FAQ

These actions are initiated by the filing of a petition. The petition must be “served” on the opposing party. This means the papers must be hand delivered to the opposing party. The person who files the petition first is called the Petitioner and the person who is being served is called the “Respondent.” We can usually locate someone using our extensive resources which include private investigators and process servers. If an opposing party absolutely cannot be found then we can “serve” the person by a process called service by publication. This process takes longer than actual personal service.

All the assets must be evaluated for distribution. Certain assets such as inheritance must be disclosed, but are not subject to division. Also premarital property which has not been “co-mingled” (or mixed in) with marital assets may be kept separate and not subject to division.   Generally, it is the increase in value of the premarital assets that become subject to equitable distribution.

Child support is determined using the child support guidelines. The child support guidelines are located in Florida Statute 61.13. The statute sets forth a mathematical formula that takes into consideration time sharing, day care, income and many other factors in determining what the proper amount of child support is and how it is to be determined.

The Court will look at all the factors in the Relocation Statute to decide if the relocation is in the best interests of the children.

A petition to establish paternity has the legal effect of allowing a legal process by which either the father or the mother may initiate legal action to get child support or time sharing. In this process the court can order a DNA test to establish who is the biological father.

While sharing title to property may avoid probate after your death, naming “joint tenants” may have a number of adverse consequences. In effect, adding a joint tenant to your home deed means that you have now gifted a portion of that property to those named. And when you make gifts in excess of $14,000 in value within a calendar year to someone other than a spouse, the IRS requires you to file a gift tax return, and in some cases pay gift taxes. When gifting an interest in your home to anyone, you also are endangering your own financial security.  If your new co-owners have creditors or are involved in a divorce, your assets will be at risk.  Furthermore, such a transfer may jeopardize certain property tax and other exemptions you enjoy as a senior, veteran, or homesteader.

A better idea is to create a Living Trust and name your children as beneficiaries of the Trust after you die. This has the advantage of avoiding probate, yet it gives you total control of your house prior to transferring ownership. You can also change beneficiaries if you so desire, and also provide for the circumstance if one child predeceases you.

In a “condo”, you legally own a particular unit in a multiple unit structure of the building.  Under a typical arrangement, you have a share and a right to use common areas such as hallways, elevators, gardens, swimming pools, and club house within that structure.  You pay monthly payment to an “association” for maintenance expenses of the common areas. The association is typically run like a corporation.

In a “co-op”, you do not own your own specific unit in the building but own stock in the corporation that actually owns the building and all the apartments. You lease your apartment from the corporation according to a formula based on the unit’s size.  As a shareholder, you have a say in electing the Board of Directors who manage the cooperative.

The deed gives you formal title in exchange usually for a specified amount of money. The transfer of interest in real property is not complete until the deed is delivered to you.  The deed should be recorded immediately with the county clerk in the county where the property is located.  By recording the deed, you give notice to all future potential buyers of that property that you now have an ownership interest in that particular piece of real property.  Title insurance typically performs this function to determine whether any defects occurred in prior conveyances and transfers.  If so, such defects may then be pointed out and excluded from their coverage.

The person acquiring the property through quit claim, receives whatever present interest the grantor has in that property. Unlike a warranty deed, a quitclaim deed carries with it no express or implied covenants or guarantees.

Big pitfall for income taxes.  If you quit claim your property to your children, you will be leaving them a huge tax bill compared to if they inherited the property via your death.   If you would have transferred the property via death the income tax on the sale of the house normally the day after the receipt of the inherited property would be zero.  Compared to as much as 20% on the difference between the value on the date of the gift and the date of the sale.

Capital gains exemption: Once you sell your principal residence, you may exclude up to $250,000 ($500,000 for married couples) from any realized capital gains.  In order to qualify, you must meet certain requirements: among other things, you must have lived in that home for at least two of the five years prior to the sale, and not have excluded gain from the sale of another home two years prior to the sale.

Upon publication of notice of a notice to creditors, a claimant may file a “statement of claim” against the estate.  This claim is generally required to be filed within the first three months (non claim period) of publication of a prescribed notice in a countywide newspaper. The personal representative is required to use diligent efforts to give actual notice of the probate proceeding to “known or reasonably ascertainable” creditors, to afford them an opportunity to file claims.   The personal representative or any other interested person may file an objection to the statement of claim.

Family Administration

Family Administration is generally available if beneficiaries consist solely of a surviving spouse, lineal descendants (i.e., children, grandchildren, great grandchildren, etc.) or lineal ascendants (i.e., parents, grandparents, great grandparents, etc.), and the value of the gross estate for federal estate tax purposes is less than $60,000.

Under Family Administration, the persons who receive the estate assets remain liable for claims against the decedent for two years after the date of death. The two-year period may be reduced by using Formal Administration until all claims of creditors have been barred.

Summary administration

Summary Administration is generally available if the value of the estate subject to probate in Florida (less property which is exempt from the claims of creditors) is not more than $75,000 or the decedent has been dead for more than two years.

Under Summary Administration, the persons who receive the estate assets remain liable for claims against the decedent for two years after the date of death. This period may be reduced by publication of notice in a local newspaper

Disposition without Administration

This is available if estate assets consist solely of exempt property (as defined by law and the Florida Constitution) and non-exempt personal property, the value of which does not exceed the combined total of up to $6,000 in funeral expenses, plus the amount of all reasonable and necessary medical and hospital expenses incurred in the last 60 days of the last illness.

Formal Administration

Only available for decedents who were not Florida residents as of death. This is to admit the will of a nonresident decedent to record, if certain requirements are met and the will devises Florida real estate or any right in Florida real estate. When admitted to record in any Florida county where the real estate is located, the “foreign will” serves to pass title to the real estate as if the will had been admitted to probate. This procedure is available only if either two years have passed from the decedent’s death or the domiciliary personal representative has been discharged and there has been no estate administration in Florida.

Allows you to remain in control of your assets during your lifetime, have them managed during incapacity, and efficiently and privately transfer them to your loved ones at death according to your wishes.

The Revocable Living Trust holds legal title to your assets and provides a mechanism to manage them. You would serve as the trustee and beneficiary of your trust during your lifetime, and therefore you will still need to report income earned as the Revocable Trust on your personal tax return.  You also designate successor trustee(s) to carry out your instructions for how you want your assets managed and distributed in case of death or incapacity.

In order for the Living Trust to function properly and therefore avoid probate, you need to transfer (there may be a transfer fee) many of your probatable assets to your Living Trust during your lifetime. The fact that it is “revocable” means that you can make changes to it or even terminate it at any time.

The Revocable Living Trust does not protect against creditors, lawsuits, or judgments.

A Durable Power of Attorney is a document that empowers another individual to carry on your financial affairs in the event you become disabled or incapacitated. Without a Durable Power of Attorney, it may be necessary for one of your loved ones, including your wife or adult child to petition a court to be appointed guardian or conservator in order to make decisions for you when you are incapacitated.  This guardianship process is time consuming, expensive, often costing thousands of dollars and it can be emotionally draining for your family.

There are generally two types of durable powers of attorney: a present Durable Power of Attorney in which the power is immediately transferred to your attorney in fact; and a springing or future Durable Power of Attorney that only comes into effect upon your subsequent disability as determined by your doctor.  When you appoint another individual to make financial decisions on your behalf, that individual is called an agent or attorney in fact. Most people choose their spouse or domestic partner, a trusted family member, or friend.

Generally, any individual over the age of eighteen (18) and who is legally competent can establish a Power of Attorney.  You may appoint multiple agents to serve either simultaneously or separately.  Appointing more than one agent to serve simultaneously can be problematic because if any one of the agents is unavailable to sign, action may be delayed.  Confusion and disagreement between simultaneous agents can also lead to inaction.  Therefore, it is usually more prudent to appoint alternative designees in succession.  Power of attorneys are mostly utilized to make decisions about your finances when you cannot.  The power dies when you do and therefore a probate proceeding may be in order.  Powers of attorney have fiduciary duty and cannot self-deal.

The law allows you to appoint someone to decide about medical treatment options if you lose the ability to decide for yourself.  You can allow your health care agent to decide about all health care or only about certain treatments. You may also give your agent instructions that he or she has to follow. Your agent can then make sure that health care professionals follow your wishes and can decide how your wishes apply as your medical condition changes. Hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own.

Some medical providers have refused to release information, even to spouses and adult children authorized by the Healthcare Power of Attorney on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases.  Therefore, as part of your incapacity planning, you should sign a HIPAA authorization form that allows the release of medical information to your agents, successor trustees, family or any other individuals you wish to designate.

Federal law prohibits financial institutions from accelerating your loan when you transfer property to your living trust as long as you continue to live in that home (less than 5 units)

A Permanent Residence Card (Green Card)  holder gives the individual the right to live and work in the United States on a permanent basis, The steps to obtaining a green card vary depending on whether you currently live in the United States or you are living outside the United States. The main categories for applying for a permanent residence (Green Card) card include:  Green Card through family, employer, Self-Petition, Refugee or Asylee, green card lottery, born to a foreign US diplomat.

Naturalization Process Requirements are as follows:

• To be a permanent resident (EB-1, EB-2, or EB-3) for at least four years and nine months.
• Three months prior to your five-year mark of permanent residency, you may begin the naturalization application process. The time period for which your permanent residency is counted against the time necessary to become a U.S. citizen starts the day you gain permanent resident status, (listed on the Permanent Resident card).
• Compliance with the Permanent Residency Rule. Two conditions that define the permanent residency rule are:a) The applicant must be physically present within the United States for 30 months during the 5 years of permanent residency AND
  b) The applicant may not leave the United States territory for more than 6 months at a time without a reasonable explanation

• Other requirements for naturalization include:
• Good moral character = no felonies
• Taking an oath loyalty oath to the United States
• Demonstrative ability to read, write, and speak English
• Knowledge of the history of the United States
• The resident alien may also apply for naturalization if they have been married to a U.S. citizen for at least three years.
• The petition process to determine if the foreign national is eligible to receive such residency could include an investigation into the individual’s history on subjects such as criminal arrests/convictions, diseases, unlawful presence issues.

In order to apply, you must be the immediate relative of a U.S. citizen, a member of a special category, or a family member of a green card holder.   The following are the categories:

• Husband, wife, or child under the age of 21 (immediate relative);
• A parent, if the U.S. citizen is at least 21 years of age (immediate relative);
• An unmarried son or daughter 21 years or older and their children (first preference);
• Married son or daughter of any age and their children (third preference);
• Brother or sister if the U.S. citizen is at least 21 years old and his or her spouses and children (fourth preference)

A United States consular officer will issue a visa after the USCIS approves a petition filed by a qualified family member. After the petition is approved the visa may be issued in as little as 90 days or as long as 25 years depending upon which of the categories listed above apply and depending upon the immigrant’s home country. Please keep in mind that not all family relationships serve as a basis to apply for lawful permanent resident status.

• Husband or wife and children under the age of 21 (second preference A)
• Unmarried child 21 years or older (second preference B).

A labor certification is completed by your employer, so that they can sponsor you by filing Form I-140.  The basic claim is that an American citizen currently cannot be found to fill the position being offered.

In some situations, you may be able to self-petition for a green card. This applies to certain professions such as:

• Afghan/Iraqi Translator
• Broadcaster
• Employee of an International Organization
• Religious worker
• Physician National Interest Waiver
• NATO-6 Non immigrant
• Employee of the Panama Canal

All of the above require a Form I-360, Petition for American, Widow(er), or Special Immigrant, and are described in Section 101(a) (27) of the Immigration and Nationality Act (INA).

B-1 Visa: B-1 visas can be utilized by individuals who are starting or determining the feasibility of a particular business. These individuals may conduct research, interview with future employees, partners and clients and conduct general business meetings. However, B-1 visa holders may not work in a specific business.

E-1 Visa: E-1 visas are used by people who desire to conduct a “significant” amount of trade with the U.S. The visa is reserved for individuals from countries that have signed a treaty with the U.S. regulating trade and commerce. The trade may consist of goods or services, including technology. These individuals must conduct at least 50 percent of its international trade between the U.S. and the treaty country. The trade may be coming from or going to the United States.  For a list of the countries that the U.S. has E-1/E-2 treaties with, visit http://travel.state.gov/content/visas/en/fees/treaty.html.

Procedure to apply for investor’s visa E1/E2

This visa is referred to as the “entrepreneur” or “employment creation” immigrant visa by the immigration and nationality laws of the United States

The basic requirements for the investor to obtain conditional residence in the United States are:

• The amount now required to be invested is $500,000 in rural areas or in cities with a populace of 20,000 or more experiencing 1.5 times the national average rate of unemployment. In all other areas the investment required is $1,000,000.
  1. A legal source for all funds to be invested must be proven by documenting the source of such funds and specifically detailing how the funds were earned or otherwise obtained, not just documenting that the funds were drawn from a bank account in your name.
• For the investment to qualify the investor and the immediate family for conditional lawful permanent residence, it must result in the creation of at least ten new full time jobs in a business started or reorganized by the investor.
  1. If the investor purchases an existing business, he must increase the net worth of the business by forty percent (40%), or, increase the total number of full time jobs at the business by at least forty (40%) percent (but in no event less than ten new jobs).
  2. However, under a 1995 Immigrant Investor Pilot Program, if the required investment is made in a Designated Regional Center, the ten new jobs required to qualify may be “created indirectly“. If this is accomplished by the invested amount, the investor and his immediate family will be granted conditional residence.
• Processing time, once the application and required evidence is filed, is approximately four months for adjudication of the petition by the United States Citizenship and Immigration Services.
  1. Thereafter, the second phase, an application to be processed through the United States Consulate in the alien’s jurisdiction, usually takes an additional six months; or, if the alien is in the United States at that time (for example with a “B” visitor’s visa) then the alien can process the second part of the case through an Adjustment of Status application filed with the U.S. Citizenship and Immigration Services.
  2. The applicant’s spouse and children under age 21 may obtain derivative conditional lawful permanent resident status from the applicant’s investment and application
• If the qualifications continue to be met and the business remains viable, the conditional residence will be changed to permanent residence after two years. The investor and his family will then be eligible for United States citizenship three years later (five years after being granted the conditional residence).

E-2 Visa: E-2 visas are designed for entrepreneurs and professionals who intend to manage a business in United States. The individual must own at least 50 percent of the business or must demonstrate the work experience necessary to perform the job that a company is offering them. If the individual is investing in a company, they must be doing so with personal funds or a loan that they have secured. The business must also have the justifiable ability to maintain several U.S. employees.

The investor:

Must make a substantial investment in the United States whereby he will own at least fifty percent (50%) of an enterprise that is of benefit to persons other than the investor and his family.

1. This is usually demonstrated by showing two or more full time employees; or, substantial payments to independent contractors on a regular and continuing basis for the investment to operate.
2. The investment must be active; purchases of stocks, bonds, certificates of deposit or vacant land will not qualify.
3. Development of land by subdividing and building on it will qualify, as will owning buildings that require management such as motels, apartment buildings or commercial buildings.
4. There is, at this time, no minimum amount that must be invested to qualify
5. For a list of the countries that the U.S. has E-1/E-2 treaties visit http://travel.state.gov/content/visas/en/fees/treaty.html

There are tremendous educational opportunities in the United States for students across the globe. If you are planning to visit the United States to study at educational institution, you may apply for one of the following visas:

• Must attend a school or college full-time (8-12 units per semester)
• With the intent of earning a degree, you must attain an F-1 visa.
• Show proof that they have a tie to their home country that would make it likely that they would return, such as a job offer letter or proof of a bank account.
• Spouses and children of F-1 visa holders can obtain an F-2 visa.
• Must complete a non-immigrant application online (form DS-160), with your photo.
• You are required to schedule an interview with a U.S. embassy or consulate.
• You must also select the school you would like to attend and have that school register you in their Student and Exchange Visitor System (SEVIS) database.
• Must file Form I-20. You and your school will sign the I-20 form.
• Student Visa applicants must bring their passport, application fee, photo and forms DS-160 and I-20 to their interview.

M-1 Visa:  If you are entering a vocational school, you must be a full-time students.

J-1 Visa: If you are going to be a part of an exchange program

• 3 Credit reports – one from Experian, Trans Union and Equifax

Go to www.Freecreditreport.com

Or

www.annualcreditreport.com

Or I can get your credit reports – my fee is $40.00

• 2015 and 2016 tax returns with all the attachments.

• If you own a home, I need the deed, mortgage company name, address, loan # and balance owing.

• If you have a car in your name, I need the year, make and model. I also need the exact mileage on the vehicle.  If there is a loan or lease, I need the name, address, account number and balance owning.

• I need 7 weeks of current paystubs (or proof of income) from you and your spouse (even if this is not a joint filing) – if you do not work and receive government assistance, I want the letters from the government agencies to show proof of your income.

• Bank Account name, address, account number and balance. For both spouses ( even if this is not a joint filing)

• If any lawsuits (foreclosures) or past judgments – ALL paperwork

• I want all the bills that you’re going bankrupt on – credit card bills, outstanding medical bills – all bills – doubles, triples and collection letters – I want EVERYTHING!

• If you have a student loan – I need the name, address, balance owing and from what year you took out the loan.

• If you owe the IRS any money – I want the year and balance owing.

• If you have a 401K, IRA, etc. – need name, address and cash value.

Imagine your life without the stress of the bills!!  No more fear of garnishment, or seizure, the IRS knocking on your door.  Restarting your life and improving your credit score, eventually saving money on car insurance and buying a home because now you have the credit score or the money to do so.

You can start rebuilding your credit as soon after receiving your bankruptcy discharge.  One way of doing so is by working with a secured credit card (For example, from 5^th third bank).  Most likely you will be able to get unsecured credit card offers within six months and then have good credit within a year and a half after receiving your bankruptcy discharge.

The Bankruptcy Abuse Protection and Consumer Protection Act, passed in 2005 puts much stricter guidelines on personal bankruptcy filings. Some of these guidelines include mandatory debt counseling, and a means test: income limitations on who can and cannot file, and requiring some debtors in higher income brackets to pay off a portion of their debt before allowing them to file.

Depending on the amount of money you have, your current income and your personal circumstances, you may not be allowed to file for Chapter 7, which absolves most of your debts. Instead, you may be forced to file for Chapter 13, which requires you to enter into a payment plan. Before filing, it is important that you speak with someone experienced with the bankruptcy laws so that you will have a better idea of what to expect when you file.

Back and future child support, back income taxes filed more than 3 years prior to bankruptcy filing, federal student loans, or debts incurred as a result of fraud or theft (writing bad checks, for example), some government fines, and alimony payments.

Having too much money in the bank. This is a time when it is not good to save. When you file for bankruptcy, generally anything over $200 in most cases will be seized and used to pay your creditors.  If you have a significant amount of money in savings, you may want to consider entering into a payment plan or settlement with your creditors before you file for bankruptcy. This may allow you to save some of your money.

The 341 hearing allows for creditors to appear in front of the trustee to establish any or dispute any claims.  Generally creditors do not show.  Unfortunately the hearings are held in mass, so there is no privacy.  The Trustee can ask you any question regarding your filings especially did you read the bankruptcy petition, is there any need to amend the schedules as filed, did you hire an attorney other than for bankruptcy purposes in the last 2 years, Did you transfer any money or assets to a relative within the last year.  The Trustee can also ask you how you found yourself in the need to file for bankruptcy.

If you are not present at the time of your 341 hearing, your case could be dismissed, and you will have to re-file and pay court costs again.  You will also need to bring your photo Identification and Social Security card.

Federal law prohibits financial institutions from accelerating your loan when you transfer property to your living trust as long as you continue to live in that home (less than 5 units)

Non-compete agreements are not always enforceable. Florida is a right to work state. Florida Statutes (SS 542.335) governs non-compete agreements. That statute requires that there be certain legitimate business interests of the employer set out in the statute such as for example, the protection of trade secrets or the protection of confidential information. Restrictions should be both reasonable with respect to geographic area and time. Presentation of the non-compete agreement should be prior to employment not after employment has already been engaged

A covenant not to compete is a contractual obligation not to compete against someone or a company. Typically, occurs in employment arrangements where an employer wants to prevent current or former employees from competing with the employer. It also can be used in a business sale, when the buyer would like to prevent the seller from competing after the sale with the buyer.

An agreement not to contact, solicit, or obtain clients of another business or sometimes employees of that business. Typically, occurs in employment arrangements where an employer wants to prevent current or former employees from contacting or soliciting its clientele.  It also can be used in a business sale, when the buyer would like to prevent the seller from contacting or soliciting its clientele after the sale with the buyer.

Employees cannot do acts that would be harmful to the interest of the employer. For example, if an employee starts a competing business while still working for the employer, then the employer can sue the employee for lost profits and other damages.

Most oral agreements are binding, however real estate contracts in Florida are usually not because of the statute of frauds (certain types of contracts are not binding unless they’re in writing and signed by the party against whom it’s charged, and commercial leases exceeding a year will need to be in writing, usually with two witnesses as well).

How to begin to prove unwritten agreement becomes challenging.  One way is, to look at what was physically accomplished during the time frame in question or the industry custom.

An agreed fixed amount of money that is agreed to in advance by the parties of the contract that is paid by the breaching part to the non-breaching party.  Liquidated damages have to have a relationship to what the real damages would be.  Liquidated damage provisions are usually not enforceable when they are really designed to be a penalty.

Also known as a Stockholder Agreement, is a contract between the shareholders of a corporation.

The contents in a Shareholder Agreement depends on the corporation and the shareholders, but it usually addresses:

• Shareholder rights and responsibilities.
• Share ownership and valuation.
• Management of finances, business, and assets.
• Conflict of interest rules
• A non-compete clause or non-solicitation clause.
• Dispute resolution methods.
• Rules for issuing new shares and restrictions on share transfers.
• First Right of Refusal
• Actions to take upon the death or incapacitation of a shareholder

Essentially, it establishes the rules that govern the shareholders’ relationship to the corporation and to one another.

Right of First Refusal

Each shareholder must first offer to sell their shares to other shareholders at a fair value. If the shareholders cannot purchase them, the selling shareholder can offer them to a third party.

Shotgun Valuation Provision

This is an exit provision, (also known as a buy-sell agreement), may be used because of a shareholder dispute, and it specifies that Shareholder ”A” can offer to buy Shareholder “B’s” shares, whereby Shareholder “B” can either sell at the offered price, or turn around and buy Shareholder “A’s” shares at the same price.

Piggy Back Provision

Also referred to as a “tag along” or “co-sale” provision, a Piggy Back provision applies to majority shareholders who intend to sell a significant portion of their shares. It protects minority shareholders because the buyer must also purchase their shares at the same price as the majority shareholder, therefore agreeing to purchase all the shares.

An LLC has more operating flexibility and fewer corporate formalities than an S corporation. For example, an S corporation cannot have more than 100 stockholders and must hold both periodic director’s meetings and an annual meeting of stockholders. However, owners of an S corporation may be subject to fewer taxes than LLC owners.

The advantages of incorporating in Delaware according to the Delaware Secretary of State:

More than half a million business entities have their legal home in Delaware. This includes more than half of all U.S. publicly-traded and Fortune 500 companies. Businesses choose Delaware for its complete incorporation services package, which includes modern and flexible corporate laws, the highly-respected Delaware Courts, a business-friendly state government and the customer service oriented staff of the Delaware Division of Corporations.

According to the Nevada Secretary of State:

• No Nevada State corporate income tax
• No Nevada State taxes on corporate shares
• No Nevada State franchise tax
• No Nevada State personal income tax
• No I.R.S. information sharing agreement
• Nominal annual fees
• Minimal reporting and disclosure requirements
• Stockholders are not on public record

Professional corporations (PC) are corporations that provide professional services. State law and the regulating board determine what constitutes professional services and when you are required to be a professional corporation. Typically professions that require a license, such as doctors, chiropractors, lawyers, dentists, accountants, architects or engineers. Please see your tax advisor if you are a “c” corporation who is also a professional service.  A professional Service Corporation can pay at much higher tax rates than other corporations.

Yes, a corporation can be formed with only one shareholder. However, corporate formalities, such as director and shareholder meetings, are still required in order to preserve the corporate form and prevent the shareholder from personal liability.  You must also be careful not to commingle your assets including your bank accounts.  Keeping your business expenses paid from your business bank account and your personal expenses paid from your personal bank account.

This is the person/company designated to receive official state correspondence and notice if the corporation/LLC is served with a lawsuit. Any owner, responsible person, or company can be a registered agent.  The annual renewal notice is sent to this person or entity and must be renewed normally by the end of April every year

There are some advantages to having another person or company act as your registered agent. It adds an extra layer of privacy, since the registered agent’s name and address are publicly available, and therefore you will not be surprised at home with court papers.

C corporations are subject to double taxation; that is, one tax at the corporate level on the corporation’s net income, and another tax to the shareholders when the profits are distributed. S corporations have only one level of taxation. All of their income is allocated to the shareholders.

However, C corporations have greater tax planning flexibility and can shield shareholders from direct tax liability. In addition, S corporations are subject to limitations, such as the number and type of shareholders (100) they can have.  We currently are teaching seminars in conjunction with e SCORE (a division of the Small Business Administration) on this subject every month.

Schedule to be announced.

There are some advantages to having another person or company act as your registered agent. It adds an extra layer of privacy, since the registered agent’s name and address are publicly available, and therefore you will not be surprised at home with court papers.

An agreement among limited liability company (“LLC”) members governing the LLC’s business, and members’ financial and managerial rights and responsibilities. An operating agreement is similar in function to corporate by-laws, or analogous to a partnership agreement in multi-member LLCs.

In single-member LLCs, an operating agreement is a declaration of the structure that the member has chosen for the company and sometimes used to prove in court that the LLC structure is separate from that of the individual owner and thus necessary so that the owner has documentation to prove that he or she is indeed separate from the entity itself.

Providing protection from the allegation from the opposing side to pierce the corporate veil and therefore to gain the ability to pursue collection against you personally Operating agreements can be amended at any time by the company members or managers. Not having an operating agreement especially between friends and family members open you up for potential challenges when things are either good or bad.

Deciding on how decisions are made in advance especially when you are both equal in ownership. How are disagreements resolved? Assuming that your relationship outside of business will remain the same forever is unfortunately naïve and with the current divorce rate, the time to act is before you start the business together.