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Without a doubt, the single biggest question that I receive as I travel the country and meet with clients is this: which is the best entity?

While it is indeed the most common question I’m asked, it’s also the hardest to answer. The reason for that is that I don’t think that there is a “best” entity. You see, some entities will give you certain benefits that aren’t available through other entities from a tax standpoint. At the same time, these entities may not offer the same benefits as another type of entity from an asset protection standpoint. Additionally, they may not offer the estate planning benefits offered through Read the full story

POINT # 1: Many investors believe that they can create a limited liability company (LLC) or file a corporate charter with the state and always have liability protection. This is SIMPLY NOT TRUE. The truth is that each of these business entities (the LLC, the corporation and even the limited partnership) require certain key steps after the structure is created. I always like to compare business entities to a fancy Italian sports car or a new baby…they WILL DEMAND PROPER CARE AND FEEDING!

They are fun on the first day, but you had better know how to maintain Read the full story

The best way to understand a corporation, limited liability company (or even a limited partnership) is to realize that each creates a special legal relationship or privilege between the business owner(s) and the government. These areas of government include:

1. State Government (including state taxing authorities and the state court system)
2. The Federal Government (specifically the IRS and the Bankruptcy court system)

You may be saying, alright Darius, I still don’t understand what you mean by a relationship or privilege. The best way that I can put it is this:

A business entity is a legal relationship which allows for certain privileges. Read the full story

A business entity can provide personal liability protection for its owners. The problem is that many people start business without proper instruction on how to run and manage agreements between parties, agreements with customers, internal paperwork, cash controls, voting rules, state and Federal reporting requirements and a host of other issues.

In fact, we have found between 20 to 25 actions, behaviors, or neglected tasks which commonly cause a business structure to be forfeited and can result in personal liability for the owner or owners.

Here are 5 of them:

#1. USING THE BUSINESS FOR FRAUDULENT ACTIVITIES: YOU CANNOT, SHOULD NOT, AND SHALL NOT USE YOUR BUSINESS TO CHEAT OR DEFRAUD: For example, John Smith gathers money from investors claiming that he will develop a new product for his company. Read the full story

By Darius M. Barazandeh, Attorney at Law / M.B.A.

I see it several times per day, everyday: An LLC disaster waiting to happen! No matter where I travel or with whom I speak, it’s clear that small to mid-sized business owners are not getting proper instruction on how to create, run, and maintain a ‘rock solid’ LLC. Did you or your attorney form your LLC? Are you now left with a stack of papers and confusion?

One comment that I repeatedly hear is, “Well, my attorney set it up for me two years ago…so everything is rock solid.” Usually, without much probing, I soon learn that little else has been done since then. I will typically find that even the attorney may have missed a few steps along the way! In fact, we have uncovered 24 mistakes/traps that LLC owners face all the time! Many of these mistakes are even made by attorneys, experienced business owners, and very talented people. So if you want to avoid disasters and create a ‘rock solid’ LLC…let’s get started!

While I can’t cover all 24 mistakes and traps in this article, let’s talk about the first 5 mistakes in some detail:

1. The ‘Fatal Death’ Personal Liability Clause
   A handful of states have a strange option in their Read the full story

When we were putting together the latest issue of the Real Estate Rant (www.RealEstateRant.net), Brandon recommended an article on “Going Green”!

I didn’t pay much attention to it because I didn’t realize just how much momentum the topic had gained! (So, with my tail between my legs, I must concede that he was on to something…) And because of that, I decided to write a little something on the topic with the Live Earth concert on 7-7-07.

Last night, I was watching the Live Earth concert and I was blown away by the magnitude of the event.

Plus, I learned lots of little tips that allow me to contribute my own small part towards helping the environment. These tidbits piqued my interest so I started to doing some research just to get a grasp on how big the “green” movement is.

Just go to Google.com and type in “green real estate”. There are 81,700,000 results at the time I’m typing this email… WOW!

So, why the sudden interest? Perhaps it was fueled by Al Gore’s inconvenient truth. Or maybe the rising costs of energy. Or possibly… that residents of planet earth realize that our resources are limited. Read the full story