DO I NEED AN ATTORNEY TO FORM AN LLC?

YES, in my opinion. While an attorney is not a legal requirement, online formation services and document providers will typically only provide you with fill-in-the-blank forms (form Operating Agreement, form Organization Minutes, and form Membership Interest documents), which unfortunately eliminates the main benefit of the LLC – the ability to customize the relationship of the members. These online services also often leave the members to operate the LLC with little or no instruction, which in a majority of cases causes the LLC members to lose their personal limited liability protection, thus exposing each of the members to potential personal liability for the LLC’s debts and obligations. “Would you go to a nurse, instead of a doctor, for cardiac surgery?” But the reality is most people will not see a lawyer until they are forced to hire a litigation attorney, or bankruptcy attorney, who informs them that they could have protected their personal assets, but didn’t.

Most attorneys, especially civil litigators, have a lot to gain from owners of companies (especially LLCs and Corporations) who fail to form and operate their business with the required formalities because instead of spending a few hundred dollars a year with a business attorney or corporate attorney to dot the i’s and cross the t’s, now the individual is going to spend $10,000 to $50,000 to defend a lawsuit, and still face the real probability of not only having to file a company bankruptcy, but a personal bankruptcy as well.

The reason for the custom documents is to provide, amongst a multitude of other things, (1) detailed instructions on how to run and operate the LLC; (2) qualifications as to who can be a manager of the LLC; (3) restrictions on which members/managers can bind the limited liability company; (4) provisions to reduce the likelihood of disputes among the members; and (5) a mechanism to resolve disputes or a deadlock among the members without costly litigation (at least where possible).

WHAT IS THE FOCUS OF A FRANCHISE DISCLOSURE DOCUMENT?

 The Franchise Disclosure Document (FDD) is a legal document that franchisors must furnish to prospective franchisees, by law. The Federal Trade Commission (FTC) is the regulatory body that enforces it. That makes it kind of a big deal. The FDD contains information…facts and figures on the franchise business opportunity, and is provided to help you analyze the offering. You, as a prospective owner of a franchise, must receive the FDD at least 14 days before you are asked to sign any contract or pay any money to the franchisor or an affiliate of the franchisor. You have the right to ask for and get a copy of the disclosure document once the franchisor has received your application and agreed to consider it.

Look for more on this subject in next month’s July 2015 issue of the Bottled Business Sense Newsletter.

by: BEST ASSET PROTECTION LAWYER FOR BUSINESS: http://www.wfblegalconsulting.com

5 HOT TAX DEDUCTIONS TO CONSIDER BEFORE YOU FILE

WFB Legal Consulting - Business Law Tips and Advice

As all small business owners know, this is a critical time of year to try and dig up all the expenses we can from last year in order to drive down our tax bill as low as possible.

1. Travel related expenses.  In my opinion, this is one of the most underutilized tax deductions by small business owners today.  Unlike meals and entertainment that are limited by 50%, travel expenses are 100% deductible.  These include airfare, hotel, rental cars, valet, taxi, trains, tolls, etc…  You would be shocked to know how many tax returns come across my desk every year of new clients with literally zero travel deductions.  Consider all of your travels last year that may have involved a meeting with a client, a vendor,  or a training meeting, a tour of a competitor’s facility or store, your annual board of directors, shareholder, manager or member meeting, a conference with retreat with a partner, the list goes on and on.  It just doesn’t make sense for any business owner to not have some travel expenses.

2. Auto Deductions.  Remember this isn’t travel, but expenses for your car or truck used in your business.  There are two main options:  mileage or actual expenses, and statistics show that 90% of small business owners actually utilize the mileage method.  For 2014 this was 56 cents per mile.  Surprisingly, again I see many taxpayers shy away from claiming their true mileage because they are afraid of an audit.  True, you should do your best to keep a written record, but if you haven’t been extremely detailed, still utilize an estimate and take the deduction.  I would rather see my client defend the deduction than not take it at all.  As for ‘actual’ expenses, this is for those typically with large trucks or SUVs.  IF you were following my Newsletter in December you may have seen the special Bill and Extension passed by Congress that extended the 179 Depreciation deduction for trucks with a 6ft bed or greater, vans, delivery trucks and RVs.  Don’t forget this opportunity as well if you purchased a vehicle weighing more than 6,000lbs in 2014. If this was you, do your best to track down your fuel, repairs and maintenance for last year if you used the ‘actual’ method.

3. Dining and Entertainment. Again, a highly underutilized expense by small business owners and should be a healthy line item on your tax return.  Please make sure you consider all of your meals last year where you discussed business with a partner, or a potential client, vendor or strategic alliance. If you didn’t keep a receipt, still take the expense. Technically, you don’t need a receipt if it was less than $75, but you still should be able to substantiate it if necessary with a credit card or bank statement and the purpose of the meeting.  Another overlooked fact is that you can write-off dining by yourself when you are traveling.  This has been defined as outside of a normal commute of your home office or place of business and business owners should be diligent in tracking these expenses.  However remember, although you are traveling, all dining and entertainment is still limited to 50% of the full amount. The biggest deduction for food that is for 100% of the cost is that of event food (or otherwise stated, food purchased for your attendees at a presentation you make).  This also includes food purchased for your employees at the office.

4. Office Supplies and Technology.  Every small business owner is regularly buying supplies and upgrading their phone, computers and digital reading devices.  Don’t forget that when you have a small business, the majority of these items can be fully expensed.  Make sure you track them and discuss with your tax advisor which expenses for items should be reduced by some percentage for personal use if necessary.

5. Technology and Telephone.  This is obviously an ever increasing expense as small business owners utilize technology to do business nationwide, if not worldwide.  Many also don’t know that recent case law and IRS rulings allow business owners to write-off 100% of their cell phone expenses, so long as they have at least one dedicated home phone line.  Moreover, make sure to include the cell phones of your family members that work in the business alongside you and need a cell phone for their legitimate roll in the business.

Now with all of these expenses, you need to take into account your overall income, profit and the size of your operations.  Your deductions need to look realistic and common for the type of business you have.  However, if they’re legitimate and you have support, don’t be afraid to take them.  Go for it and just have your records as back up if you need them in the future to justify your expenses.

 

BEST ASSET PROTECTION SERVICES: LAWYER FOR BUSINESS: SETTING UP AN LLC

WFB Legal Consulting - Business Law Tips and Advice

SETTING UP AN LLC: Take a look at what it takes to set your business up as a Limited Liability Company.

1. Choose a Name

Your name will be the first thing people see or hear as it relates to your new business, so make it a good one. Next, make sure you are only one using the selected company name. You can do that with a free corporate name search in your state. 

2. Register the LLC and File Your Paperwork

Call WFBLC, Inc. and I’ll file your state’s Articles of Organization paperwork for only $600.00. 

3. Get Your LLC’s Tax ID

Before you can start operating as an LLC, you need an Employer Identification Number. This is like a social security number for your business, and one you’ll need before opening a business bank account. This is included in my price above. 

4. Create Your Operating Agreement

This document outlines the rights and obligations of the members of your LLC, as well as lists the distribution of income of the Limited Liability Company to its members. Your Operating Agreement doesn’t need to be filed with your state, however you do need to keep one on premises, signed, if you have other shareholders. This is separate and apart from the filing fees, and is particularized depending upon the particular needs of your company. 

5. File Business Licenses and Permits

Additionally, you should apply for any business licenses or permits you’ll need to operate your business. It’s best to do this before you start operating your business to avoid potential fees or issues down the road. This is usually accomplished through your local city or county offices. 

6. Keep Your LLC Compliant

Once you’re operating as an LLC, your work isn’t done for good. Each year, or every other year depending upon your state of residence, you will need to file your Statement of Information. The due date for this report depends on where you filed your LLC. For example, if you filed it in Michigan, Delaware, North Carolina, Georgia, Florida, or Texas, there’s a specific date that your annual report is due. In other states, it’s due on the anniversary of when you filed your LLC. 

7. Finally, Take Care of Loose Ends

Depending on where you’re based, you may need to publish your intent to form an LLC in a local newspaper. If you form an LLC in New York, for example, you are required to run that intent in an approved newspaper for 6 consecutive weeks. This is not so in California.

BEST ASSET PROTECTION LAWYER for BUSINESS: PRACTICAL BUSINESS ENTITY TIPS—DO YOU KEEP YOURSELF SAFE?

WFB Legal Consulting - Business Law Tips and Advice

PRACTICAL BUSINESS ENTITY TIPS—DO YOU KEEP YOURSELF SAFE? 

What do the terms “articles,” “meeting” “bylaws” and “minutes” mean?

Articles of Incorporation
The Articles of Incorporation is the primary legal document of a corporation; it serves as a corporation’s constitution. The articles are filed with the proper state government to begin corporate existence. The articles contain basic information on the corporation as required by state law.

Organization Meeting
The organizational meeting completes the formation of the corporation. At the organizational meeting, a number of initial tasks are completed such as: the Articles of Incorporation are ratified; the initial shares are issued; officers are elected; bylaws are approved; and a resolution authorizing the opening of bank account is passed. If the initial directors are named in the Articles of Incorporation, they can hold the organizational meeting. If they are not named, then the organizational meeting is held by the incorporator.

Bylaws
Bylaws are rules and regulations adopted by a corporation for its internal governance. They usually contain provisions relating to shareholders, directors, officers and general corporate business. At the corporation’s initial meeting, the bylaws are adopted. Bylaws are a private document not filed with any state authority.

Minutes
The Board of Directors and shareholders transact business at meetings, with decisions being typically made by majority vote. Certain formalities must be followed in holding Board of Directors and shareholder meetings. The meetings must be held pursuant to notice. Notice may be waived if the waiver is done in writing. The secretary or other person mailing the notice should complete an affidavit of mailing notice, and the minutes of the meeting should be recorded. The notice document, affidavit or waiver should all be attached to the minutes of the meeting.

Are directors’ and officers’ names a matter of public record?

Yes. Names and addresses are filed with the state and are therefore available to anyone. Nevada requires this filing annually. They do not require notification of intervening changes.

What is the responsibility of the president, treasurer and secretary?

What is the responsibility of the president, treasurer and secretary? The president is typically responsible for entering into contracts on behalf of the corporation; the treasurer is responsible for maintaining and accounting for corporate funds; and the secretary is responsible for observing corporate formalities and maintaining corporate records. In addition to these required officer positions, a corporation may also have vice presidents and/or assistant secretaries or assistant treasurers. Typically, the authority and responsibilities of each officer is described in the corporate bylaws and may be further defined by an employment contract or job description. The President: The president has the overall executive responsibility for the management of the corporation and is directly responsible for carrying out the orders of the Board of Directors. The Board of Directors usually elects him or her. The Treasurer: The treasurer is the chief financial officer of the corporation and is responsible for controlling and recording its finances and maintaining corporate bank accounts. Actual fiscal policy of the corporation may rest with the Board of Directors and be largely controlled by the president on a day-to-day basis. The Secretary: The secretary is typically responsible for maintaining the corporate records.

What are the directors’ and officers’ corporate liability?

Under normal circumstances, officers, directors, managers, etc. do not have personal liability for lawful acts of the corporation. In addition, in Nevada statutes, the owners are not the “appropriate” party to a lawsuit. The company may also indemnify any officer, director, manager, etc. from personal liability.

What is a Board of Directors?

The Board of Directors is essentially the management body for the corporation. Responsibilities of the Board of Directors include establishing all business policies and approving major contracts and undertakings. In addition, the board may also elect the president. The officers and employees under the directives and supervision of these directors carry out ordinary business practices of the corporation. The directors must act collectively for their votes and decisions to be valid. That’s why directors may only act at a Board of Directors meeting. This, however, requires certain formalities. One such formality is that the directors all must be notified of a forthcoming meeting in a prescribed manner, although this can be waived or provided for in the corporation’s Articles of Incorporation or bylaws. For a directors’ meeting to be valid, there must also be a quorum of directors present. A quorum is usually a majority of the directors then serving on the board; however, the bylaws may specify another minimum number or percentage. The Board of Directors must meet on a regular basis (monthly or quarterly), but in no case less than annually. These are the regular board meetings. The board may also call special meetings for matters that may arise between regular meetings. In addition, boards may call a special shareholders’ meeting by adopting a resolution stating where and when the meeting is to be held and what business is to be transacted. The first meeting of the Board of Directors is important because the bylaws, the corporate seal, stock certificates and record books are adopted. Board members, like officers, have a fiduciary duty to act in the best interests of the corporation and cannot put their own interests ahead of the corporation’s. The board must also act prudently and not negligently manage the affairs of the corporation. Finally, the board must make certain that it properly exercises its authority in managing the corporation and does not abrogate its responsibilities to others. This means that the board must be very careful to document that each board action was reasonable, lawful and in the best interests of the corporation. This is particularly true with matters involving compensation, dividends and dealings involving officers, directors and stockholders. The record or corporate minutes of the meeting must include the arguments or statements to support the board’s action and they must detail why the action was proper.

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BOTTLED PROTECTION POINTS for your business: What is a “CRUMMEY” Power?

Bottled Protection Points provide tips for the business owner to contemplate and, if applicable, implement into his or her everyday operation. The Protection Points span the three interwoven areas of Business Law–Asset Protection; Estate Planning Protection; and Employment Law–all important considerations for the knowledgeable entrepreneur.

Bottled Protection Points are driven by Bottled Business Sense Newsletter; The Bottled Business Sense Show; and

WFB Legal Consulting, Inc.

BOTTLED POTECTION POINTS--3

A “Crummey” power is a provision contained in certain irrevocable trusts that permits specified trust beneficiaries to withdraw gifts you make to the trust for a limited period of time. Whether or not the beneficiaries exercise their right, the gift still qualifies for the annual gift tax exclusion.

 

Make sure you have a LAWYER FOR BUSINESS who provides you with the BEST ASSET PROTECTION available.

http://www.wfblegalconsulting.com

http://www.businessassetprotection365.com

http://www.bottledbusinesssenseshow.com

http://www.blogtalkradio.com/bottledbusinesssenseshow

BEST ASSET PROTECTION PRESENTS: BOTTLED PROTECTION POINTS For Your Business–IC or EMPLOYEE?

Bottled Protection Points provide tips for the business owner to contemplate and, if applicable, implement into his or her everyday operation. The Protection Points span the three interwoven areas of Business Law–Asset Protection; Estate Planning Protection; and Employment Law–all important considerations for the knowledgeable entrepreneur.

Bottled Protection Points are driven by Bottled Business Sense Newsletter; The Bottled Business Sense Show; and

WFB Legal Consulting, Inc.

Decisions, Decisions

Many times employers improperly classify their employees as independent contractors so they, the employers, do not have to pay payroll taxes, the minimum wage or overtime, comply with other wage and hour law requirements such as providing meal periods and rest breaks, or reimburse their workers for business expenses incurred in performing their jobs.  Moreover, employers do not have to cover independent contractors under workers’ compensation insurance, and are not liable for payments for unemployment insurance, disability insurance, or social security.

Make sure you have a LAWYER FOR BUSINESS who provides you with the BEST ASSET PROTECTION available.

http://www.wfblegalconsulting.com

http://www.businessassetprotection365.com

http://www.bottledbusinesssenseshow.com

http://www.blogtalkradio.com/bottledbusinesssenseshow

 

 

 

BEST ASSET PROTECTION AND BOTTLED BUSINESS SENSE RADIO

WFBLC Bottled Business Sense - Business in a Bottle LogoWFB Legal Consulting Inc. and the Bottle Business Sense Newsletter proudly present the launch of The Bottled Business Sense Radio Show. The show will launch June 3, 2014. More information will be made available as the show date approaches. However, the show will combine the unique features of Best Asset Protection legal principles in conjunction with the most current media marketing techniques that will grow, promote and sustain your business.

The hosts of the show will be Bill Bernard of WFB Legal Consulting Inc. and Rick Moscoso of R2 Visual Studios. Plan on tuning in to learn how you can apply all of the latest and greatest legal and marketing tools necessary to ensure the longevity of your business.

Is your business protected against the threat of malicious litigation and frivolous lawsuits?  Are you sinking company profits into marketing campaigns that do nothing to contribute to the growth of your business?

The Bottled Business Sense Show will provide practical business perspectives that uniquely emphasize both legal and media marketing strategies to protect and insure the longevity of your business. 

Whether you’re trying to provide a startup business with some level of stability, or an established business with fool-proof asset and estate protection, or simply attempting to get a better return for your business marketing dollars, Bill Bernard and Rick Moscoso will expose potential pitfalls to insure the security and growth of your business, free from unwanted expense and the threat of litigation.

You’ll learn how to implement marketing and protection tools equal to those used by today’s most successful corporations.

BEST ASSET PROTECTION LAWYER FOR BUSINESS AND NEW YEAR GOALS

WFB Legal Consulting - Business Law Tips and Advice

 

NEW YEAR GOALS FOR SMALL BUSINESS OWNERS

GOALS:

1._____________________________________________________

2._____________________________________________________

3._____________________________________________________

Happy New Year and I hope 2014 has been off to phenomenal start for everyone of you! With each new year comes a new set of goals. As humans, we’re constantly aspiring to improve ourselves, whether it’s wanting to lose weight, exercise more, get organized, spend less money, etc. In light of this yearly tradition of creating lists, here are five attainable new year business goals for the small business owner:

1.  Delegate More

When you’re just starting out with your business, money is usually tight and it’s natural to want to tighten your purse strings. However, small business owners are also notorious for having trouble handing over the reigns. Trying to take care of everything yourself can be harmful to both your well being and your business. With only one person in charge of the whole show, there’s only so far you can scale. This year, consider tasks that you can delegate down, such as the countless tasks that are easy to do and don’t require specific expertise. If you’re worried about costs, just remember how much of your valuable, revenue-generating time you’ll be freeing up.  Your business can’t grow when you’re focused on busy work. In addition to delegating down, think about areas of your business that you should delegate up.  These are the tasks that require special knowledge and skills and ones not related to the core wheelhouse of your business. While DIY may seem easier on the wallet in the short term, it’s typically better in the long run to hire a specialist to handle complex issues, such as an, accountant for bookkeeping or taxes or an expert attorney for handling your legal paperwork like incorporation.

2. Get Your Books Ready for Tax Time Early This Year

Are you guilty of waiting until the last minute to organize and file your taxes? Do you find yourself wading through emails, drawers, and your car to find any stray business receipts you can expense? Do you need to try to remember a full year’s mileage expenses on April 13th before tax day? Don’t wait until April to start on your tax forms this year. Start fresh by organizing your books from day one of the new year and start gathering what you need for your prior year’s taxes now (even if that means outsourcing your accounting or signing up for a new cloud-based application).

3. Protect Your Assets with an LLC or Corporation

While legal fine print isn’t the most exciting part of running a business, forming an LLC or Corporation can be critical to your business and personal financial health. These business structures protect your personal assets from any liabilities of the company and provide the BEST ASSET PROTECTION. This means that if your business can’t pay its debts or happens to be sued, your own personal property may be shielded from any judgment. In addition, these formal business structures can improve your tax situation and carry other benefits that you may want to discuss with your CPA or tax advisor. If you’re not quite ready to take the plunge to incorporate, you should at least register your business name with the state. This simple step is known as filing a DBA (Doing Business As or Fictitious Business Name) and it does two things:

  • It makes sure that you’re legally able to use a      business name.
  • Ensures that no one else can use your business name in      your state.

4. Put Your Customer First

As a small business owner, you know you wouldn’t be anywhere if not for your customers. As you move into the new year, put your customers first in all that you do. A small business can stand out in a crowded market by offering impeccable, personal, and customer-centric service. Treat your customers as people, not numbers or sales figures. Listen to your customer’s needs and bend over backwards to make them happy. 

5. Set Aside Time for Yourself

As an entrepreneur, you probably suffer from little separation between your personal and work life. This year, make a point to set aside time for yourself each and every day. Go to the gym, do something you enjoy or just turn off your phone and other devices for a half hour each day. It’s important to recharge your batteries in order to stay focused and motivated throughout the year. A change of scenery can stoke your creativity. Who knows what brilliant plan you’ll dream up when you step outside your daily grind. Sticking to a goal is tough for anyone. The most important thing is to create realistic ones that make sense for you and your business. What are the goals you’ve set for your business in the new year?

Please feel free to reach out and let us know how we can help.

Here’s to a successful and prosperous 2014!  WFB LEGAL CONSULTING, Inc.

OFFER: 10% off any service, excluding Basic setup and filing fees, until January 31, 2014.

BEST ASSET PROTECTION LAWYER FOR BUSINESS

WFB Legal Consulting - Business Law Tips and Advice

Set up your business entity before year’s end and make sure you have the BEST ASSET PROTECTION available for your business and personal assets. Get organized and utilize business deductions to lower your taxable income. Having a good business attorney  and a good accountant on retainer, working hand in hand, are two steps you can take to be ready should the unexpected arise. Legal action by customers, suppliers and even employees, as well as tax audits by the IRS–all emphasize the need for iron-clad asset protection and proper tax planning. 

REMEMBER: You don’t have to be in the wrong to be sued–or audited!  

Visit: www.wfblegalconsulting.com