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Two Ways To Raise Money For Your Business You May Not have Considered

Two Ways To Raise Money For Your Business You May Not have Considered published on

When starting a business, among the most common methods that are thought of to raise money for the business are a business loan from a bank, credit cards, money from savings or a second mortgage on a home. The 2 ways listed below are some that may not have been considered.

Money 2

  1. Crowdfunding. In a crowdfunding situation, you would present the idea for your business on a crowdfunding website. The public would then decide if they would like to contribute to your business by providing money. Typically crowdfunding sites allow for people who donate to a business to receive a “reward” for investing. Kickstarter and Fundable are among the more popular crowdfunding websites.
  2. Business Partner. Many companies receive money for their business from a business partner. Choosing a business partner is something that should be done with great care to ensure that the business partner’s goals are in sync with yours. It is also important to have all the proper agreements drafted such as a buy out agreement and operating agreement in place when the business is getting started. Having the agreements in place prior to any disagreements could pay off greatly down the line.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Seven Powerful Reasons to Incorporate or Organize an LLC

Seven Powerful Reasons to Incorporate or Organize an LLC published on

1. Protect yourself from personal liability

  • Corporation or LLC signs lease – you’re not personally liable
  • Corporation or LLC borrows money – you’re not personally liable
  • Corporation or LLC buys goods and services on credit – you’re not personally liable

2. Business Tax Deductions

According to Judge Learned Hand, “any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes. Gregory v. Helvering, 69 F.2d 809 (2nd Cir., 1934).” Furthermore, the Supreme Court stated that “[t]he legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” Gregory v. Helvering, 293 U.S. 465 (1935).

Entrepreneurs will want to attribute as much of their expenses as possible to reasonable and necessary business expenses. Why pay more taxes than necessary? Many taxpayers overlook legitimate deductions for business expenses. To the extent possible, entrepreneurs will want to ensure to deduct the following business expenses:

  • Vehicle expenses are deductible if they are attributable to a business use. An individual taxpayer cannot claim a corporate expense, it is an expense of the corporation. Automobile lease payments are deductible if they are ordinary and necessary expenses of a trade or business directly attributable to the operation of a trade or business.
  • Travel expenses are deductible to the extent they are reasonable and necessary expenses incurred in the conduct of a trade or business directly attributable to the trade or business. Townsend Industries, Inc. v. U.S., 342 F.3d 890 (8th Cir. 2003). Thus, a corporation could hold an annual meeting for its shareholders and directors in a distant city.
  • Start-up and organizational costs, at the taxpayer’s election, may be treated as deferred expenses and allowed as deductions prorated equally over a period of not less than 60 months, beginning with the month in which the active trade or business, corporation, or partnership begins.
  • Certain types of entertainment expenses may be deducted, such as food and beverages provided for employees on the business premises, recreational expenses for employees, expenses of certain business meetings, and items sold or made available to the public.
  • Attorneys’ fees, court costs, and other legal and accounting expenses may qualify as ordinary and necessary trade or business expenses.
  • Rent for the use of property to which the corporation has no title and in which the corporation has no equity can be deducted as a trade or business expense if the rent is paid in connection with the corporation’s trade or business, is ordinary and necessary, and is paid or incurred during the taxable year. If the property on which the rent is paid is used for both business and personal purposes, only the portion allocable to business use is deductible. If the corporation leases office space at the residence of an officer or director, for the rent to be deductible the office space must be exclusively used for business purposes on a regular basis and be the principal place of business of the corporation.
  • Expenditures for incidental repairs, maintenance, replacement, and improvements may be deducted as ordinary and necessary business expenses.
  • The cost of materials and supplies used in a corporation’s trade or business generally is a deductible business expense.
  • Interest and other borrowing charges incurred in the course of a trade or business are deductible.
  • In general, state local and sales taxes that are ordinary and necessary corporation expenses paid or incurred in carrying on the trade or business are deductible.
  • Salaries and other compensation for personal services actually rendered may be deducted as an ordinary and necessary trade or business expense. To be deductible, compensation payments must be reasonable and must be actually paid as compensation (rather than as dividends).
  • The cost of insurance may be deducted as a business expense if the insurance is connected with the corporation’s trade, business, or profession
  • Advertising costs related to a corporation’s business generally are deductible as an ordinary and necessary business expense.
  • A rebate of a portion of the purchase price to a customer generally is deductible as a business expense.
  • Payments to charitable organizations that bear a direct relationship to the corporation’s business and that are made with the reasonable expectation of a financial return commensurate with the amount of the donation may be deductible as business expenses. For example, a retail store might set aside a percentage of its sales for donation to local charities as part of a promotional campaign and thus be entitled to a business deduction for the donations.
  • Setting up a reserve account can create a legitimate tax deduction. Midas Muffler warrants its muffler for as long as the purchaser owns the vehicle on which the muffler has been installed. If the muffler fails to perform properly during the warranty period, Midas will install a new, warranted muffler on the vehicle, and the muffler owner will not be charged for the muffler, only for the labor required to install. You may be interested to know Midas Inc. (the muffler company) recorded $38.5 million in charges to reflect its estimated liability associated with outstanding warranties in the U.S. and Canada. On a going forward basis, Midas will accrue for the expected future cost of warranty redemptions at the time of the original installation of the warranted part. See Midas Inc.’s 10-K here. What does this mean? Midas is claiming such warranty reserves as a business deduction! Other entrepreneurs are bound to take note and offer long-term warranties for their products and claim a business deduction.

3. Minimize IRS Audits

  • Sole proprietors must file an IRS Form 1040, Schedule C (Profit or Loss from a Business). Unfortunately, the IRS audits sole proprietors that file the form at a higher audit rate than returns for an incorporated micro business. Also, sole proprietors with home office deductions face even more risk of audit by filing the IRS Form 8829 (Expenses for Business Use of Your Home) for home office deductions. S or C corporations avoid such scrutiny. See Shelter Your Small Business from Tax Audits.

4. Privacy

  • The Corporation or LLC can be established in such a way so that shareholder/owners remain anonymous, many times the same anonymity can be accomplished for officers and directors.

5. Use of a Marketing framework

  • Hold the business out to all as a Corporation or LLC
  • Give the business the appearance of being much bigger than it is
  • Attract investors more easily

6. Raising capital

  • Because of the ease of transfer of ownership and the “separate entity” concept of the Corporation or LLC, it is much easier to attract investors than otherwise.

7. Easy transfer of ownership

  • Put real estate in Corporation or LLC and transfer through private agreement, i.e. stock transfer rather than formal real estate transfer and closing.
  • Re-title asset to a Corporation or LLC yet continue to maintain control.

 

Raising Money For Your Business Using The Internet

Raising Money For Your Business Using The Internet published on

Crowdfunding is a new and evolving method to raise money for businesses using the Internet. It serves as an alternative source of capital to support a wide range of ideas and ventures. An entity or individual raising funds through crowdfunding typically seeks small individual contributions from a large number of people.

In 2012, Congress enacted the Jumpstart Our Business Startups Act (the “JOBS Act”). The Jobs Act makes it easier for an entrepreneur or company to find investors and raise capital. By easing various securities regulations, it encourages small business funding. The Securities and Exchange Commission (SEC) has promulgated Rules under Title II (Access to Capital for Job Creators) removing the prohibition on general solicitation or general advertising for securities offerings relying on Rule 506 (considered a “Safe Harbor” for the private offering exemption of Section 4(a)(2) of the securities Act of 1993) provided that sales are limited to accredited investors and an issuer takes reasonable steps to verify that all purchasers of the securities are accredited investors. The SEC is expected to finalize its November 5, 2013 proposed Title III (Crowdfunding) Rule this October. Until that Rule is finalized and promulgated, nationwide general solicitation is illegal.

A growing list of states is also allowing the general solicitation of in-state investors through crowdfunding internet platforms. Governor Rick Scott of Florida is expected to sign the Florida Intrastate Crowd Finance Act amending the Florida-based entrepreneurs, small business owners, and others can use web-based crowdfunding platforms as intermediaries for their intrastate funding campaigns. This law amends Florida’s securities transactions law. A Florida entrepreneur or business person will no longer be limited to soliciting financing support from Florida “accredited” or high-net-worth individuals.

Due to the strict requirements and limitations of state and federal laws, advice counsel is necessary for businesses to assure full compliance before crowdfunding activities commence on the internet.

To better understand how crowdfunding  can help your business, speak to one of our attorneys by calling 800-743-9900 or visit our website today!

www.AmeriLawyer.com

Avoid Becoming Personally Liable For Business Employment Or Payroll Taxes

Avoid Becoming Personally Liable For Business Employment Or Payroll Taxes published on

Many business owners have a false sense of protection from liability of business debts and taxes based on general rule of law that the corporate or LLC form of organization shields persons from personal liability. However, this is not the case when it comes to paying employment payroll taxes. Employers are required to withhold federal income taxes and social security (FICA) taxes from their employee wages and are liable for payment of these taxes to the IRS. The employer does not have to segregate withheld funds from other funds available. However, these funds are considered to be held in trust and cannot be spent for any purpose other than remittance to the government.

Failure to Withhold and Pay Employment Payroll Taxes

To facilitate the collection of unpaid trust fund taxes, persons statutorily responsible for making sure the taxes are paid are held personally liable. The IRS will seek a 100% penalty against certain individuals considered to be “responsible parties” for the payment of trust fund unpaid withholding taxes. The penalty does not apply to the employer’s portion of FICA and to federal unemployment taxes.

Who Is A Responsible Party?

In many situations it is difficult, based solely on the tax code, to determine who is the responsible person. The ultimate determination of responsible persons is often decided by the courts, which have taken a broad view. Courts have repeatedly stated the penalty should be imposed on persons who have ultimate authority to decide the priority of bill payment and who willfully pay other creditors, rather than paying the payroll taxes. For a small business, this may include signers on the corporate bank account(s), any of the officers, directors, and shareholders or members of the company.

Call us or visit our website today to learn more about Avoid Becoming Personally Liable For Business Employment Or Payroll Taxes!

800-743-9900

www.AmeriLawyer.com

Selling Your Existing Business

Selling Your Existing Business published on

How much is it worth? If you are thinking of selling your existing business, the first question you will ask yourself is; “How much is it worth?”

Unfortunately there is not only one method to value a business, there are many different approaches, and in addition there are also many variables to take into consideration. It is very likely that two people looking at the same business will come up with two different values.

There are a few methods however that are commonly used.

1. Value your business based on sales
Some industries tend to value the business based on the annual sales and use a multiplier. This method is commonly used in service industries; the multiplier will be different depending on the industry and a few factors individual factors. For example, one industry’s multiplier may be 2 times the annual sales, which would be the price you would ask for your business.

2. Value your business based on cash flow or profits
In this method the value of the company is based on the company’s estimated ability to generate profit or cash flow over a period of five years used with an agreed upon multiplier. As you can see, there may be vastly different opinions about the accuracy of the future projections but a profitable, healthy small business should sell for somewhere between 2.5 to 4.5. For example, if the annual cash flow in your business is $50,000 the selling price should be somewhere between $125,000 and $225,000.

3. Value your business based on assets
What if there is no cash flow or profits? Sometimes business owners cannot wait for the ideal point in time to sell the business, but they are forced to sell. In this case the method of valuing the assets may be a way to go. While it may be easy to value tangible assets such as machinery or vehicles, don’t forget that the business phone number, domain name or an existing lease in an attractive area may also be valuable assets.

To better understand how to sell your business, speak to one of our attorneys by calling 800-743-9900 or visit our website today!

www.AmeriLawyer.com

Employee v. Independent Contractor: What’s The Difference and Why Does It Matter?

Employee v. Independent Contractor: What’s The Difference and Why Does It Matter? published on

They are certain factors that go into determining whether one is an independent contractor or employee, and it all depends on the level of control and independence within the employment relationship. You are not an independent contractor if you perform services that can be controlled by an employer. Some questions to consider in determining whether one is an independent contractor are as follows: 1) Does the company control or have the right to control what and how the worker does their job? 2) Are the business aspects of the worker’s job controlled by the company? 3) Are there written contracts or employee type benefits? 4) Is this job the worker’s sole source of income and will the work relationship continue?

Which

Why is employment status important for you as an employer? A worker’s employment status affects an employer’s tax liability. When a worker is an employee, employers must pay state and federal unemployment tax, social security tax and workers compensation/disability premiums. However, when a worker is an independent contractor, the hiring party is not required to make any of these payments. Should employers incorrectly define a worker as an independent contractor, they may find themselves liable for past taxes including income taxes, FICA, federal unemployment taxes, workers compensation insurance, interest and penalties.

Don’t forget to consider these important factors next time you are hiring.

Are You Properly Protecting Your Services Or Products

Are You Properly Protecting Your Services Or Products published on

If you have a product, service, website, or mobile app which you are marketing, protecting your rights to your mark is essential. You have to be able to take advantage of as much protection as you may have.

The federal government has strict regulations regarding whether or not your slogan, logo, or name can become a registered mark. In its simplest format, the difference depends on whether or not is merely “informational” or “generic” or “laudatory” and thus not capable distinguishing this particular product or service from that of someone else. For example, “think green and made in the usa” at some point were considered not to be registrable as being merely informational. The federal government alleged the slogan was not used to identify the product’s origin. In other words, it was not successful or used to identify the source of the product.

Often, as part of that same requirement, the slogan is not actually part of the packaging of the product and only appears in advertising for the product. That is another mistake because it is difficult to establish that the slogan is used as a source identifier.

The federal government requires the slogan, words or logo itself to be inherently distinctive and identify with the product or service so that the general public, upon hearing or seeing the slogan, word or logo relates it to the particular service or product. Some popular examples of this type of slogan is “Just Do It.” for Nike.

Protecting your slogans, words or logo which you use in your business to provide your services or sell your products is often a very difficult proposition and has challenging issues to deal with. You are best served in taking the necessary and proper steps by engaging our law firm to assist you and guide you as you navigate all these steps. Just keep in mind that from the marketing as well as the legal standpoint, the more the slogan, words or logo are used in connection with a product or service, the more weight such use may carry over time in terms of the trademark registration process. Be consistent in your use; make sure the logo mirrors itself everywhere you use it. Keep detailed records and notes as well as copies of all uses in case you ever need to prove your use.

Do not delay; call us today or visit our website to get the process started!

(800) 603 – 3900

www.AmeriLawyer.com/trademark

Save Money On Taxes With S Corporation Status

Save Money On Taxes With S Corporation Status published on

An S Corporation receives the benefit of being treated like a partnership

An S and C corporation are essentially the same type of entity except for how they are taxed. C corporations will pay income taxes on their own return. In most small C corporations the owners are paid out through salaries and fringe benefits, leaving no corporate profit and therefore no corporate taxes. However, if the C corporation pays dividends, then it will be taxed as part of corporate profit. This is referred to as double taxation.

On the other hand, an S corporation does not pay taxes itself. Any profits are paid on the individual level. This is referred to as pass-through taxation. However, the S corporation has additional restrictions on who can be a shareholders, the amount of shareholders, and the classes of stock.

Making the S corporation election

To save on taxes, C corporations and single member LLC’s are encouraged to make the S corporation election. Multi-member LLC’s and partnerships will receive pass-through tax treatment by default. The election should be made at the time of business formation. Waiting to make an election can cause non-recognition of the S corporation status which will have negative consequences for the business’s tax liability. Most importantly, the election is more then just completing a form. The proper language has to be included in the Articles as well.

To understand how an S corporation election can save you money, speak to a one of our attorneys by calling 800-743-9900 or visit our website today!

New York LLC And Publication Requirement

New York LLC And Publication Requirement published on

Spiegel & Utrera, P.A. is a Law Firm that opened for business 40 years ago and its record of outstanding excellence representing more than 260 000 clients has taken us to where we are today. Spiegel & Utrera, P.A. has established a reputation for honesty and distinction in the industry; especially, amongst our repeat clients over the past 40 years. Our professionalism is observed in the level of care and commitment we demonstrate on each and every service we perform . We believe in giving our clients an excellent service because we believe you should get what you pay for!

In New York, every new Limited Liability Company must announce its formation by placing notices in two publications for six weeks, at a cost of up to two thousand dollars. For the price of $779.95, Spiegel & Utrera, P.A. P.C. will form your LLC and complete your publication requirements plus more!

INCLUDES State Filing Fees. “YES! Includes State Filing Fee”, and
INCLUDES Company Seal and Book, and
INCLUDES Certificate of Organization, and
INCLUDES Company Minutes, and
INCLUDES LLC Regulations, and
INCLUDES LLC Ownership Register, and
INCLUDES Banking Resolution, and
INCLUDES Membership Certificate, and
INCLUDES Initial Office Address for LLC, and
INCLUDES Publication Each Week in 2 Newspapers for 6 Successive Weeks,
INCLUDES Filing of Change of Office Address with New York Secretary of State, and
INCLUDES Filing of Publication Affidavit with New York Secretary of State,
INCLUDES Preliminary Name Search, and
INCLUDES 110% Lowest Price Guarantee, and Yes, even Includes Attorney’s Fee (No Hidden Attorney Fees).

Call or email us: (800) 603-3900, info@Amerilawyer.com

Visit our Website today!

www.AmeriLawyer.com

You want your business to grow and understand the benefits of having qualified, experienced counsel behind you but one thing continues to cross your mind: What will it cost? At AmeriLawyer.com, we are committed to making sure you always receive the best price and value on every purchase you make. Our 110% Lowest Price Guarantee is a testament to that commitment.

If you should find a lower price on an item we offer from a legitimate competitor, whether online or otherwise, even if that item is already on sale, we will not only meet 100% of the lower price, we will beat the price by an additional 10% of the difference to thank you for bringing it to our attention.

To find more information about New York Publication Saver LLC:

www.Amerilawyer.com

Spiegel & Utrera, P.A.
Phone: (800) 603-3900
Email: info@Amerilawyer.com

Using Social Media As A Business Tool

Using Social Media As A Business Tool published on

As technology progresses and more people use social media as a tool for marketing, several businesses are adapting to this innovation by using social media outlets such as Twitter, Facebook and Instagram as a tool to increase brand recognition for their business. There are many effective strategies small business owners can undertake to effectively use social media and improve brand recognition for their business.

Social Media

For your business, consistency on all social media platforms is highly recommended. Using your company logo as the picture for your account and maintaining uniformity on all platforms will provide followers or users with one consistent image as it relates to your business. Additionally, in order to gain followers, it is important to identify your business’s target audience and post interesting and unique photos, articles and/or videos that your target audience can identify with. Using social media to promote special offers or giveaways will also engage users and encourage them to share some of your postings. It is important to keep your target audience engaged with your business’s postings.

Another effective strategy business owners can use is to interact with profiles of those who influence the business’s target audience. Using social media to interact and connect with users who have a large following may help in gaining exposure through the use of sharing posts or could even lead to someone with a vast following posting something about your business and/or product.

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