Many people avoid Estate Planning because it may be uncomfortable or seem too morbid to discuss. But the cost and stress associated with a lack of planning results in a net loss for any family; regardless of your net worth. This article offers important information about the benefits of avoiding probate in the State of Ohio. These benefits include reduced attorneys' fees, less time for administration, and creditor protection for the next generation. When you purchase a franchise, you are buying into a company's systems, products, marketing, and name. It is important when making this evaluation to accept the limitation of freedom in exchange for what is, hopefully, a successful model. While it is essential to have an attorney review your franchise agreement, there are questions that you can ask to determine is this business "right" for you. Here is an article covering the five questions that every potential franchisee should ask before hiring an attorney to review the franchise agreement. What would happen if your spouse didn't come home from work today? Would you know where to find all of the important documents and records for their responsibilities in the home? Even if your spouse is just temporarily unable to handle their usual share, the stress associated with these circumstances is exacerbated by the frustration of trying to find basic information. Does your spouse normally handle items such as when your car insurance is due or how many itemized deductions should be taken this year, or do you both track this information? Chances are, the answer is no. While it may not be the most pleasant topic to think about, there is a solution that will give you peace of mind, help alleviate those concerns, and best of all, it is free. To solve this problem, create a shared Dropbox or Google Drive cloud storage folder for all of your important files. For most families, there is one person who handles bill payments, children's records, legal documents, taxes, or insurance. With the "green" paperless movement, hardcopy statements and records are becoming the exception rather than the rule. Do you remember the last time you received a checking account statement in the mail? You can now download your email statements or snap a picture with your phone (there are easy to use scanner applications for your phone such as TurboScan which converts these images to PDF format). Once you have the files, create a Dropbox or Google Drive account. Both offer free accounts with enough space to handle thousands of images or PDF's. After you have created an account you can upload the files from your computer, phone, or tablet. Even if you lose your computer, phone or tablet, the files are still stored in the cloud and will allow you to access the information from almost any device with an internet connection. After you have created a Dropbox or Google Drive account, you can share your "house folder" with your spouse or trusted family member. If either of you saves a file in the shared folder, that file will be accessible to the other. You can also create a master contact list, which would include account information, regular payment dates, and a snapshot of important details. What are some other benefits? Have you ever needed a document that you just could not find in your file or left at home? Another added benefit of creating a shared house folder is the elimination of paper files. Now, whenever or wherever you need the file, it is right there on your phone. Have you ever needed to send or receive a large file that wouldn't fit on an e-mail? You can create a separate folder in Dropbox and share it with the other person. The benefits to creating such an account are endless. Everyone has access to all information needed whenever, wherever, and best of all, it costs nothing. A Purchase Agreement establishes the terms and conditions for the purchase of real or personal property. In Ohio, there are specific requirements for disclosures related to the sale of real property. As with all agreements, it is vital to create clear, objective standards for payment and delivery of the property.
Every Limited Liability Company should have an Operating Agreement. This Agreement establishes the rules in which the owners of an LLC will conduct business.
Without an operating agreement, it is unclear to the members what rules they must abide by when conducting business, distributing profits, and voting on important ownership matters. This also allows the business to establish voting rights, creditor protections, and standards to resolve disputes among the members. If you are considering the investment of time, energy, and money that goes into a new business, it is important to take the proper steps to protect your investment and to protect your personal assets. If you conduct any business before your LLC is in place, all of your personal assets are at risk. Filing your Articles of Organization is not the only step in creating an Ohio LLC. Here is a summary of issues related to the proper formation. What is LLC? LLC stands for Limited Liability Company and indicates how liability is limited to the assets of the business. Ohio business law allows owners to insulate their personal assets from the assets of a business. The value of an LLC is best articulated by explaining what happens if you do not have the proper measures in place: Example: You decide to start a business that owns rental property in a college town and treat the venture as a sole proprietorship. One of the tenants is a star college athlete on the basketball team. While moving in, he falls down the stairs and breaks both legs (and is no longer eligible for the NBA draft). When the athlete files the lawsuit, he is going to name you as a responsible party. If the athlete is successful and receives a substantial judgment for the loss of his first NBA season, he will use that judgment to take whatever assets you have. This includes your rental property, bank accounts (business and personal), your home, investments, vehicles, personal property, and a percentage of your wages until paid in full. Now what would happen if we had this identical situation, but the rental property business was an LLC instead of a sole proprietorship? As long as the proper procedures are followed, the athlete can only reach the assets of the business if it is sued; rental property and bank account of the business. While you may have an insurance policy, there are limits to that policy including covered incidents and a total policy limit. In this example, even a policy limit of $500,000 - $1 million would not be enough to cover your total liability. This may seem to be an extreme example, but business owners cannot control who uses their products, services, or enters their property. It is always best to manage the amount of risk you have at any given time. Does filing with the Ohio Secretary of State automatically provide Limited Liability in business transactions? No. Filing your Articles of Organization alone does not automatically give a business owner limited liability; it authorizes you to create a business. Think of the state’s authorization as a building permit to create a business. There are steps that must be taken and maintenance that is required to achieve limited liability. What steps must be taken to ensure an Ohio business owner has Limited Liability? The key is to establish a separate entity; think of the business as a person separate from the owner. For example, the entity needs a Tax Identification Number from the Internal Revenue Service, its own bank account, and the necessary internal documents of a business. To ensure all of the proper procedures are followed, the best investment is in a qualified counsel. Feel free to contact me with questions. Many retirees want to use their knowledge and experience after retirement, but on their own terms. This can be accomplished by acting as a consultant for either individuals or companies. In some cases, the company you retired from would still like access to your expertise. How do I protect my personal assets? If you are considering the investment of time, energy, and money that goes into a new business, it is important to take the proper steps to protect your investment and to protect the personal assets you have worked your entire life to earn. For consultant companies, this protection can be provided by forming an Ohio LLC. What is LLC? LLC stands for Limited Liability Company and indicates how liability is limited to the assets of the business. Ohio business law allows owners to insulate their personal assets from the assets of a business. For all new businesses, I offer a free initial consultation. In that meeting, we will discuss your goals and the steps that must be taken to achieve those goals. In the first meeting, we will also discuss the fixed fees for services. To get started, feel free to contact my office and schedule an appointment. Here is a link to download an Ohio Business Checklist. For business owners in Ohio, it is important to create a Trust. By establishing a Revocable Living Trust during your life, if you become disabled or deceased the Trustee appointed will be able to immediately take control of your company. If you only have a Will, there could be weeks of delay before your Executor is appointed by the Probate Court. This delay can result in employees not being paid on time and other missed deadlines. Here are four more advantages to using a Trust as opposed to just a Will along with a link to an article discussing each in more detail: Legalzoom may have an excellent marketing strategy, but they are not a replacement for your Attorney. An Attorney is ethically bound to look out for your best interest above all else. Legalzoom exists to make a profit and if that means selling you every form they have (regardless of your needs) I assure you they will do it. Here is an article on the specific differences between a Licensed Attorney and LegalZoom. When forming an Ohio LLC, creating a Corporation, preparing contracts for your business, or registering trademarks it is imperative to obtain advice rather than relying on a reprinted form without understanding what it means, how to use it or which state it was intended to be used in. When starting a business with a unique idea, it is important to limit your disclosure of this idea to those who have signed a non-disclosure agreement (NDA).
The purpose of an NDA is to restrict the type of disclosure a party can make after you provide them with important information about your idea or concept. Once information is no longer confidential, it can be used by anyone to compete with your company before you have a chance to establish your brand identity. (See post on Trade Secrets). Without an NDA in place, a business owner could lose its competitive advantage. |
Elliott Stapleton Attorney with CMRS Law
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