Category: Business Planning

Making an S Corporation Election as a Married Business Owner

If you’re a married business owner and you want your business to be taxed as an S corporation, there are several things you need to know. The difference between community property and co-ownership of an asset Let’s take the example of owning a car. If you and your spouse are both on the title to […]

LLC Operating Agreement: Is a Non-Compete Clause Necessary?

You and several friends start a new business and operate it as a limited liability company (LLC). Now that you’ve completed the first step—choosing a business entity—it is essential to prepare an operating agreement. The operating agreement is a contract that governs the operations of the LLC and sets forth the arrangements made among the […]

Transferring LLC Membership Interests Part 3—Involuntary Transfers

An involuntary transfer of an LLC membership interest is just that—a transfer prompted by a creditor action or a triggering event outside of the member’s control. An individual or entity obtaining a membership interest because of an involuntary transfer usually cannot fully step into the shoes of the transferring member. This statutory protection—often called a pick […]

Don’t Let Change Wreck Your Business: The Buy-Sell Agreement

Divorce. An unexpected death, disability, or retirement. An irreconcilable dispute. These triggering events may put your successful, stable business into a tailspin. Luckily, a buy-sell agreement can help you and your business be better prepared to handle these events. What is a Buy-Sell Agreement? A buy-sell agreement is a legally binding agreement between co-owners of […]

Record Keeping for Your Business: What’s Required?

Whether you are just starting up a new company or have a business operating for a while, good record-keeping is essential to running your business. You are responsible for establishing an effective system to store and maintain your business records, whether your small business is a sole proprietorship, partnership, LLC, or corporation. Some forms will […]

I Need to Hire Someone for My Business; What Do I Need To Know?

Most businesses try to grow – at least somewhat.  However, to grow or to step away from the business for a personal life, vacation, or other ventures, you’ll need help with day-to-day operations.  If you’ve never hired someone before – or it’s been a long time – don’t worry – here’s the information you need […]

Transferring LLC Membership Interests Part 2—Voluntary Transfers

An LLC affords its members a certain amount of personal asset protection. Part of this protection hinges on the restricted transferability of LLC membership interests.  Restricted transferability protects the non-transferring members from creditors and unwelcome new members, which upholds the integrity and value of the non-transferring members’ membership interests. Most (but not all) LLCs impose […]

Transferring LLC Membership Interests Part 1—An Overview

Say you are a member of an LLC. You own membership interests in the LLC. However, what if you want to leave the LLC? What if you get a divorce? What if you have creditors seeking immediate repayment? What can you do with your membership interests? The answer depends on how transferable those membership interests […]

Does the “Corporate Veil” Really Protect Your Personal Assets?

You may have done your homework and weighed your options. Perhaps you’ve even considered common business entities’ tax and non-tax implications. We bet you’re also intrigued by the protections certain business entities afford their owners. The “corporate veil” that protects business owners’ personal assets can make a corporation or limited liability company (LLC) look very attractive. […]