Posts filed under 'Business'
Lately I have been seeing and hearing about companies that will provide legal forms for wills, and business entities (like corporations and limited liability companies), but not legal advice. Hence the question, “Should you be your own lawyer?”
Legally any individual can represent themselves in court. In today’s impersonal fast paced world, people want to buy the thing to solve their problem. In this case a piece of paper that acknowledges that your business has paid the appropriate filing fee and the appropriate piece of paper with the State allowing you to transact business as a corporation of LLC. That is a small part of what I do for my client’s.
Yes I prepare that paperwork plus more paperwork that is needed for the type of entity that is recommended. This is where the Lawyering starts and the form filling stops. I get to know what my client’s business is about, what risks they face and what their tax position may be. Based on that information I make a recommendation on the type of entity they should form and why.
The same holds true with your will. You know who you want to get your things and the kids, but you may not know that there are alternative ways to transfer those assets that will protect your assets from liabilities your family may be subject to, including estate taxes. Additionally, when you deal with an attorney he/she can help you evaluate the best way to handle potentially problematic heirs.
In full disclosure, I have not actually seen any of the forms advertised so I am not commending on the quality of the forms or correctness of the form filling. Ultimately, it is a question of Value. Do you value professional advice, or do you just want a piece of paper?
Joseph Michael Dickerson
www.dickersonlaw.com
www.theroadmaptorich.com
August 20th, 2008
This is the first year that many of us have dealt with the new Texas Franchise Tax, a.k.a. the Margins Tax. The tax on its face sounds innocent enough, just 1%. The reality as many of you have come to know is that this 1% is of your gross revenue with very few deductions (employee costs or cost of goods sold). As a result, it is possible to have a loss in the business and still have to pay the franchise tax. It has happened in certain service industries like transportation and forwarding. Some industries received some breaks, including retain, physicians and lawyers. The original purpose of the change was to bring all business entities under the tax. (Limited Partnerships and others we excluded under the prior law.)
Unfortunately as with most things the pendulum has swung to far and will need to adjust (hopefully sooner than later). I have some ideas on fixing this problem but I would like your input and comments. I intend to put together a simple plan provide revenue for the government that is equitable, without becoming an burden unfair burden on businesses.
As for my thoughts I suggest that the tax focus on the net income for the business for federal tax purposes. By doing this we can simplify preparation of the tax returns for the included businesses and allow all industries to be treated on equal footing. This will remove any bias for one industry or another, because the net amount is what is being taxed. I would also recommend a flat tax rate that would start after the first $300,000 of net income for federal tax purposes.
These are just some of my preliminary thoughts, I welcome and encourage you to comment on this blog. Your feedback is important to me. I may include your ideas or thoughts in my letter to Governor Rick Perry and the Texas Legislature. (Your anonymity can be assured is you like.) You can email me at jmd@dickersonlaw.com.
Until Next Time.
July 30th, 2008
I was in Austin meeting with clients yesterday. As we discussed setting up an new business entity we talked about the importance of a Buy-Sell Agreement between the owners. This agreement is like a business pre-nuptual agreement. It lays down the rules for what happens with the 4Ds, at the begining when everyone is happy and getting along. The 4Ds I am talking about are:
Death
Divorce
Disability
Disagreement
It is important to establish how these items will be handled if one of these 4Ds should occur.
Death and Disability can often be handled with insurance. Divorce and Disagreement require coming up with a way to buy out the partner is a way that would be acceptable to either party.
This is a very important document to put in place early on with any partnership.
July 29th, 2008
