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LEGAL ASPECTS OF BUSINESS

LEGAL ASPECTS OF BUSINESS. RANORD J. DARENSBURG ATTORNEY AT LAW BUSINESS CONSULTANT “INFORMATION BEFORE LITIGATION”. Congratulations. The decision to start a small business is a step in the direction of; PERSONAL GROWTH PROFESSIONAL DEVELOPMENT FINANCIAL FREEDOM. A Few Facts….

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LEGAL ASPECTS OF BUSINESS

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  1. LEGAL ASPECTS OF BUSINESS RANORD J. DARENSBURG ATTORNEY AT LAW BUSINESS CONSULTANT “INFORMATION BEFORE LITIGATION”

  2. Congratulations... • The decision to start a small business is a step in the direction of; • PERSONAL GROWTH • PROFESSIONAL DEVELOPMENT • FINANCIAL FREEDOM

  3. A Few Facts… • Almost all businesses start small. • U.S. Census Bureau statistics of U.S. Businesses shows that over the last 20 years approximately 95% of new employer firms started with fewer than 20 employees. • Some data sources show that small business that are successful account for 90% of the new jobs over the past few decades. • Small businesses tend to fill gaps in the labor market that are typically underserved, i.e. high school diploma or less, high school aged workers, disabled workers and rural workers. • Based on the data, one could surmise that start-up businesses are incredibly valuable to the labor market in the long term and continuing firms tend to overwhelm current employment trends. ranord@uneedavoice.com

  4. Reviews are mixed… • A major part of job generation and destruction takes place in the small firm sector, even though small firms provide a greater share of new jobs. • The reality however is that with start-up comes closures. • Small businesses with fewer than 20 employees also account for 95% of closures • Most small business start small and stay small.

  5. Starting a small firm is no small feat • Social Issues are a large part to the start-up business process. • Knowing these issues and addressing them honestly and properly can help to improve your likelihood of success. • Support of friends and family • Maintaining a full-time job • Maintain time for self • Build in time for family • Setting boundaries with friends • Using networking to your advantage • How your business will affect your community

  6. LEGAL ASPECTS ARE IMPORTANT • This course is designed as a “hit the high point tutorial on addressing the most immediate needs and hopefully answer the most frequently asked questions. • The course in not intended to substitute for the full advice of professionals such as accountants and attorneys. • Many legal decisions must be made and cannot be overlooked. • ALWAYS consult a professional with expertise in the field in which you may have questions. • GET AS MUCH INFORMATION AS POSSIBLE • “Information before Litigation”

  7. ISSUES • Business Name • One of the first decisions you will have to make is the name of your business • You cannot use a name that is already in use, in most cases. • Check with the Secretary of State of ensure that the name you wish to use does not currently exist as an active business or legally registered to someone else • May have to consider an alternate name

  8. BUSINESS STRUCTURE IS IMPORTANT The business structure has many legal implications Must give careful consideration to deciding on the most viable and beneficial business structure. Determining what is involved in operating and starting your business will help to determine what type of business entity you wish to form You will need to register your business in order to be a legal business in most states.

  9. Types of Business Structures Sole Proprietorship Partnership Limited Liability Company (LLC) Limited Liability Partnership (LLP) L3C Incorporation (INC)

  10. Sole Proprietorship • BE YOUR OWN BOSS • This business structure is most suitable for those who can manufacture their own goods or carry out their on services • Examples of types of business best suited for the sole proprietorship include cleaning services, selling goods online and those who make foods/products from scratch.

  11. Advantages of Sole Proprietorship Less costly and easier to get started Complete control over every aspect of the business No Profit Sharing

  12. Responsibilities of Sole Proprietor Requires extreme discipline and desire Total responsibility for all decision Must comply with all licensing requirements, ordinances, and local regulations. Must keep accurate and up to date income and expenditure information for tax purposes Must pay income taxes.

  13. Partnership A business relationship in which two or more parties or entities agree to conduct a business for mutual benefit. A type of unincorporated business organization in which general partners, manage the business and are equally liable (unless otherwise specified) for its debts. Partners share the responsibility for the company’s profits and losses as well as it’s liabilities and debts. A partnership itself does not pay taxes, however all partners have the responsibility to report their share of profits and losses on their tax returns when tax documents are filed.

  14. Limited Liability Company - LLC Provides owners limited liability. Generally liability is limited to the level of investment. Many small businesses find this to be the most advantageous business structure, having the best aspects of a partnership and a corporation. Like a corporation, members/owners are protected from personal liability in properly registered LLC. Has tax rules which are more flexible when involving business and personal expenses. Sometimes viewed as a pass-through entity; can pass through to its owner the company’s profits and losses.

  15. Corporation, INC • A corporation is a separate juridical legal entity. • Protects owners from personal liability • Must act at all times as a separate entity to retain legal protections. • Allows a group of people to pool their energy, time, and money for profit or nonprofit activities. • A Corporation formed when its founders comply with a state’s incorporation process. • In Louisiana in order to start a corporation a group must file Articles of Incorporation with the Louisiana Secretary of State.

  16. Other Limited Liability Business Structures L3C Low Profit Limited Liability Company A company organized to perform services or engage in activities that benefit the public. Unlike a nonprofit, an L3C is operated like a regular profit-making business and is allowed to make a profit as a secondary goal. A small but growing number of states -- including Illinois, Michigan, Utah, Vermont, and Wyoming -- have passed legislation allowing L3Cs. www.l3c.com Limited Liability Partnership, LLP There are two types of partners in this arrangement: the general partner, who is the acting manager, and the limited partner, who shares in the profits and risks. The general partner can be one person or a group of people, and often there is a "silent partner" who provides financing for the general partner's business operations.Read more: Definition of a Limited Liability Partnership | eHow.comhttp://www.ehow.com/about_6574739_definition-limited-liability-partnership.html#ixzz1x3elLVfy

  17. Louisiana Secretary of State Forms Documents Attached 1. Transmittal Form 2. Article of Incorporation Form 3. Domestic Corporation Initial Report 4. Articles of Organization –LLC 5. Limited Liability Company Initial Report 6. Article of Organization L3C 7. Application for Registered Limited Liability Partnership 8. Trade Name Registration, Trademark or Service Mark 9. Application for Employer Identification Number

  18. How to make yourself legal… Decide on a Business Name Register/Reserve Business Name with State Complete the necessary documentation that legalizes your business structure Secure EIN (Tax ID Number) Obtain any licenses, permits and required certifications.

  19. An ounce of prevention is worth a pound of cure • Seek the advice of professionals • Attorneys • Accountants • Experts in fields in which you are seeking to do business Ranord J. Darensburg Attorney at Law Business Consultant ranord@uneedavoice.com 888-605-5551 www.ranord.com

  20. Legal Disclaimer The materials and information in this presentation have been prepared by Ranord J. Darensburg, Attorney at Law for informational purposes only and do not constitute legal advice. This information is only provided as general information whereby individuals and businesses may familiarize themselves with issues that may impact their lives and businesses. For these reasons, readers should not act upon this information without seeking professional advice from attorney regarding the specifics of your circumstances. The information presented today is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice or to substitute for obtaining legal advice from an attorney.

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