The LLC and corporation are popular business entities because they limit the owner’s personal liability for actions taken on behalf of the business – but they don’t just magically erase that liability. Rather, these entities require regular attention to maintain the owner’s liability protection. Too often, business owners – and individuals using these entities for personal asset protection – neglect their all-important, ongoing obligation to maintain them. Some fail to pay th

If business were a 1980s coming-of-age film, then the S Corporation would be the overlooked middle child at Corporate High School — in other words, the protagonist of the film. The LLC. The older, more prestigious C Corporation is the star quarterback, socializes with the Fortune 500 cool kids, and is hardly in need of introduction. The younger LLC, who avoids liability both legal and parental, is easy-going and trendy with the small business crowd. And then there’s the S Cor

Determining whether your business should be an LLC (or a Sole Proprietorship) is daunting even with a grasp of the basic differences. Ultimately, it’s a question of diligence between you and the corporate veil. The corporate veil is a legal concept most easily illustrated by the Wizard of Oz. The towering, Technicolorful personality of Oz is all smoke, thunderbolts, and righteous indignation. It is awesome in the truest sense of the word. But there’s something out of place. “

It’s 2013; it’s the start of a new year and the time to start a new venture. What type of legal structure is right for your business? That’s not for me to say. All can advise is that you be educated about the decision you make. To that end, today’s post is not meant to answer any questions. Instead, it’s to help you wade through the legal acronyms so you can actually compare the pros and cons of each available organizational structure for your business. By no means is this an

I have spoken before about being a member of Wealth Counsel — a national network of estate planning attorneys. This membership gives me the opportunity to associate with the best and the brightest. Through that association, we publish a couple of newsletters for clients and professionals interested in estate planning, business law and asset protection for themselves or for their clients. In the last issue of The Wealth Counselor, we took a closer look at the powerful planning

I don’t know if it is a sign of a turning economy, but recently I have had a lot of people looking into selling their business. I have really taken the view that they wanted to get out a long time ago, but the market would not support them at the numbers that they wanted. There is a lot out there in print about how to sell. You can find a bunch at any good book store. You can also find good material in the Wall Street Journal. So don’t start this without doing your research.

Al Pacino, in playing Michael Corleone in “The Godfather,” immortalized the phrase, “It’s not personal, it’s just business.” For small businesses, the line should be slightly modified to “it’s not personal, it stays business.” The biggest mistake I see in representing business owners is made by the small business owners who try to separate their business from personal assets frequently fail to notice that they are personally liable on “business” credit cards. These business o

Sometimes things just don’t work out. That can be true in a marriage or in a business. When a member of a two-person LLC wants out, and assuming partners agree about departure issues, you do not need to amend the LLC entity itself; rather, the operating agreement of the LLC needs to be amended and restated to explain why the amendment is being undertaken. Good drafting will eliminate reference to the departed member, and adjust the membership interest of the remaining member

I just finished working with a corporation on a buy-sell agreement. The process involved all principals, and was painful for them to work through what was a second generation discussion of what happens now and what will happen in the future. But fortunately, they completed their process and reached the end. Equally important for the company was that it worked out a process to fund any potential purchase and a process to evaluate that purchase in the future. While the process