Skip to content

Non Profit Organizations; How to Create One

Non Profit Organizations; How to Create One published on

Developing a non profit organization is not as non profitable as it may seem. Non profit organizations have to produce enough money to pay for its employees as well. In this article, we are going to discuss the development of a non profit with regards to the benefit of being a recognized 501 c3 organization and receiving donations. We will also discuss the difference between an LLC vs an LLP, protecting your trademark, and adding entities to your business such as fictitious names or assumed names.

Non Profit Organizations

How to Develop Your Non Profit Organization

You have sat on the park bench thinking how much good you can do by creating a non-profit organization to help the children you know with autism. Your son was diagnosed with autism when he was 6 years old.  Your child will need more work than the average child. If something isn’t done soon, your child may get left behind.

When speaking to the school, they have told you repeatedly that there are just not enough funds in their district to slow the classes down for him.  This is when you develop your non profit organization. It’s not much; just a part-time organization that teaches the children life skills so that they are capable of surviving if you, the parent/guardian, are not around.

What is the process to structure your non profit organization?

First, you need to register the business as a non profit organization.  Once you have received your articles of incorporation, it is important that you apply with the Internal Revenue Service as soon as possible for your tax-exempt status. You may ask, why so fast? This is because the questioning of the tax-exempt application is long and tedious. The quicker you get to the questions from the start of your business, the less explanation you will have to give for each. Limited information is available for each question.

Now that you have your 501 c3 tax-exempt status, what benefits do you have?

Depending on the business, and location, you may be eligible for sales tax exemption. You may have eligibility to receive grants or loans for your organization to hire specialists or equipment for your kids. You may receive public recognition for your business being a non profit organization. Government organizations may offer you discounts such as the post office.

Is it possible to make money while running  a non-profit organizations?

A non profit organization is a business.  It carries out charity work and raise money to help the community.  Because of this, resources are needed to carry out their work.  You will need to hire lepers, specialist and a management team.  Your business is going to require that you put the majority of your time into it and you will need to receive a paycheck too.   For your business model, you need to consider how money is going to be received  and plan accordingly.

Should I protect my non profit registered trademark?

All of the city knows about your program and it has grown bigger than ever expected. Donations have poured in, and you want to create a trademark for your organization’s  name and logo.

 

What is a trademark and how does it work?

A Federal Trademark is a word, name, symbol, phrase, slogan, or combination of these items which is used to mark and distinguish goods or services to indicate their source or origin throughout the United States. Federal Trademark rights may be used to prevent others from using the same or a similar Mark in the United States.

• A name or logo in many cases overtime becomes a company’s most valuable asset.
• It prevents others from adopting your name or design and gives you very favorable enforcement powers throughout the United States.
•  You will recieve no or only limited protection in a local geographic region.
• It Allows you to put everyone on notice with the Federal Trademark symbol “®” once the Federal Trademark process is complete.
• The business may advertise and promote your mark and build name recognition and goodwill for your business with out fear of losing the Mark to another.
• The Federal Trademark or Federal Service mark may subject the copycat to injunction, statutory treble damages, profit disgorgement and attorney’s fees if litigation is necessary to prevent such a copycat from using your Mark.

We can help you register your trademark at www.AmeriLawyer.com

Which is better for my new company; Limited Liability Partnership (LLP) or Limited Liability Company (LLC)?

Non Profit
Marys Salon and Spa

You have spoken to a local barber to assist your children with their daily grooming routine. Joe and his wife Mary, have showed great interest in joining your group. Joe would like to help with the boys. Mary would like to make a salon/ spa for the girls. Which type of entity should they create; an LLP or and LLC?

Limited Liability Partnership (LLP)

A strong feature of the Limited Liability Partnership is that obligations of the limited liability partnership, whether arising in contract, tort, or otherwise, are solely partnership obligations so that none of the partners are personally liable. The only reason for the use of the mere limited partnership form, rather than limited liability partnership, is when a limited partnership is required by lenders or other creditors. Understandably, because of liability protection, the limited liability partnership form of partnership is preferred over the other types of limited partnerships.

Limited Liability Company (LLC)

The main advantage of the LLC is that it is not burdened with the ownership restrictions imposed on a small business corporation (also known as a Sub Chapter S Corporation). An LLC may have more than 100 Members or as few as one. Its interests are held by corporations, partnerships, Non-Resident Aliens, trusts, pension plans and charitable organizations; the LLC may make special allocations, thereby avoiding the single class of stock requirement applicable to an S corporation; and it may own more than 80% of the stock of a corporation and, therefore, may be a member of an affiliated group.

How do we decide which is better for us?

Joe and Mary may also want to test the waters before forming one of these entities. They can form a contract between each other to agree on all the aspects of the business. They may also want to create a primary business for Joe, and then create a fictitious name for Mary’s salon. This contract needs to establish who is responsible for the liability of Mary’s salon and spa.  If she takes a loan to create this Eden for the girls and cannot pay the costs of the loan, who would be the person liable? If the salon fails any unpaid items, could affect Joe’s barbershop.

Spiegel and Utrera can help you decide the best entity for your business.

You can hear more details about starting a non-profit organization and much more by visiting our YouTube channel.

 

Final Thought:

It is in an entrepreneurs best interest to go to the local library, and look in trade association journals.  These journals can assist you with developing your business plan, or expand your business.

ARE YOU READY TO START YOUR BUSINESS?
INCORPORATE TODAY AT WWW.AMERILAWYER.COM

Not Ready? Have More Questions?
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. 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

Business Expenses and Building Business Credit

Business Expenses and Building Business Credit published on

Creating a business is an American dream. Hard work and dedication may not be enough when starting your business.  you must keep your eye on the big picture.  There are many moving parts.  Monitoring business expenses, protecting your work with copyrights or a trademark, securing your ownership of an item, and purchasing equipment for your business, how to  keep track of business expenses and building business credit are just a few topics we cover below.  

You Made It!  How Do You Keep It?

 

Copy right your intellectual work

Opening day of the hip hop world championship has arrived. For over 10 years you and your crew of 8 guys have been practicing 8 hours a day for this moment right here. You know that these guys love you, but business is business. If they win this competition, it means touring and public recognition. What does that mean for you? Are you just the choreographer and nothing more? Why should they get all the fame? What can you do to make sure that you are securely the sole representative and director of this crew? After all, you need to make money too.

First and foremost, you need to make a contract with the crew. This contract should indicate that you own the copyrights to the dance performance that they are demonstrating on stage. In order to do that, you have to register your original authorship with the federal copyright. The contract should also state that anytime that the dance is performed in this manner, you would receive royalties from it as well as each member of the dance crew.

 

Copyright your work
business expenses

That’s My Move!

What if someone is already performing my moves? The move is authentic, and it even is referred to as the “cut and dry.” The “cut and dry” is eligible to be copyrighted as soon as the original dance move had been created in fixed form, and then registered with the federal courts. if it is being used after it has been registered, you may sue the person in federal court. However, it is much better to register the copyright, because it creates a public notice that you own the rights and enables you to sue in federal court if someone uses your choreography without your permission.

We’re Going On Tour

To take the crew on tour, is going to be a huge expense. There may be more than just the dancers to bring across the states with you. You need somewhere to place the props for the many new dance routines. You already own one bus, that actually belongs to you, but it looks like you need additional capacity.  Each situation is different, but for this situation it is best for you to invest in the second bus from another LLC that has no relation to the crew and lease  the bus to that crew’s LLC.   This leasing strategy is a great way to build your business credit as well.  Another point for leasing the bus to the crew, rather than purchasing it, could be an insurance issue.  If the bus is involved in an accident, and the now famous dance crew is the owner of the bus, you may be liable for damages.

Wait! Can I Claim This As A Business Expense?

Another question that has come up is: If the crew decides to go to Disney after one of their shows during their break, does that take away the ability to claim the trip as a business expense? The answer is no. A business trip is a trip taken while conducting business during the eight-hour day. What the crew does on its off time is not going to be questioned. As long as the trip its self was for a business purpose.  When a business expenses are claimed however, it is important to only claim the time that was utilized for business.

Visit our YouTube Channel for more information on building business credit and tracking business expenses.

ARE YOU READY TO START YOUR BUSINESS?
INCORPORATE TODAY AT WWW.AMERILAWYER.COM

Not Ready? Have More Questions?

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

Copyright Your Work

Copyright Your Work published on

AToday’s youth is confused and trying to claw their way out of a hole trying to express their individual personalities. Some show their uniqueness by the way they dress, some write, some even rap or sing.  How ever they choose to express themselves, they must be allowed to create their own empire. Let’s be real, not all children or even young adults are built for stardom, but many truly are talented. To follow their dreams is everything for them. The words a young singer places on paper are very, very real in their hearts.  To copyright their work is not even a thought for them. Perhaps it should be. 

 

Register Your Works of Authorship

So, how do they protect and promote their music or drawings? Start by creating a marketing plan.  We will talk about trademark or copyright laws, and how each artist can protect their work. We will also discuss creating a business with multiple partners and extending credit to your customers.

Copyright your work
Protect Your Works of Authorship

You notice that your child is behind her camera almost every day and on the computer editing those pictures all night long. She is passionately writing and drawing as well. What could she be up to? You sit her down to talk to her about what you believe is anti-social behavior. She opens her computer, only to reveal the most beautiful photos you have ever seen.  Attached to each is a short essay describing her photo. There is no bias here, the pictures are divine. She then confesses to you that she wanted to enter her photos into a contest for a scholarship to the Arts Institute. Should you be concerned about copyrighting her photos and writing?  The only way that your rights will be enforceable in the federal courts, is to copyright her work.  You child will need to create her own company where she can sell her art.

Let’s discuss the different types of protection you can use to protect her work.

 

What Is a Trademark?

A Federal Trademark is a word, name, symbol, phrase, slogan, or combination of these items which is used to mark and distinguish goods or services to indicate their source or origin throughout the United States. Federal Trademark rights may be used to prevent others from using the same or a similar Mark in the United States.

What is a copyright?

A Federal Copyright is a form of protection provided by the laws of the United States to the authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works.  Once an original work is created, the federal copy right will begin.  The federal copyright in the work becomes the property of the author who created the work. Generally, only the author can rightfully claim federal copyright. With this in mind, there are some exceptions to this rule.

 

 

 

Spiegel and Utrera can start your copyright process with 5 easy steps:

STEP ONE. Submit your Trademark, Copyright or Trade Dress Order 

We make it convenient for you to submit your Trademark, Copyright or Trade Dress. You can complete and submit an order online with our (128 bit encrypted) secure order form. This will take, approximately, 5 minutes of your time. You can call one of our many offices toll free or you can also visit one of our many office locations. If visiting one of our offices, please call to verify attorney availability and to request an appointment.

STEP TWO. Preparation of the Trademark, Copyright or Trade Dress Application

Our staff will prepare your Trademark, Copyright or Trade Dress Registration Application based upon the information you have submitted.

STEP THREE. Verification of the Trademark, Copyright or Trade Dress Application

Once Spiegel & Utrera, P.A. has prepared your Trademark, Copyright or Trade Dress Registration Application, it will be emailed to you for your approval and signature. Once you have approved and signed the Trademark, Copyright or Trade Dress Registration Application, you will return it to Spiegel & Utrera, P.A. along with Credit Card authorization for payment of the government filing fee.

STEP FOUR. Sending of Trademark, Copyright or Trade Dress Application to the Government

Once Spiegel & Utrera, P.A. receives your signed Trademark, Copyright or Trade Dress Registration Application and the government filing fee from you, your Trademark, Copyright or Trade Dress Application will be filed with the government.

STEP FIVE. Confirmation of Filing of Trademark, Copyright or Trade Dress Application to the Government

Upon filing your Trademark, Copyright or Trade Dress Application with the Government, Spiegel & Utrera, P.A. will give you written confirmation of the filing of your Trademark, Copyright or Trade Dress Application with the Government.

Keeping accurate records for your business is important.

Another topic to consider, is record keeping for the sale of these photos. We already know that her photography skills are top notch.   Also, her writing skills are incredible.  This is the time to think about making her freelance journalism a corporation. In doing so, she could sell her photos and essays to magazines, bloggers, websites, or more.

It is important however, that she create a separate bank account for the money she earns for her work. Bookkeeping is important when you have your own corporation. By keeping bank records and credit card expenses separate, it will help to keep your business organized and on track once you see your accountant.

Extending Credit To a Client

What do we do if she is now selling one photo and article a month to a magazine who promised payment a week after they received the photos? The company has received many of your photos., but you still have not received payment.   You want to keep the relationship with the customer.  You cannot continue granting them your inventory without payment. It may be necessary to sell your photos on a C.O.D. basis. This may let you know if they had any intention on paying you to begin with.

When extending your customers a line of credit, it is important to consider who they are.  Moving forward, you can create your own credit application to verify all the aspects that you need to know prior to extending credit to them. It is important, however,  that you know their personal information when it comes to finding out if your client is going to pay or not. Once you have determined the credit status of the client, you should be able to negotiate your income.

Visit our YouTube for more information like this

 

 

ARE YOU READY TO START YOUR BUSINESS?
INCORPORATE TODAY AT WWW.AMERILAWYER.COM

Not Ready? Have More Questions?

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

Non Profit Organizations and 501 C3 Exemption

Non Profit Organizations and 501 C3 Exemption published on

Non Profit  and 501 C 3 FAQs

Lets talk about Non Profit  and 501 C3 organizations and where to start them for a minute.  We are going to answer the following questions:

  1. Is there a difference between a non profit and 501 C3?
  2. What is the process to set up a non profit organization?
  3. How many people do you need to set up a non profit organization?
  4. Can I purchase property and not affect my tax exempt status?
  5. Where should I Start my business? Can I set up my business in any state; or does it have to be in the state I live in?
  6. What will happen if I don’t have a separate bank account for the business? Can they go after my personal money?

1. What is the Difference Between a Non Profit and a Tax Exempt 501 C3?

When we refer to a non profit organization, we are referring to any organization formed and organized for an non profit purpose. A 501 (c) (3) is a recognition by the IRS that the organization is now exempt from all income taxes. Tax exempt however, is merely the result of the non-profit being recognized. Most tax exempt companies are non-profit organizations set up for charity, religious, literary, or educational purposes.

  • A non profit corporation is a business entity incorporated at the state level where there are no equity owners that hold shares of stock. Also, none of the corporate income is distributive to members, directors, or officers. Instead, such non-profit corporations typically are controlled by members that elect a board of directors.
  • Tax exempt 501(c)(3) non-profit corporations are classified as either a public charity or a private foundation. Generally, organizations that are classified as public charities are those that are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities; have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities; receive income from the conduct of activities in furtherance of the organization’s exempt purposes; or actively function in a supporting relationship to one or more existing public charities.
    Private foundations, in contrast, typically have a single major source of funding (usually gifts from one family or corporation rather than funding from many sources) and most have as their primary activity the making of grants to other charitable organizations and to individuals, rather than the direct operation of charitable programs.

Back To List of Questions

2. What is the process to start a non profit company?

  •  First thing is that you would need to file with the state and organize your business so that you can receive your articles of incorporation.
  • As soon as you receive the articles of incorporation, register the company with the IRS.  This is so that you will be recognized as a tax exempt organization.
  • Its important to file the articles with the IRS as soon as possible because you will need to answer many questions about your organization.  If you complete the questions early, you would have to answer less questions regarding your business, because there is less information to process.  The longer you wait, the more questions you will have to endure which can make the process a longer one.
  • You should then receive a letter of determination from the IRS with in two to six months, and  your business should be ready to go.

If you’re not sure about what to do or seem to have a hard time with the process and you are ready to start, we can help you create your non-profit organization.
Back To List of Questions

3. Do I need a specific amount of people to create my non profit organization?

Because a non-profit organization, a total of 3 people must direct the entity.  You have been given the power of a tax free business.  The benevolent purpose must be carried out by all three members of the company.  A non-profit organization retains all money from the business.  But don’t forget, that you still have administrative expenses and salary.

Back To List of Questions

4. Can I purchase property with out affecting my tax exempt status?

It is time to purchase a secondary building for the business. Can you purchase a new building without it affecting your tax exempt status? The answer is yes.  It is advisable however, to create a multi member LLC for the corporation.  You could purchase the building through the multi member LLC, and lease the building to the non-profit organization.

This way there are many advantages to both entities.  The multi member LLC would receive an income.   The depreciation of the building with off set the rent income.  Leasing the building to the non profit organization could result in the appreciation of the building which will be to the advantage of the LLC in the years to come.  It is important to discuss that the lease must adhear to a few rules.  The lease must be at fair market value as indicated by an appraisal, and it must be an at arms length transaction with full disclosure.

Back To List of Questions

non profit
Non Profit Organization

 

___________________ Additional FAQs_______________________

5. Where should I start my business; does it have to be formed in the state where I live?  Can I choose which state I set it up in?

When considering where to set up a business, you must entertain all ideas about laws and regulations of businesses. Yes you can set up a business anywhere. There is however, a way to go about it.  Many times the it may be that the business owner would want to open the business in another state.  Nevada, for example, offers asset protection.  Because there are so many choices, you may want to speak to a legal representative to decide which of the many options are right for you.  Perhaps, an entrepreneur would set up his business in Delaware because of it anonymity and it background history of business law.  Most new business owner do not mind paying the cost to be qualified.  With the costs, state offers them asset protection.

Back To List of Questions

6. What will happen if I don’t keep my business expenses and personal expenses separate?

When you open your new business, you should immediately open your new bank account under the business name.  It is also important to make sure that you keep records on your business expense.  The problem many new entrepreneurs have is where do I get the money to finance my brand new business?  You can loan money to your business and pay yourself back. Another option is to invest in your business.  By placing your company’s money in an account, you are also creating a protection against any type of liability that may come up.

Back To List of Questions

Final Thought: Procrastination is the number one enemy of the entrepreneur.

ARE YOU READY TO START YOUR BUSINESS?

INCORPORATE TODAY AT WWW.AMERILAWYER.COM

Not Ready? Have More Questions?
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

Personal Guarantee

Personal Guarantee published on

We Can Make a Business Successful; Here are Three Important Things to Focus On!

Business  require a lot of work and time spent working on it to assure that a product is specific to each customer that walks through your door.  The new business requires that you advertise, manage money to its fullest, and in the end make it last so that you can pass it on to your children and family.  You may have to even sign a personal guarantee to investors. Today we are going to address these three subjects, because the idea of opening your own business is that you will make a profit, and be able to continue the business for years to come. It is up to you to make your dream of a business come true, and we are going to help.

What What Form of Advertisement Should I Use?

Lead Generation System

Now that your business is open, the biggest question should be how should I advertise my business?  It is likely that you have a fixed budget, and you are not sure where to turn. First and foremost, you need to create a lead generation system.  Let’s say that you are the proud owner of a new food truck, and you want to get people to visit your location on specific days?  How do we initiate customer interest in your service?  Given technology today, you could start anywhere. Ideally you would need to test the different types of advertisements.  Which one works better for your entity?  A suggestion for your business might be social media.

Advertising On A Budget With Social Media

Approximately 81% of the US population uses social media in its various forms.   It may work to just use one of these avenues to advise your business followers where the truck will be on a certain night.  In many cases social media offers a free form of advertisement that can reach all of your friends, and if your service is good you can reach many of your friend’s friends.  If you offer consistency, there is a good chance your business will thrive.

You must make an investment in your advertising, and then test, test, test. Keeping statistics on the form of advertisement that you choose is vital.  It will let you know for future advertisements which form produced the greater amount of leads for your business. Once you find a good response, repeat the advertisement,  because it works.  You want to find out the cost per lead with each of your campaigns.  For help with your advertisements you may want to check out the Data & Marketing Association.  They have many educational programs to help your business in its endeavor.

Money Management is Key to Your Business

 

It is hard enough to maintain a budget for family life, and now you want to fund your business on top of that? As we have mentioned in other blogs, now that your business is open and incorporated, you will have the eye of investors and banks who may not have otherwise have been interested in your ideas.  These investors may be able to loan your business some money to help get it off of the ground.  That’s where a Personal Guarantee is  at it’s start.

What is a personal guarantee?  it is an unsecured written promise from you, the business owner, to the bank guaranteeing the repayment of your loans.  Since it is unsecured, you need to know that the guarantee is from you, not the business.  Therefore, the responsibility lies on you to make good on your agreement.  If your business goes under, the personal guarantee will be your personal responsibility.  When you have a business and business line of credit it is important that the owner maintain good records for the financial part of the business.  Should the day arise that you do not want to maintain the business anymore, you will not be able to just release yourself from the debt. This burden of debt and liability may, in essence, be passed on to the next owner.

Bankruptcy! Don’t Do It!

Perhaps the food truck you started out with was a vegetarian food truck.  Although it was original, it did not promote as well as your friends burger truck. The money is just not flowing as it needs to be.  There are more bills to pay than there is cash flow coming in.

How can you pay the bills and relieve yourself of all the business debt?  What about a business bankruptcy?  Cant I just file for bankruptcy and start fresh? Would I be free of all the loans and credit card debt that the business created?  It would not be that easy.  Ultimately, it is likely that you can file for a business bankruptcy , but it comes with a ton of baggage.  You will have this on your shoulders for the rest of your life. Additionally, you will still have the debt and be labeled with the fact that you filed a bankruptcy.

Contrary to popular belief, Bankruptcies don’t disappear after many years.  The question on the loan application and even on job applications these days is, “Have you ever filed a bankruptcy?” not “have you filed a bankruptcy in the past 7 years?”  We do not recommend to entrepreneurs to file a bankruptcy on their business.  Each case is significantly different that the other, and we recommend that you seek legal advice about your financial case.  You can always contact us at AmeriLawyer.com.  It is a possibility that your debt may be able to be re-negotiated, or a change in the business model may help move your business back to a positive working environment.

Changing Your Business Model to Boost Your Income

You have re-negotiated your business model, and now the food truck is doing so much better.  Rather than just vegetarian food as the headline, you have changed it to a pasta truck with a vegetarian friendly menu.  The food trucks leads are now moving swiftly and you are even doing so well that your staff had to grow as well. You are also catering parties as an additional service.  your company gained a partner and  has now built a restaurant and added 3 additional trucks in the same name as the original food truck company.  The business has thrived and doesn’t show signs of slowing down.  It is time to start considering where you will go when the time comes to leave this earth.  Who will the business go to? Your business is now back and better than ever.

Revocable Trusts vs. Wills

How can I make sure that the business goes to my child if I should pass away?

Your business is going well and your family has grown.  What is the best way that you can secure your assets to go to the children?  The best suggestion would be to place your asset in either 2 individual trusts or a joint livable or revocable trust.  This way should you pass, the assets skip probate and go directly to the intended party.

What is are the benefits to having a revocable trust?
  • Avoiding probate: What does that mean? If an estate has to go through probate, the court determines what assets are part of the estate, the court marshals the assets of the estate, and then the court disposes of the assets in accordance with the Last Will and Testament or as provided in the state statutes. Such a probate process can be quite lengthy and expensive. With the Joint Revocable Living Trust, Probate is avoided because the Trust assets are owned by the Trust rather than the individual decedent.
  • Isolating Liability: Using multiple Joint Revocable Living Trusts for different family members, you can avoid spillover of liability to other family members. For example, Mother Smith, the matriarch of the Smith Family, sets up one trust for Daughter Smith and one trust for Son Smith, because she knows that the local police are staking out Daughter Smith’s Botox shop. The Internal Revenue Service is upset that Son Smith hasn’t filed his tax return since 1993. By isolating liability and using multiple Joint Revocable Living Trusts, Daughter and Son Smith’s issues won’t spillover and affect each other.
  • Ease of administration: If an individual establishing the Trust has real estate, the cost of probate administration is avoided because the property held in the Trust will pass at the decedent’s death free of probate unless the Trust estate is to be distributed to the decedent’s estate.
  • Revocability: Cutting someone out of your estate plan? The Joint Revocable Living Trust allows you the flexibility to make changes to the trust document while you are still competent and alive.
  • Privacy Preservation: Don’t want your friends and relatives aware of your private affairs? The Joint Revocable Living Trust allows the transfer of your personal assets to remain private within the parameters of the trust document. That is distinguished from the situation where if you had a Last Will and Testament, the probate process would expose your estate to the public.
  • Creditor Protection: What happens with a trust beneficiary law suit? Do you want a creditor to get any of the       beneficiary’s money? Creditor Protection prevents creditors from attaching the interest of the beneficiary in the Trust before there are cash or property distributions.

Also if  you decided to purchase life insurance you could place that in a trust as well.  The benefit of a trust is that if you pass away, you will avoid probate.  Also if you place your life insurance on a trust it will add to your gross estate.  This will benefit you for tax purposes.  Another factor may be that you may have forgotten an asset.  You would not necessarily have to put it in the trust. You could simply add that asset to your will.

A Last Will & Testament

A will is a disposition of assets from a person to their heirs. Having a Last Will & Testament means a person has the freedom to choose who are their heirs, Personal Representative or Executor to administer their estate, what gifts are made and to who or what, who is a guardian of surviving children, who bears the tax burden and whether real estate and other assets may be sold with probate court proceedings. It is very important to insure the Last Will & Testament meets certain formalities so it is deemed valid.

For more questions as to which is better for your situation,  you can contact us at www.AmeriLawyer.com

ARE YOU READY TO START YOUR BUSINESS?

INCORPORATE TODAY AT WWW.AMERILAWYER.COM

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

Four things to consider with a S Corp or LLC

Four things to consider with a S Corp or LLC published on

How can we create our dream business from a simple hobby? 

Should we start an S Corp or LLC?  Here are four things to consider when making your hobby your business: what is an S corp or LLC, the difference between an independent contractor and and employee, hiring employees for full-time or part-time,  reviewing a Non-compete agreement as it relates to right to work states, and most important; choosing S Corp or LLC .

So many times we become great at a hobby, and a friend or even a new acquaintance will ask you that question heard all too often; “Why don’t you go into business?” “You are so good at this.” It could be anything, mechanic, photographer, baker, personal trainer or hair dresser. Did you know that the majority of businesses today started from that question? A poor boy, who’s life had no meaning other than drawing cartoons for the local paper became one of the most noted business owners in the world; Walt Disney. “If you dream it, you can do it.”- Walter E. Disney.

What Type of Business Should I Form?

S Corporation (S Corp) or a Limited Liability Company (LLC)?

Lets say your hobby is working on cars. You have been fixing cars since you were 16 in your parents’ driveway and now an opportunity is knocking on your door. Your friend has an open garage next to a grocery store that you can lease for a great price. You have some tools, and you know in your heart that you could make this hobby a operational business. Should you open this business as an S Corp  or LLC?

First, you need to decide what each type of entity could do for your business.  What is an S Corp?  What is an LLC?  Are there more benefits to one entity than the other?

What is the Difference Between S Corp or LLC?

What’s a Subchapter S Corporation?
At the state level, it’s filed as a “plain vanilla” corporation, but if it meets certain requirements and elects to be treated as a “small business corporation,” at the federal level it can enjoy distinct tax benefits.

The Subchapter S Corporation is an attractive form of doing business because it combines the business and legal characteristics of a corporation with many of the income tax characteristics of a partnership. For flow-through of profits and losses to the owners, the Subchapter S Corporation is treated in a manner similar to a partnership. For other purposes, such as limited liability, distributions, redemptions and reorganizations, the Subchapter S Corporation is treated much like a regular corporation.

What are the tax benefits of a Subchapter S Corporation?

A regular Corporation is subject to federal and Florida Corporate Income Taxes. Therefore, profits are taxed first on the corporate level and then again at the individual level of the shareholders to whom the profits are distributed.

This double taxation could result in a combined taxation rate of 70% or higher! A Sub-Chapter S Corporation is exempt from federal and Florida corporate Income Tax, so that the earnings of the Corporation flow directly to the owners.

What are the requirements of a “small business corporation?” A small business corporation is a domestic corporation that:

  • Is not an ineligible corporation (such as a bank, insurance company, possessions corporation or domestic international sales corporation);
  • Does not have more than 100 shareholders (spouses and families are now counted as one shareholder);
  • Does not have shareholders other than individuals, estates, certain trusts, or certain tax-exempt organizations;
  • Has no nonresident alien shareholders; and
  • Does not have more than one class of stock (i.e., has only common stock, not both common and preferred).

What is a Limited Liability Company?
The Limited Liability Company (“LLC”) is a hybrid entity that is very flexible and, depending on how many owners (known as “Members”) and what such Members elect to do, may be taxed as a partnership or corporation, if it has multiple Members, or as a sole proprietorship, if it has only one member, while providing limited liability protection for all of its Members.

For federal tax purposes, an LLC, like a partnership or sole proprietorship, is a pass-through entity; thus, its income and losses are taxed only at the member level. However, all members of an LLC, like the shareholders of an S corporation, have limited liability for the debts and claims against the LLC. No member will be burdened with the personal liability

Decisions; Decisions!

You have decided that this is going to be your own business.  With out question, you are going to be the business’s sole proprietor.  You’re not really sure if you will be able to create the business with the limited resources you are currently holding. To incorporate your business as an S Corp would be an ideal choice. Limiting your own personal liability is your first priority. By Creating your corporation, you have taken the responsibility of your business off of you and your family. “Your Car Shop” is its own entity now.

Now that “Your Car Shop” is alive, you have access to all the benefits that a business provides. This means that investors who might not have otherwise been interested are now acknowledging your business. You are now eligible for that line of credit that will help your business get off the ground and working.  Tax breaks are another one of the many benefits that your new company will be privy to.  If something happens to you or you wish to retire the business you are able to transfer the business to whom ever, or even sell the business without having the business expenses being forced upon you or your family.

When you’re ready to form an S Corp or  LLC; we can help! Simply visit www.AmeriLawyer.com to get started. 

What types of workers should I hire?

Hiring an employee or an independent contractor.
A big aspect of running a business is knowing that your super powers end at “human.”  For this reason, it is likely that you will need to hire employees to help run your business.  What kind of employee are you looking for?   If you know that winter is coming and “Your Car Shop” specializes in snow tires, you may want to hire some additional employees for the winter season.

Lets define an employee and an independent contractor.  If you direct the manner in the means of the work; they are employees. You, the business owner, instruct the employee as to the time they come in, how they conduct their everyday work, and when they can take a break or a day off. The independent contractor can be given a time to come in to work. However, the business owner does not give specific instructions as to how they preform the work or complete their work.  The independent contractor does not have tax withheld from their pay, nor do they receive company benefits included with their employment.

It is in good advice that the business owner first has a written agreement with and places each employee or the independent contractor on payroll and shows that they are accounted for.  If the employee gets hurt on the job, reports their injury and they are not listed on your payroll, you may be flagged for investigation. This may mean that you would need to seek legal representation, and possibly lose a lot more that just a business.

We can help you create your employment or independent contractor agreement on our website www.amerilawyer.com

How does a non-compete agreement work?

Can I Be Sued for Creating My Own Business?
It is safe to say, that many people find friends or associates because they have a common interest. You are aware that your company, “Your Car Shop,” is the same nature of business as your friend”s garage called, “The Car Shop Down Block.”  You once worked as an independent contractor for the owner of  “The Car Shop Down the Block.” When you started working in his garage you signed an agreement that assured him that you would not open another business like his for one year after you terminate your employment with him. Its not like you knew an opportunity was going to open up this quickly. As a matter of fact, you probably quit so that you could pursue the new business.

Can your friend sue you for opening “Your Car Shop” a couple months after terminating your employment? The nature of a non-compete agreement is so restrictive that often times they are not enforceable. It would be suggestible to seek legal advice on your specific case. In general, all agreements that restrain a trade or work are illegal. Please keep in mind that there may be some states that allow exceptions.   To create the exception, the business owner would have to request a  judge to determine the details of the contract. The judge then rules on  a reasonable duration of the contract, and the type of restricted activity.

Plan Your Work and Work Your Plan

“Your Car Shop” is on its way to great things. It takes a lot of hard work and dedication to start your own corporation. There are so many avenues that you can travel with your business.  In order to keep it on track, you have to stay focused and market your business correctly. Market your business well and don’t forget to,  “Plan your work, and work your plan.”

Listen to Our Radio Show

You can also listen to our radio show episode for complete conversation on “Hobbies Becoming a Business” by viewing the video below. Please visit our YouTube Channel for 20 additional episodes of valuable insight on “How to Start, Expand, Buy or Sell Your Business”.

https://www.youtube.com/channel/UCBbWg0TlRsWsP1Ocsyf2Prg/videos

ARE YOU READY TO START YOUR BUSINESS?

INCORPORATE TODAY AT WWW.AMERILAWYER.COM

Not Ready? Have More Questions?
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

References:
https://www.biography.com/people/walt-disney-9275533

Business Succession Planning

Business Succession Planning published on

BUSINESS SUCCESSION PLANNING

Ineffective business succession planning is one of the leading reasons why family businesses do not survive into the second generation. In the same way that a person would draft a last will and testament, business owners also need to create a succession plan because this ensures that their business survives unscathed. A succession plan gives owners control over their company. This control will prevents fights after the owners becomes deceased. Such advance planning also prevents the Internal Revenue Service from claiming more than is necessary during the transition.

 

Business Succession Planning

Even though every succession plan is different, here are a few basic rules of thumb:

 

  • Start the planning early because planning affords business owners more options. Especially when it comes to mitigating tax liability by transferring ownership to children. This will minimize the size of the tax bill after the death of the owners;
  • Be objective, determine what the business requires to survive and grow;
  • Seek the help of accountants and attorneys. Business owners can work toward reducing the family’s tax obligations. Also avoiding possible legal complications between partners and family.
  • Consider the vested interests of company officers and loyal employees. Business owners can retain talent and they’re best customers.
  • Lastly, communicate clearly and openly with family members. The business succession plan will best serve the second generation.

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. General Counsel Club members have access to unlimited legal, business, credit and tax advice.

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!  Spiegel & Utrera, P.A. will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Target Customers With A Fictitious Name or DBA

Target Customers With A Fictitious Name or DBA published on

TARGET LOCAL CUSTOMERS WITH A FICTITIOUS NAME OR DBA
A fictitious name (assumed name, alternate name, trade name or DBA name) is a business name that is different from your personal name. It is also different than the names of your partners or registered name of your LLC or corporation.

The name of your business should convey the product or service you are providing. It may also provide business location description. For example, compare the following two businesses with the fictitious names: “John Smith’s Services” and “Pete’s Miami Audi Car Repair Service”. Consumers living in Miami that need their Audi model repaired will most likely call Pete’s place of business. If a business owner has several places of operation, the business owner may consider registering several Fictitious Name or DBA with the location included in each of the separate names.

PLAN A STRATEGY

Plan an effective marketing strategy for your business with the use of one or many Fictitious Name or DBA.
Start by registering a fictitious name that emphasizes the service or products you offer and include specific areas to target. Once you have your fictitious name registered, you can use your localized fictitious name in your ad copy. Use your fictitious name on print ads, billboards, bus stop benches, etc. In addition, you will be able to use your fictitious name in your seo marketing strategy as well. Drive fee search engine traffic to your site with the use of your fictitious name!

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

The Benefits Of Registering A Federal Trademark

The Benefits Of Registering A Federal Trademark published on

As an entrepreneur, you will spend days and weeks coming up with a name for your business or products. Because of the effort put into creating the mark,  protecting the brand of your company is a concern for the business owner. As a result there are benefits to registering a federal trademark!

A Federal Trademark is a word, name, symbol, phrase, or slogan used to mark and distinguish goods or services. The mark indicates their origin throughout the United States. The federal trademark prevents others from using your registered trademark and also protects you from others using a similar mark.

Registering a Federal Trademark.

The internet and social media advertising is exploding into a common marketing tool that every business today must implement into their business model. The use of a trademark is very important for the protection of your business.

 

Registering a federal trademark provides several advantages:

  1. Public notice to the world that you claim to be the owner of the trademark and/or logo.
  2. You will have exclusive use of the trademark and anyone else would have to seek permission and compensate you for the use of your trademark.
  3. You are able to bring an action in federal court if someone infringes on your trademark.
  4. The U.S. registration can serve as a basis to obtain registration in foreign countries.
  5. The ability to record the U.S. registration with the U.S. Customs and Border Protection Service to prevent importation of infringing foreign goods, and
  6. Finally, you will have the right to use the federal registration symbol, which is the R in the circle.

Do not delay!

Call us to register your trademark at (800) 603 – 3900 or visit our website

Order your trademark here.

Building In Financial Forecasts For Your Business Plan

Building In Financial Forecasts For Your Business Plan published on

To attract investors and build a line of credit you need to project business finances

Essentially, you must make educated guesses about how much money will be spent and how much will be taken in. Then you can use these estimates to calculate whether your business will be sufficiently profitable to sustain a bottom line. Usually a business will start off operating lean until you start building a customer base. If your projections show your business losing money initially, then you must consider raising prices or cutting costs while still in the planning stage. This can help you avoid sinking money into a business that cannot be profitable. On the other hand, if your business model shows profitability, then you can start to invest more and build your enterprise.

Business Plan

Understanding projected financial situation through estimates and calculations

Start off with a break-even analysis by estimating income and expenses over the first year. In theory you should be able to turn a profit by the end of the first year. If not, then you must reconsider the business model. After determining the business can turn a profit, then turn to a month-by-month projection of your business’s net profits for the first year. Keep in mind that some businesses will be more or less profitable during certain months due to seasonal turnover. Finally, determine a start-up cost estimate. There are few generic costs that are common to all business types, they include, research expenses, insurance, business license, incorporation costs, permit fees, equipment and supplies, advertising and promotion, borrowing costs, employee costs and technological expenses.  These costs should be included in your business plan to give a true picture of how much money you will need to get off the ground.

 

 

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

Page Footer

Document Footer