attorney-client privilege, the absolute work-product doctrine or the conditional work-product doctrine. Only a judge has the power to conduct any sort of review, and then only on materials subject to the conditional work-product doctrine.

This article focuses on limits to an arbitrator's power when one of three privileges are asserted: (1) the attorney-client privilege, (2) the absolute work-product doctrine and (3) the conditional work-product doctrine. A strong understanding of this distinction can enable an attorney to enhance the cost-effectiveness of arbitration by eliminating any doubt regarding the procedures for ruling on claims of privilege. It can also help an attorney get the most "bang for the buck" from outside consultants by maximizing the use of such consultants while giving comfort to the client that such communications will not be disclosed to the arbitrator.

The key distinction between an arbitrator and a judge when faced with claims of privilege is that a judge can order an in camera inspection of information (in limited circumstances) whereas an arbitrator cannot. If a party in arbitration invokes the attorney-client privilege or the absolute work-product doctrine, an arbitrator is prohibited by California Evidence Code § 915(a) from requiring an in camera review of the documents to rule on the claim of privilege. If a party in arbitration asserts the conditional work-product doctrine, an arbitrator is prohibited by California Evidence Code § 915(b) from ordering an in camera inspection of the documents to rule on that claim of privilege as well.

The Attorney-Client Privilege and the Absolute Work-Product Doctrine

To understand these distinctions, it is useful to review the three types of privileges covered by this article. First, the attorney-client privilege protects an attorney's communications with a client regarding, among other things, case strategy and the attorney's advice to the client. California Evidence Code § 954. Second, the absolute work-product doctrine protects all communications directly reflecting the attorney's impressions, conclusions, opinions or theories about the case. California Code of Civil Procedure § 2018.030(a).

Both the protection of the attorney-client privilege and the attorney work-product doctrine are "absolute."

Furthermore, the communications are protected even if conducted in the presence of third parties (such as experts or consultants), if the purpose of the third parties' presence is to further the interests of the client. California Evidence Code § 952.

The Conditional Work-Product Doctrine

The conditional work-product doctrine, on the other hand, is not an "absolute" protection. The conditional work-product doctrine protects attorney work-product that doesn't expressly contain the attorney's impressions and opinions of the case. Under the conditional work-product doctrine, information is not discoverable unless a court determines that denial of discovery will unfairly prejudice the party seeking discovery. California Code of Civil Procedure § 2018.030(b).

The important distinction between the conditional and the absolute protections is the need for a court to rule on the issue of prejudice. This is where California law specifically limits the powers of an arbitrator as compared to a judge.

California Evidence Code Section 915

California Evidence Code § 915(a) expressly prohibits the disclosure of privileged information when an adversary challenges a claim of attorney-client privilege or the absolute work-product doctrine. California courts have held that a party claiming either of these privileges is not required to waive the privilege by disclosing the information to assert the privileges.

California Evidence Code § 915(b) provides a procedure by which a judge - not an arbitrator - can conduct an in camera review of documents claimed to be privileged under the conditional work-product doctrine. The plain language of § 915(b) reflects the Legislature's intent to limit in camera inspection authority to judges only by using the words "judge" and "the court," rather than the broader term "presiding officer." The legislative history of § 915(b) also supports the view that only judges have the authority to order an in camera review of documents claimed to be protected by the conditional work-product doctrine.

Practical Applications

Privileges are important protections that enable clients to fully investigate the strengths and weaknesses of various approaches to resolving a legal dispute. If clients had to fear disclosure of their privileged communications, they might be prevented from fully exploring all useful resources for dispute resolution.

Empowering only judges - not arbitrators - to conduct in camera reviews of privileged documents is an important safeguard under California law. Understanding this protection may also be the key to winning your next case.

Robert M Heller Robert M. Heller, a Professional Law Corporation 1875 Century Park East, Suite 1000 Los Angeles, CA 90067 http://www.rhellerlaw.com/ Article Source: http://EzineArticles.com/?expert=Robert_M_Heller

Are You Personally Liable For the Acts of Your Corporation?

Do you own a business as a corporation or an LLC, and think you're insulated from personal liability? Think again. There are numerous ways that a shareholder of a corporation or a member in an LLC can be held personally liable for the acts of the entity. One, in particular, is the alter ego doctrine. Ordinarily, a corporation is regarded as a legal entity separate and distinct from its stockholders, officers and directors. Under the alter ego doctrine, however, if a corporation is used to perpetuate a fraud or accomplish some other wrongful purpose, a court may disregard the corporate entity and hold the individual who controls the corporation liable for the corporation's acts. This is known as "piercing the corporate veil."

More and more frequently, lawyers are asserting the alter ego doctrine in shareholder and other corporate-related litigation. Understanding the possible exposure will help you protect yourself.

While a court will look at all of the circumstances regarding corporate ownership and control when deciding whether to pierce the corporate veil, there are some important steps you can take to prevent a court from holding you responsible for the acts of your corporation or LLC. Among them are:

* Keep the corporation adequately capitalized, e.g., be certain the corporation has funds sufficient to cover its obligations;

* Keep the corporation's funds and assets separate from and not commingled with your own;

* Maintain corporate formalities, e.g., have corporate meetings, maintain minutes, pay business taxes or fees as appropriate;

* Keep the corporation's records separate from your own;

* Do not use the corporation as a conduit for personal business;

* Do not hold yourself out as personally liable for the corporation's debts; and

* If you own or control multiple corporations, utilize different boards of directors, different officers, different employees and different office space.

Unfortunately, there is no absolute protection from an alter ego claim. Following these steps, however, will greatly reduce the likelihood that you will be held liable for the acts of your corporation or LLC.

Robert M Heller Robert M. Heller, a Professional Law Corporation 1875 Century Park East, Suite 1000 Los Angeles, CA 90067 http://www.rhellerlaw.com/ Article Source: http://EzineArticles.com/?expert=Robert_M_Heller

Avoiding Shareholder Litigation

Assert Inspection Rights. This can result in some surprising revelations which, in turn, may lead to interesting results.

Expand Board of Directors. Expanding a company's Board of Directors can avoid and/or eliminate a deadlock. It may also bring in a fresh point of view.

Purchase Control. If the shareholders each own an equal number of shares one shareholder may wish to consider paying a premium to buy a controlling interest in the company.

Seek Appointment of Provisional Director. If the corporation has an even number of directors and the board is deadlocked, any director or holder of at least 1/3 of the voting shares can petition a court to appoint a provisional director to break the deadlock. If the corporation has an uneven number of directors and the shareholders are deadlocked, any shareholder of at least ½ of the voting shares can petition a court to appoint a provisional director under certain circumstances.

File for Bankruptcy Reorganization. Under certain circumstances, a Chapter 11 bankruptcy reorganization can result in one shareholder, or a group of shareholders, gaining control of the corporation.

Initiate Involuntary Dissolution of the Corporation. Under certain circumstances (such as fraud, mismanagement or abuse), a court may order the dissolution of a corporation against its will initiated by at least 1/2 of the directors or 1/3 of the shareholders. (Depending on the facts, a shareholder with less than 1/3 can initiate this action.) The corporation or 50% of the shareholders may elect to avoid this result by agreeing to buy out the initiator's stock for fair market value.

Sell Company to Third Party. If the shareholders are unable to continue in business together, the shareholders may wish to consider selling the company to a third party.

Execute a Buy-Sell Agreement. Of course, one of the best ways to avoid a shareholder dispute is to have all shareholders enter into a written agreement that sets forth what rights the shareholders will have in the event of certain contingencies (such as death, disability or deadlock). This is ideally done when the company is first formed but can be done at any time, including when a dispute arises.

These are just a few of the possible approaches that may be considered when faced with shareholder disputes in California.

Robert M Heller Robert M. Heller, a Professional Law Corporation 1875 Century Park East, Suite 1000 Los Angeles, CA 90067 http://www.rhellerlaw.com/ Article Source: http://EzineArticles.com/?expert=Robert_M_Heller

The LLC is the little business entity that could. Unfortunately, many services market it as the cure-all to every problem a small business has. LLCs

The limited liability company, better known as an LLC, is often touted as the perfect business for small businesses. It certainly has some major advantages, but there is another side to it. In many states, there can be a painful financial catch if you use it for your business.

The LLC was first introduced in the United States in the late 1970s. It had existed in another form in Europe for decades, but Wyoming was the first state to pass legislation that allowed it to be used here as well. Other states slowly did the same until the IRS ruled on it favorably from a tax perspective, which resulted in every state passing legislation that allowed businesses to use the LLC form.

The problem is whether you should actually choose an LLC for your business. Each state handles the entity different, but more and more are now adding fees and taxes that should make most people pause before going with the LLC over another form of business. One need look no farther than California for an example of how this happens.

California is known as being a very unfriendly environment for businesses. There are fees and taxes for every little thing. When you form an LLC in the state, you must pay an $800 fee every year for the "privilege of doing business in California". I kid you naught. That's what the law says! Ah, but it gets worse.

In addition to the $800 fee, California also requires all LLCs to pay an additional gross revenues tax. "Gross revenues" means that the tax must be paid before profitability is determined. The tax starts at $900 for gross revenues of $250,000. That figure increases to $2,500 at $500,000 in revenues. To understand how harsh this is, consider an example. You start a business and don't expect to be profitable until the third year of existence. You bring in $310,000 in gross revenues, but lose $30,000 the first year. Well, you still are going to be required to pay $800 for being in business and another $900 as your gross revenue tax. Welcome to California!

The truth is most states now have some kind of fee or tax add on for limited liability companies. Those that don't are expected to soon given this tough economic environment where tax revenues are falling so steadily. If you are considering choosing an LLC for your business, be very careful and make sure you investigate all the fees and taxes you will have to pay.

Thomas Ajava writes for FindanAttorneyforMe.com - where you can find a business attorney to help you determine the best business entity for your business.

Article Source: http://EzineArticles.com/?expert=Thomas_Ajava

Limited Liability Company - Should You Really Skip Keeping Corporate Minutes?

The LLC is the little business entity that could. Unfortunately, many services market it as the cure-all to every problem a small business has. LLCs are solid business entities, but they are not perfect. In this article, we take a look at one of the marketing claims you often see regarding an LLC and whether it has any merit.

As with any product or service being sold, you should really take marketing claims with a serious grain of salt. Not every car can be the best in the world and not every marketing claim regarding business entities is true either. This is particularly true when it comes to the claim that corporate entities are "bad" because you have to keep corporate minutes. Oh, the horror! Keeping corporate minutes is a simple process and not a factor that should be considered when deciding whether a corporation is the best choice for your business.

The flip side of this marketing theme is that limited liability companies are great because you don't have to keep corporate minutes. Is this true? Yes and no. Every state deals with the issue in different ways, but it can be said that some states do not have any statutory laws passed by the government that require you to do so. So, is that the end of the discussion? Not by a long shot.

You are absolutely out of your mind if you do not keep corporate minutes for your LLC. Why? Well, let's imagine a scenario where the LLC gets sued by some other party. As is often the case in litigation, things can get nasty quickly. In your case, they suing party starts asserting that the LLC is really just a shell entity and should be set aside so the real party [that would be you] can be held responsible for your untoward conduct.

At this point, the court is going to have to make an evaluation about whether the LLC is valid or not. What is one of the key things it is going to look at? You guessed it - the documents in the corporate book. Specifically, do they show that the LLC was functioning as a real business or as your play thing? Well, now you have a problem. Why? You don't have any minutes or corporate documents! How do you think the court is going to view the LLC in light of that? Not well!

An LLC is a great business entity choice in certain situations, but not so much in others. Put another way, some of the marketing claims are correct. The claim that you don't need to keep corporate minutes, however, is one that can get you into serious trouble.

Richard A. Chapo is with SanDiegoBusinessLawFirm.com where you can get a quickie 1 hour consult to answer your legal questions without any hassle.

Article Source: http://EzineArticles.com/?expert=Richard_Chapo

LLC VS LLP - When the Limited Liability Company Choice is Wrong

LLC vs. LLP anxiety? No surprise there. Heck, every lawyer and CPA in the country appears to be gag-gag over the limited liability company option.

And then, of course, if you've been even half observant, you'll undoubtedly have noticed that many big law and accounting firms have selected the LLP, or limited liability partnership, option. And that fact surely makes one wonder if the limited liability partnership isn't a good safe option given all the intellectual brainpower that resides in one of these big professional firms.

How can you satisfactorily answer the LLC vs LLP question? Well, you should consider the LLP for four basic reasons:

Reason #1: LLP is (Historically) Widely Accepted Entity Choice

Let's start with a bit of history. You should know that part of the popularity of the LLP choice with the large accounting and law firms comes from the wide acceptance of the LLP choice after the U.S. Savings & Loan crisis. At that time, as many of the big firms were reforming themselves, the LLP option was the most widely accepted pass-through entity available. And this wide acceptance was critically important (obviously) for professional service firms operating in numerous states and even, in many cases, across international borders.

Accordingly, sometimes firms choosing the LLP option do so (or have done so) because the LLP option is (was) the most widely accepted or the only totally accepted option in the jurisdictions in which they operate.

Reason #2: LLP Meets Largest Set of Licensing Requirements

Another reason for selecting the LLP option over the LLC option? Simple. Some businesses can't operate as limited liability companies (or their professional services firm equivalent, the professional limited liability company). These businesses however often can operate as a limited liability partnership.

Accordingly, sometimes firms choosing the LLP option make their choice because the limited liability partnership choice allows them to more easily meet state-level licensing requirements.

Reason #3: LLP Accepted/Required by Stakeholders

A quick, simple point: If stakeholders (like the owners or employees in a business) expect the firm to be operated as an LLP, that factor may be significant.

Giving stakeholders what they expect or what the popular wisdom accepts may be sort of nonsensical. But choosing the course of least resistance may be a pretty easy choice...

Reason #4: LLP May in Some Situations and Scenarios Offer Better Asset Protection

As a general rule, LLCs and LLPs offer similar asset protection though predictably the protection varies by state. Furthermore, let me just say that the asset protection features of a limited liability company greatly depend on the activities the business engages in. For example, malpractice laws mean that an LLC or LLP engaged in professional service (like law or accounting) gets far less liability protection than non-professional firms.

The forgoing caveats and qualifications aside, however, some state laws may offer LLP partners better protection against personal creditors than the state laws offer to LLC members because not all states treat interests in an LLC like a partnership. However, most (perhaps all?) states treat ownership interests in a limited liability partnership like a general partnership interest.

For more information about legal protection and the llc vs llp issue, you want to consult a local business attorney. What you want to ask about, by the way, are (1) how charging orders will work in a worst-case scenario, and (2) whether your ownership interest in the LLC or LLP can be seized by a personal creditor.

Seattle-area author and CPA Stephen L. Nelson regularly writes about business accounting and taxation issues related to the llc versus llp question.

Article Source: http://EzineArticles.com/?expert=Stephen_Nelson

LLC's, S-Corps, Sole Props - Huh?!

The name of the game is limit your liability. I put that in bold because it is very important. As an entrepreneur, your going to take risks, a lot of them. Picture a corporation or an LLC as an artificial person that you have created. Now all of the business you do, the bank accounts you open, the merchant credit card accounts you start and the lease you sign will all be through this artificial person. If for some reason the business goes belly up or some one decides to sue you for any reason, they cannot go after you personally. They can only go after the LLC or corporation and its assets. So your car, your house, your money outside of the company is safe!

If the business can't pay the bills, the business goes bankrupt not you, unless you have signed personal guarantees on anything (which they will most likely make you do when leasing a building, etc).

Sole proprietorship are the exact opposite of what we've discussed above. YOU are liable for your business and anything that happens to it. I do not recommend this as your liability is far too great and you have no artificial person protecting you.

Anyone can start an LLC or corporation, for just about any reason. Whether you have a blog, a restaurant, an eBay business or you're a tutor, anyone can run their business through a company. In fact, it is very wise to do so. To provide a good example, I own a restaurant and I have plans on opening many more. What should I do? Open them all under my name or a corporation / LLC. Both would be wrong. I would open each restaurant under a separate corporation or LLC, thereby limiting each restaurant's liability to themselves. So if one restaurant fails, the others are protected under their own corporations. That's something they don't teach you in college! It is amazing how many novice entrepreneurs (my former self included) have jumped recklessly into ventures and not considered how to limit their risk exposure. It is a crucial element of the game!

Now that you know why you need an LLC or corporation...it's time to learn how...here is a very simple breakdown that will explain everything you need to know:

• Corporation - Planning on going public? Then this might be for you. But if this is for a small business, you will probably want to form an "S-corporation." If you form a regular corporation, you will be taxed on both the corporate earnings as well as your personal earnings, which means you will be double taxed. That's no good! An S-Corporation stops that from happening. So you will most likely want to form an S-Corp. Drawbacks to forming a corporation are paperwork, record keeping requirements which very state to state and a large lack of flexibility. The main benefit from using an S-Corp is employment tax savings. So only the salary you collect can be taxed, not the profits you collect depending on the amount of shares you own.
• LLC (Limited Liability Company) - This is what I usually recommend to any entrepreneur who wants to start their own business. For all intensive purposes, an LLC is treated just like a corporation, BUT there is very little paperwork, almost no record keeping requirements, complete flexibility in ownership (have as many partners as you'd like), you can distribute the profits however you like and you are still protected by that "artificial person." Having that flexibility in ownership distribution can be invaluable to an entrepreneur as well.
• Sole Proprietorship - Don't do it...

So odds are you going to want to start an LLC. Don't go to a lawyer or accountant to do that! They'll overcharge you for a service that a monkey can now do (I'm going to catch heat for that one)! There are plenty of online services that you can set this stuff up on. I use Legalzoom.com. They are very reliable and very fast. With a few clicks of the mouse and $150, you'll have your very own corporation or LLC. A lawyer would charge you $2000. Being an entrepreneur is about saving money, not spending it. Thank me later....

On a final note, you can form your new LLC or S-Corp in any state you like, but I recommend forming it in the state you will be doing business in. Delaware and Nevada are both great places to form these types of entities because of their corporate laws and lack of taxes, while California is probably the most unfavorable place due to their minimum tax of $800 (you have to an annual $800 no matter what, unlike most other states) and their higher corporate taxes. It all really depends on the business. Example: I own a restaurant in California...I formed that LLC in California. The various internet companies I own are mostly run through LLC's in Nevada and Delaware because they're based on the internet, not an actual physical location. So why not benefit from less taxes and better laws.

So that covers it all...now go start your company and get the ball rolling!

For more great entrepreneurial information, visit me at http://www.makingmike.com.

Article Source: http://EzineArticles.com/?expert=Michael_Mulhall

Filing Corporate Bankruptcy - What Happens Next?

Filing for bankruptcy can be extremely confusing and complicated. To help you better understand what happens when you file for corporate bankruptcy, we've outlined the process below. For more information, talk to your local bankruptcy attorney.

In today's economy, the word "bankruptcy" gets tossed around a lot... But what does it actually mean and what happens after your company files a bankruptcy. In layman's terms, bankruptcy is when your company has financial obligations and liabilities that exceed your assets, making you unable to pay your bills as they come due. Filing for bankruptcy is a judicial solution for the debtor-your company-to seek relief from your creditors. The courts will determine if you are unable to satisfy your debts and, if so, attempt to determine a fair way to satisfy your creditors.

Filing for bankruptcy is similar to any other lawsuit: a bankruptcy petition simply starts the process, without guaranteeing any outcome or resolution. However, unlike other legal proceedings, a bankruptcy filing immediately generates an automatic stay, also known as bankruptcy protection. This injunction stops creditors from taking additional action to attempt to collect on their debts until the bankruptcy case is resolved. This stay essentially gives your business temporary relief and time to develop a plan for debt resolution.

As your corporate bankruptcy case proceeds, different creditors will be treated differently, but if or when the court declares your company bankrupt, the court will attempt to satisfy your financial obligations in an equitable and appropriate way.

Of course, just as every company is unique, every bankruptcy filing is different. Depending on the financial obligations, assets, and even structure of your business, your bankruptcy proceeding will unfold differently. Perhaps the most important question is whether to file a Chapter 7 bankruptcy or proceed with a Chapter 11 bankruptcy filing. The former dissolves your business, liquefying assets to satisfy creditors; the later involves reorganizing the business to regain solvency and profitability.

If you're considering filing a business bankruptcy, now is the time to consult a professional bankruptcy lawyer. These specialized attorneys can help determine the right course of action for your particular company, helping your business achieve the best outcome given the circumstances. Contact your local bankruptcy attorney today-there may be non-bankruptcy options available for resolving your business debts!

Matt Gallo is the Internet Marketing Manager for Prospect Genius, a leading provider of online local advertising.

Article Source: http://EzineArticles.com/?expert=Matt_Gallo

Ethical Vs Legal Business Operation

There is a little 'legal' restructuring mechanism that has become the toast of 'good strategic advice' to businesses of late. A relatively mysterious process called 'Administration'.

I have to admit complete ignorance in the past about the full meaning of the term, as well as what it means in practice. Perhaps you may have too - but seeing that I have come across this 'term' at least 7 times in a period of 4 months - I have decided that I really do need to talk about it!

As an advocate of ethical business and ethical franchise modeling, I am in awe that this business strategy is one that many, many business owners have turned to as a way to 'get out of hot water'. I realise that there are so many challenges today in running and operating a business, much less surviving tougher economic climes, but I am horrified in this new trend. I almost feel as depressed as when I hear about the increasing divorce rate in the world. My question of 'why get married in the first place' can be asked too of business owners who have failed to manage their businesses well, and how they are being rewarded with this easy way out to clear their decks.

In layman terms: 'Administration' is a method whereby if you find your business in a tough place of not being profitable and not being able to pay your creditors (although not quite at the bankruptcy stage) - you can turn to professional 'business recovery specialists' who will guide you through a path of taking you neatly out of the hot water...and then 'protecting you' from your creditors and employees asking for money from you. And then, as a cherry on top, give you the opportunity to open your doors again the next day - doing the same business, but under a different name. (Can you feel the emotion behind my words here?)

The consequences:

• A huge backlash on small business who lose clients and are lumbered with bad debt (i.e. they are the creditors who have been dedicated to providing the products and services to help the business owner do his business)

• The employees who have worked hard to help the business owner keep his business going and thriving in the past - don't get their salaries, get no real notice and get very little in compensation

• The business owner actually has to 'start all over again' because no-one wants to touch him or his business because of how he let them down

So, I guess my message to the business owner who is considering this path of 'recovery' is to use a healthy balance of good business sense and being compassionate to the parties involved. I realise that sometimes business owners have to take drastic measures to save their businesses, but my only wish is that they engage their employees in the move and be more empathetic to the impact it has on them and the creditors too.

I may be naive, but I do think that great business leaders consider every one of their actions before they take them and step forwards in the best way to lead others carefully to the other side of troublesome situations.

http://www.expertfranchiseguide.com/home.htm Get Shelley's FREE report that outlines 'The 7 Critical Realities You Need to Know Before You Buy a Franchise' by clicking here and going to 'Want to Start a Business', or Get your copy of her e-book 'Buying a Franchise: A Route to Entrepreneurship' by clicking here.

Article Source: http://EzineArticles.com/?expert=Shelley_Pearson

Setting Up a Business in Thailand

Many foreigners nowadays wish to start up or expand their business in Thailand. Starting a business in a foreign country can be both a rewarding opportunity and a daunting task. Thailand is known as the Land of Smiles and the government extends this hospitality into the business registration process. There are One Stop Service Centers which provide business start ups with a one location to obtain all the necessary information to incorporating a new business in Thailand. The Thai government has made great improvement over the last few years to speed up the business registration process in Thailand. Now a Thai Company can be registered in one business day after receiving a confirmation of the name reservation of the Thai limited company.

New businesses both big and small can set up in Thailand with ease. For a small new Thai business you can easily register your new Thai limited company with a minimum capitalization of 2 million baht. The Thai government requires that at least 25 percent of the starting capitalization be paid up on the date of the meeting for company registration. This start up capital can be used immediately for office rental, buying computers, purchasing inventory and other business expenses. As for big businesses, Thai government has their Board of Investment (BOI) program for offering special sectors many benefits for choosing Thailand as their start up location. This can include small software developers with just a few people to large manufacturing operation. The incentives include tax holidays, reduce tax duties on imported machines, fast processing of work permits and visas for foreign staff, and as well as tax free zones for importing raw materials which will be used and exported as a finished product (for some designated sectors).

The ownership percentage of your Thai company depends on the type of business registration you process with the Thai government. The most common type of registration is the Thai Limited Company with 2 million baht required initial capitalization. A foreigner can only hold up to 49 percent of the shares in this type of structure. Thus, the Thai partners must have 51 percent. The BOI company structure offers the ability of 100 percent ownership in certain business categories. It is recommended that you contact a Thai company incorporation lawyer to assist you in the planning of your new business in Thailand.

Jose Darrel Bella works as a Consultant for Siam Legal International, Thailand's largest legal service network with offices in Bangkok, London, Los Angeles, Phuket, Samui, Pattaya, Chiang Mai and Hua Hin. Contact Siam Legal at +66 (0) 253 8100 or info@siam-legal.com to learn more about Thailand Limited Company Thailand business registration.

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What is Commercial Law?

Commercial Law is the name given to any legal issues around the area of business and commerce. Commercial Law is made up of many different areas.

CONTRACTS

Contracts are legally binding agreements, usually in the form of a document. Contrary to popular belief though, verbal agreements are also legally binding. Contract can be agreements with clients or customers, such as what work will be done, how and when. In a retailer, when an item is sold to a customer that automatically becomes a contract of sorts. The customer has certain rights, such as the right to a refund if the item is faulty.

Another area where contract are important, are employment contracts. Employment contracts dictate an employees' salary, working hours, holiday entitlement and working conditions. The employer then has to abide by these agreements.

TAX

It is important that businesses pay the right amount of tax, or they will be held legally accountable. Solicitors can advice business on the areas where tax can be saved, and which tax breaks they are entitled to. For example charities are often entitled to certain tax reliefs.

EMPLOYMENT LAW

Employment Law regulates the legal rights of workers. Businesses have to make sure employees are paid correctly. This is even more important since the advent of the minimum wage in 2000. Employment Law also protects against discrimination; businesses are not allowed to discriminate in any situation, including during the recruitment stage. This area of commercial law also dictates the legal holiday entitlement and the maximum working hours allowed.

MERGERS & TAKEOVERS

There are a number of legal issues to consider when a business takeover or a merger between two or more businesses takes place. Commercial solicitors are required to make sure everything is as the law dictates. Contracts must be sorted out to state the conditions of the takeover. This can include how the role of employees may change, any agreement as to the direction the company will take, and of course the financial agreements. Agreements as to when payments should be made, and whether it is in instalments or a lump sum are covered here. The company which is being taken over may demand certain conditions of the sale.

HEALTH & SAFETY

This is an area that has become increasingly important in recent years. This area of law covers the health and safety of employees and customers. Areas of operation must have potential dangers clearly marked and steps must be taken to prevent accidents where possible. Companies can be help responsible if accidents occur.

FINANCE

Finally, finance is an area that is relevant across business. Relationships between businesses and banks can be crucial to the financing of businesses so it is an important consideration. Finance overlaps with many other areas of commercial law, such as employment, tax and contracts.

Andrew Marshall ©

Commercial Solicitors London. Article Source: http://EzineArticles.com/?expert=Andrew_Marshall

Tax Avoidance and Tax Evasion

Though you may not realize it, there is a way for you to legally save some money on your taxes. Of course, there are some illegal methods of saving money in this area, as well, but these are of course unethical and quite risky. If you are caught cheating on your taxes you could face hefty punishment.

It is important for you to be able to distinguish between the practices of tax avoidance and tax evasion. Tax avoidance is a perfectly legit way to lower how much you pay in business taxes every year, and it is actually an encouraged method of saving money on your taxes. Tax evasion, on the other hand, is not permitted by law. You commit tax evasion when you avoid paying your owed tax liability.

Tax Avoidance

Tax avoidance is actually a relatively common practice among business entities. Though the name may appear to be a bit misleading, it is actually perfectly legit and even encouraged by the United States government. Through tax avoidance, you don't completely skip out of paying all of your business taxes; instead, you capitalize on the various deductions and loopholes available.

There are several ways that you can carry out tax avoidance. Many companies opt to invest chunks of their money in municipal bonds, which are not taxable. Depending on how much money they choose to invest, they may be able to reduce their taxes significantly. Another common tactic is to form a separate entity in an offshore jurisdiction, where corporate taxes are not applied.

Finally, owners of the company can avoid taxes by donating all of their personal assets to the business. Because the corporation owns all of the money you make, you will not be subject to the affiliated personal taxes. They may still have to pay corporate taxes, however.

Tax Evasion

You should be aware of what tax evasion is, so that you don't accidentally engage in this illegal practice in your efforts to lower your taxes. This is actually considered to be a form of fraud, so even if you save a lot of money when you start off, when you are caught you will face face high fines and years in federal prison. You commit tax evasion when you purposefully avoid, without the presence of a loophole, paying your tax obligations - either personal or corporate, or both.

Contact Us

If you would like to learn more about the differences between tax avoidance and tax evasion, then Manhattan business attorney Ellen Rothstein can help you. To get the capable legal counsel you need to legally save money on your business taxes, contact her today by visiting http://www.erothsteinlaw.com/.

Joseph Devine Article Source: http://EzineArticles.com/?expert=Joseph_Devine

How to Value a Company's Buyout Price in Legal Forms

If you are a co-owner of your company and thinking of future ownership changes, then buyout agreement is one of the legal forms that you want to look at. It specifies company structure and ownership responsibility in case either side of co-owners would like to step out of business operation or ownership in the future. Among many things to consider, one of the biggest and important tasks is to determine fair price of the company at the future status. It is not simple to just predict how your company's value will end up for the next few years.

Agreeing on a fixed price

At some point, you need to decide the company's buyout price and evaluate its future price and mention in the agreement. When you nail down a company's buyout price, the most straightforward way would be to make an agreement on the actual fixed dollar price in the buyout agreement.

Advantages:

This pre-agreed value or fixed price will give all of the involved partied a simple and certain way of figuring out company¡¯s fair buyout price. With this method of setting a fixed dollar value, it would not be necessary to consult accountants, appraisers, or even earning figures when the owner's interest is purchased. You can simply take out the buyout agreement and locate what the fixed amount of price specified in this legal form.

With this fixed price method, the owner's life can become easier without having to fine tune all the financial figures and consult accountants because of this issue. It helps out the owners draw a clear picture of how the future holds would fan out, how much they could expect to carry when they walk out the company. The owners can easily do estate planning because it becomes obvious how much the agreed value of the ownership interests would be when unforeseen circumstances occur. A fixed price also lets the current owners know the amount of estate taxes would be as well as the cost of life or disability insurance.

Disadvantages:

It is a difficult task to estimate and pinpoint a fixed price for any company's true value. Valuing the company's price requires the owners to have business acumen or at least get familiar with business common sense and rule.

Here is the major problem with fixed price method: Any value you have chosen for your company will be surely outdated soon. The fixed price should be adjusted according to the business profitability and owner's expectation, depending on the initial outlook and the actual outcomes from the daily operations. And then after few years of successful operation, it would be fair to put a business value on the ability of the company to appeal to the customers and business which is called goodwill.

It is also recommended that you need to revise your agreement periodically. You can do this by preparing a new agreement with a new value or a separate statement, in which case you will need to make sure to attach copies to the buyout agreement so you can reference at any time.

Go to Free Legal Forms site, where you can find many free legal forms and resources including a Buy Sell Agreement that you can use to protect your own assets and specify your legal rights towards your company as a co-owner.

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Setting Up a Limited Partnership - Some Info to Get You Started

The current state of business and commerce has necessitated the corresponding development of various bits of legal jargon that can befuddle even the most hardened businessman. If poring through the endless litany of new words and terms to remember presents a formidable enough challenge for these seasoned veterans, what more to the novice or even the merely relatively inexperienced ones? Thankfully there are many online sources, this article just being one of them, that can help you sort through the jumble and hopefully make the process as pain free as possible. Many web sites have been developed to help you in these and many other important business matters, among them is the site "LegalZoom".

First a definition: just what is a Limited Partnership Agreement and perhaps more importantly how do you set up one? Well the best way to explain this very simply is by comparison. A Limited Partnership Agreement has many characteristics in common with the more familiar General Partnership Agreement yet has the added benefit of still offering limited liability protection to some of the partners within the corporation.

One of the stipulations of the Limited Partnership Agreement however is that at the very least one of the partners must hold the position of general partner with corresponding unlimited liability. In addition, at least one of the partners must be a limited partner whose liability is limited to the amount of his or her investment. In this type of business arrangement (one that is becoming more and more popular in today's multi faceted and varied business climate), the designated limited partners will serve to function as "silent partners". To further explain their role, these limited partners will typically have the privilege of making a capital investment much in the same manner as passive shareholders from within a publicly traded corporation but with the added restriction that they would have no direct involvement in the actual management and operational decisions of the said business.

Another important distinction is that Limited Partnership Agreements will in the vast majority of cases allow for what has come to be called pass-through taxation, as its income is not normally taxed at the entity level. The clear advantage of course is that Limited partners can then use any of the losses incurred to offset other passive income when it comes time to fill up their tax return forms. In addition, General partners losses can be and in fact are typically used to shelter other income up to the value of their investment in the partnership. The reason for this last stipulation is because their losses are not usually considered passive.

One of the most popular reasons for embarking on a Limited Partnership Agreement is that it is especially useful and desirable in many types of businesses where a one time, limited-term project is the driving goal, good examples of these would be real estate ventures or perhaps the financing of a motion picture for the film industry. Limited Partnership Agreements have also recently come into popular usage as some type of estate planning.

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Incorporated - Are You Really Protected?

You have always wanted to be your own boss. You have grown tired of just being an employee. The company is offering severance packages to many of your co-workers. After talking with your spouse, you decide to accept the severance package and tap into your savings to open a sports bar. You know generally that you will need to protect yourself from being sued by incorporating your business. You have seen commercials advertising incorporation fees for as low as $100. You fill out the standard paperwork and "voila", your sports bar is incorporated and you are very proud of yourself that you saved substantial attorney fees.

Your business starts a little slow, but you still manage to turn a profit within the first year. You manage to survive the first year although you started the business with less than 25% of the recommended amount for similar type businesses. During slow business periods, you sometimes use business revenues for personal expenses and use personal funds to capitalize the business.

You downloaded some contracts from the internet to utilize for supplier contracts and made sure to sign on behalf of the business in most cases. However, there were a few contracts with some longtime friends that you signed your name personally.

One cold winter morning, you read in your local newspaper about an accident that injured five teenagers and are horrified to learn that a few of the teenagers suffered permanent injuries to their legs and arms. On the same day, you receive a call from an attorney representing the teenagers who requests to speak with your bartender about a certain man who may have frequented your bar before driving on the wrong side of the road and injuring the teenagers. The bartender verifies that the man was asked to leave because he appeared to be drunk and two weeks later, your Sports Bar and you personally are served with a summons to appear in court.

You are dismayed that the Sports Bar is being sued and thoroughly confused why you have been named in the lawsuit. At this moment you retain counsel who informs you that the opposing attorney is attempting to "pierce the corporate veil". The attorney explains that because you were undercapitalized when the business started and you appeared to be the businesses' alter ego because you commingled funds and signed contracts personally, you could be personally liable for the injuries to the teenagers even though you incorporated the sports bar.

The lawsuit drains the sports bar's resources and the lawsuit is eventually settled with your personal resources. Two years after you started the business, you are forced to sell your home and file bankruptcy.

Wilton A. Person's broad professional experience makes him the ideal attorney for the entrepreneur minded individual or business. Whether your needs require Mr. Person's detail oriented transactional expertise (or his talents involving business litigation, Mr. Person will zealously represent your interests - http://www.personlaw.com

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DBA Forms Made Easy With Forms From LegalZoom

The world of business as we know it today has undergone a tremendous change in a relatively short period of time. Anyone who compares the intricacies involved in putting up a business today to say, even a mere ten years ago is sure to find that the business landscape has gone through significant changes, some would say for the worse although you will no doubt find many who welcome the innovations and enhancements that the new business climate has to offer.

Take for example the tedious business of filling out forms. As necessary as the filing of forms is in order to ensure that you are able to operate your business in strict conformity with local business laws, let's face it; the task is dull and boring at best and at worst it can take up a significant amount of your precious time. Time that you can better put to use in the pursuit of more worthwhile activities, like making money from your business for instance. Of course, it is precisely the quandary that faces the average businessman is that you need to accomplish all these business requirements and other various forms of paperwork before you can embark on your chosen enterprise and (hopefully) start raking in that hard earned cash.

DBA or Doing Business As forms are only one in the long line of local government requirements that you will probably have occasion to face in the course of starting up your own business. And the good news is, is that they can be found online for typically a much lower price than what your local law office can hope to provide it for. But I hear you asking now: how do I file for a DBA (Doing Business As) form and more importantly what is it exactly? You have come seeking for answers and we are happy to oblige you in your quest.

DBA forms are of a particularly weighty concern for you if you for any reason need to run a business under a name other than the one that it is legally filed under. The name used for this form may vary from town to town with some areas calling it by the terms fictitious business name, trade name or assumed name. In nay case, they all mean the same thing: a form that allows you to run your business under another name for whatever legal reason. LLC or the Legal Name of the Corporation is, as you may have guessed, the actual name that your company is registered under in line with various local and state regulatory laws.

Many online companies, most notably among them the company "LegalZoom" - can help you to navigate through this potentially confusing maze of legalese and other official documents. The LegalZoom site guarantees its potential customers honest and upfront pricing schemes that compete with the best around. You will find that their charges for filing a DBA form for you are significantly lower than what a local lawyer might charge you for the very same service.

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