Setting Up An Indiana LLC
Posted on | March 7, 2010 | No Comments
Question: “We formed an LLC a few years ago, but haven’t done anything with it. We do own properties and a business, but nothing is titled in the name of the LLC. There are several family members involved and our tax returns are a mess. Any advice on what we should be doing?”
Matt’s Answer: “Yes, I advise you to gather all your deeds, financial records and company records, and sit down with your business or real estate attorney, your CPA and your insurance agent. I have reviewed your company records, and can see that you’ve done essentially no planning. We need to develop a plan for you. You need an asset protection plan that includes some training and education on how to operate your LLC. You need to get better insurance on your properties, your business and the LLC members. You need to fix your company record book, which includes the drafting and completion of an Operating Agreement. And, that Operating Agreement should contain buy-sell provisions to address what I call the “Big D’s-” death, disability, marital divorce, dissolution of the entity, and disinterest by one or more members. You also need to fix certain accounting and tax irregularities, which flow from your failure to devise a plan.
Your meeting with your attorney should last one hour to two hours, and should include training and instruction on how to operate this business. Yes, it is a business. “Real Estate Investing” is a misnomer. It should be called “Real Estate Management” or “Real Estate Business.” You should apply basic business principles to your real estate business. Although I cannot explain in great detail here everything you need to do to correct the shortcomings of your operation, I can assure you that it is a fairly routine matter for an experienced real estate and business attorney. This is not difficult to correct, but you need to consult with professionals and implement a plan. Do not believe everything you’ve read in a book, on the Internet or in a seminar manual. And do not expect your CPA or insurance agent to fix your legal matters, as each of these three professionals has his or her own expertise and field of licensed competency. Go see all three- an attorney, a CPA and an insurance agent- and get your house in order as soon as possible. Within thirty days, you should have your real estate business matters in order.”
Fully Virtual Law Office Is Launched in Indiana
Posted on | March 1, 2010 | No Comments
Indianapolis, IN: March 1, 2009 – Tiffany U. Vivo, an Indianapolis attorney and Managing Partner of Vivo Law Offices, LLC announced today the launch of Indiana’s first fully virtual law office (VLO) in Indiana. The VLO’s address is www.IndianaVirtualLaw.com.
A virtual law office (VLO) is a web-based law practice that enables clients and lawyers to communicate through encrypted messages from any web access point at times convenient for the client and typically at reduced costs. A VLO is not a website operated by non-lawyers selling legal documents, such as Legal Zoom. Rather, a VLO is a licensed law office that uses the web to facilitate attorney-client communications and the safe exchange of data and documents with a licensed attorney.
“By eliminating expensive law offices, large staffs and other unnecessary overhead, our VLO can deliver cost-effective legal services from Indiana-licensed attorneys at lower costs,” explained Vivo. Increasingly, consumers are turning to the Internet for solutions to legal, medical, home improvement, car repair and other problems. “A VLO is not right for every client, but VLO’s do offer many clients access to a knowledgeable and experienced attorney, and good legal documents at a fraction of the cost,” Ms. Vivo further explained.
The other huge advantage of a virtual law office is convenience. A virtual law office can be accessed by a client anytime from anywhere the Internet is available. “There is no doubt that clients expect more convenience. Many clients do not want to drive in downtown traffic, find parking and then fight crowds and elevators just to see their lawyer,” noted Matthew Griffith, an Indianapolis attorney who often meets clients away from his downtown office. “Coffee shops are my office away from the office,” Griffith added.
“It is important that any law virtual firm office strictly adhere to the Indiana Rules of Professional Conduct and the Best Practice Guidelines for Legal Information Web Site Providers written by the E-Lawyering Task Force of the American Bar Association’s Law Practice Management Section and the ABA Standing Committee On the Delivery of Legal Services,” said Ms. Vivo.
About Tiffany U Vivo, Attorney: Tiffany U. Vivo is an Indiana attorney. At her physical law office, she practices immigration and family law.
Business goals & limiting liability
Posted on | January 28, 2010 | 2 Comments
Chances are that your lawyer has never encouraged you to establish business goals as a legal strategy. In this blog, I hope to convince you that goal setting is a great way to reduce your chances of getting sued or having other legal troubles. Of course, setting goals is only part of the battle. What’s a goal worth, if you never take the next step: Implementing a plan to meet those goals? But, let’s start here- Goal Setting.
I think business goals are best defined as components of your “Vision.” What is it you are trying to create, build, rebuild or restructure? What will your company look like in 12, 25, 60 months from now? For example, I am involved in helping to launch a virtual law service- www.IndianaVirtualLaw.com. IndianaVirtualLaw has a vision of its intended future. It is becoming the best, online law firm providing a wide range of legal forms, documents and other “unbundled services” with no fewer than 80 regular clients and 200 annual clients within 12 months. IndianaVirtualLaw intends to be an automated, forms-driven service that is almost entirely online to serve a specific market segment.
I could describe the vision for IndianaVirtualLaw in more detail, but you get the idea. The more specifically I can defined the vision of any company, the more likely I will be able to create a plan to reach that goal- realize the vision.
Once you have a well-defined vision, you can determine the steps required to move your company from where you are today to where you need to be to realize the vision. And this is the stuff of business planning.
With a well-defined vision and business plan, you can chart your conduct, define operations, establish employee roles, etc. You can create operations manuals, policies, procedures, etc. And in those operational tools, you can identify risks and create ways to keep customers happy, safe and out of the courtroom suing you. Remember that HAPPY CUSTOMERS WON’T SUE YOU.
Your company will also be able to manage cash flow better. That reduces disputes with vendors over payments, because you won’t be late on payments.
If cash flow is good, you can avoid doing business with less desirable customers and clients, especially slow-paying customers and clients. Thereby, you can avoid having to hire attorneys or collection agencies to collect your accounts receivable.
If your company is functioning well, you can afford to retain professional advisors, like lawyers, CPA’s, insurance advisors, business coaches, etc. And, this enables you to implement preventative measures that reduce liability risks, rather than the more costly way of reacting to problems.
Etc., etc., etc.
The advantages of setting goals and implementing business plans are enormous. So, I think it is critical that business attorneys understand business to help their clients with goal setting and planning as part of the client’s asset protection plan.
Asset Protection- More on Piercing the Corporate Veil
Posted on | January 13, 2010 | No Comments
A reader recently asked me this: “Can I PERSONALLY receive payments for services rendered through my S-corporation without jeopardizing my “corporate veil” or “corporate shield?”
The corporate veil insults owners and officers of a limited liability entity personally from liability risks of a business.
The answer to the reader’s question is yes, as long as this reader follows the corporate formalities I teach my clients and as long as he doesn’t commit one of the “7 Deadly Corporate Sins.” I listed the seven or eight (depending on how you count them) things you should avoid in order to buttress your corporate structure and not have your “corporate veil” pierced. Indiana corporations and Indiana LLC’s are governed by these rules, and I have generally described Indiana case law and the Indiana Code in these blogs. I give more guidance on this important topic in these other blogs:
http://www.askmattonline.com/uncategorized/piercing-the-corporate-veilshield/
http://www.askmattonline.com/asset-protection/what-is-the-corporate-veil-or-shield/
As to the question asked by my reader, he is going to receive checks in his personal name for work done through his S-corporation. The contract at issue is in writing and is between his S-corporation and another company. That’s a very good thing for my client, as it helps to distinguish him from the S-corporation he owns. For reasons not important here, the payments will be mailed as checks to my reader but made payable to him personally. I advised him to deposit the check in his S-corporation’s checking account and to treat the payments as if the payment had gone straight to the S-corporation and not to him personally.
By taking these steps, he will not violate any of the “7 Deadly Corporate Sins” and will avoid the “co-mingling” issue. The payments rightfully belong to his S-corporation, not him personally. So, he is merely depositing payments in the bank account of the rightful owner- his S-corporation. He is actually doing something positive to separate his personal affairs from his business affairs, which buttresses his corporate protection and limited liability. A court should look favorably on what he is doing, if this ever became an issue.
By the way, there is no significance to the fact that this reader owns an S-corporation, as opposed to a C-corporation. I did mention the “S” election status of this particular corporation to make the point the even S-corporations are obligated to follow the rules I described in this and the related blogs. The tax status of an entity should not impact the manner in which the corporate veil is preserved and protected. The same is true for LLC’s, although the formalities for LLC’s are different than they are for corporations. Otherwise, the same rules apply to LLC’s and corporations.
A good small business attorney will help you structure your business affairs in a way that limits your personal risks and protects your personal assets. If you need an Indiana attorney, make sure you hire a lawyer who understands Indiana business law.
___________________________
Matthew A. Griffith is an attorney, business performance coach, mentor and entrepreneur. He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals. Matt has nearly two decades of experience helping businesses grow.
TRADEMARKS- 5 simple RULES to consider
Posted on | November 20, 2009 | No Comments
Rule #1- Don’t try to trademark your logo, business name, tag line, etc. without professional help.
I see people screw up their trademarks on a regular basis. Trademark law is not as complex as patent law, but it is not easy for most law persons. Don’t be cheap. Get professional help.
Rule #2- Your lawyer may not be the right lawyer for your trademark needs.
About 25% of my trademark cases come from clients who first hired a lawyer who knew nothing about trademark law, and then they came to me for help. If another lawyer files a trademark improperly, I have to charge the client more to fix the trademark application than I would have charged to do the entire filing from the beginning myself. It is always more and harder work for me to fix another lawyer’s mistakes, than it is for me to do the job right the first time.
Rule #3- Decide on an I.P. strategy sooner than later.
Not all logo’s, company names, tag lines, etc. should be trademarked. Or, state trademarks might be enough, and there is no need for a federal mark. If you use a good trademark lawyer, he or she will discuss strategy with you first. If your trademark lawyer hasn’t engaged in cost-benefit analysis of various strategies with you, fire that lawyer and find a better one.
Rule #4- Protect your trademarks.
Once you get a trademark or service mark, protect that investment. Indicate ownership of your business name with an ® if it is registered as a federal trademark, a ™ if it is an unregistered trademark and a SM if it is an unregistered service mark.
Rule #5- Understand that trademarks are not the only ways to protect your I.P.
* If you plan on incorporating, register your name with your state’s secretary of state.
* Common law rights can be just as powerful as statutory trademarks.
* Federal law protects certain domain names from Cyber Squatters.
* Copyrights are different than trademarks. Learn when to use which set of protections.
* First in time often equates to first in right. So, be able to prove "first-use" by keeping records that document the date you began using your business name.
* If you do business abroad, you should also register your business name there.
* If you go over state lines, you better see a trademark lawyer about your needs, rights and risks. Everything changes when you do business over state lines. Remember the Internet enables you to do business anywhere at any time- day or night!
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Matthew A. Griffith is a business and real estate attorney, entrepreneur, business success coach and investor. He guides small business owners, management teams, inventors and investors to profitability using both time-tested and innovative business ideas, methods, tools and techniques. For a consultation, contact him via email- griffith@indiana-attorneys.com
Business Plans – THE benefits OF PLANNING
Posted on | November 11, 2009 | 3 Comments
Introduction by Matthew A. Griffith, Esq.
Below is a guest blog by Dan Lacy with Dynasty Business Building- http://dynastybuilder.com/home. Dan is, in a sense, a competitor of mine, in that we both help businesses and their owners avoid risks, maximize opportunities and grow businesses into profitable enterprises through business coaching and plan development. Nonetheless, I have to give credit where credit is due. The blog post below may be the best written summary I have ever read on the benefits of business planning. I can help more clients do more good and avoid more losses through simple planning than can be accomplished through any other business technique or function. In fact, I use business planning as a tool to reduce legal liability risks, as well as to increase profitability. Yet, most small to medium sized business do virtually no planning. Or, they create a plan but fail to implement it. Hopefully, Dan’s summary in this blog post will encourage a few business owners to start taking planning seriously. I hope this helps at least one of you. And thank you Dan Lacy. Good stuff.
Planning Today – Surviving Tomorrow
GUEST BLOG BY DAN LACY
In the first and second chapters of the book of Numbers in the Old Testament, we find a detailed description of the Israelite campsite during their wilderness trek. To the casual reader an outline of the particulars of encampment might seem to be irrelevant minutiae. What is actually presented, however, is a brilliant model for effectively managing the activities of a large organization. Moses and Aaron were responsible for governing almost a million people. By adhering to a carefully structured plan for day-to-day concerns they were able to prepare for long term problems and issues more efficiently.
Of course, what was true for the ancient Israelites is also true today. Planning is the key for any business owner who wishes to build a company that has a solid foundation for future growth and development. Yet, less than 15% of small business owners surveyed admit that they are doing an adequate job of planning for the future of their business. In fact, managers rarely fall short of their real potential for lack of technical competence. Of all the organizations and businesses I have consulted in the last 30 years, the one principle cause for failure is the inability or unwillingness of the executive staff to logically and consistently plan for the allocation of limited resources – labor, money and time – toward all the viable opportunities that exist.
While strategic planning is an integral part of maintaining the growth cycle of a large corporation it is even more critical to smaller organizations because they, typically, lack the resources necessary to absorb the cost of mistakes, errors in judgment, or failure to foresee change. The planning process allows management to evaluate the future where they want to be and how to get there. It helps them establish goals and then gives them a performance standard by which to measure themselves. Better yet, planning allows them a process to identify and resolve problems before they become crises.
Before gathering your staff together – either formally or informally – to begin the planning process for the future growth and development of your company, it’s important to understand exactly what this vital activity will accomplish:
1. Planning formulates the future. The planning process allows the people in your organization to anticipate and, therefore, shape the future.
2. Planning motivates people. Everyone wants to have a part in determining their future. The greater the feeling of ownership each individual has in determining the objectives of the organization, the more committed they will be to making sure those objectives will be achieved.
3. Planning establishes the organizational structure of a company. The planning process will clarify what structural issues need to be resolved in a company. This will determine what organizational model needs to be implemented to address these issues.
4. Planning directs delegation. The key to effective delegation is understanding what assets and liabilities a company has in terms of its human resources. By determining who is best suited to handle a particular role, the entire organization should be able to live up to its maximum potential. (Tim Collins – Good To Great).
5. Planning promotes communications. The planning process affects each division of a company, including the finance, marketing, sales and operations divisions. Thus, for each area of a company to achieve their respective goals, they must cooperate and communicate with divisions that they normally don’t communicate with.
6. Planning fosters the process of monitoring. The planning process establishes standards or goals that an organization must achieve to accomplish their overall objectives. Without a monitoring system, management will not be able to assess how well these goals are being achieved.
Planning is essential for the survival of the company. If the organization does not have the time or manpower to do adequate planning, then the company should utilize outside resources to help them set, monitor and achieve their goals. Time spent on planning is time well spent and money spent on planning is money well spent when the plan is utilized.
Protect Your Business name
Posted on | October 22, 2009 | 1 Comment
Your business name has value, if you protect it. Consider what your business name does for you:
- It can identify your product or service.
- Customers instantly recognize your company.
- Your name can suggest speed, quality or other marketable characteristics.
- You distinguish your company, product or service from those of the competition.
Add to a good business name-
* A tag line
* A logo
* A color scheme
Now you’ve got a BRAND. And branding is critical to attracting new customers and retaining existing ones.
But how do you protect your brand? More specifically, how do you protect your COMPANY NAME?
STEP ONE- Hire a good business attorney. If you live in Indiana, call and interview Indiana business attorneys knowledgeable in this area of the law.
STEP TWO- Decide whether your company will offer services or goods to customers in more than one state. If so, you’ll have more work to do in picking and protecting a name.
STEP THREE- Chose an unique or original business name. Most state secretaries of state have websites where you can search for available names. You’ll also need to check the Internet and the United State Patent & Trademark Office.
I recommend that you go one step further. Once you’ve done a preliminary search and have chosen a name, hire a professional service company that specializes in name searches. I use such a service regularly, and it is the most cost-effective way to ensure good selection of a name.
STEP FOUR- Work with your business attorney to devise a Name Registration Strategy. Do the cost-benefit analysis required to determine whether you need federal trademark protection. In most states, you’ll want to register your business name at the state level. Many businesses should consider federal trademark registration, but never anticipate that they have an interstate business. That’s a huge mistake.
Then, if you are granted state or federal trademark or service mark rights, note those rights by use of the appropriate registration symbols- use the ® if it is registered as a federal trademark, a ™ if it’s an unregistered trademark and a SM if it’s an unregistered service mark.
Your Name Registration Strategy should include filing fictitious or assumed business names. These are known as “DBA’s,” which stands for “Doing Business As.” This strategy not only protects names but can also prevent lawsuits, but that’s another article that I’ll write separately.
STEP FIVE- Register your domain names. As they say in Chicago politics. . . early and often. Registration is cheap. So, register a reasonable range or combination of your name as .com, .net, .org. .biz or any other relevant extensions. Make it easy for customers to find you by directing traffic from multiple sources to your home page.
STEP SIX- Monitor for violations of your rights. Use Monitor trademark infringement with CyberAlert’s Trademark Infringement Monitoring Service, or resolve it with trademark protection services from The Trademark Company.
STEP SEVEN- Enforce your rights. For example, have your business lawyer send “Cease And Desist” letters to anyone violating your business name rights. Submit complaints regarding domain name use to an arbitrator according to the Domain Name Dispute Resolution Policies set forth by the Internet Corporation for Assigned Names and Numbers (ICANN). Challenge other trademarks or registered business names that infringe on your name rights. Etc., etc., etc.
If necessary, file lawsuits.
If your business name is an important part of your branding strategy or goodwill, then take the time and make the investment to find the right business attorney to help you protect that brand.
Do I Need to Register My Company to Do Business?
Posted on | August 1, 2009 | No Comments
Yes, no, sometimes and maybe.
The answer as to what registration is required for a business depends on two things: (1) the legal entity you create to operate your business and (2) the nature of your business.
Small business owners often make the mistake of creating a corporation or LLC without completing basic steps. Use this short checklist to review whether you formed or registered your business properly.
1. Pick the right legal structure for your business. Your options include the limited liability company (LLC), general or limited partnership, limited liability partnership or corporation. Your business lawyer and your accountant should be consulted. You should consider such factors as the number of owners, the business plan, the capitalization plan, taxes and other factors.
2. File a Certificate of Business Name. Most businesses use a shorten name, called a trade name, for marketing purposes. ACME Medical Products, Incorporated will be marketed as “ACME” or “ACME Medical Products.” One of the cheapest and most important things you can do keep your limited liability “shield” in place is to file a Certificate of Assumed Business Name in order safely to use trade names.
3. Register for your business’ Federal Tax ID. All partnerships, multi-member LLC’s and corporations must have an Employer Identification Number, which can be obtained from the Internal Revenue Service.
4. Register with the State Revenue Agency and Obtain Permits/Licenses. Depending on the nature of your business, you may be required to register with your state, especially if you sell a product and are required to collect sales tax. In some parts of the country, you might even be required to obtain local permits or licenses.
Of course, this is the short list, and your business may be required to obtain other permits or licenses, or you may be required to register with other governmental agencies. See your legal advisor for help.
Matthew A. Griffith is an attorney, business performance coach,mentor and entrepreneur. He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals. Matt has nearly two decades of experience helping businesses grow.
Tags: attorney > business plan > corporation > llc > register > Small Business
Start a New Business
Posted on | July 25, 2009 | No Comments
Starting and running a small business takes desire, passion, skills, knowledge and talent. It also takes research and planning. While many small or start-up businesses can recover from early mistakes, many cannot. Every small business makes initial mistakes, but no small business can survive fatal missteps. So, planning is important.
Explore and evaluate your business and personal goals. Using those goals, craft a comprehensive and thoughtful business plan that will help you reach these goals. The process of creating a plan forces you to think about important issues that you might not think about without planning.
A plan is a valuable tool that can serve multiple purposes. But like hand tools, a business tool left in the “tool box” and never used is worthless. Again, the process of planning is most important, rather than detailing the plan in a formal written document. I recommend that plans be written, but the written document is not more important than the planning process itself.
Let’s Get Started-
List your reasons you want to start a new business. Consider this list to start your thinking:
- Self-management or freedom
- Financial independence
- Creative freedom
- Maximize personal skills and knowledge you’ve developed over the years
Decide what type of business is right for you. Ask yourself:
- What do I enjoy doing?
- What skills have I developed? What value can I add?
- What am I good at doing?
- How much money do I need to support myself? My family?
- How much time do I have to run a successful business?
What’s my business niche?
- What business do i want to start?
- What services or products can I sell?
- What need, want or desire can I meet?
- Will buyers pay for it?
- Is there competition? Competition is not always bad, as it demonstrates a market for your product or service.
- What strategic advantage do I have over the competition?
- Can I deliver a product or service with better quality, cheaper, faster?
- Do i have to create a demand for my business? How hard will that be?
Finally, consider these tough questions:
- What skills and experience do I lack?
- What legal structure will I use?
- How will I keep business records and data?
- What insurance do I need?
- What equipment or supplies do I need?
- How will I pay myself?
- What are my resources?
- What are my cash or credit needs?
- What facilities do I need? Is location important?
- What will I name my business? Is my brand important?
As you can see, these lists are long but still probably not comprehension. Small business owners must go through this process. It’s not always fun, and the answers might suggest that starting a small business is a bad idea. Resist the urge to accept any answer that furthers your dream but is not supported by facts. In other words, as you answer these question, be honest with yourself. Not every business should be started.
If your honest answers suggest that starting a new business is a good idea, use your answers to create a focused, well-researched business plan. A good plan is a blueprint for business operations, management, and capitalization. Review your business with your business lawyer, your CPA, friends and business associates. Schedule a monthly review of your plan, and be prepared to change the plan frequently. A good business plan is a flexible one that should change as you encounter obstacles and your business grows.
Matthew A. Griffith is an attorney, business performance coach,mentor and entrepreneur. He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals. Matt has nearly two decades of experience starting small businesses and helping businesses grow.
Tags: attorney > branding > business > business plan > Small Business
Matt’s next class. . .
Posted on | July 16, 2009 | 2 Comments
August 28, 9:30 am: Legal Landmines: Grow Your Business Without Stepping In It
Description: 100% of new business owners make critical mistakes in starting a new venture. The lucky ones survive their mistakes. The rest fail quickly, eventually go bust, get sued or struggle for months or years without ever realizing the full potential of the business concept or talent in the company. In this class, we will outline the key steps to forming a new business. We’ll outline legal liability threats and practical solutions. We’ll also discuss how to minimize income taxes. And, we will outline the advantages, dangers and opportunities of having partners. Even if you’ve already started and are operating your business, you’ll benefit from the lessons offered in this class.
For details or to register, click here go to Rainmaker University.
Tags: Asset Protection > attorney > corporation > limited liability > llc > Small Business > taxes
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