Business and Tax Planning

Entity selection, formation and structure

For most businesses today, the choice of entity is between “S” corporations, limited liability companies (LLCs), limited partnerships and limited liability limited partnerships. Each type of entity has advantages and disadvantages with respect to income taxes, payroll taxes, estate and gift taxes, liability protection, management of operation, and ownership rights. Only a professional who understands the tax results of the different entities and the business and liability characteristics of the entities can select the appropriate entity structure for each client’s unique situation. For example, there are markedly different tax and liability ramifications when owners make capital available to a business as a loan or as an equity contribution.

Shareholder agreements, buy-sell agreements, operating agreements

When a business has more than one owner, a written agreement should be reached between the owners on: division of profits; compensation; when additional capital/money must be contributed/loaned to the business; what happens if all owners are not able to contribute/loan money to the business; ability of a former owner or key employee to engage in a competing business; and purchasing the interest of a partner who retires, becomes disabled or dies. Again, these business agreements all have significant economic and tax consequences to the business and to the owners of the business.

Minimizing income taxes, payroll taxes, Medicare taxes

All taxes, except estate and gift taxes, have increased, recently. Payroll taxes, including Medicare taxes, are now higher than they have ever been, so it is important to understand the tax rules and how these taxes can be minimized. Rising income tax rates require tax strategies to be reviewed and new ones considered.

Contracts, including employment agreements, independent contractor agreements and leases

Should a person who provides services to your business be an employee or independent contractor? Can you prohibit that person from competing against your business after he or she no longer works for you? Can you require disputes with a service provider, employee, or independant contractor to be settled by arbitration and stay out of the court system? Can you avoid payroll taxes on the payments to the service provider? If the service provider commits a negligent or intentional act and harms someone, can you and your business be held liable for the actions of the service provider and if so, is there a way to avoid, or minimize, liability? These are some of the issues that we address and resolve with employment agreements and independent contractor agreements.

Purchase, sale and financing of assets and businesses

We assist clients who wish to purchase, sell and finance businesses, real estate and other assets. We advise our clients on the tax, business and liability issues associated with these transactions. There are often long-lasting and serious financial implications associated with such transactions, which require the guidance of experienced legal counsel.