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Dallas Business Law Blog

Estate planning tips for business owners

As a business owner, you may be so focused on handling the day-to-day operations of your business that you may forget to plan for the unexpected. As an entrepreneur, you are most likely very skilled at planning and this should include your estate.

When you fail to have an adequate estate plan in place, you may be risking a lifetime of hard work which can affect family members and associates. If you are wondering what estate strategies you should focus on, here are a few important ones.

Avoiding common small business mistakes

Small business owners and entrepreneurs take on a heavy workload when starting a new venture. Every decision from the name of the company to forming the business entity to hiring staff rests on the business owner from the get go.

Due to the sheer number of tasks to handle, this is a common time for new small business owners to make potentially long-lasting errors. Some of these potential errors could have major legal ramifications going forward. Here are some of the more common mistakes by Texas business owners and some tips to avoiding them with your new venture.

Should You Help Your Child Start A Business?

You want your child to succeed. Since day one, you have done everything within your means to set them up for lifelong success, from providing them with nice clothes to seeing them through school. Now, your child has approached you with an idea for a business. The only thing missing is the money to launch the venture. Should you chip in?

Will Noncompete Agreements Become A Thing Of The Past?

Nationwide, businesses have used noncompete agreements to prevent former employees from turning into competitors. Many consider these agreements critical to maintaining their position in a marketplace that is already highly competitive. However, there is a legislative tide turning and state legislatures, as well as some employers, around the country are beginning to question this practice. Will Texas be far behind?

An LLC Does Not Completely Eliminate Risk Of Personal Liability

One of the key reasons individuals form limited liability companies (LLC) is to protect themselves from personal liability. However, business owners should never assume that by creating this type of business entity they have no risk of personal liability for their actions. A recent case decided by the Texas Supreme Court on February 23, 2018 highlights this fact.

Lack of proper licensure can create a legal mess

New business owners have many legal actions and decisions to make. Unfortunately, during the early days of running a company, many business owners forget the importance of licensure.

Most owners know about the general business license, but the government also regulates a variety of industries. As such, the government uses licensure to make sure that businesses practice legitimately. License and permit requirements also protect consumers from harm.

As an LLC member, signatures matter

Each limited liability company (LLC) has its own structure, comprised of one, a few or many investors and decision makers. Like any other enterprise, different members have different roles while representing the larger body together.

When representing the company, it’s essential to make it clear that actions are for the LLC. Signing a business contract with just a member’s name is a legal risk because it opens a possibility to conflating the individual with the business. One of the primary reasons why people form an LLC is to separate personal and business assets.

Creating a viable succession plan for your family business

Ensuring business continuity should be given just as much thought as other business strategies, but it is often put off or overlooked. According to the U.S. Small Business Administration, less than 30 percent of small business owners have a formal succession plan. Given that 90 percent of U.S. businesses are family owned and less than 15 percent succeed to the third generation, the importance of a succession plan cannot be overstated.

 

Forming a Limited Liability Company and Federal Tax Filing Consequences

The limited liability company (LLC) form of business organization is extremely popular and provides many advantages to its members. The benefits of this form of organization includes limited liability for its owners (known as members) and the avoidance of the double taxation which afflicts corporations. Members can also participate in the management of the entity without losing limited liability protection. With the large proliferation of this form of business organization across the United States the federal tax filing consequences of the LLC are also important to consider.

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.

Owners of an LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit "single-member" LLCs, those having only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state's requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.

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