Legal

Corporate Governance and Maintaining the Corporate Veil

The purpose for incorporating (C corp., S corp., LLC) a business is to protect investors (stockholders, owners, etc.) from personal liability for corporate (business) debts. To enjoy such protection, the corporation must be maintained in a certain manner.

Q&A: Does Your Business Indemnify You from Personal Liability?

Question: A business owner I know recently was threatened with legal action by one of his minority stockholders for excessive compensation and for the personal use of an expensive company car. I own 80% of my company; three people own the other 20%. How can I protect myself against such a lawsuit?

Can Your Contracts Also Help “Sell”?

What rules govern what can and cannot be put into an agreement or contract? To be binding, a contract simply must have an offer, acceptance and consideration. There are no rules on what it cannot contain. So why not add language that reaffirms why clients are hiring you and how they will benefit?

If you are one of these people who treat written agreements as some sort of sacred script that, once written, can be touched only by high priests (i.e., lawyers), stop taking them so darn seriously. Sure, agreements are important and, once signed, they document binding commitments. But feel free to work with them and rewrite them so they serve you better.

Bankruptcy Law: Created to Benefit Us All

United States law allows every person and/or legal entity, such as a business, to trade, borrow and lend as it sees fit. This right is fundamental to our free-market system. It gives those who sell goods and services the freedom to offer "terms" - at their own risk. It gives lenders the right to lend - at their own risk. And it allows businesses and individuals to borrow and make promises to pay - at their own risk.

Where to Keep Important Documents

When you die, the bank that has your safe deposit box may "seal" it until sometimes-lengthy legal procedures end. This can occur even if a second registered holder of the box is still alive. Only government and court-appointed representatives have access to the box during those procedures. Here are suggestions for using a safe deposit box wisely.

C-Corp Status: A Killer When You Sell

C-corporation status offers few benefits but substantial drawbacks for the typical private-business owner. Why haven't you switched to an S or LLC? It's cheap and easy. Just file a form with the IRS. Talk to your financial advisor and if he or she agrees, get it done.

Entity Crisis: Choosing the Right Legal Entity

Selecting the most appropriate legal entity for your business can be a confusing task. However, picking the one that strikes a comfortable balance between cost, complexity, liability protection and taxation can give you peace of mind at a time when you have much on your mind. Use this overview to see the big picture and begin to ascertain which will suit you best.

Bankruptcy Law Changes Make it Harder to Flee Financial Obligations

Newly enacted changes to U.S. bankruptcy law attempt to make it more difficult for individuals to avoid financial obligations by filing for bankruptcy. The result? More people will be forced to work out repayment plans.

Laws Require Businesses to Protect Employee Medical Data

State and federal laws require organizations such as businesses to respect and protect as confidential any health or medical information to which it might become privy. As a business owner, you risk financial loss if you fail to comply with these laws. The governing federal law is the Health Insurance Portability and Accountability Act of [...]

What About the Limited Liability Partnership?

The LLP is the youngest of legal entities. It arose out of the savings and loan crisis of the 1980's. The state of Texas was the first to created the entity to help protect lawyers that were being pursued by the federal government for their work for S&Ls.