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What are the advantages of forming a Corporation?

Tue, 24 Mar 2009 11:37:25 GMT

There are several advantages to organizing your business as a formal corporation. A corporation is a separate legal entity that is distinct from its individual owners. Businesses that incorporate according to the requirements of state law are provided a “corporate veil” for the business owners. That means that the owners’ personal assets are protected and are typically not used to pay any corporate debts or liabilities. While the limited liability is one of the m

What is Redemption?

Wed, 22 Dec 2010 18:49:52 GMT

Redemption is a legal term that describes a debtor’s action of reclaiming collateral that a creditor took legal possession of pursuant to the terms of a secured loan. Typically, a debtor must pay the creditor the fair market value of the collateral in order to redeem it. Some states have specific laws about when and how a debtor may redeem property. Sometimes a debtor must seek a court o

What steps should I take to start a business?

Sun, 10 Apr 2011 22:52:23 GMT

When starting a new business, several key decisions must be made regarding the organization, financing, management, and operation of the business. First, you should do your homework – research your business idea and prepare a business plan. Once you’ve decided to go ahead with your idea, you will need to determine the legal structure of your business (whether a sole proprietorship, partnership, LLC, corporation, non-profit, or a cooperative) and o

Do I need to develop terms and conditions for my business website?

Tue, 24 Mar 2009 11:50:31 GMT

Yes, creating and posting terms and conditions for your website is probably a good idea. However, it is important that you think carefully about those terms and conditions and, if possible, have an attorney review the terms and conditions before you post them. This is especially important if you are offering anything for sale on your website. An attorney can help you draft terms and conditions that will benefit you should a dispute arise over a transaction on your website. Th

What is the Retail Installment Sales Financing Act?

Tue, 29 Jun 2010 17:27:38 GMT

A Retail Installment Sales Financing Act is a state law that governs retail installment contracts. A retail installment contract is one where the lender maintains title to the property, such as a car, and the borrower has use of the property and makes regular installment payments toward the purchase of the property. It is often used in the purchase of motor vehicles. While each state’s Reta

What steps are required to form a corporation?

Tue, 01 Mar 2011 18:22:39 GMT

A corporation is a legal entity with a corporate charter from a state. To form a corporation, the following simple steps are required:

1. Select a name for your business. State laws restrict certain words or phrases that can be used in your business name - so make sure you check your state’s rules, which are typically available on the Secretary of State website.

2. Pr

What is equity financing?

Tue, 06 Jul 2010 16:26:12 GMT

Businesses are usually expensive to open and operate and many businesses need investors in order to make the business successful. One way in which business owners can get funds for their business is through equity financing. Equity financing allows people (or other businesses) to invest in the business in exchange for an ownership interest in that company. The investors may be given common stock or preferred stock in the company and, depending on the amount of money they inve

What steps are required to form an LLC?

Fri, 20 Nov 2009 23:21:12 GMT

To form a limited liability company, the following simple steps are required:

1. Select a name in accordance with the state’s rules regarding limited liability company names. Certain words may be restricted from being used in an LLC name per your state’s laws.

2. Prepare and file the required paperwork with the Secretary of State in the state where the LLC is to be forme

What steps are required to form a corporation?

Tue, 01 Mar 2011 18:22:39 GMT

A corporation is a legal entity with a corporate charter from a state. To form a corporation, the following simple steps are required:

2. Pr

How can I collect money that is owed to me by my customers?

Tue, 24 Mar 2009 11:51:08 GMT

It is can be difficult and frustrating to have money that is legally owed to you by customers and not have the customers pay on time. After sending an initial bill and not receiving payment you should follow up with an additional bill marked “Overdue.” Additionally, you should call the customer and remind them of the overdue bill. It is important that you record all of your attempts to collect money from your customers so be sure to make note of the date, time and outc

What steps are required to form an LLC?

Fri, 20 Nov 2009 23:21:12 GMT

To form a limited liability company, the following simple steps are required:

1. Select a name in accordance with the state’s rules regarding limited liability company names. Certain words may be restricted from being used in an LLC name per your state’s laws.

2. Prepare and file the required paperwork with the Secretary of State in the state where the LLC is to be forme

I want to do business online. Do I need to charge state sales tax?

Tue, 24 Mar 2009 11:47:57 GMT

Currently, an online seller has to charge sales tax if that seller has a physical location in the state where the online customer is located. It does not matter what type of physical location the seller has in the customer’s state. For example, if you have a warehouse in Pennsylvania, headquarters in Delaware and stores in New York, Florida and California then you need to charge sales tax to all of your buyers from Pennsylvania, Delaware, New York, Florida and California.&nb

What is debt financing?

Mon, 30 May 2011 16:51:36 GMT

Debt financing is a way for businesses to get the capital that they need to open or to operate an existing business. Debt financing is when a person, business, bank or other entity provides capital to a business and the business has the obligation to pay back the principal on that loan plus an agreed upon rate of interest. Many businesses find that debt financing is advantageous because it provides needed capital while allowing the existing owners to maintain ownership and control o

Does a contract have to be in writing in order to be enforceable?

Tue, 07 May 2013 22:19:14 GMT

No, a written contract is not required to create all contracts. The U.C.C. implements something called The Statute of Frauds (S.O.F.). The S.O.F. requires that certain contracts be recorded in writing in order to be enforced. The S.O.F. has been implemented to reduce and prevent fraud in contracts. The S.O.F. requires that all contracts for the sale of goods over five hundred dollars be in writing to be enforceable.

For example, if you orally agree to buy your neighbor`s car for

Do I need a license / permit to open my business?

Mon, 15 Aug 2011 17:00:45 GMT

That depends on what type of business you own. Many businesses do not need any special licenses or permits in order to operate their businesses. However, some businesses that engage in certain trades or professions may need special licenses. For example, certain professionals such as doctors, lawyers, teachers and accountants need special licenses, issued by appropriate state agencies, in order to engage in the practice of their profession. Also, some businesses that engage in ce

What benefits must I legally provide to my employees?

Tue, 24 Mar 2009 11:44:39 GMT

The type of benefits which an employer must provide to his or her employees depends on the number of people employed by the company and the state(s) in which the company does business. Private employers typically must pay social security taxes for employees and maintain unemployment and workers compensation insurance for employees. Some states also require employers to carry disability insurance for their employees. The Family and Medical Leave Act provides that certain employers with more

Do I Need a Taxpayer Identification Number for my Business?

Tue, 24 Mar 2009 11:43:24 GMT

A taxpayer identification number (TIN) is a number used by the Internal Revenue Service (IRS) to identify people and companies. Most companies need to file with the IRS to receive an Employer Identification Number (EIN). Those who do not need an EIN typically use their social security number unless they fall under a limited exception to the general rule. A business needs to obtain an EIN if the business has any employees, if it operates as any type of corporation or partnership, i

What are the advantages of organizing a business as a Sole Proprietorship?

Thu, 22 Jul 2010 18:59:49 GMT

A sole proprietorship is a business that is owned by an individual and that is not formed pursuant to any special legal construct, such as a limited liability partnership or a corporation. As a sole proprietor, the individual who owns the business has the exclusive right to make business decisions. It is a rather inexpensive way to operate a business since there are no corporate taxes, filing fees and few, if any, legal fees associated with creating or operating a sole propriet

What is a C Corporation?

Tue, 24 Mar 2009 11:41:22 GMT

A C corporation is the most common type of corporation. The “C” refers to the subchapter of the Internal Revenue Code which explains the rules of taxation for this type of business structure. C corporations may have any number of investors and it can, therefore, be easier to raise the capital necessary to operate the business. Since the number of investors is not limited, C corporations can offer stock incentives to their employees. Corporate owners usually do not have

What is limited liabilty?

Mon, 31 Mar 2008 18:41:42 GMT

Limited liability is a principle of business law which shields the owners of a business from the business's liabilities. Owners of a business which has limited liability may lose only what they have invested in the business, meaning creditors cannot reach to the owner's personal assets to cover the businesse's debts. If a business is sued or goes bankrupt only the assets of the business may be used to cover the debt, a stockholder may not be forced to sell their home or

What is an S Corporation?

Tue, 24 Mar 2009 11:39:01 GMT

There are several different types of corporations from which business owners can choose when they initially set up their business. One type of corporation is an S corporation. The “S” in “S Corporation” refers to Chapter 1, Subchapter S of the United States Internal Revenue Code. Owners who choose to incorporate an S Corporation are choosing not to have the Corporation pay income taxes but rather to have each shareholder pay personal income tax

How often do I need to pay taxes?

Thu, 24 Mar 2011 17:13:42 GMT

If you operate a business then you will need to pay your federal and state income taxes and your self employment tax at least annually and likely more often than that. If a business expects to owe $1,000 or more in taxes at the end of the year then the business needs to file quarterly tax returns. Other types of taxes such as business entity taxes and excise taxes must also be paid according to the schedule determined by your state taxing authority.

What are the advantages of a limited liability company (LLC)?

Tue, 24 Mar 2009 11:36:35 GMT

A Limited Liability Company (LLC) is a form of business organization which combines some of the benefits of a corporation with some of the benefits of a sole proprietorship. Owners of an LLC enjoy the limited personal liability for mistakes or misconduct of the business that owners of corporations enjoy. However, LLC owners are not subject to the same tax implications as a corporation. Further, an LLC offers its owners quite a bit of flexibility to determine how the business is going t

Do I need business insurance?

Tue, 24 Mar 2009 11:42:51 GMT

Most businesses need some kind of insurance coverage. The type of coverage varies from business to business and many companies need more than one type of insurance policy. For example, professionals, such as doctors and lawyers, usually must have malpractice insurance. Businesses that operate vehicles must have motor vehicle insurance. Many businesses also need property insurance to protect against things such as fires or natural disasters. Since most businesses can benefit f

What are the advantages of a limited liability partnership (LLP)?

Wed, 09 Feb 2011 17:01:07 GMT

A Limited Liability Partnership (LLP) has many of the same characteristics as a general partnership. However, there is one important advantage to the LLP business model. If a partnership is formed as an LLP then each partner is only personally liable for his or her own negligence or for the negligence of an employee under that partner’s direct supervision. So, if for example, the partners formed an accounting firm and one of the accountants is found guilty of malprac

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