Archive for the ‘Other Areas’ Category
What to Know Before Setting up a Limited Liability Corporation in Georgia
Limited Liability Corporations (LLCs) in Georgia contain similar characteristics of both corporations and partnerships. For taxation purposes, LLCs are treated as partnerships, with pass-through taxation to the individual.
The key benefit of an LLC is that you, the member, are protected from personal liability. But in order to enjoy this benefit, the member must keep personal assets and expenses completely separate from business assets and expenses. If there are commingling of funds by the member, then a creditor could potentially “pierce the corporate veil” to show the member is treating the LLC as an individual account, and thus go after the member’s assets.
Forming an LLC in Georgia requires several steps. First, you must file the Articles of Organization (AO) and pay the required fee to the Secretary of State. To register online, visit the Georgia Secretary of State’s website. The registered name must contain the words Limited Liability Corporation or the abbreviate LLC in order to provide notice to the public of the nature of the business entity. During the formation, another important aspect to consider is the management of the LLC. An LLC may be run by managers who are members; however, the AO can also call for the LLC to be run by a sole managing member.
The most helpful aspect of the LLC is that a member is not liable for any of the LLC’s liabilities, even though a member is always liable for his own personal torts. Therefore, while the LLC itself might be liable under agency principles, there is not vicarious liability to the individual. Thus, ALL owners are shielded from personal liability on non-tortious matters.
There is also more flexible management in an LLC than a partnership, in that all owners may exercise control unless the AO states otherwise. Also, there is less tax to pay in an LLC because of pass-through taxation, as opposed to the tax treatment of a C corporation. Business profits and losses in an LLC are taxed (like an S Corp.) at the individual’s income tax rate, which is more favorable.
If you have a partnership or a sole proprietorship and you want to protect your personal assets while having your business income taxed at an individual rates, an LLC could be the business formation for you. You can, but are not required to, get a separate tax identification number. This would be beneficial in ensuring that business and personal assets remain separate and further prevent a creditor from alleging commingling of funds, in an attempt to “pierce the corporate veil.”
Finally, since one of the primary goals of an LLC is to insulate the member against personal liability, is it crucial that when signing documents for the LLC, the member must indicate on the document that he/she is signing as a member. If the member does not sign as a member, then he/she is signing as an individual. Signing as an individual, even if done by accidental omission, will then trigger personal liability.
Debt Settlement Companies: Reasons to be Concerned
In April 2010, the General Accountability Office issued a 45 page report very critical of Debt Settlement companies, which can be found at www.gao.gov/cgi-bin/getrpt?GAO-10-593T. Common threads among the report are that these companies advertise in all forms of electronic media (TV, radio, internet) , touting their ability to aid the financially distressed. Also, an overwhelming majority (85%) of companies collected their fees BEFORE settling any of their clients debts (The FTC has proposed banning this practice).
Several companies practiced a policy of monies paid to them for as long as 4 months went only to pay the firm’s fees BEFORE any monies were used to pay the consumer’s bills.
Some companies claimed a 100% success rate for their programs. This was contradicted by FTC and state investigations typically showing that less than 10% of consumers are successfully completing these programs.
In the most egregious of cases, when consumers combined the fees they paid to these companies with the settled amounts of the debts, they actually paid MORE than total amount of the original debts.
Lessons Learned
Be very skeptical about responding to a debt settlement organization that contacts you directly (phone, mailing, email, etc.) or advertise as cited in the report
Check with your Better Business Bureau for any complaints, but bear in mind these organizations can be operating anywhere in the country and may not have a Georgia office. It is always a good idea before dealing with any of these companies to google them and find out what people’s experiences have been.
In the alternative, we would suggest you initiate contact with or a local not for profit organization that deals in debt settlement, such as CredAbility.
You just got served with a collections lawsuit- What should you do?
So after months of phone calls and letters from the collection agency, you have finally been served with a Complaint by the Sheriff on that old credit card you took out years ago. You might be thinking it is hopeless for you to fight it and there will soon be a judgment against you. Do not give up so fast, there are plenty of tactics at your disposal. Use them.
For starters, who is to say the creditor suing you really has standing to sue you? They might allege they purchased the account from the original creditor, but they offered no proof of that in their complaint. If they offered no proof, maybe they have none. When you answer the collectons lawsuit and show you will make them prove ownership of your account, maybe they will be unable to do so. Also, do you really owe exactly $6,521.87? That is just an allegation, and it may be double what you really owe. If you don’t argue the amount now, you will not get to it later. Maybe you owed the debt at one point, but the statute of limitations has expired on the Plaintiff’s time to file a Complaint.
Those are just some of the reasons why when you get served, it behooves you to answer within your 30 days allotted to respond. If you are not sure how to answer, contact an attorney. Even if you believe they would prevail in a court hearing, you might be able to settle the debt on favorable terms after you answer the lawsuit. Depending on which court you have been sued, there might not be a trial for months, so your answer can prevent an immediate garnishment of a paycheck or a bank account. If you are sued in Magistrate Court, then the hearing will happen within a month or two of your answer, but if you are served in State Court or Superior Court, there will be months of discovery prior to the hearing date. By answering and stating a reasonable basis of dispute for a hearing, you are preventing the Plaintiff from obtaining a judgment against you during the entire time of discovery.
If you have been served and do not answer, there will probably be a default judgment against you. You will have no defenses at that time, since you were validly served and declined to raise those defenses in the proper time. Do not let that happen to you.
Learn About Business Ownership Structures
Republished with Permission © 2009 Nolo.
Learn about the corporation, LLC, partnership, and sole proprietorship.
Before you can decide how you want to structure your business, you’ll need to know what your options are. Here’s a brief rundown on the most common ways to organize a business:
* sole proprietorship
* partnership
* limited partnership
* limited liability company (LLC)
* corporation (for-profit)
* nonprofit corporation (not-for-profit), and
* cooperative.
Continue reading “Learn About Business Ownership Structures” »
Top Tax Deductions For Your Small Business
By Stephen Fishman, J.D.
Republished with Permission © 2009 Nolo.
Don’t miss these fourteen tax deductions for your small business.
It’s simple: The more tax deductions your business can legitimately take, the lower its taxable profit will be. Also, in addition to putting more money into your pocket at the end of the year, the tax code provisions that govern deductions can also yield a personal benefit: a nice car to drive at a small cost, or a combination business trip and vacation. It all depends on paying careful attention to IRS rules on just what is — and isn’t — deductible.
When you’re totaling up your business’s expenses at the end of the year, don’t overlook these 14 common business deductions.
Continue reading “Top Tax Deductions For Your Small Business” »
Dealing With Collection Agencies FAQ
Republished with Permission © 2009 Nolo.
What you need to know about dealing with debt collectors.
What’s Below:
- Should I deal with debt collectors or try to avoid them?
- Collection agencies have been calling me all hours of the day and night. How can I get them to stop contacting me?
- The collections department of a local merchant is harassing me. Can I do anything about it?
- A bill collector insisted that I wire the money I owe through Western Union. Am I required to do so?
- Can a collection agency add interest to my debt?
- A collection agency sued me and won. What collection measures can it now take against me?
