Limited Liability and Getting Started With Business Formalities – From a Business Lawyer

Business Attorneys are often asked how limited liability works, because this is often one of the greatest advantages to forming an entity that offers this type of protection (limited liability partnership, limited liability company, corporation, etc). Limited liability basically protects the business owner for the negligence of his or her employees. In other words, the limited liability status of a company does not protect the business owner from liabilities that are a result of his or her personal negligence. Company owners that actually take part in the daily activities of a business should be aware of this fact; because this makes almost as though the business is a sole proprietorship.Limited liability, on the other hand, is one of the biggest advantages of forming a corporation, or LLC, even if it only protects the business owner from his or her employee’s negligence. While any employee’s misconduct is likely outside the scope of employment, and would not make the business owner liable, the limited liability status is important for protecting the business owner’s personal assets. Failure to form the business properly might result in the business being recognized as a partnership, where the business owners would be joint and severally liable for the business’ debts (including judgments against the business); A Business law expert is useful for ensuring that your business is formed and operated properly.Clients often wonder what causes court not to recognize limited liability; this is known as piercing the corporate veil. Traditionally piercing the corporate veil is a remedy the court uses after considering certain factors. To avoid the risk of having your company’s limited liability status go unrecognized it is important that the business adhere to corporate formalities. Corporate formalities are those things which are usually done when conducting a legitimate business. This includes adequate record keeping, keeping the business owner’s personal funds separate from the operating funds of the business, acting in accordance with bylaws (for a corporation) or an operating agreement (for a LLC) for the business in question, and treating the company’s assets as though they were your own. An experienced lawyer usually prepares these documents for record keeping purposes and can help ensure that the company is staying compliant. The other thing to avoid is what is called undercapitalization, and is often found where businesses fail to properly maintain adequate insurance coverage in the case of any possible misfortune. The main point here is that the business was not formed as a limited liability entity to avoid potential business debts arising from judgments against the business.Because businesses are formed under State law, a business attorney can also advise on the advantages of forming the LLC in different states which can have certain benefits. Some of the benefits fall into different categories like more developed case law, or more developed statutes. Owners of large companies surely take advantage of being able to form an entity in different places; this is the reason you see many large corporations that where incorporated in Delaware.The business formation process can be an very challenging, and one may find regulations, permits and contracts totally confusing. However, all of these are not illogical obstacles towards establishing your company as they are just part of the many requirements that allow authorities to monitor or keep track of every business formation occurring in one place while informing the government that has jurisdiction.It is greatly important for any business to have its contracts undergo contract review. Contract review is important and is basically done to ensure that each contract is detailed, well-crafted and skillfully negotiated as the contracts protect the business and prevent legal battles and potential lawsuits. Few things must be considered when undergoing contract review.Ask – Do not hesitate to ask rather than simply signing off a contract. This is a good way for you to understand the risks or get a better deal.
Read – Take time to read the entire contract before signing to avoid unanticipated issues. Always remember that once you have signed, you will be legally bound to all the terms in your contract, whether or not you have read and understood them; the law imposes upon individuals a duty to read the contracts they sign.
Discuss – Address potential problems that may arise. It would be best if you have discussed possible problems along with negotiated resolutions before you sign the contract.
Define – Every word in the contract counts and the best contracts are the least confusing ones. Specify each detail and discuss. Every detail tackled and orally agreed upon by both parties should be put in writing; failure to do so can be detrimental should a legal conflict arise.
Innovate – Contract negotiations don’t have to involve money at all times. Parties involved may include services, a side service, co-promotion, small project partnership or possible contracts to perform in the future.These particular business dealings often include the services of a business attorney who could stand as a part of the business team dedicated to legal matters. A business law attorney has expertise that enables him to explain the legalities and limitations of the different business practices of a company. The attorney will also be aware of standard contract provisions that can be included into a contract to protect the parties.If you are after a smooth start in your business endeavors, dealing with the legalities first would be the best thing to do. It would be more favorable if you have already settled all these legal issues prior to officially opening and running your business. That will most likely help you face less legal battles in the future, if any. Often times, people start a business together and the terms are not clear from the outset; it usually is not until the business is turning a profit that the owners decide to determine what the terms should be; Do not let this happen to you, contact an attorney before you get the business going.

Landing A Small Business Loan In This Environment

Banks are not currently and probably will not be lending to small, growing businesses anytime soon. They view these small firms as too risky and banks are just not taking on any risk (any risk at all).But, that does not mean that your business cannot get the money its needs to start or grow. You just might have to go about it in a different manner which, in the long-run, may be a benefit to you and your business.For most small business, banks are not lending as they don’t want any loans with any risk on their books. While they do want your deposits and other account business, they are just unwilling to let money walk out the door.They blame these small businesses for items like poor credit, inadequate cash flow or undervalued collateral but in truth, many of these banks are just not in a position to lend to what is deemed risky businesses. And, if your business does not really need a loan, then it is deemed risky.What Can Your Small Business Do?For established small businesses, if your banker is refusing to take your call (and most are) then you should be looking at some of the alternatives methods of financing that have been around for decades or that have recently cropped up to fill the lending gaps left behind by the banks.Know that banks are not nor have always been the only and best options for small businesses. Banks tend to look at your overall business’s profits before making a business loan decision. Alternative financing options tend to look more at the need of the business and its ability to covert financial assets to cash.1) Look to factoring. If you have customers in the wings but lack the working capital to get these jobs started, factor those job orders for 100% of the cash you need to complete those jobs. Or, if you are sitting on a bunch of unpaid invoices, look to use them to get the working capital your business needs to meet immediate expenses or start that next order.2) Look to SBA loans. While these types of government guaranteed loans still have to go through banks – the SBA’s 504 program is leading the way in helping many local small businesses acquire and finance property and equipment. With the SBA’s 504 program, your local community development corporation will work with the SBA and your bank to finance hard assets. As they all spread and share the risk, your chances of getting funded increase dramatically.3) Let your business finance its own growing needs. There are a lot of growing businesses that tend to have a lot of sales but are still losing money (more cash out then in). This is not a reflection of the economy or any market but that of how the business is managed.Look for ways to reduce costs while maintaining your current level of sales or if that is not possible then look for ways to increase prices. You should always be looking for ways to reduce costs – even if your business is highly profitable.Keep shopping around for lower cost suppliers and vendors. Look to technology to improve processes or for ways to reduce staff expenses. And, constantly review your service providers – no sense in over paying for services like phone, internet, etc. If you can get your costs down and bring your profits up, you might not need outside financing at all. The best business loan is not having to get one in the first place.Business is not easy and is getting harder the longer our economy remains stagnate. However, people and businesses still need products and services to get through their days. They look for products that either make their life easier or save them time and money. And, while many are being more selective in what they spend their money on, they are still spending – good news for your business.Getting and keeping customers (letting them know who you are and what your business offers as well as keeping your business on the top of their minds) is always a challenge. But, successful businesses get out there and find creative ways to meet and overcome those challenges. The same is true in financing your small business.If you need capital to either get your business off the ground or to finance your current growth, you might as well just forget about the banks and get creative. Banks are just not ready to take chances.If you can’t demonstrate (sell) your business’s potential to the many different financing options out there (some that really want to work with your business) then you might start thinking about another career.Finding new ways to capitalize your business is just one of the many challenges that all businesses face in their development. But, the good news is that it is not the most daunting challenge you will face. If you need a business loan to start or grow your company, then get out there and get one!

As A Construction Manager, Are You Ready For The New Health Care Act?

Are you ready to provide affordable healthcare benefits to all of your full-time employees? Construction companies with 50 or more full-time employees can avoid the stresses involved with offering medical benefits to skilled laborers by hiring staffing from cost-effective labor staffing agencies.Some contractors, may choose to avoid all the complex work involved in providing health care benefits to their full-time employees and pay the penalty instead, believing this can be a less costly alternative. However, this decision is likely to put real a strain on your bottom line and could negatively affect your profit margin.Another way owners and contractors are combating the increasing cost of health care benefits, is to cut some of their full-time workforce to part-time status. This strategy can backfire too, as part-time workers can be less dedicated to their work and construction quality suffers.Benefits of hiring a labor staffing agency:Stress-free solutions to the new requirements. Many construction staffing agencies offer benefits to their skilled laborers, and are already well-prepared for the new 2014 legislation.Keep your full-time employees below 50, and rely on part-time skilled labor from a labor staffing agency.Construction staffing is simple. Many staffing agencies are committed to providing the best skilled labor in the construction market, assuring that all of your staffing needs are met fast.How will my business be affected?The law requires everyone in the United States to obtain health insurance, whether it’s individually or through and employer. If you do not, you will be required to pay a penalty that is equal to the cost of obtaining health insurance.Companies with 50 or more full-time employees must provide health care coverage to each employee or pay a fine of $2000-$3000 per employee.No one will be denied health care coverage due to a pre-existing condition.Annual policy limits on coverage will be eradicated.Lifetime policy limits will be eradicated.What’s considered a full-time employee?The Affordable Care Act defines a full-time employee as a person that works an average of only 30 hours per week, and not 40 hours. 30 hours a week used to be considered part-time to most, but under this section of the law, businesses must provide health insurance if it employs 50 or more employees who work an average of 30 hours per week. If a contractor does not offer health care benefits to full-time employees, penalties will incur, and over time, these fines are expected to increase as the impact of this mandate travels to the federal budget. With fines approximately $2,000-$3,000 per worker, it is important for contractors to identify which employees are full-time.Contractors can avoid the problems involved with keeping track of employee hours by working with a labor staffing agency. Choose an agency that provides a convenient solution to all the new health care demands. Temporary construction staffing adds just the right amount of skilled labor to your workforce, saving you time and allowing you to concentrate on your goals and deadlines, which in turn, saves your money on your bottom line.