Are You Connecting The Dots In Your Business?

When you are operating your business there are many dots to connect from a legal and tax point of view to be in compliance

. Many times business owners are not connecting the dots and this can create big issues down the road with both legal and tax issues. A common example is having an entity for your business, and you are writing off taxes in the entity and your accountant is not on board with your new strategies. That is a big problem.

Let me share with you the big picture on connecting the dots and mistakes to avoid:

1. Your CPA on board with your entity strategy. Unfortunately, many business owners establish an entity first and do not speak with their accounting firm until the year is mostly over to determine what they may need to do with regards to payroll and end of the year taxes.

2. Your attorney on board. There may be some legal documents that should be completed after you form the entity for your business. Those may include a buy sell agreement if you have a partner. The most business lawsuits I have seen over the years are not from outside parties, but from partners suing each other. A buy sell agreement is like a prenuptial in marriage, where you determine what will happen if the relationship does not work out while the honeymoon phase is going on. Other agreements include a shareholders agreement, living trust for estate planning, independent contractor, employment, non-compete, non-disclosure to name a few. An independent contractor

agreement is huge to help you make the argument the independent contractor is not an employee.

3. Structure items should be organized. Those include completing your corporate or LLC record book. If the business had a DBA name did you connect that to the new entity? Did you open a new bank account for the new entity?Do you have a business license for your business? Many cities and counties have stiff fines and penalties if you do not have a local business license. You must know the rules.

4. Your financial budgets. Do you have a budget for yourself personally? If not, this can be the kiss of death to your business. If you do not have a comprehensive personal budget, the tendency is to take more money out of the business to over compensate for your lack of a personal budget.

5. Your intellectual property including websites, tradenames, trademarks. First, you must make sure your websites are in compliance with the correct legal documents included privacy policy and disclaimers. Next, have you considered going through the process to trademark and protect your name? The good news is that can develop into value because you invested the money to protect your intellectual property. The down side is now you have to protect your trademark and do a search every year to determine if anyone is violating your mark and go after them to stop using it. That can become very expensive. More important at a minimum is to make sure you are NOT violating any other trademarks in your content or posts. If you leave off the registered marks for a company or brand, your company may be directly liable.

6. Your estate plan. Do you have your ultimate exit strategy in place if something happens to you? Will your family be left holding the bag because you do not have the loose ends tied up? Is the ownership of your LLC tied to your living trust? Do you only have a living will? You want to avoid probate if something happens to you.

Are you operating your business with one strategy but your CPA is not on board? Does your team agree with your overall approach? How many dots have you connected in your overall business? Congrats to you if all the dots are connected. You are one that can sleep better at night knowing things are organized. If you have very few dots connected this may be a great wake up call to make these items and priority for you and your family!

by: Scott Letourneau

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