Preparing for business succession can be a difficult task to begin and implement. But intentional business succession planning and preparation typically results in very positive results.
Category Archives: Business Law
Legal-Ease: Personal relationship tools applied to business and law
According to Gary Chapman, everyone has a dominant method of giving and receiving love. The five methods are gifts, time, words, service and touch.
This thesis can also be applied to business, especially when it comes to family businesses being passed down. A classic example of this is farm succession planning.
Legal-Ease: Do I need a tax/employer identification number?
Similar to social security numbers, the government needs to be able to identify various businesses and relationships, largely because of tax implications. Therefore, when a new business is started, it’s common to secure a tax/employer identification number, which is the non-human being equivalent to an SSN.
Commonly these numbers are referred to as EINs, employer identification numbers. The IRS requires that most businesses with more than one owner have an EIN.
Legal-Ease: Avoid being unintended partners
A partnership can be created by circumstances that don’t include an actual written agreement. People can become unintended partners, and then they can also be personally liable for damages resulting from their partner’s activity.
Legal-Ease: Ownership, liability are not the same
It may seem difficult to decide what a business should own versus what should be owned personally. Ownership and liability can be confusing at times. For instance, if a truck is used by a contractor while doing construction work but also used to pick up children from daycare, should that truck be owned by the business or the individual?
Legal-Ease: Good buy-sell agreements address four questions
While some may assume planning for a business’ end means that the business owners are expecting the business to fail, it really means that the business is prepared. One of the most important tools to have in place when entering business ownership is a good buy-sell agreement.
A good buy-sell agreement is effective when it answers these four questions:
Legal-Ease: Small business data loss and protection
Data loss and protection for businesses is often much more complicated than for individuals. A business must protect its own data, the data of its employees and the data of its customers as well as anyone else with whom the business conducts transactions.
Legal-Ease: LLCs and taxes
Limited Liability Companies, or LLCs, are often established by business owners to protect assets and limit liabilities. Most often when an LLC is organized correctly, net taxes are not typically increased or decreased. But, there are some exceptions to this.
Taxpayers can decide to have their LLCs taxed like “S corporations” as opposed to “C corporations.” “S Corporations” are slightly less cumbersome in tax administration than “C Corporations.” Taxpayers can also decide to have their LLCs taxed like partnerships if there is more than one owner. If the LLC only has one member, then it can be taxed as a sole proprietorship. Most business attorneys will consult with a client’s tax preparation professional before advising on how an LLC should be taxed.
Legal-Ease: Insurance’s hidden value
Minimizing risk is typically a goal of the type of law that Lee practices. Sometimes insurance policies can’t provide what legal tools can provide, and other times legal tools can’t provide the value that insurance can bring to people, businesses and farmers.
While sometimes successful people just seem to be lucky, often it’s a matter of smart planning and research that leads to success. Lee helps his clients analyze their liability insurance and to decide what additional legal tools are necessary and whether the client is appropriately insured or over-insured.
Legal-Ease: Different states, different laws
It should be apparent to anyone who travels or follows the news that different states have different laws. Participants in a transaction or contract can actually outline which state’s law will apply to disputes that arise over their agreement.