Thursday, July 24, 2014

Limited Liability Company LLC

A relatively recent form of business allowed by state statute, Limited Liability Companies (LLCs) are popular because, as in a corporation, owners have limited personal liability for LLC debts and actions. In addition, LLCs offer the benefits of partnerships, namely management flexibility and pass-through taxation.

In most states, LLC business owners - called members - may include individuals, corporations, other LLCs and foreign entities, with no maximum number of members. Most states also permit "single member" LLCs. An LLC can be managed by either by the members or by managers. Members can be compensated using distributions of profit or guaranteed payments. In addition, because LLC profits are considered earned income, managing members can deduct 100 percent of the health insurance premiums paid--up to their pro-rata share of LLC' net profit.

Tax Treatment

Referred to by the IRS as "pass-through entities," unlike corporations, LLCs are not separate tax entities and do not pay federal income taxes. Some states impose an annual tax on LLCs, but the number of members in an LLC makes a difference at tax time:

* Single-Owner LLCs - One-member LLCs are treated as sole proprietorships for tax purposes, which means the LLC itself does not pay taxes and does not have to file a return with the IRS Single-owner LLCs report profits or losses on Schedule C and submit it with their 1040 tax returns.

* Multi-Owner LLC - Multi-owner LLCs are treated as partnerships for tax purposes, which means co-owned LLCs do not pay taxes on business income; the owners each pay taxes on their respective shares of profits on their personal income tax returns (Schedule E).

Advantages of LLCs:

* Pass-through taxation.

* Avoids drawbacks of forming a corporation, such as double taxation.

* Limited personally responsibility for LLC debts and liabilities.

* Few ownership restrictions.

* Management flexibility.

 * Minimal annual paperwork and fewer formalities than corporations.

* Members must agree in writing to authorize increased ownership in an LLC.

* Customers may view LLCs as a more professional business entity than sole proprietorships or partnerships
Interested?

Though some types of businesses (banks, insurance companies, and nonprofits, for example) usually cannot be LLCs, and special rules apply to foreign LLCs, most other businesses can become LLCs.

If you're interested, check your state's requirements and the federal tax regulations for further information. For information on filing LLC tax returns, dealing with employment taxes and possible pitfalls, refer to IRS Publication 3402, Tax Issues for Limited Liability Companies. Forming an LLC requires filing proper documentation (or "articles of incorporation" or "certificate of incorporation") with the appropriate state agency, and payment of state filing fees.

Bill Willard has been cranking out high-impact writing for over 30 years. In addition to his byline pieces, Bill’s beat includes freelance copyrighting, ghostwriting and editing jobs that allow him to use his experience and skills as a writer and editor. thefreestyleentrepreneur.com Sources: Internal Revenue Service, Bizfilings.comNolo.com
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Wednesday, July 23, 2014

By The People Commercial



We're a legal document assistance company, and basically that means we help people do their own documents. The main two services we provide are living trusts and divorce. So what we pride ourselves is going above and beyond for each and every one of our customers. Whether that means sometimes going to the house and doing a home visit for home bound people who need that service. Sometimes its a notary, sometimes it's a living trust. We work with everybody. If you have a legal need, we're going to be here to help you.

Part of the Free Commercial Push by A Squared. Published online only.

Monday, July 21, 2014

Things to Keep in Mind When Running an LLC Business

Running an LLC business is not a bed of roses. You have to stay on top of things. Aside from hands-on management, you also have to look outward into what your customers want. You have to be proactive in the way your products are designed or formulated. This is the only way through which you can stay in business. In managing your operations, keep the following in mind:

- Be committed

An LLC business is bound to fail if its owner is not committed enough to its business goals. This is one of the most common reasons why people with LLC businesses close shop. Successful entrepreneurs are committed to their business goals and have a clear plan on how they can make their goals possible.

- Be frugal

Having your own business is not an excuse to splurge on yourself because you expect a sizeable profit at the end of the month. That is still tentative. Revenues earned by an LLC business should be managed and spent wisely. Be frugal in your spending and limit your allocation only to those matters that are deemed important in running the company.

- Set goals

You cannot simply set-up your LLC business without having a goal in mind. This should be as detailed as how you envision your company to be in the next five years. Or perhaps you could set a target revenue within a reasonable period of time. You can measure your performance based on how near or far you are from achieving your goal. The way you spend your budget will have to depend on what your goals are. When you have a clear goal in mind, you are less likely to splurge your revenues as you earn them. Every expense item or spending requirement should be aligned with your business goals.

- Learn to manage risks

Being in business is risky, not just but everywhere at any time of the year. The only way to survive in the business world is to learn to manage these risks. Identifying and analyzing risks beforehand is a good exercise to help you prepare for these risks. Effective risk management comes with foresight and early preparation. When contingency plans are in place, these risks can become more manageable.

While running an LLC business is not exactly that easy, having the right mindset and being prepared for any eventualities allow business owners to be on their feet so that they can spot opportunities and manage the risks more effectively.

If you are looking for information on LLC business in Tennessee, click on the link. Or you can visit http://www.ezonlinefiling.com/.
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Sunday, July 20, 2014

Probate Problems



When a person dies, the property that is owned at the time of death goes into a legal process called probate. The probate court is responsible for distributing all of the property in the estate. If the person had a legally valid and complete will then the property distribution is usually straightforward and few problems arise.

Saturday, July 19, 2014

Advance Medical Directive: The Basics

Advance medical directives are legal documents designed to outline a person's wishes and preferences in regard to medical treatments, interventions and other health care related issues. Policies may vary from state to state, but regardless of location, advance directives should always be included with each individual's personal medical records.

Advanced directives typically fall into three categories:

  • Do Not Resuscitate Order: This legal document, also known as DNR, is extremely valuable for determining end-of-life issues. A DNR order, however, is not legal until signed by the patient, a witness and a physician. It should also be dated correctly and clearly state whether the patient wants to be resuscitated or not if their heart stops beating.

  • Living Will: This written document stipulates what kinds of medical treatment the patient recommends should they become incapacitated. It can be either general or very specific depending on the person and how adamant they are about their end-of-life care issues. The usual items outlined in a living will include: whether they wish to be on life support, receive tube feedings, length of time (if any) that they will stay on breathing machines, the individual that will make decisions on their behalf, etc.

  • Durable Power of Attorney: This type of advance directive allows an individual the opportunity to designate someone, or a number of individuals, to act on their behalf for specific affairs. A durable power of attorney, or DPOA, has the ability to make bank transactions, sign social security checks, apply for disability, or even write checks to pay utility bills while an individual is medically incapacitated. Once the document is signed, the DPOA has legal priority even over next of kin.

When Should a Directive be Created?

You will see an advanced medical directive used for several different situations-such as when someone is having a major surgery, diagnosed with a life-threatening illness or is even becoming a single parent. Advance medical directives are extremely beneficial if an individual is unable to make his or her own medical decisions. Whatever the reason, all advance medical directives should be signed by an attorney and be notarized.

How to Obtain an Advance Medical Directive

Luckily, there are many ways that someone can obtain an advance medical directive. Many companies have booklets available, social workers and nurses usually have them on hand, and hospitals and attorneys also have copies of directives. It is worth the effort to ask for an advance medical directive as it will be invaluable during a medical dilemma.

By having previously documented personal wishes and preferences, the burden of making tough decisions for family's and physicians' is lessened. Not to mention, the patient's autonomy and dignity will more likely be preserved by following their own choices regardless of mental or physical capacity.

This article was written by Roger Brent Hatcher, an attorney at Smith, Gilliam, Williams & Miles, a leading Atlanta Law Firm since 1928.
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Friday, July 18, 2014

Making A Living Will Impacts End Of Life Care



New research by Lauren Nicholas at University of Michigan's Institute for Social Research shows that making a living will impacts the end of life care of individuals. This is the first national study involving sample from across the US.

Wednesday, July 16, 2014

What Is Limited Liability and Why It Is Important?

The best way to explain limited liability is this - you risk what you put in. In other words, limited liability is a way to make sure that a person who is engaging in business does not risk his or her personal possessions in case the business fails. Any investor, partner, or member of the company that by law has limited liability cannot be made responsible for any unfulfilled company obligations and debts that are more than the amount that the person has invested.

Here is a simple comparison. Jack and Jill are friends. Jack is a handy guy and Jill is a great cook. To earn money from their talents, both start their own business. Jack earns his living by doing renovations. He bought his own equipment and simply advertises his services under his own name. Jack is a sole proprietor.

Jill decided to open a bakeshop. Before going into business, however, Jill has formed a small corporation (an S-Corporation), called Jill's Cakes, Inc. Jill invested her savings into Jill's Cakes, Inc. as a starting capital and then bought her baking equipment and leased her shop on behalf of her corporation. So long as things go well for Jack and Jill there are almost no differences between the two ways of doing business.

As soon as things turn sour though, the differences become apparent. One day, Jack mopped the floor right before leaving the apartment he just painted, but forgot to put up a sign. The owner walked in, slid on the wet floor and broke an ankle. He is suing Jack for medical expenses and lost wages. Jill accidentally dropped a peanut in a wrong batch of batter and caused a severe allergy attack in one of her customer. That customer is suing her for medical bills and pain and suffering.

What is at risk for Jack and Jill? Jack is risking everything he owns - his work equipment, his truck, his house, his personal belongings. So long as there is a judgment against him, Jack must sell anything he owns to pay it. Jill is risking only her business assets - her cooking equipment, her cash reserves, and anything else owned by Jill's Cakes, Inc. But her personal things, such as her car and her apartment, are safe. Her business may become bankrupt, but her life will not be destroyed.

Of course, this story describes a worst case scenario. Many businesses prosper without many troubles. But many also fail, and it is so easy for a business owner to take advantage of limited liability that everyone should do it.

Several types of business entities offer their owners the protection of limited liability. The most popular are corporation and limited liability company (LLC). Each of these entities has its own advantages and drawbacks, but both offer their owners limited liability protection.

A few things are important to remember in the context of limited liability. First, a company must be properly maintained in order to offer full liability protection that it is designed to offer. In short, if a company is only a company in name, but is run as if it is one and the same with the person running it, the courts will consider it a sham, and will not afford the owners limited liability protection.

Second, even in a limited liability business an owner may be responsible for amounts beyond his or her investment. This is the case when an owner has personally co-signed a debt agreement (such as a credit card application). This signature gives the lenders a personal guarantee of repayment of that debt and in the case of default they can go after the owner's personal assets. Other owners of the company (or investors) would not be liable if complete repayment is beyond the resources of the business, but the owner who had done the co-signing would be responsible for that amount.

Further, in some professions it is impossible to reap the benefit of limited liability. Professionals like lawyers, doctors, accountants, chiropractors, engineers, or architects are prevented by law and ethics from limiting their liability. We want these professionals to be personally responsible for their decisions so that they always make the decisions carefully.

The bottom line is, anyone doing business should consider taking advantage of a limited liability entity, if at all possible. Consider it an insurance against your worst case scenario.

Alex Zehnbacht is an entrepreneur with over 8 years of experience in start-ups and business consulting and one of the founders of MyUSACorporation.com, an online business dedicated to help entrepreneurs with all their business filing needs. He has helped thousands of clients to incorporate their businesses, register an LLC, obtain various business licenses, and much more. Alex has a personal blog where he shares his view on variety of topics.
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Tuesday, July 15, 2014

What Is An Executor Of An Estate



You can start planning your estate at any time. Typically, though, most people don't begin to draft their Will, or establish a trust to hold property, until the "big" things in life happen -- like getting married, buying a home, having children, or starting a business.

Monday, July 14, 2014

Probate and Administrative Process, Know Your Rights

Probate is the system in which the court's system's method of processing the estates of a dead person. It is a legal document that enables the administration of the estate of the deceased. It allows for the resolving of claims and distribution of the deceased's will. Any grievances surrounding a deceased person's estate are filed in the probate court also known as the surrogate court. Once probated, the will becomes a legal instrument that can be enforced by the executor.

Administration process

Administration process of an estate on the other hand is the process by which the deceased person's assets are collected, maintained and distributed. An estate administrator sees to the proper administration of the will.

The Probate process

The probate process begins after the death of a person. An interested person files an application to administer the estate; a fiduciary is then appointed who is to administer the estate and at times may be required to pay a bond to safeguard and to insure the estate. Creditors are notified and legal notices published. There may be filed a petition to appoint a personal representative may need to be filed and letters of administration obtained. All these processes must be done in accordance with the limitation clause.

Property that avoids probate

Property that passes to another person contractually upon the death of a person does not enter probate for example a jointly owned property with rights of survivorship. Property held in a revocable or irrevocable trust that was created when the grantor's was still alive does not also enter probate. In most of these cases the property is distributed privately and without many issues thus no court action is required.

What happens in the probate and administrative process?

After a probate case has been filed in court, an inventory is entered and the deceased's property collected. The debts and taxes are paid first then the remaining property distributed to the beneficiaries. The probate and administrative process may be challenged at any time as a whole or part of it. The issues that arise during such hearings include will contests and paternity issues and these have to be solved before the matter is decided.

The need for the appointment of an administrator arises where the deceased left no will, some assets are not disposed of by the will, in cases where there is a will however, the case goes to probate directly. The estate administrators act like will executors but where the will does not state how to distribute of property, they follow the laid down laws.

Visit the Law Offices Roman Aminov Brooklyn to learn more on Probate Attorney Brooklyn law processes.
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Friday, July 11, 2014

Choosing Between an LLC and Corporation

When you choose to make the next step in your business and incorporate, you are faced with a big decision: should you form an LLC or a corporation? With either choice, you gain limited liability protection to shield your personal assets from the debts and liabilities of your business, as well as several tax advantages. Still, there are big differences between these two types of business entities and your choice will have a big impact on your business. Here is some information to help you choose between the two.

Limited Liability Company

What is an LLC? An LLC, or limited liability company, is one of the most popular choices for small businesses and it is basically a pass-through entity, but it can be taxed as a corporation as well. Many business owners choose to form an LLC because this entity is very flexible; the company income can be passed through to individual members, who pay their share on their tax return, or it can be taxed as a C corporation or S corporation.

LLCs have no specific structure or management that must be met. While most people choose to manage their LLC with members, or owners, they can also choose to form an LLC with a Board of Managers. With an LLC, you gain limited liability protection, which protects your personal assets if your business is sued or cannot pay its debts.

Corporation

A corporation is usually a better fit for a larger company as there are strict requirements to meet. A corporation must have a central management structure with a Board of Directors. Ownership is also very different as a corporation issues stock, which is all the same. A corporation is also required to have regular meetings, maintain and file documents, and maintain minutes.

An LLC can choose how it will be taxed, but a corporation will be subject to something called double taxation. This means that business income is taxed at a corporate level and then taxed again when it is distributed to the shareholders.

Choosing Between an LLC and Corporation

There is no choice that will be right for every business. As a general rule of thumb, however, an LLC is a better fit for small businesses and start-ups, as LLCs have less requirements and it costs less to maintain and form an LLC while enjoying limited liability. Corporations are usually a better fit for large companies.

The best way to choose between these two entities is with the help of a lawyer, accountants, or a corporate services company, as the decision is based on many factors related to your business, including your risk level, business income, and long-term goals.

Christine writes for USA Corporate Services, Inc, a corporate service company that helps non-residents and residents form an LLC or incorporate in any state in the U.S.
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