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Showing 69 posts in Business Formation and Planning.
Choice of entity is important for budding businesses
Choosing a business form with which to organize a growing business is not always an easier matter, especially for those with little experience in business. Selecting a business entity form is important, though, as it can help position a business to increase growth by offering certain protections, particularly in the areas of liability and taxes, as well as trademarks and licenses. More >
Supreme Court decision highlights definition of closely held corporation
Many of our readers have already heard about the recent U.S. Supreme Court decision granting for-profit, closely held corporations the right to opt out of the federal contraceptive mandate. Because the scope of the decision was limited to such companies, it isn’t as far reaching as some had hoped for, although some commentators have pointed out that the language of the decision doesn’t make it entirely clear which businesses are affected. More >
Does Your Business Use Surcharges?
On January 27, 2013, it became legal for retailers to impose a surcharge on consumers using a credit card at their business. The surcharge was a key provision in a settlement stemming from a class action suit brought by several retailers against credit card companies. The permissible surcharge amount depends on how much is paid by the merchant in processing fees, but can range from 1.5 to 4% of the purchase price. More >
Before Taking The Wheel, Take A Hard Look
When it comes owning a business, some people like starting from scratch. Others prefer to have a foundation already established when they take the reins. There are pros and cons to both, but one should never think that by purchasing an existing business that they are minimizing their legal or financial risks. Just like starting your own, the first step to buying a business is determining what the best industry is for you, where you would like to be located, etc. - the generalities that only you can determine. The second phase, known as the "due diligence" phase, is a more fact-intensive process and may require more than one set of eyes. It is during this time when you review and verify information about the subject business. An attorney and accountant can offer invaluable assistance in this process. There are numerous things to consider, not all of which can be discussed at length herein, but this list should serve as a starting point for some of the most important considerations. More >
'Til Death Do Them Part: Creditor Rights
Settling the affairs of a deceased love one is never easy. When the decedent has outstanding debts to credit card companies, mortgage lenders, or other institutions, the process is further complicated. Generally, no one else is legally obligated to repay the debt of a person who has died, but there are exceptions to this rule. For instance, a co-signor on a loan may be liable for the debt under certain circumstances. More >
Trusts Can "Materially Participate" in Businesses
Estate planning attorneys and financial planners now have much-needed guidance about "material participation" and "personal services" as they relate to trusts. The Tax Court recently ruled that a trust materially participated in its rental real estate business and therefore could deduct the losses it incurred in conducting those activities as losses from non-passive activities. The court rejected the IRS's argument that "personal services" performed in real estate activities must be performed by an individual, not a trust. This ruling is especially important considering the introduction of the "Medicare Tax" which imposes a 3.8% surtax on net investment income (the definition of net investment income includes income derived from a trade or business that is a passive activity to the investor). More >
Lost & Found: How Business Owners Should Handle Unclaimed Property
This week, it was announced that Kentucky State Treasurer, Todd Hollenbach, has returned more than $100 million in unclaimed property to its rightful owners during his six years in office. According to Hollenbach, that is more than all the state treasurers combined returned in the 60 years before his administration. That is quiet an impressive statistic. More >
A New State & Your Estate
People are not stationary - moving to a new state for work, family, or other reasons is a part of life for a great deal of individuals. What happens to an estate plan, though, when a person no longer lives in the state where their plan was created? Is the plan still valid in their new state? Although estate planning documents that were validly executed in one state should generally be valid in another, these instruments may need some modification. It is highly recommended that all executed documents be, at the very least, reviewed by an attorney when relocation occurs. More >
My Spouse is Gone, But is the Debt?
After a divorce, the last thing one wants to consider is the debt that their former spouse may have left behind. In Kentucky, debt accumulated during the marriage is treated differently than property acquired during the marriage. Kentucky is a marital property state, meaning that property acquired during the marriage is subject to equitable distribution. On the other hand, according to the Kentucky Supreme Court, there is no statutory presumption that debts incurred during the marriage are marital or non-marital in nature. More >
The Role of Appraisals in the Inventory Process
Settling a loved one's estate after their passing can be an overwhelming process. In Kentucky, the first step involves filing a petition to do one of three things: (1) probate the will; (2) appoint an administrator/administratrix (if no Will exists); or, (3) appoint an executor/executrix (if a Will does exist). Within the same form, the petitioner must also include fair market value estimates of the decedent's real and personal property. More >
