Business Owner Checklist

Transcription

1 Business Owner Checklist Shea Aiello A Professional Limited Liability Company

2 Copyright 2015, Shea Aiello, PLLC American Drive, Southfield, Michigan Disclaimers: Although the author(s) and publisher have made every effort to ensure that the information in this book was correct at press time, the author(s) and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. The scenarios included in this document are not uncommon and include some variations of real life scenarios. The information in this publication is based on general legal and tax rules and is strictly for informational purposes only. It is not intended as legal or tax advice. Readers should consult legal and tax advisors as to their specific legal or tax situation as it may require more complex analysis, or the consideration of other information.

3 Own a business? You should be able to answer some of these critical questions. Being a business owner does not require you to be a legal expert. However, there are some basic things you should know about your business; or at the very least, you should know how to acquire this information quickly. These are common legal issues and questions faced by business owners. Are there any big unknowns for your business? Entity Formation How is your business set up? In most cases, it s best to be a Professional Limited Liability Company (PLLC) or Professional Corporation (PC). You face less liability than if you are structured as a sole proprietorship or partnership. How is your business taxed? Schedule C? C-Corp? S-Corp? If you don t know, ask your CPA. Personal Liability Protection Do you have a Personal Umbrella Policy? How much does it cover? Is it enough to protect you? Do you have business insurance? Do you have breadwinner life insurance? For example, what if a Doctor dies and the spouse is the stay-at-home dad/mom? How does the surviving spouse get by? Human Resources Do you have Employee Contracts? Do you have an Employee Handbook? Did you pull these documents off Google? If so, have they ever been reviewed by an Attorney?

4 Succession Planning Who would own your company if you died tomorrow? Who would run your company? What would happen if your business/practice partner dies, quits, becomes disabled, or wants to retire next year? What is the plan if your heirs are not interested, qualified, or experienced enough to do your job? Do you have/want/need a Buy Sell Agreement? If you have one, are you familiar with how it works? Do you know who is buying your shares? Is it your partners? The company? Is it funded with life insurance? Who is paying for the life insurance? How long has it been since the Buy Sell has been reviewed by an Attorney, CPA, and or Financial Advisor? Has your life or your business significantly changed since then? Once a Buy Sell is in place, it needs to be periodically reviewed. You want to make sure you have a competent team (Attorney, CPA, and Financial Advisor) that talks to each other for your best interest (rather than working in isolation). BUY SELL AGREEMENTS: A Buy Sell Agreement can give the company or your partners the option of purchasing your ownership interest if you die, quit, retire, and or become disabled. You can then use the money for retirement, or your family can receive it as their inheritance. Remember that only 1/3 of businesses survive into the 2nd generation and only 1/2 of businesses have a succession plan and that plan is usually in the Will. Remember that a Will must go through Probate Court, which is a messy, expensive, uncertain, and time-consuming process.

5 Collections How do you collect on accounts receivable? Do you have a vendor that handles receivables that are past due? Do you have legal counsel that is prepared to take legal action on receivables that are unacceptably past due? Third Party Liability Has an Attorney ever reviewed your vendor contracts? If yes, how long has it been? What about your lease(s)? Have they been reviewed by an Attorney? Do not lose sleep if you are unsure about some of these questions. You are still in good shape if you at least know how to get the answers quickly. If you are completely lost and do not know where to turn, an Attorney, CPA, and/or Financial Advisor could probably point you in the right direction. You can always give us a call. We would be glad to help. SEE THE NEXT PAGE FOR OUR CONTACT INFORMATION.

6 CONTACT INFORMATION Call us at one of the numbers below to schedule a complementary consultation with an estate planning attorney. We will review your current estate planning strategy or discuss establishing a new strategy. The review meeting is complementary and comes with no charge or obligation. Schedule a complementary consultation: Metro Detroit: Southfield Clinton Township Romeo Taylor Call Eastern & Western Michigan Ann Arbor Tecumseh Grand Rapids Kalamazoo Lansing Call Northern Michigan Midland Bay City Saginaw Flint Call Upper Peninsula Traverse City Sault Ste. Marie Muskegon Call Have a question first? us at info@sadplaw.com Visit us on the web at