When developing a new business, one of the questions that you must ask is what type of entity your business will be. There are many different types of corporations that can be formed, but not every type is right for every business. It is imperative that you choose right corporate structure for your business. Failure to do so can have a significant impact on the life of the business both financially and contractually. When setting up a corporation, it is imperative that you speak with an experienced business attorney to find out which corporation is best for you.
Two common types of corporations are general corporations and professional corporations. Each has its own requirements and qualifications to determine which is proper for your business. Both types have their advantages and disadvantages that need to be considered in forming a corporation. The following are the main differences between a general and professional corporations.
A general corporation is the most common type of corporate structure. A general corporation is one that is a completely separate legal entity owned by stockholders. There is no limit to the number of the stockholders that are protected from any creditors of the corporation. Instead, the personal liability of a stockholder is usually limited to the amount of investment that was made in the corporation.
There are many benefits to forming a general corporation. The main benefits include personal protection from debt and liabilities of the corporation, the corporation can outlive the life of its owners, and there are certain benefits that are tax-free. Additionally, transfer of ownership can be done through the sale of stock and ownership does not necessarily need to change the management of the corporation.
A professional corporation is one that only performs services in one, single profession. It is a specific type of corporation for professionals like doctors, lawyers, accountants, etc. The professional is able to form a corporation, but the professional remains liable for his or her own actions. However, the professional is shielded from malpractice claims that might be brought against other associates of the corporation. Shareholders are required to hold licenses in the relevant profession of the corporation.
There are many benefits to forming a professional corporation. First and foremost, the professionals are shielded from liability from nonprofessional acts. Second, a professional corporation offers many tax benefits. One of these benefits is the ability to deduct fringe benefit plans, like a group term insurance plan, from their tax documents. Finally, there is also free transferability of interests. These transfers are still subject to statutory or regulatory restrictions.
Knowing which type of corporation to form can be difficult to ascertain. Failure to form the right type of corporation can cost you financially and contractually. The experienced business attorney at the Law Office of Kris Mukherji can help eliminate this confusion and difficulty. You do not want your business to be formed incorrectly and result in trouble. Consult with an attorney early to eliminate mistakes and give your corporation the best chance at success. Contact us today for a consultationRead More
Buying a business is much more complicated than simply handing over a sum of money and receiving a business in return. On the flip-side, a seller of a business must do a lot more than just receive a sum of money in exchange for a business. Buying or selling a business involves complex laws and many moving parts. Additionally, there is more than one way to buy or sell a business. The best method to use will depend on the business being sold and the needs of the parties involved.
Selling a business is not like other consumer transactions, in which cash or credit is exchanged for a good or service. Instead, there are different methods used, with the two most common being asset sales and stock sales.
An asset sale is one in which the buyer purchases the seller’s assets. The buyer is only assuming responsibility for the liabilities that it chooses. If the buyer does not assume all of the seller’s liabilities, then the seller remains liable for them. If the business has shareholders, the seller will usually distribute the proceeds of the sale to the shareholders of the business through dividends or distributions. Shareholders are then liable for the taxes on the dividend they receive. The party selling the business remains liable for taxes on the asset sales, as well. There are some exceptions to these tax obligations in the event the business is a pass through entity, but generally, each party remains responsible for the tax implications on their income. Buyers often prefer this method of business sales.
Another method often used in the sale of a business is the selling of stock. In a stock sale exchange, the buyer is purchasing the outstanding stock of the business. Outstanding stock includes the shares of stock that are currently held by the shareholders, the shares that are held by instructional investors, and shares owned by the officers of the company. Like an asset sale, the proceeds of the stock sale are distributed through dividends or other distributions. Often times, a stock sale is preferred by seller. This is because it acts as a “clean break” for the seller’s shareholders.
Contact an Experienced Business Attorney Today
Whether you are considering buying or selling your business via asset sale, stock sale, or another method, an experienced attorney can be invaluable to the transaction. There are many legal challenges that can arise in the buying or selling of a business. Avoid adding extra stress to the situation and hire an attorney at the outset to handle unexpected issues as they arise. The experienced attorney at the Law Office of Kris Mukherji is here to help you from the first step in a transaction through its finalization. Contact us today for a consultation.Read More
An asset protection trust is a tool that is used to hold assets in a separate vehicle so that they cannot be taken by creditors. When an issue arises that could result in a lawsuit, the party seeking compensation will try to sue the party with the deepest pockets. An asset protection trust is an option for assets to be legally held in a separate tool so that the owner can still enjoy the benefits of the assets, but does not have direct ownership. There is both Domestic Asset Protection Trusts (DAPT) and Foreign Asset Protection Trusts (FATP). There are many advantages to an asset protection trust.
Legal Opportunity to Protect Assets
When facing a lawsuit and the possibility to paying a large sum of damages, there may be the temptation to conceal assets. This is illegal, and failure to disclose assets during a lawsuit could be considered perjury. An asset protection trust allows the owner to transfer ownership of their assets and avoid criminal charges. Creditors do extensive research to find assets. If you think that you will be able to successfully hide assets, you are wrong and will likely be caught. It is best to utilize legal means of asset protection.
Becoming a Less Favorable Subject of a Lawsuit
When someone is filing a lawsuit, they are likely going to target the party with the deepest pockets. When your assets are placed in an asset protection trust, you become a less favorable target for lawsuits. If the party being sued does not have assets that are available for creditors, the likelihood of being sued decreases. Plaintiff’s attorneys in civil lawsuits often work with a contingency agreement in place. This means that they do not collect money upfront for work to be completed, but instead will take a percentage of the damages awarded. The plaintiff’s attorney will likely conduct a preliminary search before taking on a case. If the attorney discovers the adverse party does not have assets to collect upon, then he or she is not likely to take the case.
The motivation behind most lawsuits is money. Having less money or fewer assets than other parties involved in a case may put you at an advantage. The less money you have, the less likely you are to be pegged an easy target to collect upon at the end of a lawsuit.
Hire an Experienced Asset Protection Attorney
We live in a litigious society. No one is immune to lawsuits. You do not have to be a billionaire to be concerned with protecting your assets and wealth. Speaking with an asset protection attorney can be a life-changing move. The attorney at the Law Office of Kris Mukherji is a member of the Asset Protection Council. This is a group of attorneys, CPAs, and Financial Advisors committed to asset protection. Contact us today to find out how we can help you protect your assets.Read More
Whether you are starting a new business or the owner of a successful business that is already established, a successful business needs to have a knowledgeable business attorney. You have taken the time to develop business plans, execute them, and potentially see them result in success. It is important to find the right attorney to help you with all of the legal issues that are certain to arise as you grow your business. Finding the right attorney involves seeking out someone with particular attributes and expertise.
In order to have an efficient and effective attorney-client relationship, there must be a level of trust in each other. Both parties need to communicate the truth to the other at all times. Your attorney should always be truthful with you, but this type of honesty goes beyond simply telling the truth. It involves the attorney being direct in his or her delivery of information. A business can only thrive when the owner is operating with every piece of information. Regardless if its is “good” or “bad” news, your attorney should always tell you what is happening in regards to your business.
The legal system operates in a linear fashion. Everything has a process that must be followed. Your attorney should not operate in a different fashion. Knowing that your attorney has a process in place to deal with issues that arise and other steps in the course of business will help you get the most value out of your legal services. You should be aware of your attorney’s strategy for handling your business and if he or she has plans in place for issues or pitfalls that might arise.
The term ‘business law’ is vague. From its name, you can assume that it has to do with business and the legal issues surrounding running, owning, and operating various types of businesses. However within that are many, many different areas of business law. There is a wide range of issues and complexities that may arise. Therefore it is important to know that the attorney you are hiring can provide the legal services that you need. The practice should be versatile enough that the attorney can handle the basic needs of your business.
As state above, business law encompasses a wide range of topics. While no attorney can be knowledgeable in every part of the law, an attorney with proven success in certain areas can be promising. There is no substitute for experience. Experience results in confidence, knowledge, and knowing the resources available to deal with legal issues. Ask about the areas of business law an attorney has practiced in to be confident that your attorney will be able to competently handle the needs of your business.
The business law attorney at the Law Office of Kris Mukherji is here to help you with your business planning needs. With a proven track record of success, Attorney Mukherji is a reputable business law attorney with years of experience. Contact us today for a consultation and get your business law needs to be handled.Read More
Think about all the ways you try to protect your safety in day-to-day life – wearing a seatbelt when you are driving, making sure that the airbags in your vehicle function properly, having working smoke detectors in your home, and having renters/home insurance. These are just a few of the ways that average people protects themselves from injury, accident, or other unexpected life events. You are prepared for day-to-day emergencies, but are you prepared with someone to make medical decisions if you can not? Or someone who can take over your finances when you are unable to manage them? An estate plan can deal with these issues and more.
What is an Estate Plan?
Before you can have an effective estate plan, it is important to understand what that is. An estate plan is the method by which a person can dictate how his or her estate should be administered after death. It can also include contingencies for what should happen during one’s life should a person be unable to care for him or herself or make important decisions.
The most common part of an estate plan is a will. This is the document executed during one’s lifetime that dictates the way that assets will be distributed after death. The execution of a will has many strict requirements in the state of California. To ensure that it is properly prepared and executed, an estate planning attorney can help you.
While a will is the most commonly thought of estate plan, there are other components. A power of attorney is also part of an estate plan. This is legal documentation giving another individual power of attorney, or the ability to make decisions on behalf of another person. For example, a power of attorney can give another the ability to make financial determinations and health decisions.
How do I Set Up an Estate Plan?
The first step to establishing an effective estate plan is talking to an experienced attorney. An attorney will be able to explain the requirements needed for each element of an estate plan. The preparation of an estate plan begins with a discussion about what you want to happen with your assets following death. Your attorney will make sure that the documents are executed properly and will stand up to scrutiny of the court should there be any challenges.
Why Have an Estate Plan?
When people die without a will or any legal documentation describing what they want to be done following their death, they are leaving those decisions up to the courts. Probate is the process by which the courts will settle a deceased individual’s estate. If the deceased has a will, the court will verify the will and then the terms of the will are followed. Without a will or plan, the court decides how assets will be distributed. Without a will, or estate plan, you are leaving the future of your assets up to the courts. It is important to have an estate plan so that your wishes can be carried out after death.Read More