A recent Wall Street Journal article detailed the steps you should take to avoid collection problems when expanding your business across state lines. The article suggested prevention was by far the best defense. I believe that’s right, but I’ll make a much broader statement: Prevention is the best defense for
Subchapter S status was enacted so that startup companies and other entrepreneurs would not shy away from choosing a corporate form of organization because of the potential for double taxation. A corporation that elects Subchapter S status is treated for federal income tax purposes as a partnership, but maintaining the
Today at Macworld, Apple formally announced their jump into the cell phone market with the iPhone. There are two main lessons that every entrepreneur, whether Apple-lover or PC-enthusiast, can take home from this landmark event: (1) You need to protect your intellectual property early. Steve Jobs said Apple has applied
Launching a startup business with a friend can be an exciting and rewarding experience. However, I suggest you take a moment and really think about what the potential consequences might be. Starting a business is tough and having a friend involved will only make it more difficult if things go
Fortune Small Business recently ranked the top 10 U.S. states for small business taxation: 1. South Dakota 2. Nevada 3. Wyoming 4. Alabama 5. Washington 6. Florida 7. Mississippi 8. Colorado 9. Texas 10. Michigan While potential tax savings should not be the sole reason in deciding where to start
Running a startup, you have a billion things to do. Don’t forget to add “First Organizational Meeting” to your to-do list. This meeting should take place after the issuance (or effective date) of your certificate of incorporation. But don’t wait too long, as you have some important business to handle,
After you have made the decision to incorporate, the next question is “where to incoporate?” You can incorporate in your own state and be considered a domestic corporation, or you can incorporate elsewhere and do business in your own state as a foreign corporation. Generally, if most of your business
When choosing a name for a new startup, you should make sure the name is one the public will remember and associate with your business. It can be catchy or dull, short or long, but this name should be permanent, as a large portion of your company’s goodwill will be
An earnout is the method of paying the seller of a company based on that company’s future earnings. The earnout will call for additional payments to the seller if the company’s post-sale earnings reach a certain level. The earnout is useful when buyer and seller do not agree about the
As counsel, is it appropriate to speak up if you believe your client is overleveraging to finance an acquisition? Two factors must be considered to answer this question: (1) Your capacity. You are an attorney (not an I-banker). That law-school corporate finance elective or that undergrad finance degree might have
