Running a legally healthy business4/...on small business planning. • Make your business a priority and schedule an appointment + keep it. • Choose (or make sure) that you have

�Running a legally healthy business

"

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Make your life easier. Satisfy your clients’ needs. Stay within scope of your practice.

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Video 4 Legal Business Structure"

"Making sure you have what you

need to keep your family & business legally healthy. "

Visual Roadmap"

© 2014 Vujà Dé Law | All rights reserved |Educa>onal and Informa>onal Purpose Only

Roadmap"How your legal entity structure impacts not only your business but also … •  Kids, •  Personal Finances, •  Personal Health, and •  Personal Property When you ARE the business – you are REQUIRED to address the BIG picture.


Impact on the business" The choice of your business entity structure has two major considerations 1.  Taxes 2.  Personal liability


Taxes"•  You are only required to pay the amount of tax

determined by the tax code laws and rules. •  Doesn’t mean you have to pay the maximum amount of

tax. •  The tax code is a beautiful puzzle that has many ways to

legally structure your transactions to minimize the tax you pay to Uncle Sam.


Tax Basics"•  Taxes are either flow-through or double. •  Flow-through means that the money you make and

therefore the tax you owe flows-through the business structure to you personally.

•  Double-taxation means that the money you make, stops

1st at the business level, and then a 2nd stop at you personally.


Tax Basics"Available business structures •  C-Corporation (double-taxation) •  S-Corporation (flow-through) •  LLC (flow-through) [limited liability corporation] •  LLP (flow-through) [limited-liability partnership] Entity Comparison Chart Includes all categories of differences, many far beyond the scope of this material.


Choosing based on taxes"•  In 99.9% of businesses, you aren’t going to want double-taxation, so

the C-Corporation is out. •  All the other choices have the same flow-through (or pass-through)

tax structure, BUT there are numerous ways that they differ in tax planning + impact on your family/personal.

•  Please, please, please consult a tax professional or an attorney who

practices in taxation to learn how the LLC and S-Corporation choices would play out for you.


Liability"When you are running a business, you have personal liability issues UNLESS you choose a business structure that can shift the liability off of you personally and onto the business.


Shifting Liability"•  I don’t know about you, but I don’t want my house or other assets on the line for

my business. •  If you have a general or limited partnership – you are likely on the hook for not

only the business liabilities but for anything the other partners might wrongfully do. •  I have yet to recommend or form a general or limited partnership for a solopreneur. •  There are instances when a general or limited partnership is a good business strategy

– talk to your dream team attorney, he or she can tell you when that is.


Shifting Liability"•  The LLC and the S-Corporation shift the liability off of you

personally and put it on the company. •  Now you must treat your company like a company and not just an

extension of yourself. This means running the books from a professional perspective and not just a 2nd personal checking account.

•  If you run the business as just a 2nd personal checking account, then

the courts will look at your behavior and say – “you weren’t running a business, and so we will pierce the corporate viel.”


Action Step"•  Contact an attorney who works in taxation and focuses

on small business planning. •  Make your business a priority and schedule an

appointment + keep it. •  Choose (or make sure) that you have the right business

structure for your business and your family. © 2014 Vujà Dé Law | All rights reserved |Educa>onal and Informa>onal Purpose Only

© Vujà Dé Law | All rights reserved | Educa>onal and Informa>onal Purpose Only

We are here

Impact on family"


I get it … when you’re so busy trying to run your company and make the best decisions you can for your company … you might not have any idea that every single business decision has a direct impact on you personally + your family. The one area that I see far too many solopreneurs royally messing up.

Kids"


•  If you have minor children, then you must, must, must have a formal legal guardianship plan set up for them.

•  This is where you simply must imagine the worst-case

scenario and plan for it. I get it. I know how hard it is. My Kid, My Plan (example of a comprehensive formal legal guardianship plan)

The loving comprehensive resource I created from the core of my mother’s heart.

Health"


•  You sit down at your computer to work and … you have a stroke… what happens next?

•  Again, I get it … this is not fun to think about but it simply is reality

and you have the chance now to plan for that. Do you have the legal documents that will tell anyone exactly

1. Who can have access to your health information, and 2. Who can make your health care decisions if you can’t communicate.

Health Forms "


There are 3 pieces to your health care pie Patient advocate designation (your state might have a different name for this) 1. What do you want to happen. 2. Who talks for you. HIPPA release 3. Who can know what’s going on with you.

Finances"


•  You make a quick run to Target and BAM! Someone t-bones you … what happens next?

•  Who knows all the logins to your bank accounts? •  Who has legal authority to access your money when they need to take care

of your kids, pay business bills, pay the mortgage … Power of Attorney is the form that can lay out 1. What needs to be done. 2. Who can do it.

Property"


•  The final layer of how your business structure impacts your family. And the one that most people think of first.

•  Let’s say that your t-bone accident on the way to Target does kill you. (Sorry it

literally is part of my job to talk about all these darn worst-case scenarios) What happens to your business?

•  You’ve built it up to an incredible level and now what? •  Do you want your family to be able to sell it? •  Do you want it to be transferred to someone else?

We’re talking about Wills and Trusts here.

Wills"•  A Will is a public document that simply provides the probate court with a set of instructions that you

write. A Visual Picture of a Will •  All your assets are still in your name. •  When you die, the probate court using your Will (the instruction sheet) changes the ownership of

these assets over to who you directed it should. •  Pros: it is legally less intensive work, and so will cost less than a legally intensive product like a trust. •  Cons: it is a public document. It doesn’t do any of the work for the probate court, so your family or

your estate will have to pay for the probate court to change the name on the assets. This is why people often say that probate is expensive.


Trusts"•  A Trust is a private legal document. You write out explicit instructions for how you

want everything handled. •  Your Trustee is the person that follows your instructions. •  Pros: it’s a private document (really key when you have minor children), you

maintain control, you do the work for the Probate Court. •  Cons: it’s a legal intensive document so it will cost you upfront (compared to a Will

which you pay for when you die). A Visual Picture of a Trust


Action Step"•  Kids: create a formal legal guardianship plan. •  Health: Prepare your patient advocate designation +

HIPPA release. •  Finances: Prepare your Power of Attorney •  Property: Prepare how you want your stuff handled. Your business + personal are intimately intertwined. Keep them legally healthy.


© 2014 Vujà Dé Law | All rights reserved | Educa>onal and Informa>onal Purpose Only

Video 5 Annual Legal Health Check-Ins"

"Making sure you have what you

need to keep your family and business legally healthy. "

�Running a legally healthy business

"

VUJADELAW.COM

Make your life easier. Satisfy your clients’ needs. Stay within scope of your practice.

Running a legally healthy business4/...on small business planning. • Make your business a priority and schedule an appointment + keep it. • Choose (or make sure) that you have

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