No matter how much you are killing it in sales in the real estate world, nothing can halt a successful business as quickly as a lawsuit. And because real estate agents are entrepreneurs dependent on production, the risk is even higher than for other types of business owners. It’s important to make sure that your business—and your livelihood—are protected against possible risks. One of the best ways to do this is to form a business entity, such as a limited liability company, or LLC.

How do you know if you need an LLC? Many real estate agents are considered independent contractors, responsible for calculating their own payroll taxes and submitting them to the government. If this is you, then you are treated as a separate business from your employer in the eyes of the government—leaving you susceptible to personal responsibility in the case of a lawsuit.

Unlike a sole proprietorship, where you are essentially viewed as an extension of your business, an LLC gives protection against your personal assets if your business is ever engaged in a suit. This means that if your business is found liable and has a judgment filed against it, or it incurs debt that you can’t repay, your personal assets could remain unaffected. If you are a sole proprietor, all your business and personal assets are at risk.

There are a variety of options when determining which business structure best fits your needs, that’s why it is important to talk with an attorney that has experience setting up LLCs, like the team at LexLaunch.com. Besides establishing legal protection, which is enough in and of itself to create an LLC, there are a variety of other benefits as well. Here are a few:

1. Business Write-offs. Businesses get to deduct some forms of business expenses from their taxes. As a realtor, you are often responsible for paying for your own marketing, office space, mileage to and from events and showings, and more! If you have an office area in your home, you might be able to deduct some of your mortgage and utility bills as well. It’s important to consult with your CPA to consider the tax savings of setting up an LLC.
2. Separate Bank Account. It’s important to keep your business and personal banking as separate as possible. If you create an LLC, you can apply for a business bank account, which tends to have more perks than a standard personal banking account. Keeping these accounts separate also makes business accounting and budgeting easier.
3. Business Loans and Credit Cards. If you own a business, you can apply for loans and credit cards that often times offer better terms than loans and cards for personal use. Benefits include a longer pay-off cycle, reduced APR, and more available credit. You can also ask for multiple cards for additional people who might work for you, such as an assistant.
4. You hear it everywhere in business these days: “Be your brand.” Forming an LLC allows you to have both a personal and a professional persona. How you are perceived by future clients can mean the difference between building your customer base and losing it. Forming a business gives the impression that you are dedicated, that you are committed, and that you are unique from other realtors associated with the same company.
5. Here are a few more important reasons for real estate agents to form LLCs, from one of the founders of LexLaunch.com, Tim Denker:

Whether you’re a new agent or you’ve been around for awhile, it’s important not to make decisions regarding business formation on your own. Before deciding on an entity, it is important to consult with professionals who have experience helping small business owners decide the right type of structure for their business, like the attorneys at LexLaunch.Com.

Our attorneys will also help you create the written documentation you need to set up your structure, as well as submit the documentation on your behalf. They can also review any specific documentation, contracts or agreements specific to your other affiliations with larger real estate groups.

Make sure your business and personal assets are protected from risk, call the professionals at https://www.lexlaunch.com/ today at (816) 434-6610 or click here for more information.

Tax Season for Missouri LLCs and Kansas LLCs is upon us.

It’s the most wonderful time of the year—tax season is officially here! While you might not agree with the first part of that statement, the second part is not up for debate—when April 15^th hits, will your small business be ready to file? We’ve prepared a few tips to help you prepare your business for tax season this year.

1. Know your tax distinction. First of all, it’s important to know how the IRS sees yours business. This is usually determined when you set up your LLC. An LLC has the unique status of allowing the owners to choose how they will be taxed. As we’ve talked about in previous blogs, these distinctions also require different bookkeeping roles throughout the year. Whether you are a sole proprietor/partnership, an “S” corporation or a “C” corporation it will distinguish what tax rules you need to follow. It’s important to look up your LLC’s tax election and/or check with your CPA to make sure you are following the correct guidelines for your designation. Partnership and “S” corporation requirements (a/k/a flow-through) will have each partner report income, losses, deductions and credits on their personal tax returns based on how much of the business each member owns. “C” corporation requirements treat your business as a separate taxpayer or entity.
2. Retrieve last year’s tax returns. Unless this is the first time you’ve filed taxes for your business, you will always need the prior year’s return to complete the current year. Dig this out of a drawer or file cabinet, wherever you place your important documents, and review carefully. Last year’s return will list carryover amounts and depreciation schedules.
3. Get your books in order. Whether you use an accountant, an online system or paper and pencil, make sure your bookkeeping is up to date. Account for all income, including earned interest on savings accounts. Make sure you have reviewed your inventory and totaled the cost of all goods sold. Don’t forget to include all expenses such as mileage, advertising, depreciation, professional fees and insurance. Get a printout of the balance in the company’s income and expense accounts.
4. Review the operating agreement. Any changes in the way profits and losses are assessed to each member over the past year can change the way taxes are assessed and paid. Make sure to reflect any differences in the new return, and record changes in your meeting minutes.
5. Schedule a professional review. After collecting the information above, it’s important to have a professional with expertise in small business review your return. This might include an accountant and an attorney who can explain to you the details of what you are filing and to make sure that you are receiving the tax and risk-protection benefits your company needs to remain successful.

At LexLaunch.Com, our legal professionals can give you the peace of mind you deserve when filing taxes for your small business. We can go through each step with you to ensure that you are taking the correct steps to shield your small business from risk for years to come, and we’re more than happy to help you find a great CPA in your area if you haven’t already. Give us a call today at (816) 434-6610 or click here for more information.

As 2018 gets underway, now is the perfect time to review your current business structure and determine if any changes need to be made in the new year. As your business grows, evolves and changes, it might make sense to change your current structure to something that provides greater risk coverage and more adequately suits your business goals.

When is the best time to make a change? How do you change it? If you change it, can you switch it back later? These are questions that are best answered by an attorney with experience in small business law, like those at LexLaunch.com. Each business structure has different legal and compliance obligations, so make sure you understand the differences before changing your business structure.

Here are common reasons to consider changing the structure of your business:

1. Have you taken on a business partner?
2. Have your profits increased or taken a downturn?
3. Have you expanded your offerings?
4. Are you looking to purchase real estate for your business?
5. Did you buy an existing business, or did another owner leave the business?
6. Did you increase the number of employees at your business?
7. Have your financial goals changed recently?
8. Are you reorganizing the operations within your business?
9. Are you looking for investment opportunities or looking to sell your business in the near future?

Each business structure has different legal and compliance obligations, so it is important to have an attorney explain the differences before you decide to change your business structure. A good attorney will take the time to meet with you and discuss the following before providing guidance:

• Pros and cons of changing your business structure
• Types of each kind of business structure
• Determining a business plan for your new structure
• Whether partnership agreements or corporate governance documents are required
• Whether new trademarks or business names need to be registered
• Review other agreements that are currently in place or will need to be formed with the new structure

You don’t have to wait until you need to change your business structure to talk with a professional. In fact, it’s better to plan for your business needs now and make those changes before you need them. With careful planning with an experienced attorney, you can take advantage of opportunities as they arise. You can also insure that you are personally and professional protected from risk as your business grows. Don’t wait to review your business structure, call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.

It’s no secret that we at LexLaunch.com feel that using online legal incorporation services to form your LLC are no match for the expertise that comes with working with a personal attorney. But what if you used an online service before heeding our advice? No matter if you used an online incorporation service years ago or just last month, it’s important to have an attorney independently review your documentation to make sure you are adequately prepared for managing risk to your company and your personal assets for years to come.

Incorporating your business is not an easy process, nor is there a “one size fits all” packet of incorporation documents to file. There are often secondary requirements that extend beyond what is offered on online sites. Also, regulations for formation are always changing and vary from state to state. If you miss a vital update, your application might be faulty or incomplete, leaving you open to personal and professional risk in the future. Reviewing the disclaimers on these online sites is enough to make the most confident applicant a little wary.

If you’ve already used an online legal service to incorporate your business, it might be a good idea to have an attorney with knowledge of business incorporation, such as the lawyers at LexLaunch.com, to review all documents created when you began your business. An attorney will be able provide direction as to the viability of your legal setup structure, as well as:

• Ensure that the correct documentation was filed for your state
• Guide you through the tasks required following incorporation, such as naming a board, issuing stock, and/or completing any further publication requirements
• Anticipate possible legal issues that might arise in the future (such as intellectual property ownership or fundraising) and advise you on next steps to reduce risk
• Give you cost estimates for future legal needs so that you can budget accordingly
• Provide peace of mind that you “did it right” and that you have taken the steps needed to reduce risks

Every new business is unique, and a lawyer can help tailor legal work to your specific situation. Asking an attorney to review the documents created by an online legal service gives you an extra layer of confidence and protection when disagreements and challenges arise in the future.

If you’ve used a “one size fits all” service for incorporating your business, get the peace of mind you deserve by scheduling an appointment with an attorney that has experience in setting up new companies, like the lawyers at LexLaunch.com. Give us a call today at (816) 434-6610 or click here for more information.

As we head into 2018, it’s a great time to focus on your small business and set goals for the upcoming year. The professionals at LexLaunch.com have 5 New Year’s Resolutions that can keep your company in good legal standing and reduce risk during the new year.

• Incorporate your business. This is always our #1 resolution for any small business. Taking the time to formally incorporate your company provides risk protection and possible tax benefits as well as protecting your personal assets. It also gives your business added credibility to new and potential customers. LexLaunch.com provides simple solutions with real attorneys to make this process quick and easy for any business owner.
• Update your records. If you have already formed an LLC, it’s a good idea to make sure the appropriate address is on file with your state and make sure your annual minutes are up to date. It’s also a good idea to review your bylaws, your operating agreement and any partnership agreements pertaining to the ownership of the business. The professionals at LexLaunch.com can create a checklist of items to review and help answer any questions you might have during the review process.
• Meet with your advisors. While meeting with an attorney once a year for a business review is important, you should consider meeting with other professionals as well. You might schedule an appointment with your accountant, financial advisor or any other business consultants that can help you gain a clear picture of the state of your business. These professionals can also update you on the latest business trends and any new regulations that could affect your company.
• Develop a business plan. Once you’ve met with your advisors, it’s time to make a formal plan for the year. A business plan puts your goals and projections on paper and allows you the ability to track and measure your progress throughout the year. It will help you focus throughout the year and see how far you’ve come. Schedule quarterly reviews of your plan in your new 2018 calendar.
• Settle your disputes. If there are any unresolved issues carrying over from the previous year, try to resolve them in 2018. Outstanding grievances can take your focus and energy away from growing your business. If you cannot resolve the matter on your own, meeting with an attorney that specializes in small businesses can help you decide the next best steps to clearing any outstanding differences and clearing the path for a more positive new year.

While there are many more resolutions that you might want to add to your list for 2018, these 5 suggestions can help reduce your risk and put your business on the path to success. The professionals at LexLaunch.com thank you for your support this year and wish you all the best for a great 2018! If you’re ready to plan for the upcoming year, make an appointment to speak to a legal representative to learn more about how you can decrease risks and protect your business in 2018. Call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.

2017 is racing toward the finish line—is your small business prepared to head into the new year? The holidays can be an overwhelming time with end of the year paperwork and sales goals, and the small business professionals at LexLauch.Com want to make things as easy as possible for you. We’ve created a simple checklist to help you close out this year and get 2018 off to a great start.

Here’s our checklist of legal items for small business owners to review before the clock strikes midnight on January 1:

• Review your business structure. Many small businesses start out as sole proprietorships or partnerships, but need to transition to a different type as they grow. If your business is not incorporated, you might want to consider filing as an LLC to reduce your financial risk and possibly give you more flexibility when it comes to taxation. Your CPA can review your current tax situation, and the professionals at LexLaunch.Com can explain the legal benefits of incorporation with you.
• Close inactive businesses. Did you start a business in the past and it is no longer in operation? Even if you’ve physically and mentally closed the doors on this venture, you need to file formal termination paperwork of your LLC or Corporation. If you don’t, you might still be charged fees associated with the business and you may still be required to submit tax returns to your state and the IRS. Legal professionals can help you file an “Article of Dissolution” or “Certificate of Termination” document with the Secretary of State, as well as help you cancel any licenses or permits you hold in the state or country.
• Hold an annual meeting for your LLC or Corporation. It’s important to keep your business in good standing, and accurate bookkeeping is frequently overlooked by small business owners. Annual meetings allow you to stay in good standing with your choice of business structure. Along with the meeting, it is a good idea to record minutes of the topics addressed and the members present. You can read more about annual meetings and minutes HERE.
• File an Amendment to your Articles of Organization. For any major changes to your business in the past year. If you have changed business structure, authorized more shares, or changed board members you will want to file a notification with your state. This is a vital step in keeping your “corporate veil” from being pierced and keeps your business in good standing with the state.
• Tie up any loose ends. Review any other changes that have occurred in the past year, and take action to compete any final steps. Does your business need a Fictitious Business Name (also known as a “Doing Business As” or DBA)? Are all of your licenses and permits current?

The end of the year can be hectic, but if you set aside some time to close out any business needs and resolve issues at the end of 2017, you can prepare your business for a fresh start in 2018! Don’t go it alone, make an appointment to speak to a legal representative to learn more about how you can decrease risks and protect your business in 2018. Call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.

No matter how much pride of ownership you have for your business, there might come a day when it’s time to hand the reigns over to a new owner. Whether or not this possibility is currently in your sights, it is important to have secure plans in place to make sure the transaction is as painless—and profitable—as possible. Getting a lawyer involved from the day you decide to step aside can give you the peace of mind needed to provide a secure path for the future.

An attorney is an integral part of your preparation team. You need a professional that has experience in reviewing existing contracts that contain rights and obligations of shareholders, loan agencies, suppliers, employees and other partnerships within your business. Experienced business lawyers will be able to develop checklists and contracts to cover the issues that are common to selling a business so that you won’t have surprises at the time of the sale. They should also be able to provide advice regarding the pros and cons of stock sales versus asset sales, along with any representations that the seller is making and any warranties that will be expected by buyers.

Preparation is the key to successfully selling a business, and partnering with an attorney is a vital part of the due-diligence process. By drawing up prototype asset or stock purchase agreements before the sale, the seller can be sure that all exhibits for potential buyers are in place before starting the process. This allows sale negotiations to focus on price and financing without roadblocks created because the seller can’t provide critical information to the buyer. It also increased the buyer’s trust, which can be a critical component in making the sale.

Of course, it’s best to work with attorneys who have experience in the selling of businesses, like the team at LexLaunch.com. We are ready to help you reduce your risks and protect your assets. If you are considering selling your business, either now or in the future, call the experts at LexLaunch.com today at (816) 434-6610 or click here for more information.

If you own a business, it’s important to plan for what will happen to your business after you pass away. As a business owner, most of your assets–and your family’s financial security—is tied up in your business. Establishing a successful estate plan depends on the business being transitioned to someone in the family or sold to someone else. Either result can take years to prepare. Careful planning with a legal representative familiar with estate planning, like the team at LexLaunch.com, will protect your assets and reduce liability when your business is passed to another family member or sold. And, since most of us do not know precisely when our time on earth will end, it’s never too early to implement a clear estate plan.

Without an estate plan, your family might be left with lots of problems obtaining the assets of your business upon your death. Your business might have to be shut down if no one knows how to run it, where to find important contacts and where your accounts are located. Without a designated plan, all assets of the business will need to go through court systems to determine ownership. This takes a great deal of time—normally at least a year–and can be very expensive. This process is also public, so all your assets will be revealed to whomever is interested in the meantime.

A fundamental step in estate planning is building a revocable trust. Your assets will then fund the trust to keep them out of the lengthy and exhausting probate process. To manage this funding, business owners can work with estate planning attorneys to create a “revocable living trust agreement.” Proper creation and funding of this trust can help keep your assets out of the probate process by placing the administration of your estate in the hands of someone designated to manage the assets, the trustee. While you are alive, you serve as the trustee. The type of business you own and interests that you have will determine the structure of your trust, which is why it is important to work with an attorney who has experience in this process.

Proper estate planning can prevent your assets from becoming entangled in the probate system upon your death. This is important for the security of your family, and a step that all business owners should not overlook. It’s important to make an appointment with the attorneys at LexLaunch.com to start the estate planning process. A well-implemented estate plan is an important part of taking the risk out of your family’s financial future and, most importantly, will provide stability and comfort to those you love most after you are gone.

At LexLaunch.com, we are dedicated to providing small businesses with the legal foundation they need to create a strong and successful future, for the life of their business. Have you spoken to a legal representative to decrease risks and protect your business? If not, call the professionals at LexLaunch.com today at (816) 434-6610 or click here for more information.

An optional yet important step for maintaining your LLC legal status–and the risk reduction it provides–is to hold an annual meeting with members/shareholders and the Board of Directors discuss the major components of the company. If you choose to take this step, recording meeting minutes can give you additional support if your LLC status is ever challenged.

There are a few major reasons why your small business should hold annual meetings, record meeting minutes and keep them in a secure location:

• Liability Protection. Operating as a corporation protects you and other shareholders from personal liability. To maintain that the company is a separate entity from its owners and shareholders, you need to show that the appropriate steps are being taken to appoint board members and directors, consider input from shareholders, and make decisions of a corporate—rather than personal—nature.
• Funding. If you are currently looking for financial backing, or will be in the future, it is important to show potential investors that you are completing all necessary steps needed to remain a corporation. Investors want to see that risk-reduction measures are in place, that that documentation supports these claims.
• Dispute Avoidance. Who is supposed to manage finances? Who handles marketing? Were these official decisions? If owners and/or shareholders begin asking questions, it is important that these topics were previously written down.
• Taxes. The class of corporation you chose when you set up your business needs to be reflected in the annual minutes. You should also include any bonuses and retirement plan contributions that were given, as these can impact your taxes. The directors should also specifically approve any loans to shareholders to lessen the opportunity for the IRS to reclassify the loans as taxable dividends. For this reason, it would be a good idea to have your CPA present at your annual meeting.

Once your company holds its annual meeting and minutes are prepared, you need to keep them in a safe place together with past meeting minutes. All electronic copies should be backed up and secured.

These are a few examples of why annual meetings and minutes are an important part of your business processes and records. It is a good idea to have legal representation present in your annual meetings to ensure that all points are addressed and all conflicts have been resolved.

At LexLaunch.com, we are dedicated to providing small businesses with the legal foundation they need to create a strong and successful future. Have you spoken to a legal representative to decrease risks and protect your business? If not, make it a goal to call the experts at LexLaunch.com today at (816) 434-6610 or click here for more information.

If you’re growing your small business, you might find yourself in a position to hire employees and/or independent contractors to take over some of the responsibilities associated with carrying out certain duties. (We cover the differences between employees and contractors HERE.) This can be concerning if your business has intellectual property and processes that you would like to remain confidential. It’s important to reduce your risk before the hiring process begins. While it’s important to talk to an attorney before asking an employee or contractor to sign formal documentation, you need to be aware of the three main types of noncompetition agreements used to protect your assets from being divulged to your competition.

• Traditional Noncompetition Agreement: The traditional NCA states that an employee, during employment or after termination of employment, will not work for the employer’s competitor for a certain period. This prevents the employee from taking sensitive information acquired while working with the employer and using it against the company by using it while working for the competition. It is important to note that NCAs can only be signed by employees, not independent contractors. Since, by law, an independent contractor is one that does work for multiple employers at the same time, asking the contractor to sign a NCA can negate the independent contractor status and you could be on the hook to pay full employee benefits and taxation if audited.
• Non-Solicitation Agreement: An NSA prevents a former employee from soliciting, contracting or transacting business with the employer’s customers or employees for a certain period after leaving the company. This prevents an employee from taking your clientele and employees with them when they leave your company. Again, this can only be signed by an employee, not an independent contractor.
• Confidentiality Agreement (also known as a Nondisclosure Agreement): This contract prevents employees from using their employers trade secrets, proprietary information, confidential business information, customer lists, or any other sensitive information that could only be obtained by working for a particular employer. Since trade secrets are vital to a business’s continuation, there is typically not a time restriction on these contracts. These contracts can be signed by employees or independent contractors alike.

What is the best option for your company? It’s important to speak with an attorney that specializes in small business to understand the differences between the contracts and the risk reduction that can be associated with each. The experienced professionals at LexLaunch.Com are happy to listen to your individual needs and create solutions that work for you and your small business. Call the attorneys at LexLaunch.com at (816) 434-6610 or click here for more information to learn more about how to decrease risk and protect your small business.