This is especially true when it comes to closely held businesses, such as LLCs, with two equal owners. In these situations, it’s ideal for key agreements, such as LLC operating agreements, bylaws, or buy-sell agreements to have deadlock provisions. 

Deadlock provisions in an agreement are clauses that outline the actions to be taken in the event that the members are unable to make important decisions because of a deadlock.

A deadlock can occur when there is a stalemate among members over important matters, such as the direction of the business or the allocation of profits. These provisions can include procedures for resolving the deadlock, such as mediation or arbitration, or procedures for dissolving the LLC if the deadlock cannot be resolved. It can also include provisions for buying out one of the member's interests or in some cases removing a member who is causing the deadlock. 

These records typically include articles of incorporation and annual financial reports, whereby the business lists the nominee as a company officer, member, director, or manager. Nominee services can protect your privacy, which can be useful for a person who likes the idea of running his or her own business but wants to avoid the attention that can come along with it.

WHAT IS A NOMINEE?

According to the Stolen Asset Recovery Initiative (StAR) of The World Bank, a nominee is an individual or corporate entity that rents its name to someone else to protect that person’s identity. Nominees can be any individual, including friends, family members, or professionals like accountants or lawyers. Often, business owners will look for companies that specifically offer nominee services rather than individuals.

The primary reason for company owners to use nominees is to legally ensure the owner’s privacy. However, the Internal Revenue Service (IRS) notably requires the actual business owner’s information when you apply for an employer information number (EIN) for your business. This means that, while the true business details are not publicly available, the IRS does have record of who actually owns the business.

However, building your company’s online operations and making money from them can be challenging unless you have a background in online marketing. This is why we are offering five tips for

monetizing your company’s online presence, so your business can thrive and grow in today’s highly competitive digital marketplace.

01 - OFFER PREMIUM CONTENT

Consider offering a paid subscription or exclusive access to certain content on your company’s website, mobile app, and other digital media. Premium content could be in the form of blog posts, webinars, ebooks, videos, podcasts, or an exclusive members-only area that requires users to pay a fee to access.

If your online platforms have a large enough audience, you can even offer other businesses the opportunity to sponsor your content for a fee for exposure. These days, you will find a wide range of easy-to-use, digital-content platforms that allow almost anyone to create premium content that’s immersive and visually engaging. Some platforms target web designers, but even people with no skills or experience in web design or code can create interactive content that generates more web traffic to your online outlets and earns you money simultaneously. 

If you are going to have a paid subscription with premium content, contact us to review your subscription terms and conditions. Setting clear boundaries on the use of your intellectual property (IP) is an often overlooked hole in your legal foundation that we can help you fill.

Unfortunately, in today’s highly litigious society, lawsuits are far-too common, with up to 53% of all small businesses in the U.S. sued each year, according to the Small Business Administration. 

One of the worst parts of being sued is that whether you are in the right or not, you can still be on the hook for extremely expensive attorney’s fees and court costs.

And this comes on top of all the time you lose in the midst of conflict, not to mention the potential damage to your brand’s reputation. This is exactly why we support our business clients to stay out of court and out of conflict with proactive planning. 

But sometimes no matter how well prepared or proactive you are, you can still be sued or threatened with a lawsuit. If your business is facing a lawsuit, here are some things that can help prepare yourself and your company for what lies ahead.

That said, there are a number of metrics vital to a company’s long-term success that many business owners overlook or fail to track properly. But ignoring these numbers can keep your company from achieving its full potential. 

With this in mind, here are 3 critical but often-overlooked metrics all business owners should keep a close eye on. If you need support in tracking these metrics or setting up the business systems that allow you to track them, consult with us, your Personal Family Lawyer® with business planning expertise.

01 - EMPLOYEE SATISFACTION

While most business owners understand that employee satisfaction is important, most don’t realize just how critical it is. In fact, some business experts rank employee happiness as the single-biggest driver of a company’s success.This makes sense, seeing that happy employees are not only more productive, but they also typically deliver better customer service, which can lead to increased sales and repeat business. On the other hand, unhappy employees can result in slow or lost sales, as well as decreased levels of customer satisfaction. Not only that, but a satisfied team leads to less turnover, and employee turnover is among the most costly of all business expenses, especially when you factor in the costs of recruiting, hiring, and training new staff.

Given these correlations, tracking both employee satisfaction and turnover costs can be an effective strategy for achieving sustainable growth. When employee satisfaction increases, your turnover costs should fall. One of our favorite resources for tracking employee happiness, and understanding employee satisfaction is a tool called 15five. Check it out, and see if it helps your business monitor team satisfaction. The bottom line: If you start by making sure your employees are as happy as possible, many of the other factors affecting your company’s productivity and growth will usually fall into place on their own.

The following 4 agreements are among the most essential legal documents for just about every business. If your business is missing any of these foundational documents, or you need the agreements you already have reviewed, contact us, your Personal Family Lawyer® with business planning expertise right away.

01 - BUSINESS ENTITY AGREEMENTS

One of the very first decisions you will make as a business owner is how to legally structure your business. To minimize your personal liability and maximize tax savings, we often advise our clients to set up their business as a limited liability company (LLC) or a corporation. In either case, you’ll need to draft the proper business entity agreement to stipulate how your business entity will be governed and run. For an LLC, this is in the form of an operating agreement, while corporations require corporate bylaws. Both legal documents define the rights and responsibilities of your company’s owners: LLC owners are known as “members,” while corporation owners are “shareholders.” 

Among other functions, these agreements establish how the company will be managed not only on a daily basis, but also in the event one owner dies, becomes incapacitated, or retires, as well as stipulating what will happen if the company fails. These agreements also outline how business communications will be handled, along with how disputes will be resolved. Business owners often don’t take these documents seriously enough—or even bypass them entirely—because the owners are friends, and they figure they will just figure everything out as they go. But giving short shrift to these agreements is a huge mistake.

Conflicts are inevitable in any business, and even if everyone gets along, you still need to plan for events like the company’s eventual sale or dissolution, as well as incapacity, death, or retirement of an owner. For this reason, you should always consult with an experienced business lawyer like us to help you create these agreements, and never try to draft them on your own using a do-it-yourself (DIY) online document service.

As your Personal Family Lawyer® with business planning expertise, we will not only advise you on the entity structure that’s right for your business, we will also support you to create robust operating agreements or bylaws to ensure your company’s governing documents cover all of these critical areas.

By developing your business as a part-time side gig, you can greatly reduce the personal and financial risk that comes with starting a new business from scratch.

If you are eager to get the ball rolling with your side hustle, here are 4 strategies to enhance your chances of success.

01 - MONETIZE YOUR PASSION

The quickest and easiest way to get a side hustle going is to start with something you truly enjoy doing, you are already good at doing, and that provides value to those around you. By turning something you are passionate about into a money-making venture, you’ll likely have the motivation to see things through when the going gets tough, because even when you are not making any money, you’ll still be having fun. If you are working a day job, find something you enjoy doing and for which you already have the skills, experience, and industry knowledge. For example, if you work in marketing and really enjoy creating your company’s digital media, you might launch your own e-newsletter or graphic design service. 

But first, be sure you aren’t violating the terms of your employment agreement with your current employer. As your Personal Family Lawyer® firm with business planning expertise, this is something we can help you with to make certain your new venture doesn't get you into any legal trouble. If you already own a business, find ways to generate new income streams from your current operation. From affiliate marketing to consulting and creating new digital platforms, there are an array of different options to choose from for creating new revenue sources. Not sure where to start or which options to choose? We can help you with that.

Your choice of entity will not only determine the rate at which your business is taxed, as well as how and when you are required to file your taxes, but it can also impact a variety of other factors affecting both you and your company. 

Last week, in part one of this series, we covered the tax obligations associated with three entity structures: Sole Proprietorships, Partnerships, and Limited Liability Companies (LLCs).

Here in part two, we’ll cover the tax treatment of the remaining two entity structures—C Corporations and S Corporations—along with discussing the benefits and drawbacks related to each one.

C CORPORATIONS

A C Corporation is a separate tax-paying entity that files its own tax return, Form 1120, to report its income, as well as claim deductions and credits. Corporations taxed as C Corporations currently pay taxes at the corporate tax rate of 21% on all net income.

Your choice of entity will not only determine the rate at which your business is taxed, as well as how and when you are required to file your taxes, but it can also impact a variety of other factors affecting both you and your company.

Some of these factors include how you pay yourself, your risk of being audited by the IRS, the type of tax deductions and tax credits available to your company, and the types of strategies you can use to reduce your tax bill.

That said, each entity comes with its own rules and requirements governing its tax obligations. Moreover, depending on your company’s size, location, the number of owners and employees, and its revenue, certain entities won’t be practical from a tax-savings standpoint. Given this, when it comes to paying taxes, there’s no single entity that works best for every business. On that note, here we’ll provide a brief overview of the tax obligations for each type of business entity, along with some of the advantages and disadvantages inherent to each structure.

While this article can serve as a good starting point for helping you understand an entity’s tax benefits, you should always consult with us, your Personal Family Lawyer® with business planning expertise to get our advice before making your final decision.

Yet, despite the critical role they play in a company’s success, far too many business owners fail to take their agreements seriously.

Whether it’s winging it by creating your own agreements or using cheap, do-it-yourself (DIY) legal documents you purchase online, failing to treat your legal agreements with the respect they deserve can seriously cost you.

In fact, just one poorly constructed agreement could end up costing you tens of thousands of dollars in attorney’s fees and court costs—or even put you out of business entirely. 

Last week, in part one, we covered the first 5 of 10 pitfalls that can put your company in serious jeopardy if you take the DIY route with your legal agreements. Here in part two, we’ll cover the five remaining pitfalls that you’re likely to encounter when going it alone with these vital documents.