Archive for the ‘ Business Law ’ Category

IS A NON-DISCLOSURE AGREEMENT IMPORTANT FOR MY FLORIDA SMALL BUSINESS? (WILL IT BE ENFORCEABLE?)

Posted on: Jun 16, 2019 by in Business Law
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Protecting your company’s IP (intellectual property) can be a daunting legal challenge for small business owners, but an experienced Florida small business attorney can help.

If you own a business in this state, you may need to have your employees, your potential investors, and others you work with sign a non-disclosure agreement – particularly if your business owns customer lists or trade secrets that may have value to others.

Are non-disclosure agreements legal in Florida? What can – and can’t – be included in a non-disclosure agreement? How can a business attorney help? Keep reading, because you are about to learn the answers to these questions and more about non-disclosure agreements in Florida.

WHAT IS YOUR MOST VALUABLE BUSINESS ASSET?

As a business owner, your IP may be your company’s most valuable asset. Several situations will require you to provide access to that intellectual property to an employee, contractor, investor, or another company. Many businesses in Florida use non-disclosure agreements to protect their IP.

In a general sense, a non-disclosure agreement should be signed whenever you share your company’s intellectual property and you do not want the other party to steal it or share it without your consent.

WHEN IS A NON-DISCLOSURE AGREEMENT APPROPRIATE?

When an employee will have access to the company’s intellectual property, a non-disclosure agreement should be signed when that person is hired or when that person is promoted to a position that requires access to the IP.

You’ve put considerable time, money, and work into your business. Your trade secrets, business agreements, proprietary processes, and client lists must be protected from any employee who might consider using your own intellectual property to start a business and compete against you.

A Florida business lawyer can draft a non-disclosure agreement that meets your precise business needs. Do not download one of the blank forms available online – it might not be enforceable in this state, and it cannot satisfy your company’s unique, specific needs.

SHOULD PARTNERS AND INVESTORS SIGN NON-DISCLOSURE AGREEMENTS?

If your business takes on an investor or a new partner, you will probably have to disclose much or all of your company’s sensitive information. Having a prospective investor or partner sign a non-disclosure agreement will protect that information.

If you are seeking an investor for a startup, you need to know that most venture capital investors will not sign a non-disclosure agreement.

SHOULD A PROSPECTIVE BUYER SIGN A NON-DISCLOSURE AGREEMENT?

In the future, if you decide to consider acquisition or buy-out offers, you will have to disclose all of your financial and operational details to the prospective buyer. You will need a non-disclosure agreement in case a prospective buyer backs out before the transaction is finalized.

A larger company can arrange an acquisition or a buy-out by working with a broker who ensures a buyer’s ability to follow through on the transaction – before the company releases any sensitive information – but small businesses may not want to pay a broker’s fee and will need protection.

The situations described above are not necessarily the only situations where you may have to share your company’s intellectual property. Over time, suppliers, manufacturers, and contractors may need access to some or all of your sensitive information for any number of reasons.

EXACTLY WHAT SHOULD A NON-DISCLOSURE AGREEMENT PROVIDE?

A strong, enforceable non-disclosure agreement must have these four provisions. It must:

  1. Define the confidential information that may not be disclosed: A Florida court probably won’t enforce vague, broadly defined non-disclosure provisions. Clearly and precisely defining the extent of the intellectual property makes the agreement more enforceable.
  2. Specify a time limit for the agreement: The courts rarely consider a non-disclosure agreement appropriate unless a time limit is specified. A reasonable length of time for an agreement will depend on your company’s own unique circumstances.
  3. Spell out any obligation to destroy or return IP: If originals or copies of intellectual property are to be destroyed or returned, the non-disclosure agreement must spell out that process. Vague references to returning or destroying intellectual property are not enough.
  4. Describe the remedies for the breach of the agreement: The remedies for a breach should be straightforwardly described and proportional to the damage sustained by the non-breaching party. An excessively harsh remedy may not be legally enforceable.

WHAT DOES A NON-DISCLOSURE AGREEMENT REQUIRE?

It’s also important to understand that in a general sense, a non-disclosure agreement is a restraint on trade. The courts in Florida enforce non-disclosure agreements only when the agreements are properly drafted with narrow, exacting legal terms and definitions.

Always have a non-disclosure agreement signed when you share any of your company’s intellectual property. A small business lawyer can draft non-disclosure agreements that meet Florida’s legal requirements and that Florida courts, if necessary, will enforce.

If you are a business owner, and if you have not yet done so, it’s a good idea to take an inventory of the business to determine what intellectual property needs to be protected and what value this information brings to your operations.

WHAT ARE THE LEGAL RIGHTS OF INTELLECTUAL PROPERTY OWNERS?

The protections offered by the law to the owners of intellectual property are designed to provide businesses with commercial and economic benefits, so business owners should take advantage of these legal protections.

If your intellectual property has been disclosed or stolen, you have the right to bring a legal action against anyone who has violated a non-disclosure agreement. If there is a breach of contract, the contract itself then serves as a guide for the court to decide upon a just resolution.

Even when both parties to a non-disclosure agreement have built trust, a non-disclosure agreement ensures that the obligations specified by the contract will be fulfilled – or that remedies will be imposed.

WHEN IS A NON-DISCLOSURE AGREEMENT UNENFORCEABLE?

The courts in Florida consider the most reasonable, plainest meaning of the text in a non-disclosure agreement. When the language is vague or ambivalent, the court may determine that the agreement is unenforceable.

An experienced Florida small business attorney can help you draft the non-disclosure agreements that are right for your business and can also represent your business in the event that a non-disclosure agreement is breached.

If you are a business owner and you do not already work closely with a reliable business lawyer, don’t wait. If your intellectual property does not have the comprehensive legal protection that it needs, speak to an experienced business attorney – today – and get the protection you need.

HOW TO DEAL WITH AN UNCOOPERATIVE BUSINESS PARTNER (AND KEEP YOUR BUSINESS THRIVING)

Posted on: May 18, 2019 by in Business Law
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two businessmen arguing over something with things escalating

In business, dealing with difficult individuals goes with the territory. Some people are just naturally stubborn. Others seem to be naturally contentious. And even otherwise reasonable people can sometimes suddenly become quite disagreeable for no particular discernible reason.

But when the difficult person is a business partner, the business can suffer. How you deal with a difficult business partner depends on the way that person is difficult and the nature of your disagreements. Sometimes, all you need for dealing with a difficult partner is a little patience.

But in other situations, you may be compelled to seek legal advice – and take legal action. What tips do experts offer for handling uncooperative business partners? If your business is taking a hit because a partner is not cooperating, is there any effective legal action that you can take? When facing situations like these, a central Florida business attorney may be your only solution.

 

WHERE CAN YOU FIND HELP FOR DEALING WITH DIFFICULT PARTNERS?

If you’ll continue reading, you learn what the experts recommend for dealing with troublesome business partners, and you will also learn about your legal options in the event that a business partner over time becomes an insurmountable difficulty for you and your business.

A variety of classes, books, and videos offer in-depth advice for dealing with others in the business. The most famous may be Dale Carnegie’s 1936 book How to Win Friends and Influence People.

If you’re in business, you already know some of the effective strategies for handling difficult people, so what you are about to read will simply be some brief tips and reminders of several basic management principles.

 

HOW IMPORTANT IS KEEPING YOUR DISTANCE?

Perhaps the most important initial strategy for dealing with an uncooperative business partner is making a commitment to maintaining your own personal distance and boundaries.

We’ve all heard that misery loves company. Do not let someone who is consistently negative or uncooperative “pull” you into his or her “orbit.”

If you can be just a bit casually indifferent, aloof, or preoccupied while remaining pleasant and polite, it can help you keep your personal distance and help you remain objective and reasonable.

An uncooperative person incessantly finds problems and focuses on negatives. Particularly with a business partner, it is imperative to stick to business, to stick to the facts, and to work toward finding solutions. Noticing a problem is fine – if it generates a solution to the problem.

 

HOW IMPORTANT IS YOUR OWN ATTITUDE AND EXAMPLE?

Projecting a confident attitude and setting a positive example is essential, and it helps you retain control in potentially negative situations. Let those around you know that problems are challenges and there is no problem that can’t be resolved by hard work and a positive attitude.

An uncooperative business partner may be a manipulative business partner. If you feel that you are being consciously manipulated, or if any discussion of a business matter turns contentious or hostile, cut it off at once, politely excuse yourself with a plausible pretext, and leave the room.

You can’t browbeat an uncooperative business partner into cooperating. Many difficult people enjoy arguing – or so it would seem – simply for the sake of being argumentative. You may have to accept that your business partner’s mind will not change – no matter what you say or do.

 

WHY IS COMPROMISE SOMETIMES THE BEST STRATEGY?

If you can compromise with an uncooperative business partner without hurting yourself or the business, do it. There is no need to “stand your ground” if a reasonable compromise can move a business matter forward positively and constructively.

Take care of yourself. Everyone is subject to stress, and dealing with uncooperative people all day can create plenty of stress. You need the right diet, regular exercise, and plenty of sleep if difficult people are a routine part of your workday.

Taking care of yourself includes having at least one advisor, partner, mentor, or close friend you can speak with honestly, relax with, and “vent” to – and someone you trust to offer good advice. Talking it out and getting some advice can help you to clarify the situation in your own mind.

 

WHAT IF YOU HAVE TO REMOVE A BUSINESS PARTNER INVOLUNTARILY?

No business can flourish in an atmosphere of constant acrimony and negativity. There may come a time when a business partner’s failure to cooperate becomes so disruptive and damaging to your business that you may need to consider taking legal action to remove that person.

By itself, retaining an attorney to help you can have a profound impact on an uncooperative partner. An experienced central Florida business attorney can explain your legal rights and options and may be able to negotiate a resolution on your behalf quickly and cost-effectively.

You also may be able to file a lawsuit to seek a “judicial dissolution” of your business relationship and remove the uncooperative partner from the company. You may be able to seek compensation for lost business, lost profits, and more with such a lawsuit.

DO YOU ALREADY HAVE A PROCESS FOR REMOVING A PARTNER?

Lawsuits take considerable time and money and are not always the best solution to the problems posed by an uncooperative business partner.

In some cases, you may need to buy out or otherwise compensate an uncooperative business partner when that partner is removed. The wisest move is to discuss all of your options first with an experienced central Florida business attorney.

There may be a process for involuntarily removing partners spelled out in the partnership agreement, operating agreement, or another business document. If no partnership agreement is already in place, you’ll have to rely on the terms of Florida’s Revised Uniform Partnership Act.

If you and your business partners have not spelled out your rights and responsibilities with a written partnership agreement, you will not be in the best position to settle conflicts, and minor disagreements can erupt into major disputes.

 

WHEN SHOULD YOU CONSULT A FLORIDA BUSINESS LAWYER?

You need to be prepared to deal – legally – with uncooperative business partners when you’re left with no other option. A reliable Florida business lawyer can help you draft the business documents that put solutions in place before problems emerge.

Of course, you shouldn’t wait for legal trouble before putting an experienced business attorney on your team. A good business lawyer can almost always help a business owner find cost-effective answers and solutions.

If you’re dealing with an egregiously uncooperative business partner – or with any other legal matter affecting your business – get a business attorney’s help at once. That’s the right decision.

 

A Guide To Incorporating A Business In Florida

Posted on: Apr 17, 2019 by in Business Law
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If you start up a small business in the state of Florida, you will have to decide how the business will be structured. It’s an important decision. Every business owner needs to examine carefully the benefits of incorporating the business or establishing it as a limited liability company.

Starting a new business venture means making some tough choices. New business owners inevitably encounter all kinds of unanticipated dilemmas and obstacles. A Daytona Beach business attorney can give you answers to questions like these:

  • Which business structure is best for you and most compatible with your goals?
  • Should you incorporate your business?
  • What does incorporation require?
  • What are the benefits of incorporating?

WHY IS CHOOSING THE RIGHT BUSINESS STRUCTURE SO IMPORTANT?

In Florida, deciding how your business will be structured determines:

  • what kind of paperwork you will have to file with the state and how much
  • how you will be taxed and what your tax rate will be
  • the extent of your personal liability as a business owner

WHY IS BUILDING A TEAM OF ADVISORS ALSO IMPORTANT?

According to business attorney Melody Lankford, “It is critical that business owners begin to create their team of advisors – attorney, accountant, insurance agent, banker, etc. – from the outset.”

business law firm in daytona beach

“These advisors work with the business owner to determine which type of entity and what type of coverage makes sense for the business owner as an individual and from the business perspective.”

Attorney Lankford adds, “We also take into account the strategic plan for the business, which can affect entity selection. It can become expensive down the road to change entities because the strategic plan was not considered at inception.”

EXACTLY WHAT ARE CORPORATIONS?

Corporations and limited liability companies (LLCs) are business structures that provide a number of important benefits and important legal protections to their owners.

A corporation is the most flexible business structure. Corporations are chartered by the state and have legal rights similar to the rights of persons. A corporation must name directors, hold regular meetings, and record the minutes of those meetings.

Corporate ownership is changed by the transfer or sale of stock. Most corporations are either “C” corporations or “S” corporations.

C corporations are taxed at the standard corporate rate. However, in S corporations, income and losses are divided among shareholders and “pass through” to their personal taxes. Insurance companies, banks, and several other kinds of businesses may not incorporate as S corporations.

HOW ARE LLCs DISTINCT FROM CORPORATIONS?

LLCs have some of the advantages that corporations enjoy, and along with the limited liability an LLC provides, LLC managers and members are not legally required to hold regular meetings, so the paperwork for an LLC is less cumbersome than the paperwork required for a corporation.

WHY SHOULD YOU CONSIDER FORMING AN LLC OR A CORPORATION?

Limited liability companies are affordable and easy to form in Florida.

business formation

The advantages of forming a corporation or a limited liability company include:

  • Protection for your company’s name: When you create a corporation or an LLC in Florida, no other corporation or limited liability company in this state may use that name.
  • Credibility with the public: The ability to use “LLC” or “Inc.” as a part of your name tells clients and investors that your operation is a legally established, responsible business.
  • Perpetual existence: LLCs and corporations enjoy perpetual existence, while partnerships and sole proprietorships end when their owners die or close the business. A corporation exists “in perpetuity” until the shareholders and directors choose to dissolve it.
  • Asset protection: LLC and corporation owners can keep personal assets separate from their businesses. In sole proprietorships and general partnerships, owners are personally liable for the company’s debts and obligations.
  • Taxes: Double-taxation can be avoided when a business becomes an S-corporation or a limited liability company. In partnerships and sole proprietorships, taxable income flows to the owners, but a corporation’s taxable income is taxed first with a corporate tax.
  • Deductions: Limited liability companies and corporations may deduct their business expenses and employees’ salaries before the profits pass through to the owners.
  • Liquidity: If an owner leaves your company, incorporation allows that owner’s interest to pass easily to someone else. Incorporation allows shareholders to transfer their interest freely to someone else without the consent of the other shareholders.

HOW DO YOU INCORPORATE A FLORIDA BUSINESS?

To establish a limited liability company or a corporation, you must file documents with the Florida Division of Corporations. You must decide on a company name, and you’ll need to make sure that it’s available by going to the Division of Corporations’ website at www.sunbiz.org.

business documents

For a corporation, you must submit “articles of incorporation,” and for a limited liability company, you must file “articles of organization.” Let an experienced Florida business lawyer help. These documents must adhere to a detailed format and must include:

  • the name of the limited liability company or corporation
  • the principal business address of the limited liability company or corporation
  • the name and address of your registered agent
  • the names and addresses of the managers (or managing members for an LLC)
  • the names and addresses of the corporation’s directors and officers
  • the effective start date of the limited liability company or corporation
  • the filing fee

HOW WILL FLORIDA BUSINESS LAW FIRMS HELP YOU?

Your business structure choice will have long-term effects. If you are starting up a new business in Florida – or simply considering a new business – the best step you can take is to meet with an accomplished business attorney to discuss the structure and future of your business.

An experienced business lawyer can address all of your legal concerns regarding zoning, taxes, trademarks, copyrights, and hiring and employment laws. A business lawyer can also help you set up practices and policies that can prevent minor disputes from becoming big legal problems.

Every day, Florida’s business owners grapple with legal challenges that can directly impact their operations: discrimination claims, personal injury claims, intellectual property concerns, advertising and environmental regulations, and the ever-present tax issues.

WHEN SHOULD YOU SPEAK TO A BUSINESS ATTORNEY?

Florida’s business owners need legal help now more than ever before. Whether you set up your operation as a sole proprietorship, a partnership, a corporation, or a limited liability company, you have the right to the insights and advice of an experienced Daytona Beach business lawyer.

business lawyer in FL

If you’re a new business owner, a business attorney can help you to decide which business structure is best for you, your business, and your ultimate business goals. Your business attorney can also draft or review the legal documents that a new business must create.

It is imperative for business owners in Florida to exercise their rights and to take advantage of the knowledge and resources that a good business attorney can provide. Speak to a business attorney promptly. It may be the best investment that you can make.

Can A Shareholder Be Removed From A Business?

Posted on: Mar 18, 2019 by in Business Law
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Shareholders do not always work out. When a corporation or a business needs to remove a shareholder, what steps must be taken? Will the shareholders who remove another shareholder face legal challenges? How can a business law firm in Florida help?

Removing a shareholder is complicated, but if the other shareholders take the right steps, a shareholder can be removed without any violation of the law. This is a brief discussion of the steps that shareholders must take to remove another shareholder from their corporation.

STEP #1: READ AND UNDERSTAND THE SHAREHOLDER’S AGREEMENT

A shareholders’ agreement spells out the obligations and rights of a corporation’s shareholders. It ensures that shareholders are treated and represented fairly and equally. The agreement should spell out in the most precise language possible exactly how to cut company ties to a shareholder.

If the language in the shareholders’ agreement is clear and precise regarding when and how a shareholder may be removed, the removal process will be much easier.

business partners in a meeting

Shareholders without the control of a business can typically be removed by the controlling shareholders for any violation of the company’s bylaws or the shareholders’ agreement.

WHAT ABOUT MAJORITY SHAREHOLDERS?

However, even someone who owns more than fifty percent of a company’s outstanding shares can be removed if there has been an explicit violation of the terms and provisions of the shareholders’ agreement or the company’s bylaws.

If a shareholder also has an employment contract with the company, the contract will have to be closely scrutinized to avoid any unanticipated legal difficulties.

A buyout provision should also be a part of every shareholders’ agreement. Corporate shareholders in this state should have their shareholders’ agreement drafted by an experienced Daytona Beach business attorney.

WHAT SHOULD BE INCLUDED IN A SHAREHOLDERS’ AGREEMENT?

When you create a shareholder’s agreement, you will need to include a number of precise items about the company, such as:

  • a capitalization table
  • the number of shares that will be issued
  • directions for transferring shares
  • the rights of shareholders to acquire company shares
  • how shareholders are paid if the business is sold

If you need to remove a shareholder, having the details as complete and as accurate as possible in a shareholders’ agreement can make the removal process significantly easier.

business partners and disputes

If you already have a shareholders’ agreement established, allow your business attorney to review the current agreement to ensure that it’s fair, enforceable, and that it meets the company’s current needs.

STEP #2: TO REMOVE A SHAREHOLDER, HAVE RELIABLE LEGAL ADVICE

When a shareholder needs to be removed, it is important to consult as early as possible with a reliable and skilled business lawyer. Your business lawyer may be able to help you negotiate a voluntary buyout and avoid legal action by the targeted shareholder.

A business lawyer will review the pertinent documents, apprise you of your company’s legal rights and options, and help you move forward with the removal process in the most effective and legally appropriate manner.

STEP #3: CREATE A REMOVAL RESOLUTION

With almost no exceptions, there must be some violation of the company’s bylaws or its shareholders’ agreement when a shareholder is being forcibly removed from the company.

shareholder agreements

When you understand your shareholders’ agreement and have reliable legal guidance, a shareholder removal resolution may be the best next step to take in the removal of a shareholder. Have your business attorney review or help you draft the removal resolution.

You may need to present the resolution to your corporate board of directors or to specific shareholders. It should accurately explain the cause for the removal, and it should additionally include a buyout request.

STEP #4: BE PREPARED TO NEGOTIATE AND COMPENSATE

If the shareholders have no compelling legal reason for a stockholder’s removal, they may still offer to buy the individual’s shares and to negotiate a fair price that both sides can agree upon.

It is important to understand that a former shareholder’s shares must be transferred or gifted to another shareholder. It doesn’t matter why a shareholder leaves or is removed. Your company cannot have shares that are unallocated.

Transferring the ownership of shares can be accomplished through their sale or through the gifting of the shares to others by completing a stock transfer form.

WHAT CAN HAPPEN IF NEGOTIATION ISN’T POSSIBLE?

However, if the shareholder who is being removed will not negotiate, and if you cannot compel that shareholder’s removal – if there has been no obvious violation of the shareholders’ agreement or company bylaws – a good business lawyer may be able to suggest other options.

For example, if your shareholders’ agreement does not spell out how to remove a shareholder, state law will apply. Every state has laws that allow corporations and businesses to remove shareholders. An experienced business attorney will know what steps to take.

When a shareholder is removed involuntarily, even if the shareholders have acted cautiously and have had sound legal advice, there is always the possibility that the removal attempt will trigger a legal dispute. The most serious disputes can bring businesses to a grinding halt.

disagreements in a business

The right business attorney may be able to help you resolve disputes with shareholders – and other potential legal disputes – before those disputes reach a courtroom or damage your business. An experienced Daytona Beach business attorney will be an aggressive advocate on your behalf.

IN WHAT OTHER WAYS WILL A GOOD BUSINESS LAW FIRM HELP YOU?

Along with a shareholder’s agreement, your business lawyer can draft or review your company’s articles of incorporation, bylaws, operating agreements, employment agreements, contracts, policies, and procedures.

When you form a business in Florida, putting an accomplished business attorney on your team is one of the first steps to take. As the business grows, your attorney will be able to advise and represent you and your company on a wide variety of matters that a business will face over time.

Do not wait until you need an attorney. In too many cases, that will be too late. Let a qualified business lawyer put solutions in place for your business now that will keep small disagreements and difficulties from turning into serious and costly legal disputes in the future.

A business owner needs an attorney who will offer trustworthy legal advice, who will ensure that your company is entirely compliant with the law, and who will aggressively represent you if you’re involved in a legal dispute. If you own a business, a good attorney’s help is your right.

Top 10 Tax Deductions That Business Owners Need To Know

Posted on: Feb 16, 2019 by in Business Law
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business owner doing finances

Owning a business can be rewarding and deeply satisfying in a number of ways – and especially if your business is prospering. The IRS offers several tax breaks that can help Florida business owners make their businesses flourish, but some of these tax breaks can be easily overlooked.

If you own a business in this state, our Daytona Beach business lawyers can help. Listed below are ten of the tax breaks that even experienced business owners sometimes overlook.

#1: THE NEW TWENTY PERCENT DEDUCTION

The Tax Cuts and Jobs Act of 2017 established new tax rates for businesses. The corporate tax rate for the largest companies was dropped from 35 to 21 percent.

Some pass-through businesses – partnerships, sole proprietorships, S corporations, and single-member limited liability companies – will now qualify to receive a deduction of 20 percent of their net income.

business owners

This break is for business owners with an income that “passes through” to their own Form 1040 and other tax forms. In businesses like finance, law, and accounting, an owner’s deduction is reduced if his or her income exceeds particular limits. If you earn too much, you may have no deduction.

#2: THE HOME OFFICE DEDUCTION

Employees who previously wrote off a “home office” no longer have that deduction under the Tax Cuts and Jobs Act, but a deduction for a home office is still offered to taxpayers who use the Schedule C. Sole proprietors who report a profit may take the deduction for a home office.

In order to claim the deduction, a home office must be space that is devoted to your business and nothing else.

The deduction isn’t limited to a full room. Your home office can be part of a room. Measure the work area, divide it by your home’s square footage, and that figure is the part of your residential expenses – rent or mortgage, insurance, and utilities – that you may claim.

There’s a simplified method for claiming a deduction for a home office. You should consider both methods for writing off a home office and use the method that’s best in your own situation.

#3: THE RENT DEDUCTION FOR BUSINESS PROPERTY

The expense of renting business space – whether you are renting office space, a storefront, a factory, or any other type of facility for your business – is fully deductible.

#4: THE OFFICE SUPPLY DEDUCTION

Whether or not you take advantage of the deduction for a home office, you may deduct any office or business supplies that you purchase.

office supplies

The advice that you’ve always heard – about keeping all of your receipts for office supplies – is important, because those purchases help to offset your taxable income.

#5: THE OFFICE EQUIPMENT AND FURNITURE DEDUCTION

Under the Tax Cuts and Jobs Act, a business owner may deduct up to $1 million worth of equipment and office furniture purchases. Previously, owners could only deduct for equipment and office furniture purchases up to $500,000.

Owners may deduct the full purchase price of qualified equipment from their gross income, provided they capped such expenditures at $2.5 million for qualified equipment financed or purchased in 2018. The 2017 spending cap was $2 million.

On some assets, a depreciation deduction of 100 percent is available which covers both new and used equipment. Prior to the Tax Cuts and Jobs Act, this deduction was available exclusively for new equipment. Assets that qualify include:

  • equipment or machines for business use
  • office furniture
  • particular interior improvements to commercial properties
  • pickup trucks, SUVs, and vans that weigh more than three tons

#6: THE ELECTRONICS AND SOFTWARE DEDUCTION

Electronics purchases like software, tablets, laptops, and smartphones may be written off. Devices costing $2,500 or less may be expensed the year they are purchased instead of depreciated over several years. Items costing over $2,500 must be depreciated.

computer for work

New software may be completely expensed the same year it is purchased provided that the software is “off-the-shelf,” not proprietary or custom-designed, and is commercially available to anyone.

#7: DEDUCTIONS FOR TRAVEL AND MEALS

The Tax Cuts and Jobs Act did away with most deductions for “entertainment, amusement or recreation,” but several deductions for meals and travel were retained.

Meals, for example, are deductible up to 50 percent provided that the meal isn’t “lavish or extravagant.” For instance, if you invite a client to a sports event, you can’t deduct the ticket prices, but if the hot dogs, burgers, and beverages are on you, you may deduct half of their cost.

#8: THE DEDUCTION FOR INSURANCE PREMIUMS

If you’re a business owner or self-employed and you pay for your own health insurance, the costs may or may not be deductible. You cannot take the deduction if you qualified for other coverage, such as healthcare coverage offered through a working spouse’s healthcare plan.

It’s a tax break that mostly benefits sole proprietors, and the deduction cannot exceed the net profit of your business. You may be able to include some of the premiums that you pay for healthcare coverage for your spouse and dependents.

#9: THE DEDUCTION FOR SOCIAL SECURITY CONTRIBUTIONS

When you’re self-employed, you pay double to Social Security what you would pay as someone else’s employee. Under federal law, employers pay 50 percent, and employees pay the other half, but if you’re self-employed, you pay both halves.

That amount should total 15.3 percent of your net profits, but you can deduct half of your contribution to Social Security on your Form 1040.

#10: DEDUCTIONS FOR SALARIES, WAGES, AND CONTRACT LABOR

Salaries, wages, commissions, bonuses, and taxable benefits are deductible expenses. Payments to freelancers and independent contractors are also deductible. Payments to a sole proprietor, a partner, or an LLC member aren’t deductible since these owners are not employees.

business paperwork

You must send a Form 1099-MISC to independent contractors who earn $600 or more in the tax year. If you use a payroll service, in most cases the service will send a Form 1099-K to contractors. Still, sending your own 1099-MISC – to protect yourself – is a smart idea.

WHERE CAN FLORIDA BUSINESS OWNERS OBTAIN SOUND LEGAL ADVICE?

Today’s marketplace is global. Business owners are concerned about taxes and a number of other legal matters that directly affect their businesses and the business environment. Having a skilled Florida business attorney on your team is imperative.

Along with financial concerns, business owners today deal with discrimination and injury claims; legal obstacles in the hiring process; and intellectual property protection. The most basic decisions often seem to require a law degree, a business degree, and a great deal of wisdom.

An experienced Daytona Beac business attorney will provide the legal guidance, insights, and if necessary, the representation that a business owner in Florida will – at some point – inevitably need.

With a reliable business lawyer working on your behalf, a business owner in Florida can put effective solutions in place before legal problems emerge. An attorney’s help might be the best investment that you can make for your business and its future.

Protecting Your Business From These Common Legal Issues

Posted on: Jan 18, 2019 by in Business Law
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If you own a business – in Florida or any other state – you probably already know that every business owner is a target for lawsuits. The largest companies, in fact, keep full-time business attorneys on staff to deal with the numerous lawsuits that are routinely filed against those companies.

If you own a business in the state of Florida, what kinds of lawsuits can you expect to face? Are there ways that you can prevent legal trouble before it starts? And who can you rely on to provide the legal help that a business owner is inevitably going to need?

The most common lawsuits that business owners here in Florida are likely to face will be:

  • lawsuits that deal with intellectual property disputes
  • premises liability lawsuits when someone claims to have been injured on your property
  • employee lawsuits that charge you with discrimination or wage-and-hour violations
  • product liability lawsuits charging you with producing hazardous, defective merchandise

HOW SHOULD YOU HANDLE AN INTELLECTUAL PROPERTY LAWSUIT?

Intellectual property or “IP” law deals with the protection of patents, copyrights, trademarks, and trade secrets.

If you are accused of stealing – or of using without permission – another company’s intellectual property, you’ll probably be targeted by a lawsuit, and you’ll need a good business attorney working in your defense.

settling out of court

Intellectual property cases can usually be settled out of court – especially if you are not actually guilty of IP theft or if the whole incident was the result of a mistake or a misunderstanding.

If you believe that someone has stolen your company’s intellectual property – or that someone is using your intellectual property without your consent – consult a Daytona Beach business attorney to discuss your legal options.

Your business attorney can also help you obtain patents and copyrights, register your trademarks, and protect your company’s intellectual property in the future.

HOW SHOULD YOU HANDLE A PREMISES LIABILITY LAWSUIT?

Property owners are obligated to maintain a relatively safe environment so that people who come onto the property do not suffer injuries. This responsibility is known as “premises liability,” which holds property owners liable for accidents and injuries that occur on their property.

Exactly what you are liable for depends on factors including but not limited to who the visitor was and the nature of the hazard that injured the visitor. If someone is injured, you may be found liable for their medical costs, lost wages, pain and suffering, and even their attorney’s fees.

injuries on property

Stay on top of property maintenance, and purchase adequate liability insurance to protect your business and premises. If you own a smaller business, general liability coverage protects both your personal assets and your business from being seized if a judgment is made against you.

HOW SHOULD YOU HANDLE EMPLOYEE LAWSUITS?

Ignoring complaints about discrimination, harassment, or wage-and-hour issues is an easy way to trigger a lawsuit. Establish anti-discrimination and anti-harassment policies for your business, and set a tone that discourages discrimination and harassment. A good business lawyer can help.

A business which can prove that it takes discrimination and harassment seriously has a much stronger case if an employee takes you to court. You may even want to include clauses in your employment contracts that clarify your policies regarding harassment and discrimination.

Workers who believe that they have not been paid properly, who claim that they have been denied breaks, or who claim that they have been forced to work off the clock may pursue alleged violations of state and federal labor laws with wage-and-hour lawsuits.

Keeping accurate and comprehensive records is the best way to protect your business against a wage-and-hour lawsuit. A casual or lackadaisical approach to keeping records and to staying abreast of details is an open invitation to anyone who wants to file a lawsuit against you.

HOW SHOULD YOU HANDLE A PRODUCT LIABILITY LAWSUIT?

If your business sells any kind of consumer products to the general public, the design and the manufacturing of those products must be closely monitored and supervised so that the product does not pose a hazard to consumers when it is used properly and as intended.

Product liability law is exceedingly complicated, so you must have an experienced business attorney’s help as soon as possible if you are targeted with a product liability lawsuit.

legal gavel

Your attorney will investigate a product liability claim against you and look for weaknesses, flaws, inconsistencies, or outright falsehoods in the complaint.

WHAT ELSE CAN YOU DO TO PROTECT YOUR BUSINESS?

Business owners should consider requiring formal employment contracts that include nondisclosure and non-compete agreements. You should have your business lawyer explain the advantages of employment contracts and draft those contracts for you in the future.

In fact, you should have an experienced Central Florida business attorney review all of your business contracts and other important documents. Never sign a business agreement or contract unless and until you know precisely what you are agreeing to.

singing personnel paperwork

As your business expands, it is going to need appropriate personnel and human resource policies. The right personnel policies put solutions in place before personnel problems can become legal problems.

As you may know, most business disputes are resolved out-of-court by the attorneys for both sides in private negotiations. The right practices and policies will provide quick solutions and will prevent costly, unnecessary lawsuits from being filed against you.

HOW CAN A BUSINESS LAW FIRM IN DAYTONA BEACH HELP?

A reliable business attorney can help you draft a business plan, an employee handbook, and all of the additional documents that you’ll need to protect your business and keep small difficulties from becoming big legal problems.

A business attorney can also offer training and legal advice to your supervisors and managers regarding discrimination and harassment laws and policies. You will receive the sound legal advice, representation, and services that every business owner in the state of Florida needs.

When you own a business, you need quick, out-of-court resolutions that let you focus on business instead of problems. You’ve worked hard to create and maintain your business. Protect it.

Let a reliable business lawyer review all of your potential legal risks and help you implement practical solutions to potential legal problems before those problems can do damage to your business.

Top 5 Mistakes Small Business Owners Need To Avoid

Posted on: Dec 15, 2018 by in Business Law
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If you own a small business in the state of Florida, you already know that you’ll sometimes need a lawyer’s advice and services to grow your business and to keep it compliant with the law.

Business lawyers in Daytona Beach help business owners resolve both simple and complicated legal matters. They can also help business owners avoid the mistakes that can hurt your business.

HOW CAN A GOOD BUSINESS LAWYER HELP YOU?

A qualified business lawyer can help you put solutions in place before disputes arise. When a dispute does arise, your attorney can help you keep a minor conflict from becoming a major courtroom battle.

avoiding courtroom battles

What are some of the most common and easy-to-avoid mistakes that small business owners make?

1. the failure to have everything put in writing
2. the failure to plan for the future of the business
3. the failure to use effective employment agreements
4. the failure to properly classify workers as contractors or as employees
5. the failure to use effective restrictive covenants

MISTAKE #1: THE FAILURE TO HAVE EVERYTHING PUT IN WRITING

It’s a serious mistake when a small business owner fails to have everything put in writing. Whether it’s a lease, a purchase order, a storage agreement, or an employment contract, get it in writing.

Yes, it’s inconvenient to get everything in writing every time, but successful, long-time business owners know how important it can be to have every understanding, agreement, and transaction on paper and in black and white. Over time, a casual approach to details hurts a business.

When you have everything in writing, if a dispute arises, you may already have the evidence that you need to prevail. If you don’t have everything in writing, and a dispute arises, you could be stuck with no evidence to prove your side of the dispute.

It’s also never a bad idea to let your business attorney review any contract or any other document that might affect your best interests.

MISTAKE #2: THE FAILURE TO PLAN FOR THE FUTURE OF THE BUSINESS

Businesses inevitably change. People come and go. So do business trends. You can’t wait for a difficult situation to become a legal problem. You need to get “in front of” a difficult situation before it becomes a problem.

What can happen if a co-owner of your business gets married, gets divorced, dies, disappears, declares bankruptcy, is convicted of a crime, or is declared incompetent by a court? What if your business partner simply can’t get along with you any longer?

drafting business plans

Unless your business is a sole proprietorship, one or more of these situations – or something very similar – is almost certain to happen at some point in the future. You need to have a carefully drafted business plan, by-laws, or operating agreement that adequately addresses these scenarios.

If you’re a sole owner, you need written provisions that spell out what happens if you sell your business or retire. Let a Daytona Beach business attorney help you plan for the future, draft the documents you need, and review your current business plan and other pertinent documents.

MISTAKE #3: THE FAILURE TO USE EFFECTIVE EMPLOYMENT AGREEMENTS

Hiring and dealing with employees is one of a business owner’s biggest legal challenges. To protect yourself, offer your new employees an agreement that precisely spells out the duties of the job, the compensation, and any other benefits.

Business owners who are hiring employees on an at-will basis cannot imply in any way that the employment is open-ended. A good Florida business lawyer can create employment agreements that provide you with full legal protection while meeting your specific needs.

Some business owners may also need confidentiality or non-disclosure agreements, especially if you have exclusive trade secrets or customer lists that might be valuable to others.

A business attorney can draft confidentiality agreements and restrictive covenants that will, if necessary, be enforceable by a court. Below, you’ll read and learn more about restrictive covenants.

MISTAKE #4: THE FAILURE TO PROPERLY CLASSIFY WORKERS

Who are your employees and who are independent contractors? Properly classifying anyone who works for you is imperative.

For business owners, classifying a worker as a contractor can mean tax savings, partial exemptions from some labor laws, less liability, and relief from providing employee benefits.

classifying employees

These are substantial advantages, but you don’t want someone that you classified as an independent contractor to claim employee status and sue you for any additional compensation or benefits that come with that status.

So who is a contractor and who is an employee? The more control an employer has, the more likely it is that a court will find that a worker is legally an employee. If you have a concern about a specific situation or worker, have an experienced business lawyer review the situation for you.

MISTAKE #5: THE FAILURE TO USE EFFECTIVE RESTRICTIVE COVENANTS

A restrictive covenant may be part of an employment contract, a consulting contract, a purchase order, or a non-disclosure agreement. You may already require your contractors and employees to sign restrictive covenants, but if it’s not enforceable, a restrictive covenant can’t help you.

Florida law spells out a “legitimate business interest” test that the courts must use to evaluate restrictive covenants. Florida courts generally presume that for a former employee, contractor, or agent, a restraint of six months or less is reasonable but a restraint longer than two years is not.

Trade secrets receive additional protection. Where trade secrets are concerned, Florida courts generally presume that a restraint of five years or less is reasonable, but a restraint longer than ten years is not.

Restrictive covenants should clearly specify the legal action that a business owner will take if a breach occurs.

You must establish a restrictive covenant before you share any intellectual property owned by your business. A good business attorney will help you with the precise language necessary for enforceable restrictive covenants that meet your needs.

WHAT MIGHT BE THE BIGGEST MISTAKE BUSINESS OWNERS MAKE?

Probably the biggest and costliest mistake that a small business owner can make is having no legal advice or representation at all. A good business lawyer can help you in numerous ways to avoid most of the other mistakes that business owners sometimes make.

getting a business attorney

If you own a small business in Florida, you must have a reliable business attorney on your team and ready to work on your behalf. That is your right. The future of your business could depend on it.

Things To Legally Consider For Mergers And Acquisitions In The U.S.

Posted on: Nov 17, 2018 by in Business Law
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Buying or selling a business can be a complicated process in Florida. If you are buying or selling a business in this state, keep reading. The right legal help is imperative for negotiating an appropriate price and for preventing and managing risks on both sides of a major transaction.

Large, important transactions must be structured on the clearest, most favorable terms and provide full legal protection to all parties involved. The failure to be advised by an experienced business lawyer often results in subsequent legal disputes that could easily have been avoided.

HOW ARE MERGERS AND ACQUISITIONS DEFINED?

This is a brief look at the legal side of mergers and acquisitions, the problems that you may encounter with a merger or with an acquisition, and the solutions to those problems.

A merger happens when two or more distinct businesses combine to create one company. A merger of equals happens when neither business is designated as acquiring the other business. The stockholders of both companies trade in their shares for shares from the new company.

WHAT ARE THE WAYS A BUSINESS MAY BE ACQUIRED?

When one company directly purchases another company, it’s an acquisition. Acquisitions can happen in two ways – through purchases of stock or through asset purchases:

  1. Stock purchases: The acquiring company buys the shares of the target company from its shareholders and gains all of the target company’s assets and liabilities. The complexity of a stock acquisition often depends on the target company’s number of shareholders.
  2. Asset purchases: The acquiring company buys the assets of the target company including equipment, stock, inventory, and facilities. The purchaser chooses which assets to acquire, so asset purchases are often considered more advantageous than stock purchases.

HOW WILL A GOOD BUSINESS ATTORNEY HELP YOU?

A qualified Florida business lawyer can help you understand what the advantages and disadvantages are of an asset purchase vs. a stock purchase in any particular potential business acquisition.

If you are a selling a business in this state, you must see to it that you are not making any false or exaggerated representations that will come back to haunt you. If you are a purchaser, you must make sure that the selling party will stand by its representations about the business.

A business lawyer can ensure that the documents involved in a Florida business merger or acquisition are complete, accurate, and reflect your expectations as a buyer or seller. A good business attorney can also help you with and advise you regarding:

  1. debt and equity financing agreements
  2. corporate reorganization or consolidation
  3. partnership and shareholder agreements

It is essential to conduct due diligence before you initiate any transaction such as the merger of two or more companies, the purchase of a business, or any related activity. You will need a skilled, diligent attorney who has substantial contract, acquisition, and merger experience.

WHAT IS REQUIRED TO BUY OR SELL A BUSINESS IN FLORIDA?

Listed here are the steps you will need to take prior to selling a business in Florida. Go through these items with your business attorney to ensure that you have met all of your obligations and that you have adequately protected your long-term interests:

  1. If you are leasing business space, determine how the lease can be reassigned to the buyer. Landlords need to know that your buyer will continue the operation – and the rent payments.
  2. Determine if your licenses can be reassigned or if your buyer must obtain new licenses.
  3. Have your business lawyer review your contracts with clients, service providers, and vendors to ascertain what your responsibilities are to those parties when you sell the business.
  4. Conduct a lien search. If liens are outstanding, satisfy them or arrange for the payment. If you do not disclose outstanding liens against the business, you will probably be violating the sales agreement.
  5. Have all of the appropriate financial papers, statements, and disclosures ready in advance for the buyer.

WHAT IF THERE ARE COMPLICATIONS WITH A BUSINESS ACQUISITION?

If you are the buyer, realize that purchasing someone else’s business might obligate you to take on a variety of responsibilities and to handle a number of unresolved matters.

Have your business attorney ensure that everything about the purchase is legal and legitimate. If there are complications, your attorney can explain them to you and possibly even clear up those complications for you.

WHAT MUST BE CONSIDERED IN ANY MAJOR TRANSACTION?

The top consideration in either a merger or an acquisition is how the transaction is structured. A number of conditions typically must be met before a merger or acquisition can proceed. Those conditions could involve loans, liens, stock, employee contracts, or almost any related matter.

A company’s financial issues, sales, debts, services and/or products, intellectual property, and customer relations all must be considered. Have your attorney help you review the documents, performance, and finances of a company before you merge with or acquire that company.

The key to successfully completing a business acquisition, merger, or sale is to avoid unexpected complications by closely scrutinizing the details. A skilled Florida business lawyer will help you attend to those details and will help you avoid unexpected obstacles or complications.

WHAT SHOULD YOU AVOID IN A TRANSACTION?

Speaking frankly, one of the most common problems with mergers and acquisitions is the use of improper forms downloaded from online legal document companies.

Standard contracts cannot take unique situations into account. Signing the wrong contract could leave you at risk, so avoid using any standardized forms – especially in a major transaction.

A reliable business attorney can draft – or review – all of your merger or acquisition contracts and documents to guarantee that your goals are accomplished and that your interests are protected.

WHAT ABOUT THE FUTURE?

When the transaction is complete, your lawyer can help you plan for the future of your company, help you avoid legal disputes, and keep your business running smoothly by ensuring that you have policies and documents in place to deal with any unexpected complication or circumstance.

No business owner likes taking time off to handle legal matters. If you are a business owner in Florida, this is the right time to arrange a consultation with an experienced central Florida business attorney. It may be the best business investment you make.

What To Consider When Drafting Employee Contracts

Posted on: Oct 13, 2018 by in Business Law
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In 2018, the economy is booming, and employers everywhere are hiring. Here in Florida, most workers are “at will” employees, which means that they work without an employment contract, and they may be legally fired without cause.

But if you own a business in the state of Florida and you need to have one or more – or all – of your employees sign an employment contract, what will need to be considered? Can a business law firm in Daytona Beach help?

WHAT SHOULD BE INCLUDED IN AN EMPLOYMENT CONTRACT?

Legally speaking, it is a good idea for employers to offer their employees a written agreement which sets forth the terms and conditions of their employment. The document should include specific details about the nature of the work, the compensation, and any additional benefits.

An employment contract spells out precisely what is expected of an employee, and in return, it also specifies what the employee may expect from the employer.

If you own a business in this state, an experienced business attorney can draft the employment contracts that meet your precise needs and give you full legal protection. And as you might imagine, anyone doing business these days needs full legal protection.

A reliable business lawyer can also provide the legal advice and additional legal services that your business needs.

WHAT DO EMPLOYERS WANT EMPLOYMENT CONTRACTS TO ACCOMPLISH?

For employers in Florida, generally speaking, here is what needs to be addressed in an employment contract – and what needs to be kept in mind as the contract is drafted:

1. Retaining the employee: Employment contracts should stipulate the minimum amount of time an employee must remain with an employer. A contract may also stipulate that the employee must give the employer sufficient notice to find an appropriate replacement.

2. Setting goals and standards. An employment contract should include the employer’s expected standards, performance goals, and other productivity measures for the employee.

3. Protecting intellectual property: If the employee has access to confidential information, you must set some guidelines regarding what may and may not be disclosed.

4. Providing security for both employee and employer: With a properly drafted contract, both sides understand the other side’s expectations, and both enjoy certain legal protections.

WHAT SPECIFICS MUST BE ADDRESSED IN AN EMPLOYMENT CONTRACT?

The specifics that must be addressed in almost any employment contract include:

1. the employee’s responsibilities
2. the pay and pay schedule, benefits, and commissions or bonuses
3. leave and how to request it
4. profit-sharing and stock options
5. mileage and travel expenses
6. rules for the use of company property
7. rules and processes for employee discipline and termination

The last point above needs elaboration. An employment contract should spell out exactly what steps an employer must take in order to terminate the employee legally. This provision will help to protect an employer from a possible lawsuit for wrongful termination.

An employer may also want to include clauses in an employment contract that clarify employer policies regarding matters such as harassment and discrimination. It’s a good idea.

WHAT ABOUT NON-COMPETE AND CONFIDENTIALITY AGREEMENTS?

Some employers in Florida should also have their employees sign non-compete agreements. Employers in our state have only a limited legal ability to keep ex-employees from competing against them – and for only a specific length of time and in a certain geographical location.

Still, a good business lawyer can help you draft the best possible non-compete agreements. The right business attorney can also help you draft confidentiality agreements that Florida courts, if necessary, will enforce.

Employment contracts are legally binding and enforceable. If one party to a contract fails to meet its contractual obligations, the other party has the right to take legal action.

Contract dispute resolution is handled through the state courts, so Florida employers need to work with a business attorney who has substantial experience handling contract dispute cases in this state.

WHY SHOULD YOU AVOID PRE-PRINTED CONTRACT FORMS?

Every word that is printed in an employment contract counts. Every line is important. Employers absolutely must avoid using the pre-printed, blank contract forms that you can buy at an office supply store or download from the internet.

Instead, as an employer, you need precisely-written contracts drafted exclusively for your own company’s needs. A business attorney can protect an employer by drafting easily-understood employment contracts that cannot be misconstrued or misinterpreted.

Employers who wish to hire employees on an at-will basis, for instance, must avoid any language in an employment contract that leads an employee to believe that the period of employment will be indefinite.

Additionally, employers who wish to bind employees to particular terms and conditions must ensure that the language in an employment contract will hold up and will protect their interests if challenged in court.

WHAT’S THE BEST WAY FOR EMPLOYERS TO AVOID LEGAL PROBLEMS?

Deciding to retain a business attorney is the smart step that every Florida employer should take to avoid most legal problems and to deal constructively with any legal problems that may become unavoidable.

A good business attorney will help you draft, interpret, and enforce employment contracts, and if necessary, will guide you through the legal process if you are sued over an employment contract – or if you need to have an employment contract enforced.

Employers routinely sign a variety of contracts. It’s an almost daily part of doing business. However, there’s no such thing as a “simple” business contract, and if you own a business, you should never sign a contract without the advice of a good business attorney.

WHEN SHOULD YOU CONTACT A FLORIDA BUSINESS ATTORNEY?

Employers should have a business attorney review every line and every word of every contract they sign or use in their business on a regular basis.

A good business attorney should also sign off on any modifications, deletions, or additions to any business contract. The advice of a good business lawyer is invaluable, and the slight cost can save a business owner immeasurably in the long run.

Choose to protect yourself and your Florida business starting today. If you do not already have the services of an experienced business attorney, make the call immediately. Protecting yourself and your business is always the right thing to do.

The Importance Of Choosing The Right Business Structure

Posted on: Sep 16, 2018 by in Business Law
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When starting up a new business, choosing the business structure that is most compatible with the goals of your company is imperative. If you are forming a new business here in Florida, or even if you are already a business owner in this state, a Central Florida business attorney can help.

What follows is a brief description of the various business structures and some tips on how to choose the structure that is right for you and your company. Generally speaking, businesses in Florida conform to one of these four basic business structures:

1. sole proprietorships
2. general or limited partnerships
3. S or C corporations
4. limited liability companies (LLCs)

WHAT DO SOLE PROPRIETORSHIPS OFFER?

The sole proprietorship is the most popular and most traditional business structure. More than 17 million sole proprietorships currently operate in the United States.

To start up a sole proprietorship, what you’ll need is a basic business license, any special permits (such as a liquor license or a contractor’s license) that your particular business may require, and a Social Security number.

A sole proprietorship is the simplest business structure to start up. If you are the only owner and your business is not incorporated, you are a sole proprietor. However, sole proprietorship provides a business owner with very little legal protection.

WHAT IS THE BIGGEST RISK WITH SOLE PROPRIETORSHIPS?

Your income as a sole proprietor is taxed only once, because you and your company are considered the same “legal entity.”

Thus, one of the negatives to a sole proprietorship is that when the business is at risk, the owner’s personal assets may also be at risk.

If your sole proprietorship cannot pay its debts, creditors may pursue – and in some cases seize – your personal assets as well as your business assets.

A sole proprietorship, therefore, requires discipline – it is not for everybody – because the complete responsibility for the business falls on one person.

WHAT DO PARTNERSHIPS OFFER?

Partnerships are another quite popular business structure. Partnerships are established when at least two persons do business together. Much like a sole proprietorship, a partnership is relatively easy to start up.

The state of Florida allows both “general” partnerships and “limited” partnerships. A general partnership, like a sole proprietorship, provides the owners with only the minimal legal protection.

HOW ARE “LIMITED” PARTNERSHIPS DIFFERENT?

A limited partnership in Florida must have at least one general partner managing the business and assuming liability for its debts, but a limited partnership must also have a “limited” partner – at least one investor who brings capital to the business but is not involved in management.

If they do not participate in the company’s management, a partnership’s limited partners are not liable for the debts of the company.

WHAT DO CORPORATIONS OFFER?

A corporation is a business structure that is a separate legal entity with multiple owners. As a legal entity, a corporation has legal “rights.” When a corporation is sued, the owners in most cases are legally insulated from personal liability (with several exceptions explained below).

Corporations appoint directors, routinely conduct corporate meetings, and record the minutes of those meetings. A corporation’s ownership can change through the transfer or sale of the corporation’s stock.

Corporations are stringently regulated. The IRS closely scrutinizes a corporation’s financial conduct.

IN WHAT SITUATIONS ARE A CORPORATION’S STOCKHOLDERS LIABLE?

Although shareholders are generally protected from personal liability, if a corporation’s creditors can demonstrate that business and personal funds were “commingled,” a corporation’s shareholders may become personally liable for its debts.

A corporation’s creditors may also pursue a shareholder’s personal assets if they can prove that the corporation was created simply and only to protect its shareholders. Proving such an allegation is called “piercing the corporate veil.”

WHAT ARE “S” CORPORATIONS AND “C” CORPORATIONS?

The two main types of corporations in the U.S. are “S” corporations and “C” corporations.

C corporations are taxable entities taxed at the standard corporate tax rate, but an S corporation’s losses and income are divided among the shareholders and transfer or “pass through” to the shareholder’s personal taxes.

A limited liability company has the limited liability that a corporation offers. An LLC’s owner may be a sole owner, a trust, a corporation, or another LLC. Depending on how they are established, LLCs may be taxed like partnerships or like corporations.

With some rather extensive paperwork and a good business attorney’s help, an LLC can be taxed like a partnership, but otherwise, an LLC will be taxed like a corporation.

WHAT’S BEST FOR YOUR BUSINESS?

You will have to choose one of these four basic business structures when you start up a business in Florida. The choice you make will determine how much paperwork you must submit, the way you will be taxed (and the tax rate), and your personal liability.

Your choice of a business structure has long-term implications. When you decide to start up a new business in Florida, the smartest move you can make is consulting with a Daytona Beach business attorney regarding the structure of your business.

Every business will require the help of an accountant and a business lawyer. The right business attorney can provide assistance with concerns including taxes, zoning, copyrights, trademarks, and compliance with employment and hiring laws.

HOW CAN A FLORIDA BUSINESS LAWYER HELP YOU?

All businesses are governed by federal, state, and local laws and regulations. A business lawyer can help you establish the business policies and practices that will protect you from lawsuits and other legal problems.

Business owners – almost daily – face a number of legal issues that directly affect their businesses: personal injury claims, discrimination claims, intellectual property protection, environmental concerns, advertising regulations, and of course, taxes.

If you’re starting up a new business in Florida, a business lawyer will also assist you with drafting the legal documents you will need, including but not limited to:

1. by-laws
2. articles of incorporation
3. shareholder agreements
4. operations agreements
5. any other contracts, agreements, and policies

WHY IS LEGAL HELP SO VITAL FOR BUSINESS OWNERS TODAY?

Even routine, everyday business decisions – like hiring decisions – can open the door to potential legal difficulties. Business owners in the 21st century need legal help now more than ever before.

Do not let a legal dispute bring your business to a standstill. If you are a business owner in Florida, develop a long-term relationship with an experienced Central Florida business attorney.

Make the call to a business lawyer today. It’s the best business investment you can make.