ATTENTION: NEW FLORIDA SMALL BUSINESSES- BEWARE OF SCAMS!


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A Florida company based out of Tallahassee, Florida, has been attempting to convince new business owners who have recently formed a new corporation or LLC, to send money by exaggerating to be involved in a vital step in the business formation process. This “company” has gone by other aliases such as the “Florida Center of Corporation,” and now currently operates under “United Business Services”

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In the letter it states: “You have one step left to receive your Florida Certificate of Status”, they are instructed to complete their filing by filling out a stub and to “mail back to the corporations center with your payment of $47.00 (some recent mailings have said $47.99 or a similar amount) to complete your articles of organization certificate.” We urge caution because the correspondence is made deceptively like it is coming from a government agency. And note in the image here, that in very fine print, it states that “This is not a government agency.”

 

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We classify this as an inappropriate deception of the Florida Department of State services because the only service United Business Services is providing is to obtain a Certificate of Status (or good standing) from the Secretary of State of Florida.  The state only charges either $8.75 (for an INC) or $5 (for an LLC) for this.  Furthermore, when we checked the address for the company, it came up as an empty office space which is available for rent. The company came up in no searches affiliated with that address, or any other.

 

If you have any questions as to the legitimacy of these letters, do not hesitate to contact your Florida Business Law Attorney as soon as possible.

Maintaining Accurate Records

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Regardless of the size of a company, whether a small business or a large one, it should comply with its state law record-keeping requirements.

Here is a list of some of the important corporate documents to maintain:

– A copy of the corporation’s articles of incorporation or organization;

– Corporate bylaws or operating agreement;

– Organizational minutes;

– Annual reports;

-Minutes from any shareholder meetings;

-Maintain an updated list of all executives, employees, etc;

-Accurate accounting records; and

-Important Financial statements.

 

For a year-end business check-up, contact your Business Law Attorney today!

New Laws Regarding Florida’s Durable Power of Attorney

Unexpected controversy has been exposed due to a Florida law enacted in October of 2011 regarding the Durable Power of Attorney (“hereinafter DPOA”).  Prior to the change in law it was possible to prepare a DPOA that became effective upon incapacity. However, the new law no longer allows the “upon incapacity” language, thus making DPOAs effective immediately upon execution. DPOAs that were drafted before the enactment have been “grandfathered” into the new law.

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This has become an issue for many individuals, because banks and financial institutions are requiring all DPOA documents to be written in the new law due to recent economic recession and financial fraud.  These lending institutions are thereby disregarding the law that allows acceptance of DPOAs prepared before the new law.

This disregard is allowed through a statute in the law that gives banks the authority and time to review DPOAs to determine acceptance according to their own policies.  This can cause hardships for those with DPOAs with the old laws, especially those relocating from another state or country, and individuals already incapacitated or incompetent.

This issue could jeopardize the security of your future and you should not delay updating your DPOA. If you do not already have the new Durable Power of Attorney, consider working with us at Gulati Law to draft a new DPOA that is right for you and also compliant with Florida Law.

 

Source: Elder Law Answers

Inheriting A Business? Be Prepared and Start Now

Having a business passed down to you can be an exciting yet scary endeavor, and the situation varies widely depending on how well prepared you are for the transition.  Hopefully, you have spent enough time with the business to understand the plans, key players, and how to best serve your clientele.  Reviewing and updating documentation, creating rapport with clients, and developing relationships with accountants, employees, and managers can be crucial when undergoing a smooth transition. Exposure to all aspects early on can make the process go much easier for all parties involved.

file000941596447If you happen to be in a situation where inheriting the family business was unexpected or you did not have enough time to fully make provisions for the future, the best way to get started is by talking with some of the main team members involved.  You should consider talking to the following types of professionals during the set-up and transition:  business advisors, attorneys, accountants, financial planners, managers, and everyone involved in decision making for your business.  It can also be beneficial to hire advisors with your best interest in mind that can provide a third party perspective on where to start.

Getting everyone on the same page can be a challenge, but meetings and open discussions are vital in gaining a mutual understanding of the company’s short and long-term goals.  Now would also be a good time to discuss your new role in the business and the plans you have for the future.

The best way to get started when taking over the business is to do your research.  Look into documentation that can explain the current financial state of the company and the direction it was heading at the time of the crossover.  Some of these documents include: tax returns, bank statements, budgets, licenses, letters of incorporation or trademarks, and loans, credit, mortgages, and other forms of debt. After taking some time to review the information, start preparing your own ideas and questions about how this transition affects the legal and financial status of the business.  This would also be a good time to address any outside implications of the inheritance, such as disputes about succession, pressure from shareholders, and any other third parties involved.

After you understand the current state of your business, the next step is making sure you have team that is well organized and assured.  Keep communication lines open between employees, stakeholders, and all others involved with your business.  Let them know that you are doing the best you can to stay available and are willing to accept constructive input into the next steps for the business.  Ask for advice from the managers and advisors on how to make the transition easy as possible, and what has been working and not working in the past as far as methods and execution.  Try not to make any big changes yet – it is important to stay mindful of the team’s wishes, as they will be supporting you through a time that may be uncertain for the company.

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The last and most important area of focus is establishing a concrete business plan.  Hopefully before this time comes you have a strong guideline for how the business is run.  Now you can work on making this plan geared towards the plans you have for the future.  According to the Family Business Institute, about 30 percent of family businesses survive in the second generation.  Meeting with advisors and your banker on a regular basis while getting started can lead you in the right direction regarding customer needs and market conditions.  Putting in time and effort into the business will multiply your rewards worth reaping for years to come.

At Gulati Law, we have helped many small businesses transition from old ownership to new, and protect the new assets in the process. We have a private referral network in which we can refer depending on your needs. Contact us today if you have a question or need further information!

Source: http://under30ceo.com/you-inherited-the-family-business-now-what/

Real Estate Investment Tips on Tax-Deferred Exchanges (1031 Exchange)

A tax-deferred exchange is a where property owner trades one or more relinquished properties for one or more replacement properties of “like-kind”. The payment of federal income taxes and some state taxes on the transaction is deferred until a later date, instead of a typical transaction where the property owner pays the taxes on any gain realized from the sale.  The exchange, however, is not tax-free.  When the replacement property is ultimately sold, the deferred gain as well as any additional gain realized is subject to tax.

Section 1031 of the Internal Revenue Code states “that no gain or loss is recognized on the exchange of property held for productive use where the property owner has reinvested the sale proceeds into another property.  For example, if vacant land is exchanged for an apartment building, the taxpayer could not be forced to pay taxes on “paper gain”.  The general guidelines to be met in order to allow the taxpayer to defer all taxable gain are that the value of, equity in, and debt on the replacement property must be equal or greater than the value of the relinquished property.  Also, all of the net proceeds from the sale of relinquished property must be used to acquire the replacement.”

The main reason to exchange property instead of selling is the ability to postpone taxes or potentially eliminate them all together.  That way you are able to use the money saved towards investing in another property, and you receive an interest free loan from the federal government in the amount you would have paid in taxes.

Before considering a tax-deferred exchange, there are a few requirements that allow for this replacement.  First, your property must qualify.  Properties that are specifically excluded are: inventories, stocks, bonds, or notes, properties held primarily for sale, interests in a partnership, certificates of trusts, and choses in action.  Also, both the relinquished and replacement property must be held for productive use in a trade or business investment.  Immediate resales or the taxpayer’s personal residence do not qualify.

Tax Deferred Exchange

For a deferred exchange, the properties must be of “like-kind”.  This means they must both be located in the U.S. and must qualify.  Personal properties must be of like-class.  It is also a basic requirement that the relinquished property must be directly exchanged for the other property and cannot be sold for cash to be used in purchasing the replacement property.

Tax-deferred exchanges can be very beneficial for the taxpayer planning to sell an investment or property.  As long as the IRS guidelines are strictly followed, this method can be used as a wise investment strategy. Avoiding losses potentially as high as 30% due to state and federal taxes means allowing the proceeds to go towards future investments or make improvements to the replacement property. If you are considering a tax-deferred exchange for your property, contact us if you are interested in this type of transaction!

For more information see: http://www.irs.gov/uac/Like-Kind-Exchanges-Under-IRC-Code-Section-1031

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