The S Corp and the LLC

For some new small business owners, personal liability and complex taxation issues may appear to be barriers to a dream.  However, with proper legal guidance and planning, you may find that the law has created safe havens for would-be entrepreneurs in the forms of Limited Liability Companies (LLC’s) and Subchapter S Corporations.

The Limited Liability Company is a relatively new form of business that may provide the limited liability benefits of a corporation, as well as the beneficial taxation and flexibility of a partnership.  An LLC is established at the state level, and with proper planning, tax foresight and legal counseling, it may be the best option for your small business.

An S Corporation is a specific tax election by a corporation subject to certain requirements.  An S Corp may not have to pay the taxes on the corporation’s gains or losses, and the income may pass through to the shareholders, who are then taxed on their personal returns. Consult an accountant to see if your corporation is eligible for an S Corp designation, potentially saving you from double taxation, while still protecting your personal assets.  There is typically a limit in the number of shareholders in order to obtain an S Corp designation and the corporation still has responsibility for Franchise Tax obligations.

As always, check with an attorney before entering this complex, yet manageable arena, and be sure to consider all possibilities before deciding on a business structure so that your first steps will lead you in the most rewarding direction.

Blog Post written by Matthew Wheeler

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law. Unauthorized copying, alteration, display or distribution of any material is prohibited.

Are Online Legal Services Really Cheaper?

 

         At first, online legal services such as legalzoom.com, and legalhelpmate.com, seem like great tools for the cost-conscious, do-it-yourself small business owner.  There are a myriad of online services that allow business owners, entrepreneurs, and other individuals to create legal documents and corporate formation documents for businesses.  Services include trademark applications, patent applications, wills, and business incorporations.  But, in the long run, are these online services really cheaper?

 

The great thing about these online legal service providers is that you don’t have to graduate from law school or pass the bar exam to use these services.  These services can be effective for basic legal document creation, but are neither sources of legal advice nor do they offer recommendations or advise people on their legal rights.  Additionally, these sites take no legal responsibility for any document created: PERIOD!

 

If you are prepared to take the time to independently research the services that online legal service providers offer, and are aware that the only person held accountable for mistakes is yourself, then these online services might suffice for your needs.  However, if you wish to receive individualized legal advice, personal business counseling and insight from a legal professional, then you may wish to consult an attorney for assistance with your legal and business needs.

 

When you consult with an attorney, you are getting an entire package of experience, advice, and personal customer service.  An attorney can customize business documents to suit you and your business.  An attorney can save you the hassle of attempting to remedy a problem by yourself and usually is available for consultation at any time.  Yes, initially the services of an attorney cost more than self-help sites, but an attorney may save you long term costs and headaches. 

 

Simply put, you should consider all of your options before using online legal document services since the creation of certain legal documents are of the utmost importance to you and your business.

 

Post written by: Gina Franco

 

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

 

 

So, You Want to Start a Business.

When starting a business, one of the most crucial determinations is deciding how your business will be structured.  Choosing the proper business entity will help you achieve your goals and save you time and money in the future.   There are several different business organizations in California, and each business owner should decide which structure will be the most successful choice for his or her business.  Listed below are some of the most common business entities.  It is wise to consult with your accountant and your attorney to ensure that your business and personal assets are protected.

Sole Proprietorship:  A sole proprietorship is the most basic and least formal business entity.  A sole proprietorship is owned by one person, typically the person who will run the day to day activities of the business.  A sole proprietor has full control over his or her business, and the right to keep all profits earned (which are then reported on the individual’s personal tax return).  Sole proprietors are also liable for any and all debts incurred by the business and are personally liable for any potential lawsuits.  A sole proprietor would most likely have to use his or her personal assets to satisfy business debts.

General Partnership:  A general partnership is formed by two or more partners who share in the responsibility of operating and managing the business.  It is similar to a sole proprietorship in the areas of taxation and liability, and is most successfully governed by a partnership agreement.  Control and profits are typically divided equally, unless otherwise specified in the partnership agreement.

Limited Partnership (and Limited Liability Partnership):  As indicated by its name, the limited partnership differs from a general partnership with regard to the varying levels of investment, control, and liability. 

Limited Liability Company (LLC):  A limited liability company is a business structure that combines the tax benefits and structural flexibility of a partnership with the liability protection of the more complex corporate structure.  Organized by filing Articles of Organization with the state, an LLC is governed by an operating agreement, which is entered into by the members (or “owners”) of the LLC.

Corporation:  The most complex and formal business entity is a corporation.    A corporation is a separate legal entity that may outlive its founders.  Forming a corporation lends credibility to a business, creates permanence in a field and protects personal assets, as long as corporate formalities are followed.  A corporation is formed after filing its Article of Incorporation and is governed by corporate Bylaws.  Again, consult your accountant and attorney to see if a corporation is the right entity for you and your business.

Post written by:  Matthew Wheeler

 

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

What’s in a dba?

A trade name, assumed name, fictitious business name or dba (doing business as) is required when an individual is doing business for profit under a fictitious name.  In the County of San Diego, if required, a fictitious business name statement must be filed within 40 days of first transacting business with the County Recorder.  The statement may be filed in person or by mail and the fee is $25 for the first business name and owner and $5 for each additional business name or additional owner.           

Do you need to file a fictitious business name statement?  A fictitious business name is, as defined by the San Diego County Recorder’s website, a business name that does not include the surname of the individual owner and each of the partners or the nature of the business is not clearly evident by name.  If a corporation uses any name other than the exact corporate name that is filed in the articles of incorporation, then it is considered a fictitious business name.   

If you are forming or already running a business, make sure you remember to evaluate the need for a fictitious business name statement.  You should also make yourself aware of any published notice requirement and expiration of fictitious business names.  

-Jamie T. Pruitt

Jamie Pruitt Law 

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

 

Speaking of blogs . . .

Widespread Blogging 

The use of blogs has dramatically increased over the past few years and business owners should pay attention to this world of Internet exposure.  Blogs can be maintained as highly effective communication and marketing tools.  However, blogs can also expose businesses to liability for postings, retaliation from employees and clients, and potential release of confidential business information.  Business owners should familiarize themselves with online communities and create policies and procedures that specifically address blogs and related Internet postings. 

What could happen?      

Would you want every day-to-day activity of your business posted online for the world to read?  With the vast amount of blog communities, business owners should understand that it is difficult to regulate information that may be released to the public by means of a blog. 

Check out Xoogler; an ex-Google employee’s blog that has received a decent amount of media attention.  You may note, in Blogger Doug Edwards’ Here’s your desk. Now start doing marketing stuff, he identifies other Google employees by their full names and discusses specific details about his days at Google.  In another post, Edwards explains his postings are, “just an impressionistic look at Google from the perspective of a guy who worked there, with a bias toward how the brand was built.”  As a former insider, how much will he reveal about the brand and how it was built?

There are many free blog hosting sites and software is readily available to ease bloggers in maintaining their posts.  Blogs have a potentially indefinite lifespan and you may not be entitled to information regarding who may view the blog and how many times.  Internet intelligence is rapidly increasing and blogs may receive exposure from various places.  How many of you did I just direct to the Xoogler blog?  Are there already blogs, comments, or online reviews regarding your business?  Do you know?

Learn more about blogs.

As a business owner, you should research blogs and keep them in mind when creating a standard for your business.  Ignorance of online communities may be damaging to your business and it’s reputation.  Explore blogs and other online resources to stay informed of the ever-evolving business world and to produce relevant blogging policies and procedures. 

-Jamie T. Pruitt
Jamie Pruitt Law

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This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law.  Jamie Pruitt Law does not endorse any website contained in this blog and makes no guarantee or warranty regarding any website or the authenticity of such site.  Unauthorized copying, alteration, display or distribution of any material is prohibited.

 

 

Spread the Word

Welcome to my blog!

Many different issues and interesting situations arise for business owners and artists throughout their careers. This blog is intended to provide a forum to post ideas, comments, interesting articles and web pages that address various issues business owners and artists may face. No confidential information will be revealed and most of the posts will relate to preventative law ideas and modern legal procedures and ideas.

Litigation is a stressful, complicated and expensive process. I desire to help readers of this blog expand their knowledge of legal issues so they may look to the future and protect themselves from unnecessary litigation. I will label posts according to topic and relevance. The topics will cover a wide range of business formation, business planning and art law issues.

Knowledge is power. Please keep yourself informed of issues that relate to your business. You will always have more to learn and different ideas to research. If you find any topic particularly appealing or relevant to your business, please expand your knowledge by continuing your research. Continue to explore the Internet for a wider variety of resources and do not rely on this blog as your sole source of information regarding the issues or ideas discussed.

I look forward to maintaining this blog and being a part of your online community. Thanks for reading.  

Very Truly Yours,

Jamie T. Pruitt
Jamie Pruitt Law
 

Advertising Material:
This blog is intended to assist clients, colleagues and friends in their overall familiarity of the areas of practice and the services offered by Jamie Pruitt Law. This blog is for advertising purposes only and nothing contained herein should be considered legal advice. Each person or business has different circumstances and must be counseled individually. Reading information contained in this blog does not create a legal relationship with Jamie Pruitt Law and the information contained herein is protected by law. Unauthorized copying, alteration, display or distribution of any material is prohibited.