I recently met with a client who had formed a Wyoming LLC because it appeared that he would save a few bucks on fees. He lives and works in Nevada and has no other connection to Wyoming other than the LLC he formed. I asked him if he was aware of and complying with the law (NRS 86.543) that requires him to register in Nevada as a foreign entity. He said no. I told him that even if the LLC was formed in Wyoming, if he’s transacting business in Nevada, he has to register that entity with the Nevada Secretary of State as a foreign entity. Same with corporations.
As it turns out, if you are doing business in Nevada under an LLC formed in
Continue reading Saving Money with an Out-of-State Entity? Maybe Not.
Recently, I made a pretty compelling argument for maintaining a corporate book, if I do say so myself. Now that you’re convinced, what types of records should be included? Generally speaking, you should include records of corporate meetings of members or shareholders, action taken without holding a meeting first, and approvals of common business decisions. Usually, the document that memorializes action taken by the owners, with or without a meeting, is called a resolution.
For some examples of documents to include in your corporate book, refer to this list:
Meeting minutes and notices of meetings sent to members or shareholders Adopting an operating agreement or shareholder agreement Adopting corporate bylaws Appointing a board of directors Opening bank accounts Approving contracts Authorizing or rescinding the authority of an employee
Continue reading What Types of Records Should Be in My Corporate Book?
When you form an LLC or a corporation with a commercial formation company, you’ll usually receive as part of the package a fancy-looking fake leather binder, sometimes with a heavy metal document sealer thingy. Often, this binder sits on your shelf, gathering dust, doing you and your company absolutely no good. There are many reasons to have a corporate book, but the two most important, in my humble opinion, are for business succession and litigation planning.
Your corporate book should contain all significant pieces of information relating to the company and records of major decisions by the company owners. If a business owner is somehow incapacitated, or made otherwise unavailable, the second in command can refer to the book to find where the bank accounts are, what insurance
Continue reading Why Do I Need a Corporate Book?
I’m super serious this time.
Lately I’ve heard from a number of business owners whose partners have stopped contributing to the business, financially or otherwise, and the business owner calling me simply wants out. Of course, it’s rarely simple.
A few callers are lucky in that the company has not yet transacted any business and therefore no equity really exists in the business to worry about leaving behind. However, most callers find themselves in a position where they have contributed a disproportionate amount of blood, sweat, and tears to the growth of the business while their partners have done little to nothing. Many callers report that their partners have not only done nothing but have even sabotaged the business by alienating customers, entering into lopsided contracts, or making large purchases
Continue reading Why You REALLY Need an Operating Agreement
One of my clients has been struggling to pay his $13,000/month lease. During a phone call about a year ago, his landlord told him, simply, “pay what you can.” At that time my client began paying about $6,000 a month while begging the landlord to move him to a smaller space within the same complex. Though the landlord never moved him, the client continued to pay the reduced rent.
The complex was recently sold to a new owner whose asset manager (during a meeting at which the client’s accountant and I were both present) assured my client that his reduced payments were fine and would become irrelevant as soon as she found him a smaller space within the complex for about the same rent. Her words, and I quote: ”You have
Continue reading Small Business Horror Story #4: Did Your Landlord Reduce Your Rent? Prove it.
Kate’s owner is relocating and has to take her to the shelter unless she gets a home within two weeks – please help!
“This is Kate. I originally called her Kate Plus 8 – when I first fostered her mid-May she came to me with 8 newborn pups. Now all her pups have found homes and I have spent the last 3 months socializing her and showing her what love is.
She is a 18 month old Boxer/pit mix. She loves nothing more than snuggling and hanging out by your side. Fetching a tennis ball is her newest obsession, and will sleep with the ball. She gets along with other dogs well. Walking her was initially hard because she pulls, bit I got her a Halti harness and she is
Continue reading Kate – Boxer/Pit Mix Needs a Home by FRIDAY!
A potential client called me. We’ll call her Helen. Over the last ten years, Helen’s partner “Jane” had perfected this FABULOUS idea that would make them both rich. Six months ago, Helen quit her lucrative job and had since worked full-time assembling Jane’s scraps of papers and mental notes into a formal proposal they could shop around to potential clients. Jane and Helen had hired a lawyer (not me) to put together an operating agreement and Jane had promised that Helen would become part owner in the company. Helen even ponied up close to $10,000 as startup capital. Sounds like the start of a great relationship, right? Well, it wouldn’t be a horror story if it was.
The longer Helen talked, the more concerned I became.
Helen had cashed out
Continue reading Small Business Horror Story #3: If You Don’t Listen to Your Gut, at Least Listen to Your Lawyer
September 14, 2011
From the IRS NewsWire, issue IR-2011-93
WASHINGTON — The Internal Revenue Service today issued guidance designed to clarify the tax treatment of employer-provided cell phones.
The guidance relates to a provision in the Small Business Jobs Act of 2010, enacted last fall, that removed cell phones from the definition of listed property, a category under tax law that normally requires additional recordkeeping by taxpayers.
The Notice issued today provides guidance on the treatment of employer- provided cell phones as an excludible fringe benefit. The Notice provides that when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not
Continue reading IRS Issues Guidance on Tax Treatment of Cell Phones; Provides Small Business Recordkeeping Relief
This guy is in Las Vegas, Nevada and is in desperate need of a foster home.
From a friend’s e-mail: ”This sweet scared boy is still at the Henderson shelter and some staff there have not been the most cooperative when people have brought their dogs to meet him. Seems to be some pitbull prejudice there! They have even taken him off their website although he is still there. And now they are saying he needs to go to a home where he’s the only dog even though he came in with a little Chihuahua friend. Sadly they don’t take into consideration the fear and stress this poor guy is feeling and how meeting another dog under those circumstances can cause him to act atypically.
His only hope now
Continue reading Sweet Scared Pitbull Needs Foster Home NOW
It takes a village to run a business. And by “village” I mean if you’re a business owner in Nevada, chances are you’ll run across the Secretary of State, the Department of Taxation, the IRS, and the city and county business license bureaus, among many others. Are you aware there are organizations like SCORE and the Small Business Development Center that offer free advice to businesses? To find and meet with all these organizations would take months if not years. Wouldn’t it be great if they were all gathered in one place, with representatives who are eager to answer your questions, to spare you the frustration of a never-ending phone tree? We thought so too.
Come to the Small Business Rapid Resourcing Event on Thursday, October 20 from 4-7pm at
Continue reading Small Business Rapid Resourcing Event