Business Formations and Organization Attorney in Omaha, Nebraska
When you decide to turn your business idea into a reality you should research the best ways to structure it. There are various legal ways to structure a company, one of them being a sole proprietorship, this is the simplest way, but consequently also offers the least benefit and protection. How you organize your business is very important, you can create an LLC, S-corporation, C-corporation, or partnership. Each of these have benefits and drawbacks.
Limited Liability Company
An LLC, or limited liability company, is a business structure that offers its owners the advantages of both a corporation and a partnership. An LLC is a separate legal entity from its owners, which means that the owners are not personally liable for the company's debts or liabilities. This provides the owners with personal asset protection, which is an important benefit for many businesses.
One of the primary advantages of an LLC is that it offers its owners limited liability protection. This means that the owners, who are known as members, are not personally liable for the company's debts or liabilities. This is different from a sole proprietorship or a partnership, where the owners are personally liable for the business's debts and liabilities.
The limited liability protection offered by an LLC is an important benefit for many businesses. It can provide owners with peace of mind, knowing that their personal assets are not at risk if the company experiences financial difficulties or is sued. This can be particularly important for small businesses, where the owners often have significant personal assets that could be at risk in the event of a lawsuit or financial crisis.
Another advantage of an LLC is that it offers its owners flexibility in terms of management and taxation. LLCs can be managed by their owners, known as members, or by managers who are appointed by the members. This flexibility allows LLCs to be tailored to the specific needs and goals of the owners.
In terms of taxation, LLCs are treated differently than other business structures. LLCs can choose to be taxed as a corporation, a partnership, or a sole proprietorship. This flexibility allows LLCs to choose the tax treatment that is most advantageous for their specific situation.
In addition to limited liability protection and flexibility in terms of management and taxation, LLCs also offer their owners the ability to raise capital. LLCs can issue membership interests, which are similar to stocks, to raise capital. This can be an important source of funding for LLCs, particularly for small businesses that may not have access to traditional sources of financing.
In summary, an LLC is an important business structure to have because it offers its owners the advantages of both a corporation and a partnership. An LLC offers its owners limited liability protection, flexibility in terms of ownership and management, offers tax benefits, and is simple and easy to form. These benefits make the LLC an attractive option for businesses and entrepreneurs who want to protect their personal assets and take advantage of the benefits of a business entity. If you need to form or manage an LLC, give Joseph D Hall & Associates a call today!
An S-Corp, or S corporation, is a type of business entity that is important and valuable for a number of reasons. An S-Corp is a type of corporation that is subject to special tax rules, and it offers its owners a number of benefits, including liability protection, tax savings, and flexibility in terms of ownership and management.
One of the key benefits of an S-Corp is that, like an LLC, it provides its owners with limited liability protection. This means that the personal assets of the S-Corp's owners, known as shareholders, are typically not at risk in the event that the company is sued or incurs debt. This protection is important because it can help to prevent the shareholders' personal assets, such as their homes and savings, from being seized to satisfy the company's debts.
Another benefit of an S-Corp is that it offers tax benefits. Unlike a regular corporation, which is subject to double taxation on its profits, an S-Corp is a pass-through entity, meaning that the company's profits and losses are passed through to its shareholders and taxed at the individual level. This can result in significant tax savings for the shareholders of an S-Corp.
In addition to these benefits, an S-Corp also offers flexibility in terms of ownership and management. Unlike a regular corporation, which must have a board of directors and officers, an S-Corp can be owned and managed by one or more shareholders. This flexibility allows S-Corps to be tailored to the specific needs and goals of the business and its owners.
An S-Corp is also relatively simple and easy to form. In most states, it is relatively straightforward to convert a regular corporation into an S-Corp, and the company can be formed quickly with just a few basic documents. This simplicity and ease of formation make the S-Corp an attractive option for small businesses and entrepreneurs.
In summary, an S-Corp is an important and valuable business entity because it provides its owners with limited liability protection, offers tax benefits, and offers flexibility in terms of ownership and management. These benefits make the S-Corp an attractive option for businesses and entrepreneurs who want to protect their personal assets and take advantage of the benefits of a business entity. If you need to figure out the best business entity to use for your business, give Joseph D Hall & Associates a call today!
Incorporating is the process of forming a corporation, which is a type of business entity that offers its owners a number of benefits. Incorporating can provide important protections for a business and its owners. In some instances, it can offer tax savings and other advantages.
One of the key benefits of incorporating is that it provides its owners with limited liability protection. This means that the personal assets of the corporation's owners, known as shareholders, are typically not at risk in the event that the company is sued or incurs debt. This protection is important because it can help to prevent the shareholders' personal assets, such as their homes and savings, from being seized to satisfy the company's debts.
Another benefit of incorporating is that it offers tax benefits. Unlike a sole proprietorship or partnership, which are taxed at the individual level, a corporation is taxed separately from its owners. This can result in significant tax savings, as the corporation can take advantage of tax deductions and other tax benefits that are not available to sole proprietorships or partnerships. The downside of this is that you will be taxed more than once as an owner, as Corporations do not have pass-through taxation.
In addition to these benefits, incorporating also offers flexibility in terms of ownership and management. A corporation can have an unlimited number of shareholders, and it can be managed by a board of directors and officers. This flexibility allows corporations to be tailored to the specific needs and goals of the business and its owners. Additionally, it makes raising money through various methods available, whether it is through angel investors or private equity, most investors are preferential to corporations. This is due to the fact that the corporate structure can have various different classes of stock and tailor ownership in a way to maximize the returns of the business.
Incorporating is something that needs to be done properly, if you are interested in forming a corporation, give Joseph D Hall & Associates a call today!
When you structure your business without any controlling document, it will follow the default statutes created by Nebraska Law. You can alter the way your business does things or how it operates by drafting and executing an Operating Agreement. An operating agreement is a legal document that outlines the terms and conditions under which a business will operate. This agreement is typically entered into by the owners of the business, who are known as members.
Operating agreements are commonly used by limited liability companies (LLCs) and other types of business entities. The purpose of an operating agreement is to provide a clear and detailed description of how the business will be run, including how decisions will be made, how profits and losses will be distributed, and how new members can be added to the business.
The terms of an operating agreement will vary depending on the type of business entity and the specific needs of the members. However, there are certain provisions that are typically included in operating agreements. These can include:
The names and contact information of the members
The percentage of ownership interest held by each member
The management structure of the business, including how decisions will be made and who has the authority to make decisions
The roles and responsibilities of the members
The process for adding new members to the business
The process for dissolving the business
Provisions for handling disputes and disagreements among the members
Provisions for distributing profits and losses
In some cases, an operating agreement may also include provisions for member buyouts, voting rights, and other important matters.
It is important for the members of a business to carefully consider the terms of their operating agreement and ensure that it accurately reflects their intentions and agreements. An operating agreement can provide valuable protection for the members of a business by clarifying their rights and responsibilities and establishing a clear process for making decisions and resolving disputes.
In addition, operating agreements can be useful in the event of legal disputes or challenges to the business. For example, if a member is accused of breaching the terms of the operating agreement, the agreement can provide clear evidence of the member's obligations and help to resolve the dispute.
Overall, operating agreements are an important tool for businesses and their members. By creating and carefully following an operating agreement, businesses can help ensure that their operations run smoothly and that their members are protected from both liability and unforeseen events. If you have questions about an operating agreement, give Joseph D Hall & Associates a call today.
How Do I Pay Myself from An LLC?
One common question I hear is how do I pay myself from my LLC, luckily this is a very easy feat to accomplish. As the owner of an LLC, you are considered a member of the company, and you are entitled to receive a share of the company's profits. In order to pay yourself from your LLC, there are a few steps that you should probably follow.
First, you should determine the amount of profits that your LLC has earned. This can be done by reviewing the company's financial statements, such as its income statement and balance sheet. You should also consider any expenses that the company has incurred, such as salaries for employees, rent, and utilities.
Once you have determined the amount of profits that your LLC has earned, you should decide how much of these profits you would like to pay yourself. This decision will depend on a number of factors, including your personal financial needs, the financial needs of your business, and any agreements that you have made with other members of the LLC.
Once you have decided how much you would like to pay yourself, you should create a plan for distributing these funds. This plan should include details about how the funds will be paid to you, such as through regular salary payments or periodic distributions. It should also include details about how the funds will be taxed, such as whether they will be subject to self-employment taxes or other tax obligations.
Once you have created a plan for distributing the profits to yourself, you should implement this plan. This may involve making regular salary payments to yourself, or it may involve making periodic distributions to yourself. It is important to follow your plan consistently in order to ensure that you are receiving the funds that you are entitled to as a member of the LLC.
In summary, if you are the owner of an LLC, you can pay yourself from your business by determining the amount of profits that the company has earned, deciding how much of these profits you would like to pay yourself, creating a plan for distributing the funds, and implementing this plan. By following these steps, you can ensure that you are paying yourself fairly and consistently from your LLC. If you have questions about managing your LLC or business, give us a call today!
Biennial Reporting for Your Business Entity in Nebraska
In Nebraska, businesses are required to file biennial reports in order to maintain their good standing with the state. A biennial report is a document that provides information about a business's current status and activities, and it is typically filed every two years.
In Nebraska, businesses are required to file biennial reports with the Nebraska Secretary of State. The report must be filed during the calendar year in which the business's original articles of incorporation were filed, and it must be filed by the last day of the business's anniversary month. For example, if a business was incorporated on June 15, 2022, its first biennial report would be due by June 30, 2024, and its second biennial report would be due by June 30, 2026.
The biennial report must include certain information about the business, such as its name, address, and the names and addresses of its officers and directors. It must also include information about the business's current status, such as whether it is active, inactive, or dissolved.
In addition to this basic information, the biennial report must also include a statement of the business's current activities. This statement should describe the business's current operations, including the type of products or services it provides, the number of employees it has, and any other relevant information.
If a business fails to file its biennial report on time, it may be subject to penalties and fines. In addition, the business's good standing with the state may be affected, and it may be unable to conduct certain activities, such as obtaining business licenses or permits.
In summary, in Nebraska, businesses are required to file biennial reports in order to maintain their good standing with the state. A biennial report is a document that provides information about a business's current status and activities, and it must be filed every two years with the Nebraska Secretary of State. The report must include certain information about the business, such as its name, address, and the names and addresses of its officers and directors. If a business fails to file its biennial report on time, it may be subject to penalties and fines. If you need some help doing your biennial reporting, give Joseph D Hall & Associates a call today!