Thursday, January 31, 2013
How to Start an LLC
Setting up a limited liability company or LLC is so easy contrary to what others think. There are fewer documents that are required to be passed in order to establish the business and there are also simple processes involved. But in order to understand the process involved in starting a limited company, you should know first what the features of the company are.
What is a limited liability company?
A limited liability company is one of the business structures in which it features a combination of partnership and corporation. It has the legal protection of owners' personal assets and the creditors cannot pursue them during bankruptcy like corporations. Aside from the protection of assets, the LLC also enjoys tax and operational benefits of partnerships. This means that there is only one level of taxation unlike in corporations where the company is taxed at a business level and the shareholders are also taxed for their dividends.
What are the requirements of starting an LLC?
Although the limited liability company is a hybrid business structure, establishing one is very easy. The law only requires one document to be passed by the company but there may be other requirements depending on the state where the business will be established. The only document required is the Articles of Organization.
The Articles of Organization
This is the basic document of the company. Some states call this document "certificate of formation" or "certificate of organization". Important information about the company is stated in this document such as business name, owners or members, duration of the business, name of the registered agent and the corresponding address, purpose of the company, and managers' names and addresses, if applicable.
There is a filing fee for the Articles of Organization and the price depends on the state. The fee may range from $100 to $800. There may be other fees that the state may require so it is best to consult first the LLC filing office before processing the document. This is a disadvantage compared to partnership or sole proprietorship.
Operating Agreement
This document is not required by law but may be required by some states. This document indicates how the company will be managed and the organizational structure of the LLC. It is important to have this document before the company operates in order to avoid confusion within the organization.
The Operating Agreement sets out rules for ownership of the company. This includes members' rights and responsibilities, percentage interest in the business, management of the organization, allocation of profits and losses, and certain provisions such as "buy-sell" in case one of the members dies, becomes disabled or leaves the company. Such provisions are important because the life of the company is affected if one of the members leaves the LLC.
Publication requirements
There are some states that require the company to publish a notice in a local newspaper stating the intention of establishment. In case this is required, the notice should be published several times for several weeks, depending on what the filing office will require. After the specified period, an affidavit of publication should be passed to complete the filing of the company.
Article Source: http://EzineArticles.com/7405553
Wednesday, January 30, 2013
DIVORCE !!! Easier than you think? - By The People Fairfield CA
Rene goes over how a divorce does not always need to involve a full legal team. He explains the process of how By The People can help file the paperwork necessary for the courts. See more at http://www.bythepeopleca.com
Monday, January 28, 2013
A Guide to Successfully Filling Out a Living Trust Form
Living trust forms are sensitive legal instruments that require careful following of instruction. First, let us define a living trust and then go on to discuss why it is necessary to understand how to fill out the form and how to go about it. A living trust, also known as a revocable living trust is a trust that is created by an individual who is alive with the purpose of holding the title of his or her assets and distribution of these assets upon the death of the individual. It is referred to as a living trust because it is created while the individual is still alive. On the other hand, is a trust is created through a will, it will be referred to as a testamentary trust, having been created through the individuals, last testament and will. Hence, the living trust will is not to be confused with a will.
The concept of a probate
It has come to be an exceedingly popular way of tax planning, and it helps in steering clear of a probate, which has been passed as a law in some States during the property succession process. The probate ensures that the deceased debts to any individual or institution, including the government, will be settled before distribution to the heirs begins. This process is expensive, time-consuming and feels like an invasion of privacy. Therefore, to stay away from all these, individuals are turning to trusts, which have added tax benefits too.
The procedure of creating such a fund is a bit complex and involves the filling out of a bunch of trust forms. This must be done with the utmost care and accuracy, because one false move on the forms and the whole trust could be in a lot of trouble and could go on for a long time. It is, therefore, imperative that an individual be extra vigilant when undertaking this exercise. Here, are some pointers that will aid when filling out living trust forms.
Filling the living trust forms
The first basic, and most straightforward, precaution that is ignored is folding the form.
1. The forms should always remain unfolded and must be free of any creases, stains or smudges. This is because computers read most of the forms, and any foreign appearance on the form may be tantamount to invalid or wrong information.
2. It is extremely critical that an individual be exceedingly careful when it comes to the detail. One should recheck the details filled in and do it a couple of times to make sure that one is on the safe side. This is important because a slight error in the details could change a lot in a court of law and an individual or the heirs could end up in an unpleasant situation just because of a small mistake when filling out the form.
3. As stated above, most of the forms are read by computers that have optical character recognition software, and so it is vital to write in a legible and clear handwriting so that the computer will read the correct information.
4. Always have copies of the forms in an easily accessible place because one may require referring to them in case of anything.
5. Always consult with the attorneys on any move an individual may wish to make (alteration or modification of the trust) because they are more qualified and experienced in dealing with matters that concern the living trust.
Follow the basic pointers above and be assured that there will be a smooth and uncomplicated process of creating a living trust. Always take necessary steps after this to preserve the living trust forms in the best condition.
Article Source: http://EzineArticles.com/6951614
Sunday, January 27, 2013
Defining Legal Terms - By The People Fairfield CA
Rene goes over what types of questions they can help answer at By The People. A lega document preparation company. See more at http://www.bythepeopleca.com
Saturday, January 26, 2013
Let Us Help You Set Up Your Corporation or LLC!
By the People will create your Company Articles, file them with the Secretary of State, and create an Organizational Kit for you, including: Sample Bylaws and Minutes, Seal, Shares, and Misc. Needed Forms.
Our fees are $399.00 plus filing fees:
INC - $115.00 and
LLC - $85.00
Friday, January 25, 2013
What is a Durable Financial Power of Attorney?
A durable financial power of attorney (POA) is a document that grants authority to someone of your choosing to handle your financial matters. This can include paying your bills, accessing your bank accounts and even selling or buying assets and negotiating real estate deals.
A regular Durable POA allows the named agent to step in at any time and doesn't require a disability to be active. For example, your wife could sign a financial document for you while you are out town.
A "springing" Durable Power of Attorney on the other hand, only gives your financial agent access to your finances when a doctor has diagnosed you as mentally or physically unable to handle your own affairs. In the case of a "springing" durable POA, you will be in full control of your own financial matters while you are of sound mind and body.
If your family depends upon you for financial security, a POA can allow them to continue using your assets if you should become disabled. If you do not name a power of attorney your spouse or family will have to get a court order to handle your finances. This will require a judge to declare you "incompetent" and could delay paying bills and paying for any medical care you may need.
Your Durable Financial POA is only valid while you are still alive. Upon your death, control of your financial assets will pass to your estate executor or your trustee if you have named one.
In addition, a Durable Financial POA will also terminate automatically if you cancel it, a court deems it invalid, your spouse was the agent and you divorce, or if the named agent is not available. Considering this last case, it is a good idea to name a back-up financial agent.
Article Source: http://EzineArticles.com/4835856
A regular Durable POA allows the named agent to step in at any time and doesn't require a disability to be active. For example, your wife could sign a financial document for you while you are out town.
A "springing" Durable Power of Attorney on the other hand, only gives your financial agent access to your finances when a doctor has diagnosed you as mentally or physically unable to handle your own affairs. In the case of a "springing" durable POA, you will be in full control of your own financial matters while you are of sound mind and body.
If your family depends upon you for financial security, a POA can allow them to continue using your assets if you should become disabled. If you do not name a power of attorney your spouse or family will have to get a court order to handle your finances. This will require a judge to declare you "incompetent" and could delay paying bills and paying for any medical care you may need.
Your Durable Financial POA is only valid while you are still alive. Upon your death, control of your financial assets will pass to your estate executor or your trustee if you have named one.
In addition, a Durable Financial POA will also terminate automatically if you cancel it, a court deems it invalid, your spouse was the agent and you divorce, or if the named agent is not available. Considering this last case, it is a good idea to name a back-up financial agent.
Article Source: http://EzineArticles.com/4835856
Thursday, January 24, 2013
By The People Fairfield CA
Rene talks about how By The People in Fairfield can help people with legal matters in an inexpensive way. See more at http://www.bythepeopleca.com
Wednesday, January 23, 2013
How to Write a Promissory Note
When writing a promissory note, be sure that the date the money is borrowed is prominently indicated. Write a promissory note, identifying the borrower and terms of the loan, with advice from a certified family mediator in this free video on legal self-help.
Tuesday, January 22, 2013
5 Steps for Preparing an Advanced Healthcare Directive
An advanced healthcare directive made out to tackle any health problems will kick in the event where you are temporarily or permanently unable to make your own decisions due to any physical or mental conditions. Such a directive should be made thoughtfully, and if you want it to be truly effective, the following steps will tell you how.
• Plan the Contents: The first and most important thing when setting out to make an advanced directive is to decide how you want your treatment to be handled for the period when you cannot take a call. Your wishes can be generalized for accidents or ill-health or can specify particular ailments and medications, and the extent to which invasive treatment or life-sustaining techniques should be administered or even end-of-life wishes. The content will vary depending on your age, unique circumstances, or any particular wishes that you may have.
• Type of Directive: Next you will have to choose the kind of directive you want to have. You can make a set of instructions referred to as a living will or can appoint an agent or proxy to take decisions on your behalf by creating a power of attorney specifically for healthcare. However the most effective way is to combine both in the advanced directive to make it more effective in different conditions.
• Communicate: Before you finalize the directive you must talk to your doctor or any healthcare personnel who will not only tell you about the different aspects of such a directive but also the pros and cons of specific treatments, and how they can affect you in the future. In addition to the doctor you must speak with your family and take them into complete confidence so that there is no confusion when the time comes.
• Preparing the Directive: Once your mind is clear you can proceed to put down your directive on paper. At times a state may have a set of advanced healthcare directive forms that you can fill, but these may be too generalized in which case you can create your own directive to be more specific and customized. Most directives will require your signature along with those of two other witnesses, however you must find out for any other requirement of your particular region. Personnel at the healthcare facility can provide you with the proper guidance or may alternatively direct you to professionals who are well trained for such purposes.
• Pass on the Directive: The last but equally important step is to provide the concerned people with a copy of the directive. Ask your doctor to place the directive in your medical file so that anyone dispensing treatment at that time will be aware of your wishes. Also make sure your appointed agent has one and is thoroughly briefed about the contents. Finally make sure your family or close friends have a copy too.
One more thing to remember is that the advanced healthcare directive is a document that can be changed whenever you wish. Periodically you must review its contents and make the necessary changes to maintain its effectiveness.
Article Source: http://EzineArticles.com/7014459
• Plan the Contents: The first and most important thing when setting out to make an advanced directive is to decide how you want your treatment to be handled for the period when you cannot take a call. Your wishes can be generalized for accidents or ill-health or can specify particular ailments and medications, and the extent to which invasive treatment or life-sustaining techniques should be administered or even end-of-life wishes. The content will vary depending on your age, unique circumstances, or any particular wishes that you may have.
• Type of Directive: Next you will have to choose the kind of directive you want to have. You can make a set of instructions referred to as a living will or can appoint an agent or proxy to take decisions on your behalf by creating a power of attorney specifically for healthcare. However the most effective way is to combine both in the advanced directive to make it more effective in different conditions.
• Communicate: Before you finalize the directive you must talk to your doctor or any healthcare personnel who will not only tell you about the different aspects of such a directive but also the pros and cons of specific treatments, and how they can affect you in the future. In addition to the doctor you must speak with your family and take them into complete confidence so that there is no confusion when the time comes.
• Preparing the Directive: Once your mind is clear you can proceed to put down your directive on paper. At times a state may have a set of advanced healthcare directive forms that you can fill, but these may be too generalized in which case you can create your own directive to be more specific and customized. Most directives will require your signature along with those of two other witnesses, however you must find out for any other requirement of your particular region. Personnel at the healthcare facility can provide you with the proper guidance or may alternatively direct you to professionals who are well trained for such purposes.
• Pass on the Directive: The last but equally important step is to provide the concerned people with a copy of the directive. Ask your doctor to place the directive in your medical file so that anyone dispensing treatment at that time will be aware of your wishes. Also make sure your appointed agent has one and is thoroughly briefed about the contents. Finally make sure your family or close friends have a copy too.
One more thing to remember is that the advanced healthcare directive is a document that can be changed whenever you wish. Periodically you must review its contents and make the necessary changes to maintain its effectiveness.
Article Source: http://EzineArticles.com/7014459
Monday, January 21, 2013
What Is Probate Litigation?
Definition
Article Source: http://EzineArticles.com/6997853
Probate is defined as the legal process of how the debts are paid and assets and property distributed of an individual who has passed away. Often times, the process involves a will and sometimes there is not one available. When a deceased individual's Last Will and Testament is offered for probate, there are many requirements and all heirs and creditors have rights, privileges, and limitations that must be strictly followed. The probate court identifies the assets of the deceased, assesses the taxes and other expenses, and distributes the funds and property to legal heirs listed in the will. A lot of probate matters are resolved without legal action, but when complications or requests for contest arise and the matter is discussed in court, it is called probate litigation. If a deceased individual has a large estate, various movable and immovable properties, and sizeable bank accounts, then their assets are more likely to be involved in probate litigation.
What is Probate Litigation?
Probate litigation involves the laws, codes, and statues that preside over wills, trusts, and the settling of a deceased individual's estate. It often includes disputes among relatives and challenging certain sections, provisions, or the entire Last Will and Testament. The Last Will and Testament can be disputed due to several reasons. The facts of individual disputes define the type of action that needs to be defended or prosecuted. The law of limitation is firmly relevant to probate litigation and even if there is a valid claim, a case will not be preceded by the probate court if the time limit has passed.
Types
• Undue Influence: claim that disputes whether the person creating the will did so in a free manner without being persuaded by an individual who was in a position of control and trust.
• Mistake in Execution: the execution requirement for a will to be valid in the state it was created does not meet all of the provisions and is therefore invalid.
• Lake of Mental Capacity: claim declared based on the belief that at the time the will was created, the individual composing the will did not have the essential mental ability to completely understand the amount and nature of the assets and property, the beneficiaries who would normally receive the property, and how the property is distributed by the terms of the will. Lack of capacity can be due to the natural aging process, diagnosed medical condition, or influence of medications. Lack of mental capacity claims are based on medical records and behavior o the individual prior to executing the will.
Other Activities
Probate litigation can also involve various other activities besides contesting wills including:
• Will Construction: in the case of a vague will where the document does not completely dispose the entire estate or beneficiaries have passed away, the court assists in how the deceased estate and property should be distributed.
• Heir Determination: when an individual does not have a will or has little contact with his or her family, the court determines the heirs.
• Accounting: beneficiaries have the right to an accounting of the assets and property and court assistance may be requested to receive an account of the assets of the estate. Beneficiaries may also object to the accounting if it is unacceptable for any reason.
Article Source: http://EzineArticles.com/6997853
Sunday, January 20, 2013
Living Trust Definition - What is a Living Trust?
The best living trust definition is a written legal document which substitutes for a will as your primary estate planning vehicle. When you have a trust you transfer your assets such as your home, financial accounts and personal property to the trust. In addition you change the beneficiary or contingent beneficiary of retirement accounts and life insurance to the trust. These assets are then administered for your benefit during your lifetime, and either continue to be held or transferred to your beneficiaries when you die.
The creator, also called the grantor, of the trust usually names him or herself as the initial trustee in charge of managing the assets. This allows the grantor to remain in control of the assets during his or her lifetime. For all practical purposes under this living trust definition, nothing changes in the way the grantor manages or controls the assets after they are put in trust. The only difference is the named owner.
A successor trustee is named in the document, usually a family member or friend but sometimes an institution such as a bank or trust company. This successor trustee then will manage the trust assets for benefit of the grantor if the grantor becomes disabled and for the contingent beneficiaries after the grantor dies.
This living trust definition is for the revocable living trust. It is also sometimes referred to as a revocable inter vivos or a grantor trust. It may be revoked or amended at any time by the grantors as long as they are still competent.
Article Source: http://EzineArticles.com/1839400
Saturday, January 19, 2013
Facts About A Probate Process
When a person dies, someone has to handle their estate and the process it through a legal system. This is what is commonly referred to as probate. It is also sometimes referred to as administering the estate. The term estate refers to any money, property and other possessions.
The process involves collecting all the possessions left, paying any outstanding debts and distributing whatever is left to the people entitled to it. It helps transfer the estate in a supervised and orderly way. Estate administration applies whether the deceased left a will or not. In practice, the process will depend on whether the deceased left a will and where they lived.
If there was a will, the executor named in the will is in charge of the property administration process. If a will was not left, an administrator will be appointed by the court to administer the estate. The general term for the person in charge of administration for an estate is the personal representative.
In America, the process is usually under the jurisdiction of the probate courts which are state courts. This means that the process will vary from state to state. In the U. K, the process for England, Scotland, Northern Ireland and Wales is also different. However, the general procedure is similar for most jurisdictions in many places.
The executor of the will or the administrator is given the authority to handle matters of the deceased by the court. The document showing that he/she has the authority is used to access any assets held by the deceased. The activities of the personal representative are usually governed by strict rules to avoid misuse of power granted to them.
In some places, the personal representative has to notify the public that the estate owner has passed on. This gives any person with any alleged claim to the estate an opportunity to file a formal complaint. The personal representative is in charge of payment of any debts or taxes that were owed by the deceased.
The personal representative conducts a complete check of the property in the estate and collects all necessary documents. There are some assets that are non-probate, for example assets held jointly, the ownership automatically passes to the remaining person in case of death of one on of the owners. The inventory check is important to identify all assets and make sure the assets are adequate to cover the debts owed. The payment of creditors is done according to merit and this varies in each area. The will, if available, determines how the property will be divided. If there is no will, the probate laws determine what each beneficiary gets.
The distribution of assets to the beneficiaries usually marks the end to the probate process and the property accounts are then closed. In most cases, the personal representative is entitled to a fee. The probate process can be complicated depending on how complicated the property is. If the property to be probated is in different jurisdictions, different processes may have to be followed.
Article Source: http://EzineArticles.com/7047326
The process involves collecting all the possessions left, paying any outstanding debts and distributing whatever is left to the people entitled to it. It helps transfer the estate in a supervised and orderly way. Estate administration applies whether the deceased left a will or not. In practice, the process will depend on whether the deceased left a will and where they lived.
If there was a will, the executor named in the will is in charge of the property administration process. If a will was not left, an administrator will be appointed by the court to administer the estate. The general term for the person in charge of administration for an estate is the personal representative.
In America, the process is usually under the jurisdiction of the probate courts which are state courts. This means that the process will vary from state to state. In the U. K, the process for England, Scotland, Northern Ireland and Wales is also different. However, the general procedure is similar for most jurisdictions in many places.
The executor of the will or the administrator is given the authority to handle matters of the deceased by the court. The document showing that he/she has the authority is used to access any assets held by the deceased. The activities of the personal representative are usually governed by strict rules to avoid misuse of power granted to them.
In some places, the personal representative has to notify the public that the estate owner has passed on. This gives any person with any alleged claim to the estate an opportunity to file a formal complaint. The personal representative is in charge of payment of any debts or taxes that were owed by the deceased.
The personal representative conducts a complete check of the property in the estate and collects all necessary documents. There are some assets that are non-probate, for example assets held jointly, the ownership automatically passes to the remaining person in case of death of one on of the owners. The inventory check is important to identify all assets and make sure the assets are adequate to cover the debts owed. The payment of creditors is done according to merit and this varies in each area. The will, if available, determines how the property will be divided. If there is no will, the probate laws determine what each beneficiary gets.
The distribution of assets to the beneficiaries usually marks the end to the probate process and the property accounts are then closed. In most cases, the personal representative is entitled to a fee. The probate process can be complicated depending on how complicated the property is. If the property to be probated is in different jurisdictions, different processes may have to be followed.
Article Source: http://EzineArticles.com/7047326
Friday, January 18, 2013
What Are The Key Factors To Consider In Choosing A Business Entity?
The choice of an entity is often the first important legal decision that an entrepreneur must make. In the last few years the choices have become greater. An individual business owner can have a sole proprietorship, corporation (C or S) or limited liability company. An organization with several owners can be formed as a general partnership, corporation, or Limited Liability Company ("LLC") (note limited partnerships and Limited Liability Partnerships will not be discussed in this article). On what basis does a firm make this important decision? Certain key factors help to form a guide in answering this question.
Sole Proprietorship
This is the easiest, least costly and least regulated type of organization for the individual. The only legal necessity for forming this business is to commence operations. It is recommended to file a fictitious name registration in all states in which the business will operate and check zoning and licensing laws for the location of the business. Additionally, all marketing materials should be trademarked and/or copyrighted.
As a result of the simplicity and low costs involved in a sole proprietorship, many individually owned businesses choose this option. However, there are some negative aspects to consider. The most important reason to choose one of the other options is that the individual is fully liable for any and all claims by customers, employees, vendors or others.
General Partnership
Similar to the sole proprietorship in the ease of formation, the only requirement to form a general partnership is that two or more people engage in a business activity for profit (Uniform Partnership Act). Expenses and profits do not need to be shared equally. Although there are no formal requirements, it is highly recommended that a written partnership agreement be executed among the partners. Like a sole proprietorship, the general partnership is not taxable as an "entity".
There are disadvantages to a general partnership. The partners of a general partnership have unlimited personal liability for not only their own torts and contracts, but for those of the other partners too. The death or withdrawal of one of the partners causes a dissolution of the general partnership. Caution should be exercised to avoid having the partnership be viewed by IRS as a corporation and then taxed as such.
Corporation
A corporation that is owned by a limited number of people is known as a "closely held corporation". Like a partnership, most, if not all, of the shareholders are involved in the management of the business. However, unlike a partnership, all the shareholders, or owners of the corporation, have limited liability for the acts and omissions of the other owners. Additionally, avoiding personal liability for business debts and court judgments is another advantage of a corporation. Generally speaking, a creditor can only collect from the assets of the business, not against the personal assets of the owners.
Because a corporation is a separate legal entity from its specific shareholders, the business continues regardless of who owns the shares. Corporations offer the opportunity to bring in investors who can own shares in the company without having to worry about personal liability. Tax deductions may be taken for benefits provided to its employees and to the owners. Corporations often have a more favorable tax rate structure to allow the owners to save earnings at a lower rate.
There are two types of for profit corporations, the "C" corporation and the "S" corporation. These refer to IRS statutes that dictate different tax treatment for the two types of entities. A "C" corporation is required to pay corporate taxes on profits and the shareholders pay taxes on their compensation and/or dividends. For this reason many small organizations elect to be "S" corporations. An "S" corporation does not pay taxes on the profits; profits and losses are passed through to the owners. However, the owners of an "S" corporation cannot be corporations, partnerships or LLC's.
Some of the disadvantages of forming a corporation are the costs and formalities involved. The costs to incorporate vary by location, but typically run several hundred dollars. Corporations are required to hold annual board and shareholder meetings and minutes of director and shareholder actions must be maintained.
Limited Liability Company
The LLC is a relatively new entity. It was created to combine some of the advantages of a general partnership and a corporation while eliminating some of the disadvantages of both. Owners of an LLC, called "members", have limited liability similar to shareholders of a corporation. However, in structure, the LLC is more like a partnership.
The LLC can be managed by the members or by a manager. Usually there isn't a board of directors or officers. Corporate formalities such as meetings and minutes are not required. Profits and losses are passed through to the owners on their personal tax returns and are not separately taxed to the entity. LLC members do not have to be individuals and voting power and share of profits and losses do not have to be identical; for example, an owner can receive X% of the profits and own Y% of the LLC and have Z% of the voting rights. It's obvious to see why LLC's are so popular.
In conclusion, there are many factors to consider when choosing the form of entity for your business. The advice of your accountant or tax advisor and attorney should be considered before making a selection. We welcome any questions you might have.
THIS ARTICLE IS NOT INTENDED TO PROVIDE LEGAL ADVICE NOR ESTABLISH AN ATTORNEY-CLIENT RELATIONSHIP.
Article Source: http://EzineArticles.com/6288218
Sole Proprietorship
This is the easiest, least costly and least regulated type of organization for the individual. The only legal necessity for forming this business is to commence operations. It is recommended to file a fictitious name registration in all states in which the business will operate and check zoning and licensing laws for the location of the business. Additionally, all marketing materials should be trademarked and/or copyrighted.
As a result of the simplicity and low costs involved in a sole proprietorship, many individually owned businesses choose this option. However, there are some negative aspects to consider. The most important reason to choose one of the other options is that the individual is fully liable for any and all claims by customers, employees, vendors or others.
General Partnership
Similar to the sole proprietorship in the ease of formation, the only requirement to form a general partnership is that two or more people engage in a business activity for profit (Uniform Partnership Act). Expenses and profits do not need to be shared equally. Although there are no formal requirements, it is highly recommended that a written partnership agreement be executed among the partners. Like a sole proprietorship, the general partnership is not taxable as an "entity".
There are disadvantages to a general partnership. The partners of a general partnership have unlimited personal liability for not only their own torts and contracts, but for those of the other partners too. The death or withdrawal of one of the partners causes a dissolution of the general partnership. Caution should be exercised to avoid having the partnership be viewed by IRS as a corporation and then taxed as such.
Corporation
A corporation that is owned by a limited number of people is known as a "closely held corporation". Like a partnership, most, if not all, of the shareholders are involved in the management of the business. However, unlike a partnership, all the shareholders, or owners of the corporation, have limited liability for the acts and omissions of the other owners. Additionally, avoiding personal liability for business debts and court judgments is another advantage of a corporation. Generally speaking, a creditor can only collect from the assets of the business, not against the personal assets of the owners.
Because a corporation is a separate legal entity from its specific shareholders, the business continues regardless of who owns the shares. Corporations offer the opportunity to bring in investors who can own shares in the company without having to worry about personal liability. Tax deductions may be taken for benefits provided to its employees and to the owners. Corporations often have a more favorable tax rate structure to allow the owners to save earnings at a lower rate.
There are two types of for profit corporations, the "C" corporation and the "S" corporation. These refer to IRS statutes that dictate different tax treatment for the two types of entities. A "C" corporation is required to pay corporate taxes on profits and the shareholders pay taxes on their compensation and/or dividends. For this reason many small organizations elect to be "S" corporations. An "S" corporation does not pay taxes on the profits; profits and losses are passed through to the owners. However, the owners of an "S" corporation cannot be corporations, partnerships or LLC's.
Some of the disadvantages of forming a corporation are the costs and formalities involved. The costs to incorporate vary by location, but typically run several hundred dollars. Corporations are required to hold annual board and shareholder meetings and minutes of director and shareholder actions must be maintained.
Limited Liability Company
The LLC is a relatively new entity. It was created to combine some of the advantages of a general partnership and a corporation while eliminating some of the disadvantages of both. Owners of an LLC, called "members", have limited liability similar to shareholders of a corporation. However, in structure, the LLC is more like a partnership.
The LLC can be managed by the members or by a manager. Usually there isn't a board of directors or officers. Corporate formalities such as meetings and minutes are not required. Profits and losses are passed through to the owners on their personal tax returns and are not separately taxed to the entity. LLC members do not have to be individuals and voting power and share of profits and losses do not have to be identical; for example, an owner can receive X% of the profits and own Y% of the LLC and have Z% of the voting rights. It's obvious to see why LLC's are so popular.
In conclusion, there are many factors to consider when choosing the form of entity for your business. The advice of your accountant or tax advisor and attorney should be considered before making a selection. We welcome any questions you might have.
THIS ARTICLE IS NOT INTENDED TO PROVIDE LEGAL ADVICE NOR ESTABLISH AN ATTORNEY-CLIENT RELATIONSHIP.
Article Source: http://EzineArticles.com/6288218
Thursday, January 17, 2013
What Is Probate And More About The Process?
What is probate? This is a common question in among many people. They have totally no idea of what the term probate means. Probate is simply the re-entitling property, and can also be said to be the legal process of transferring the property of a deceased person to the right beneficiaries. The transfer of property is mainly guided by a will. A will is document that is written by a person during his life time to act as a guideline in distributing his wealth once he dies.
This legal practice is presided over by a judge. The procedure can be simple when there is a will. You will just have to confirm that the will is original and that nothing was altered after death of the owner. When the will is confirmed as valid, then the estate lawyer can continue with reading it out as it is written.
The procedure for transfer of property can however be long and expensive when there is no valid will to guide on wealth distribution. Many court hearings will be necessary and this will cost a lot in terms of legal fees and time.
This practice can be long and take even over a year when no one the involved parties can not reach an agreement. For the process to be smooth and quick, all parties must agree on a way forward and accept to accommodate all suggestions without compromising the procedure. This is however not the case because each party wants the better share and care less about others.
The practice can also be slowed down when the deceased had outstanding debt to another party like a financial institution or individual person. That party will want to be repaid and this will call for an auction of the deceased assets. The assets are sold off to pay back the debt owed. This can turn to be a bitter period for those who would have otherwise inherited the property.
One should prepare to avoid this procedure, especially when one is aged or in bad shape in terms of health. This involves writing a will that will stipulate distribution of his wealth. In such a way, they ensure that their property goes to those they desire once they die. This will also prevent family chaos in battle for his wealth. This process on the other hand is not necessary when one is young or does not own much property.
The practice is important in transfer of wealth and allows the state to determine if the property was legally acquired. If not, the state can seize the estate. It also allows the state to determine if all statutory fees were paid during the deceased life time, for instance taxes due. The process is also important in paying outstanding bills and then the remainder can be given to the inheritors.
The procedure can however cause splitting of family relations when all people are not satisfied. It leads to ill feeling over the winners and can ruin relationships for ever. This is where the importance of uncontested will come in. Those who want the system to be considered should be willing to sacrifice a lot for its success.
Article Source: http://EzineArticles.com/5904983
This legal practice is presided over by a judge. The procedure can be simple when there is a will. You will just have to confirm that the will is original and that nothing was altered after death of the owner. When the will is confirmed as valid, then the estate lawyer can continue with reading it out as it is written.
The procedure for transfer of property can however be long and expensive when there is no valid will to guide on wealth distribution. Many court hearings will be necessary and this will cost a lot in terms of legal fees and time.
This practice can be long and take even over a year when no one the involved parties can not reach an agreement. For the process to be smooth and quick, all parties must agree on a way forward and accept to accommodate all suggestions without compromising the procedure. This is however not the case because each party wants the better share and care less about others.
The practice can also be slowed down when the deceased had outstanding debt to another party like a financial institution or individual person. That party will want to be repaid and this will call for an auction of the deceased assets. The assets are sold off to pay back the debt owed. This can turn to be a bitter period for those who would have otherwise inherited the property.
One should prepare to avoid this procedure, especially when one is aged or in bad shape in terms of health. This involves writing a will that will stipulate distribution of his wealth. In such a way, they ensure that their property goes to those they desire once they die. This will also prevent family chaos in battle for his wealth. This process on the other hand is not necessary when one is young or does not own much property.
The practice is important in transfer of wealth and allows the state to determine if the property was legally acquired. If not, the state can seize the estate. It also allows the state to determine if all statutory fees were paid during the deceased life time, for instance taxes due. The process is also important in paying outstanding bills and then the remainder can be given to the inheritors.
The procedure can however cause splitting of family relations when all people are not satisfied. It leads to ill feeling over the winners and can ruin relationships for ever. This is where the importance of uncontested will come in. Those who want the system to be considered should be willing to sacrifice a lot for its success.
Article Source: http://EzineArticles.com/5904983
Wednesday, January 16, 2013
Why Should You Incorporate Your Company?
There are many reasons for incorporating but the most important to consider are the benefits of incorporating and the implications that it may have for your business. A quick examination of all the benefits to be derived from incorporating will reveal that the best time is when you are actually taking your startup business from inception to reality. Consider all of these corporate advantages:
Limited Liability
Incorporating your business is really about protecting your personal assets. Anyone who starts up a business will find it taking up a major portion of their time but that doesn't mean you have to assume a total risk with everything you own. By incorporating your business you are drawing a clear line between your personal asset and the assets of the company. That way if anything should go wrong with the company, you'll still have your personal property. It's important to keep those two aspects of your life separate.
Attracting Investors
When you incorporate your business you're also telling potential investors that you're serious about your company's future. That is going to make getting money from investors a lot easier. Any investor will be taking a risk by giving you capital. You can make them feel more confident with a professional approach to your business plan through incorporation.
Tax Issues
Just as incorporating your business will protect your personal assets it can also help improve your tax filing status. With a corporation, you have the ability to defer paying taxes to a time during the fiscal year which will be more beneficial. This also applies when you accept an income. The goal should be to work with your accountant to find a proactive way to reduce your tax burden which can ultimately allow you to reinvest in the business. There are also a wide range of small business tax deductions which can help you make improvements but they would only apply to a business that has been incorporated.
Better Client Prospects
If an investor feels better investing in a corporation then a potential client will also share those feelings of confidence in your business. Incorporating your business projects a level of stability to customers. They know they're not dealing with some "fly-by-night" organization but someone who is in for the long haul of providing service.
Corporate Legacy
For all practical purposes, a corporation is a legal entity that can far outlive the lives of its founders. When you can move your company into the realm of Fortune 500 type of businesses then the hope is that they'll be around long after the original board has gone onto greener pastures. A corporation is about longevity which is exactly what you should be focused on for your new business.
Article Source: http://EzineArticles.com/7174611
Tuesday, January 15, 2013
Why Most California Residents Have No Estate Plannning Documents
When I ask why so many people have never created their own estate plan, they say it is because they "don't have enough assets to worry about." That is why the probate court exists - to "take care" of most Californians. I say "take care" of because once you've been to the probate court, you'll never want to go again. So, most California residents are ignorant of the consequences of having no estate planning documents in place.
Financial Incapacity. Unfortunately, the probate court supervises your assets (however small) for the rest of your life in the event that you lose capacity to take care of them yourself. This means that someone who cares about you will have to go to court every year to explain to a judge how your assets are being spent and invested, all for the public to see. This person pays an attorney and an accountant to accompany him/her every year so the judge is convinced that he/she is not embezzling your assets, however small. This person is guilty until proven innocent if anything is missing. Your assets will soon become even smaller at this rate. If you are over the age of 18, this process is called a conservatorship. All of this can be easily avoided by having a quality Durable Power of Attorney for Financial Management in place.
Minor Children. If you have children under the age of 18, and they inherit assets upon the death of a parent, their assets would be part of the probate process but called a guardianship. The same attorneys, accountants and conservators get paid to "take care" of their money until their 18th birthday, at which time, the entire amount is distributed to them. How many parents would normally give their 18 year old child a large amount of money? How much less so if you are not here to help them make wise decisions.
Healthcare Decisions. If you cannot make your own health decisions, and you don't have an Advance Healthcare Directive in place, then someone will have to open a conservatorship with the probate court (same procedure as above) in order to have authority to talk to your health care professionals. Imagine a true story where an 18 year old daughter went to senior prom and ended up in the emergency room. Her parents went to visit her there but the doctor couldn't provide any information until they obtained a court order from the probate judge (conservatorship). It usually takes several weeks to obtain court orders.
After Death. If you don't write your own will, California will write one for you. The state has already created a system to decide who will be in charge of your estate, your body and receive your assets upon your death. If you have separate property (not community property), you might be surprised to find out who stands to inherit it from you - it's not always your spouse. This probate process takes about one year if all goes well, requires a lawyer to be hired at a percentage of the gross value of your estate, requires the administrator to hire the court's appraiser, pay the court's fees and an accountant is usually involved. For example, it would cost about $15,000 to pay the probate costs of a $200,000 estate. It costs about $50,000 for a $1,000,000 estate and goes up from there. When calculating the estate value, do not deduct any debts, mortgages or expenses.
Non-US Citizen spouses. There can be huge tax consequences if you have more than $1 million and your spouse is a non-US Citizen. You would want to investigate a QDOT trust to defer the taxes until such time as your spouse can become a US citizen.
Article Source: http://EzineArticles.com/7388323
Monday, January 14, 2013
Living Will Form vs. Health Care Power of Attorney Form
A will to live, formally called a living will form, is a type of advance directive. These legal forms are usually required to be notarized or signed and dated by witnesses.
A living will form usually covers specific directions as to what kind of medical treatment your caregivers will give you or are not allowed to give you. Some people go as far as to refuse food and water if they become incapacitated. A will to live is just that though, it is intended to force caregivers to give you the kind of medical treatment you want if you can't communicate those directives yourself. You are considered unable to communicate when you become incapacitated or brain damaged.
Another form similar to a living will form is a power of attorney for health care form. A power of attorney for health care form appoints some one you trust of your choosing to direct your health care decisions.
End-of-life health care decisions can be very difficult and emotional on your family; 1/3rd of Americans have had to make end-of-life health care decisions for their family. A living will form will keep your family members from making these critical, emotional, and frightening decisions.
You are also entitled to fill out a do not resuscitate order if you so choose to do so, this order will not allow your caregivers to put you on life support. Often times depending on the hospital and jurisdiction they will withhold do not resuscitate orders until their confirmed or simply not even recognize their legal power. Most hospitals will not perform intubations or resuscitation only when faced with these orders but they will treat infections, pump food and fluids directly into your blood stream, use pain management, and adequate comfort care are often times continued.
These types of forms are valid as soon as they are notarized or witnessed, copies should be given to your doctor, family, and any one else you feel may need a copy.
Article Source: http://EzineArticles.com/483946
A living will form usually covers specific directions as to what kind of medical treatment your caregivers will give you or are not allowed to give you. Some people go as far as to refuse food and water if they become incapacitated. A will to live is just that though, it is intended to force caregivers to give you the kind of medical treatment you want if you can't communicate those directives yourself. You are considered unable to communicate when you become incapacitated or brain damaged.
Another form similar to a living will form is a power of attorney for health care form. A power of attorney for health care form appoints some one you trust of your choosing to direct your health care decisions.
End-of-life health care decisions can be very difficult and emotional on your family; 1/3rd of Americans have had to make end-of-life health care decisions for their family. A living will form will keep your family members from making these critical, emotional, and frightening decisions.
You are also entitled to fill out a do not resuscitate order if you so choose to do so, this order will not allow your caregivers to put you on life support. Often times depending on the hospital and jurisdiction they will withhold do not resuscitate orders until their confirmed or simply not even recognize their legal power. Most hospitals will not perform intubations or resuscitation only when faced with these orders but they will treat infections, pump food and fluids directly into your blood stream, use pain management, and adequate comfort care are often times continued.
These types of forms are valid as soon as they are notarized or witnessed, copies should be given to your doctor, family, and any one else you feel may need a copy.
Article Source: http://EzineArticles.com/483946
Sunday, January 13, 2013
Estate Planning Tools: Durable Power Of Attorney - Seven Factors To Consider
If something happens while you are alive, that makes it impossible for you to handle your financial affairs, sign legal documents or communicate your wishes to others, you could have trouble in many ways. Without a properly executed Power of Attorney, your family may need to get a court order just to handle your affairs. These can cost plenty and waste months of time.
Even though a power of attorney is a relatively simple document and is readily available from many sources, I am still amazed at how many families and individuals do not have one in force. Follow these simple guidelines and make sure that you are protected should anything ever happen that would cause you to need one.
Seven Factors To Consider:
1. Your Agents: One of the most important decisions with a power of attorney is your selection of agents. Will you use a single agent or appoint co-agents? Who will be your successor agent(s) if someone is unable or unwilling to fulfill their duties? These are the questions you need to answer before you are ready. Your agent(s) should be organized, good with numbers and possess great common sense.
2. Access Medical Records: Will you allow your agents to have access to your medical records? They may need this information to keep track of, or to dispute medical bills. But if you want or do not want them to have access to this information, you will need to specify inside your power of attorney.
3. General or Specific Powers: Will your power of attorney provide your agent with broad general powers or very specific powers? You can decide on either, but the more specific you get, the more limited the powers your agent will be allowed. Most people will choose to provide a general power that will include handling most financial, business and personal matters.
4. Beneficiary Changes: You can empower your agents with the ability to change your beneficiaries if you would like, but this can be a risky proposition. In most instances, you will not allow for this provision. You can also provide for the power to refuse potential inheritances. I think this can be helpful in situations where, if someone passes and is leaving you an inheritance, but you refuse it (or are deceased), it would go directly to your children instead.
5. Effective Dates: When will your power of attorney take effect? When will it terminate? You can have it take effect immediately upon execution, you can have it take effect upon the certification of some medical condition or you can specify a certain time period. You might use this if you were going to be out of the country for 3 months or in a rehabilitation program for certain length of time. All powers of attorney terminate immediately upon the death of the individual, but you can set other dates or events as previously outlined.
6. Hire Professionals: Will your agent have the power to hire professionals such as accountants, financial advisers, lawyers, etc? If you want them to be able to handle these on your behalf, you have to specifically allow them by including this power within your document. If not, you may want to specify who you are already working with and require their services if needed.
7. Receive Compensation: Will your agent be allowed to receive reasonable compensation for time and efforts spent acting as your agent? Will they also be allowed to receive reimbursement for any expenses that they incur while acting on your behalf? In most cases you should allow both of these. Taking care of someone's affairs can be time-consuming and there should be reasonable remuneration for these services. While you can specify either way, your agents may be unwilling to participate without it and this could cause bigger problem down the road.
Summary: Having a power of attorney drafted is a fairly simple and inexpensive process. You can hire an attorney, use online legal services or purchase a legal software package to assist you with the preparation. It is very important to follow the execution and filing recommendations for your state and county. Having proper witnesses and notarization of all signatures is a great safeguard for any legal documents, so make sure to get them done right.
Article Source: http://EzineArticles.com/6320682
Saturday, January 12, 2013
Which Is Best, A Will Or A Living Trust?
You don't have to be wealthy to need a will in regards to your personal property. After you're gone, legal wrangling can become time consuming for family members left behind and often creates indecision and fighting amongst potential beneficiaries as your wishes may not be clear. A will is usually straightforward and simply put is a legal document that specifies how your property will be dispersed at the time of your death. It can be revoked or amended at any point in your lifetime, and can be used to appoint a guardian for any children that are not yet of legal age.
Another option to be considered is a living trust. A living trust handles property management of all assets and all of these assets are transferred to the trust. Typically, you will act as your own trustee while specifying who will act as trustee upon your death. A living trust has the added benefit of avoiding probate after you die and preventing public disclosure of all your private financial matters. A living trust does have some drawbacks. It must be maintained and any new property acquired must be transferred to the trust or it will not be under the protection of the trust. A living trust is also more expensive to initiate and must be managed. Generally a living trust is recommended if your estate exceeds a specific dollar amount, you have minor children, you're willing to manage the trust, and if you want control of when your beneficiaries receive any assets.
A simple will might be a better option if there is informal probate available where you live. Informal probate is a greatly expedited form of probate and is generally available to those whose estate is under a certain dollar amount. If you are single without children, and you don't own a business, it probably isn't necessary to set up a living trust and a simple will is sufficient. Upon your death, the executor of your estate will submit your will along with a petition to the probate court. The petition requests that the will be accepted as legal and valid and request that the executor named in the will be legally appointed. Any heirs, beneficiaries, or creditors must be notified of the submission of the will and have a specific amount of time to challenge it or submit claims against the estate.
This process does not apply to living trusts, which is why many people opt for a living trust versus a will. Each person's situation is unique and should be evaluated by an attorney who is familiar with estate law. Talk to your family and determine who will handle your affairs after your death. With everyone understanding who will handle which aspects of the estate and what to expect, the loss of a family member is a less stressful one.
Article Source: http://EzineArticles.com/5226882
Another option to be considered is a living trust. A living trust handles property management of all assets and all of these assets are transferred to the trust. Typically, you will act as your own trustee while specifying who will act as trustee upon your death. A living trust has the added benefit of avoiding probate after you die and preventing public disclosure of all your private financial matters. A living trust does have some drawbacks. It must be maintained and any new property acquired must be transferred to the trust or it will not be under the protection of the trust. A living trust is also more expensive to initiate and must be managed. Generally a living trust is recommended if your estate exceeds a specific dollar amount, you have minor children, you're willing to manage the trust, and if you want control of when your beneficiaries receive any assets.
A simple will might be a better option if there is informal probate available where you live. Informal probate is a greatly expedited form of probate and is generally available to those whose estate is under a certain dollar amount. If you are single without children, and you don't own a business, it probably isn't necessary to set up a living trust and a simple will is sufficient. Upon your death, the executor of your estate will submit your will along with a petition to the probate court. The petition requests that the will be accepted as legal and valid and request that the executor named in the will be legally appointed. Any heirs, beneficiaries, or creditors must be notified of the submission of the will and have a specific amount of time to challenge it or submit claims against the estate.
This process does not apply to living trusts, which is why many people opt for a living trust versus a will. Each person's situation is unique and should be evaluated by an attorney who is familiar with estate law. Talk to your family and determine who will handle your affairs after your death. With everyone understanding who will handle which aspects of the estate and what to expect, the loss of a family member is a less stressful one.
Article Source: http://EzineArticles.com/5226882
Friday, January 11, 2013
A Living Will - Your Medical Directive
How do you feel about life-support systems for the terminally ill? How much thought have you given to the decisions your family may face when contemplating the choice of maintaining or terminating life-sustaining medical treatment for you? Certainly, it is an easy subject to avoid considering. However, it is important to recognize there are measures you can take now that can help solidify your thoughts and wishes on the subject, thus providing your loved ones with guidance in the event such decisions become necessary.
A Closer Look
At the present time, nearly all states have passed some form of law dealing with the requirements for living wills or health care proxies. While a health care proxy allows you to appoint someone to make decisions on your behalf, a living will generally allows you to specify the particular types of treatment you would like to have provided or withheld. Each state has its own set of requirements.
A living will is a medical directive - written in advance - that sets forth your preference for treatment in the event you become unable to direct care. The document may be drafted to include when the directive should be initiated and who has the decision-making responsibility to withdraw or withhold treatment. In addition to allowing respect for your wishes, the living will can help alleviate feelings of guilt or uncertainty experienced by those faced with the responsibility of making important decisions for loved ones.
The Patient Self-Determination Act
A far-reaching federal law, known as the Patient Self-Determination Act, requires all health care providers that receive Medicare and Medicaid to inform everyone over age 18 of their right to determine how they want to deal with this issue and whether they want to fill out a living will. If you have received information on this subject, it's no coincidence, since the law also requires increased emphasis on community outreach and education.
This law impacts virtually every hospital, nursing home, and health maintenance organization (HMO) throughout the country. It is important to note that the law does not mandate that health care providers require their patients have a living will. Instead, it stipulates that health care providers must provide written information about the patient's rights to make decisions about medical treatment, including the right to make an advance determination about life-sustaining medical treatment, and record whether the patient has done so.
At the present time, it appears most of these organizations have determined this question can most appropriately be handled when a patient is admitted. Therefore, the next time you are admitted to a hospital-even for something as minor as having a mole removed-don't be surprised if you are given information about these rights and are asked to fill out a form that asks whether you currently have a living will or wish to have one.
The living will is a legal document and each state has its own specific requirements. A qualified legal professional can help you understand the benefits of a living will and what has to be done to assure its validity.
Article Source: http://EzineArticles.com/7064617
Thursday, January 10, 2013
Criminal Record Expungement - How to Get a Clean Record
Is it possible for you to expunge or clean your criminal record?
In order for you to delete any item from your criminal record, it is necessary to file a petition to the court asking them to erase or expunge information. Here is a short step by step process on how to file a petition.
- Complete the petition for expungement and the general waiver and release form -- In order to complete the information required by the form, it is important for you to know the date of your arrest, the enforcement agency that took charge of the action, the offense that you were arrested or convicted, and the disposal date of your case.
- Make several copies of this form and deliver them to the court where your case was handled.
- The entire process is expected to take 90 days. However, this will depend on your petition and whether there is an objection within a month by the State's Attorney or the enforcement agency. If there are any objections, the court will hold a hearing and you will be notified to attend the session.
What is the waiting period before you can file for expungement?
It is expected that you will need to wait for three years after you are convicted before you can file for an expungement. However, these rules vary depending on the nature of the case. To learn more information about this, you can contact the Criminal Justice Information System.
Who are allowed to see my criminal record?
Aside from you, there are also other groups of individuals who are permitted to view your record.
- The Criminal Justice and Law Enforcement Agencies -- Police departments, parole, courts, probation departments, defense attorneys, prosecutors, and correction officials are given the right to review your record.
- Potential Employers -- Public employers such as the local, federal, and state government agencies are allowed to see the records. Aside from this, owners of child care agencies, museums, hospitals, banks, schools, school bus companies, and brokerage houses are also enable to view the criminal record that you hold.
- Occupational Licensing Agencies -- All agencies that issue licenses for professionals are allowed to view your criminal record. Some of these agencies include those that give licenses to barbers, doctors, nurses, drivers, and brokers.
- Bonding Agencies -- If an employer takes a bond on you, which is usually an insurance policy, the agency that is tasked to issue that bond will be permitted to review your criminal record.
Because a lot of people are allowed to view your criminal records, it is very necessary to ensure that all information written is accurate.
Article Source: http://EzineArticles.com/7398777
Wednesday, January 9, 2013
Frequently Asked Questions on LLC Formation
A limited liability company or LLC is technically a new concept in the business world. The United States has only acknowledged this in the late 1970s. So it is expected that many people do not know what an LLC is. Here are the common questions that people ask about the company and LLC formation.
What is a limited liability company?
A limited liability company is a hybrid business structure that features the protection of personal assets of a corporation and tax benefits of a partnership. In this way, the company enjoys a lot of benefits.
What are the requirements in LLC formation?
Only one document is required by law to form an LLC, although some states require other documents. The Articles of Organization is the basic document that states the company's information such as business name, address, names of members and their addresses, name and address of registered agent, and the life of the company. There is a filing fee for Articles of Organization and the fee depends on the state where the business will be established.
What is the business structure of an LLC?
During the LLC formation, the structure of the company will be determined by the owners. One feature of the limited liability company is the flexible management structure. It means that the number of owners (called members) is not limited. The company can have a sole owner, partners, or many members as long as their rights and responsibilities are clearly stated in their documents.
The members can also decide on how the company will be managed. The company can also be run by managers instead of members.
Who can be members?
This is a typical question in LLC formation since the company has flexible management structure. In most of the states, the members are the managers by default but the members can also be owners only and not managers especially if they are not knowledgeable on how the business should be managed.
Since there are no restrictions on ownership, members can be individuals, partnerships, corporations or even another LLC. But this should be verified with the LLC filing office if the state allows such ownership.
How are LLCs taxed?
The federal government classifies limited companies in order to determine how the company will be taxed. Since an LLC enjoys the tax benefits of partnerships, double taxation is prevented unlike in corporations. But there are times when the company files for an election for corporation during or after the LLC formation. In this way, the government will treat the company as a corporation just for the federal income tax purposes.
If the LLC is treated as a sole proprietorship or partnership, the taxation is passed-through. This means that the members of the company will declare the profits or losses of the company in their income tax return. In this way, the company is not taxed at a business level but as income of the owners.
What is a registered agent?
A registered agent should be determined during the LLC formation. This is the designated person to receive legal documents especially for the future lawsuit that involves the company. The name of the registered agent together with his or her address should be included in the Articles of Organization.
Article Source: http://EzineArticles.com/7405560
Tuesday, January 8, 2013
5 Things To Look For In A Trustee
One of the most important decisions that a person will need to make when building his or her estate plan is his or her choice of a trustee. This is especially true of your are thinking of creating a testamentary trust with your minor children as beneficiaries. Your choice of a trustee will not only impact the management of your entrusted properties and assets, but will ultimately affect the lives and welfare of your chosen beneficiaries.
Choosing a trustee can be tricky and nerve-wracking, and is definitely not something that should be taken lightly. With your children's or other beneficiaries' welfare on the line, it's imperative that you make a good choice. I mean, sure, your younger brother may be a hit with his nephews and nieces, but can you depend on him to properly manage your finances in case you're gone or incapacitated?
Below are some of the characteristics that you should look for when making your crucial choice:
Fiscal Competence
Please keep in mind that your appointed trustee will be responsible for managing the properties included in the trust. These properties may consist of bank accounts, real estate, stocks, and other items which require some degree of fiscal competence to be managed effectively. It's always best to find a trustee with sufficient experience and know-how in managing, maintaining and maximizing such properties.
Willingness
Another thing you'll have to consider is the person's willingness to take on the responsibility of managing your entrusted properties. This will determine the degree of vigilance or dedication that a chosen trustee will give to the task of managing the trust and ensuring the best interests of your beneficiaries.
Honesty
It makes perfect sense that a trustee should be someone you can trust. While there are available means through which a dishonest trustee can be removed or replaced, save your beneficiaries the trouble by appointing someone with proven honesty and integrity.
Legally Qualified
Although most anyone can be appointed as a trustee, there are specific disqualifications set by law which you must still observe. For instance, you cannot appoint a minor as a trustee. Before choosing someone, make sure to check on the specific qualifications required by law, otherwise your appointment of a disqualified trustee may be considered null and void.
Dependability or Availability
Let's say you've already come up with a shortlist of individuals possessing the first four characteristics. Another item that you'll need to consider in narrowing down that list is the person's dependability or availability. Do not appoint a person who may be too busy with his own affairs to actually pay attention to the management of properties included in the trust.
Article Source: http://EzineArticles.com/6719166
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