b2ap3_thumbnail_shutterstock_130099715.jpg2018 is a year in which to either initiate or revisit the issues of business formation. The stock market is at an all-time high and new tax legislation has been passed. For individuals in business, it is essential to respond to the new legislation with thoughtful business entity selection and careful transaction negotiation, irrespective of government quagmires. This is the case whether you are the owner of a single member LLC or an executive in a traditional corporation. Whatever your personal business needs in planning for the effects of the new tax code, rely on the knowledge of an experienced Fremont business law attorney.

Limited Liability Corporations Are Forecasted to Receive Favorable Treatment

If you are currently receiving income as a traditional employee or freelancer in your capacity as an individual, it may be advantageous to consider registering a Limited Liability Corporation (LLC) with the California secretary of state. It is possible for even one person to register an LLC and receive business income through the entity.  In this scenario, the registrant / business owner is typically classified as a “single member” owner of the LLC.  Importantly, an LLC is afforded status as a “pass-through” entity with regard to the taxation of income. Income earned by a pass-through entity is not subject to taxation when the income is passed through from the business to the individual. This is different from income earned by a traditional corporation, which is taxed once on the way out from the business to its shareholders, and then again at the individual level. 

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b2ap3_thumbnail_Untitled-design-31.jpgWith the passage of the Tax Cut and Jobs Act and the Healthcare mandate in limbo, it is a difficult time to make big decisions concerning business, finance, and health in the United States. Whether you are already engaged in commerce or planning your entry into business operations (in California or anywhere in the U.S.), you need to know where you stand financially. That goes for both the present and the future. Taxation is obviously a key part of a business’s financial outlook. As such, it is imperative that you utilize the type of business entity that best suits your individual and business needs and goals with regard to income earned over time. General partnerships, traditional corporations, and the increasing popular and oft-mentioned “limited liability” entities are different in important ways. In discerning the entity that is best for you and your business, rely on an experienced Fremont business law attorney.

A Limited Liability Business Entity is a Pass-Through Business Entity

You may have heard of or are already familiar with “limited liability” entities, such as the Limited Liability Company (LLC) and Limited Liability Partnership (LLP). In such entities, income is not taxed at both the business level and the individual level.  Rather, income earned by the business “passes through” the entity to the individual without being subject to taxation. The individual’s income is subject to taxation.  However, the reporting of income and calculation of taxation on pass-through income factors in business expenses and losses. Depending on the complete picture of profits and losses specific to a given limited liability entity, pass-through income may not be taxed as highly as if the income were employment-based, for example, and not passed through from entity to individual. 

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b2ap3_thumbnail_Untitled-design-25.jpgIf you are active in commerce, whether as a part of a sizeable corporation or small business, or merely planning an entrance into the business world, you need to understand how the proposed Tax Cuts and Jobs Act will affect your bottom line. The percentage of tax your business will pay, or the percentage that you as an individual will pay on income passed through a business entity, bears on the scale and scope of your yearly operations. In planning for your financial future in business, count on an experienced Fremont business law attorney.

The Tax Cut and Jobs Act Intends to Permanently Lower the Corporate Tax Rate

If you are on the board of a successful large corporation, you will likely benefit from the Tax Cut and Jobs Act. This is because the legislation intends to permanently lower the corporate tax rate from 35% down to 20%. The President has alluded to a compromise in the 22% range, but this remains to be seen. Either way, with the bill in the final conference-related stage, traditional corporations could soon benefit from a substantial decrease in taxes owed. The philosophy behind this at least initially deficit-increasing measure: to encourage business to remain in the U.S., investing savings in expanded domestic operations and the jobs that would propel them, rather than looking abroad.

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Fremont business law attorneyConfidentiality agreements can protect a company’s secrets, ensure an employee knows what is expected of them, and they can mitigate against problematic employees, right from the date of hire – but are they ever a violation of the federal labor law? If so, when, why, and how? Learn the answers to these questions, and discover how an experienced business law attorney can protect your company’s interest with help from the following information.

Confidentiality Agreements Must Meet Certain Criteria

Although employers are within their rights to request a confidentiality agreement from their employees, there are certain requirements to which they must adhere. For example, a confidentiality agreement cannot be so restrictive that it violates an employee’s rights – and that includes their rights to whistleblower protections.

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California small business lawyerWhen small businesses start up or begin to grow, they may have limited funds to hire outside help. Some may find relief through a telecommuting employee – or someone that works remotely. However, this option is not right for every business or every business owner. Learn more about hiring employees for telecommuting positions, including how to discover if it may be the appropriate choice for your small business.

The Challenges of Hiring New Employees

Small businesses that need to hire outside help may find that wages, along with the additional costs that are typically associated with hiring physical employees, are too much of a burden to bear. Hiring physical employees can also mean moving to a physical location for those that have previously worked from home. Add in the stressors of ensuring that a business is adequately protected from discrimination issues, harassment issues, and other legal matters, and the hiring of a physical employee may be downright impossible for some business owners.

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Willett Law Firm

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Fremont, CA 94538

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