Video Summary

Video Summary

What steps do I take when I want to form an LLC?  Well, the first thing we need to talk about is, Why are we forming an LLC?  Presumably, the purpose of doing this is to try and protect your personal assets from the business liability so that if your business gets sued that they can’t take any of your personal assets.

Now an LLC is different than a – it’s sort of a hybrid between a partnership agreement and a corporation and it does afford the parties limited liability; however, it is a little more complicated than a corporation since you don’t necessarily have officers and directors and they have particular duties.

In an LLC you have managing members or a managing member and that’s all designated under an operating agreement.  The operating agreement designates what each party is supposed to do and also it shows who is the ownership interest in an LLC.

Now any number of people that I see come in and say, “Oh, I have an LLC,” and I say, “Well that’s just terrific, can I see your operating agreement?” and their eyes glaze over, roll in the back of their head and they don’t know what I’m talking about.  So I say, “Well, who owns that?”  “Well, I do,” or they tell me who it is.  “Well, where is that,” because that’s what the operating agreement does.  It lets you know who owns it.  It’s sort of analogous to a corporation whenever you don’t issue any stock.

Well who owns it, you know, if you don’t have any shareholders, well, nobody owns it. So with an LLC it’s fairly complicated.  For that reason I suggest that whenever you’re talking about setting up an LLC let’s talk about why you want to set it up and the advantages of an LLC versus a corporation.

So if you have a going concern a corporation is probably much easier to handle and to be in – affords you more liability protection than an LLC, particularly if you are a single member LLC.  If you’re the only one interested there’s been several cases that says well, they can get your personal assets or go through the – get the LLC assets for your personal debts.

So before you jump into an LLC or go on-line and set it up I suggest that you might want to think about setting up an appointment and let’s talk about setting up an entity that will accomplish what you want because, if you simply set up a corporation, don’t issue any stocks, well, you may not have afforded yourself any protection from your creditors’ claims, and if the corporation gets sued then you may be personally liable for the assets.  So if you have some questions about setting up an LLC or corporation, give me a call at (727) 847-2288.

Video Summary

What steps should I take if I am considering buying a business?  Be very careful.  (a) whenever you buy a business or are considering buying a business, first thing that I ask the people is whether they’ve had any experience in a particular business so that they know what they’re looking for and that every business is unique.

I know particularly the restaurant business or the delicatessen business, the bar business, there’s all sorts of things that unless you’ve been there you don’t have any ideas of what the problems could be as far as a business is concerned and that’s true about any business.  So if you don’t have any experience and a going concern be very, very careful.

You need to hopefully work in the business for a period of time so that you can get the expertise and know any problems that are associated with it. So that is huge as far as (a) having the expertise as far as running the business once you purchase it.  Also, you need to be sure you review the books and records of the business and do a due diligence as far as that’s concerned.

You need to be very concerned about key employees, making sure that they don’t leave and there goes your book of business as far – whatever business it is and they go out on their own if there are key employees.

So you need to, whenever you locate a business you need to then prepare a contract which will give you the opportunity to exercise due diligence and if you would like to come in and speak to me about what all you need to do to buy business I’ll be happy to discuss it with you and work on preparing the contract but a lot of it has to do with your area of expertise and your ability to know what to look for in any particular business.  If you have any questions give me a call at (727) 847-2288.

Video Summary

Why should I file an annual report?  Well annual reports are, I believe, due on the first of May and you file those in conjunction with your LLC or your corporation.  It’s a revenue generator for the state of Florida, so you must file an annual report and pay the $150.00 fee.  If you don’t pay it and you want to keep your corporate existence in effect the reinstatement fee is something like $450.00 or $460.00, so the penalty is rather severe.  If you don’t pay the fee, then your corporation or LLC will be administratively dissolved by the Secretary of State. 

The other purpose in filing the annual report is it’s a resource that banks or other people use in dealing with an LLC or corporation to see who the resident agent is, see who the officers are or managing members of an LLC. So if you went to open up a bank account well then they would check with the secretary of state to see who the officers are. 

So, these are very good reasons why you need to file your annual report every year-  because you are going to get dissolved if you don’t and it’s also a resource for people to know who they need to contact in the event that they want to deal with a corporation and verify who the officers of the corporation are, or members of the LLC are.  So if you have any questions or need to have your annual report filed give me a call at (727) 847-2288.

Video Summary

What are director’s minutes?  Director’s minutes are the minutes of the directors of corporations.  The director’s function is to give direction to the management on the corporation (the management being the officers of the corporation).  Directors elect who the officers of the corporation are and also make major policy decisions such as opening branch offices and making substantial purchases.  If there is a change in the business plan, they adopt that and you incorporate this all into the director’s minutes, as well as election of the officers each year.

Many times the directors, the officers and the shareholders are all the same when you have a small corporation.  However, if you want to be treated as a corporation you need to act like a corporation and one of the functions is to have directors minutes as well as shareholder minutes.  The directors are elected by the shareholders and we have shareholders minutes.  Once the directors are elected, the directors then elect the officers.  The shareholders don’t directly elect the officers of the corporation.  So you need to have two sets of minutes each year to keep your corporation operating and appearing that it is serving as a corporation.  Otherwise, it can be disregarded or unprotected if it is sued, which is the reason why people like to have corporations. 

There is protection of their individual asset from those who make a suit to “pierce the corporate veil”.  One of the first things they ask for is to look at your corporate record book to see if you do have directors minutes and shareholders minutes and to see if you’ve been conducting business as a corporation (or whether you’ve just been writing checks out to pay your utility bills and treating it as a paper entity.)  So if you have any questions about your corporation, directors minutes or shareholders minutes give me a call at (727) 847-2288. Thank you.