As a small business owner, there are many legal considerations that you will need to be aware of in order to protect your business and your personal assets. Here are the top 5 tips that a lawyer can give to a new small business owner:
5 Tips for Small Business Owners:
- Choose the right business structure: The type of business structure that you choose will have a significant impact on not only on the legal aspects of your business, but also the financial. There are several types of business structures to choose from, including sole proprietorship, partnership, limited liability company (LLC), and corporation. Each type of structure has its own advantages and disadvantages, so it is important to consult with a lawyer to determine which structure is best for your business.
- Understand your obligations under the law: As a small business owner, you will have a number of legal obligations that you need to be aware of, such as compliance with labor laws, taxes, and other regulations. It is important to consult with a lawyer to ensure that you understand your obligations under the law and that you are in compliance with all relevant regulations.
- Protect your intellectual property: Small business owners often have valuable intellectual property assets that need to be protected, such as trademarks, patents, and copyrights. A lawyer can help you to understand the different types of intellectual property and how to protect them, as well as how to register your intellectual property so that it is legally recognized.
- Create a strong contract: Contracts are an essential part of any business, and it is important to have a lawyer review all of your contracts to ensure that they are legally binding and enforceable. A lawyer can also help you to understand the terms and conditions of your contracts, and can help you to negotiate any disputes that may arise.
- Have an exit strategy: Starting a small business is a significant investment of time and money, so it is important to have a plan for exiting the business if things do not go as planned. A lawyer can help you to develop an exit strategy that will help you to protect your assets and your business in the event that you need to close or sell your business.
In conclusion, starting a small business can be a challenging and daunting task, but with the right legal advice, you can protect your business and your personal assets. By following these top 5 tips, you can ensure that your small business is legally compliant and that you are well-prepared for any legal challenges that may arise. If you are thinking of starting a small business, it is important to consult with a lawyer who can help you to navigate the legal landscape and to ensure that your business is successful. Contact the Brenden Kelley Law team at 216-644-3359 today.
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S-corporations and C-corporations are two different types of business structures that are recognized under U.S. federal tax law. Both types of corporations provide limited liability protection to their shareholders, which means that shareholders are not personally liable for the company’s debts and liabilities. However, there are some key differences between the two types of corporations that can have a significant impact on how the business is taxed and operated.
Differences between C-Corporations & S-Corporations
One of the main differences between S-corporations and C-corporations is the way they are taxed. C-corporations are considered to be separate entities from their shareholders, and they are subject to corporate income tax on their profits. In contrast, S-corporations are considered to be “pass-through” entities, which means that the company’s profits are passed through to its shareholders and taxed at the individual level.
This pass-through taxation can be a significant advantage for S-corporations, as it can help to avoid the “double taxation” that can occur with C-corporations. For example, if a C-corporation earns $100,000 in profits, it would be taxed at the corporate level, leaving $70,000 after corporate taxes. If the company then distributes the remaining $70,000 to its shareholders as dividends, the shareholders would then have to pay personal income tax on those dividends. With an S-corporation, the $100,000 in profits would be passed through to the shareholders and taxed at the individual level, avoiding the additional corporate tax.
Another difference between S-corporations and C-corporations is the number of shareholders they can have. S-corporations are limited to 100 shareholders, while C-corporations can have an unlimited number of shareholders. This can be a significant consideration for companies that are planning to go public or that have a large number of investors.
There are also some restrictions on the types of shareholders that S-corporations can have. For example, S-corporations cannot have non-resident alien shareholders, and they cannot have more than one class of stock. This can limit the flexibility of the business in terms of raising capital and issuing stock options.
In terms of flexibility and management, C-corporations can have a board of directors, while S-corporations cannot. However, S-corporations can have more flexibility in terms of profit distribution. Unlike C-corporations, S-corporations are not required to distribute profits equally among shareholders, and they can choose to retain profits in the business if they wish.
Complexity and Disadvantages
One of the main disadvantages of S-corporations is that they can be more complex to set up and maintain than other types of business structures, such as sole proprietorships or partnerships. They are also subject to more regulatory requirements, such as holding annual meetings and keeping detailed records of the company’s financial and operational activities.
C-corporations also have their own advantages and disadvantages. They are considered more stable and with more prestige. They can also raise capital more easily and attract more investors, but it comes with the trade-off of double taxation.
Choosing Which Corporation
In conclusion, whether to choose an S-corporation or C-corporation depends on the company’s specific needs and goals. S-corporations can be a good option for small businesses that want to avoid double taxation and have a relatively small number of shareholders. However, they may not be the best option for companies that are planning to go public or have a large number of shareholders, as they have restrictions on the number of shareholders and types of shareholders they can have. C-corporations, on the other hand, may be a better option for larger companies that plan to raise capital and have more flexibility in terms of profit distribution and management structure. It’s important to consider all aspects of each type of corporation, weigh the pros and cons, and seek legal advice to determine which structure best suits your business. Please call Brenden Kelley Law at 216-644-3359 so that we can assist you starting your business.
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Starting a new dental practice is an exciting time, but it’s important to ensure you’re in compliance with all relevant laws to prevent legal issues down the road. As a dentist, you must comply with all consumer laws, including those specific to medical professionals. Here are some of the most important issues to consider.
Consent: What You Need to Know
One of the most important issues for dentists is obtaining informed consent from patients before performing any dental procedure. Informed consent requires that you provide detailed information about the proposed treatment, viable alternatives, and any foreseeable risks of the procedure. You must answer any questions and get the patient to sign an informed consent form. Failure to obtain informed consent can result in legal action. If you’re unsure of the requirements where your practice is located, consult a dental lawyer.
Dental Patient Rights
As a dentist, you must uphold dental patient rights, as set forth by the Ohio licensing board. This includes standards related to care, reporting, records, and other dental patient rights issues. Any violations of these rights can lead to sanctions and lawsuits.
HIPAA: Protecting Patient Data
HIPAA sets the standard for protecting sensitive patient data, including dental records. This means that you must take the necessary steps to protect physical and digital records and information regarding patient diagnosis and treatment. Patient data must be kept confidential except when given written permission to disclose it to others, such as insurance providers.
Dental Malpractice and Clinical Negligence
Dental malpractice lawsuits can arise when a dentist fails to follow the generally accepted standard of care when treating a patient. This can result in nerve injuries, failure to diagnose oral cancer or periodontal disease, and wrongful tooth extraction. If you’re facing a dental malpractice lawsuit, consult a malpractice lawyer immediately. Clinical negligence lawsuits can be costly and complicated cases to resolve, even though payouts should ultimately be covered by malpractice insurance.
Associate Agreements: What to Look Out For
When considering associate agreements, carefully assess the merits of the offer and scrutinize for any limiting clauses, such as transfer of ownership of patient charts, non-solicitation provisions, and non-compete clauses. If you’re unsure of the potential legal implications of an offered associate agreement, discuss the contract with an attorney.
Practice Buy-Ins and Partnership Agreements: Know What You’re Getting Into
Partnership agreements will dictate your tax burden, legal liability, management responsibilities, and many other factors of your business. It’s important not to sign such a document unless you are sure that all the legal consequences are in your best interests—or at the very least that you are fully informed of their consequences.
Running a dental practice comes with a variety of legal issues that need to be carefully considered to avoid legal action. From obtaining informed consent to protecting patient data, upholding patient rights, and dealing with malpractice lawsuits, it’s important to work with a dental lawyer who can help you structure your practice to avoid problems and assist. Please call Brenden Kelley Law at 216-644-3359 so that we can assist you.
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One of the most crucial decisions when opening a dental practice is choosing the right entity and tax structure. What may seem like a simple task at first can quickly become overwhelming. There are many nuances and considerations that make it nearly impossible to select the default best choice. In this blog post, I have highlighted some practical options for small dental practices with one or two owners.
Avoid the Liability of Sole Proprietorships and General or Limited Partnerships
One of the easiest entities a person can form is a sole proprietorship. However, it offers zero protection from personal liability. That means if the business fails you’re personally on the hook. General and limited partnerships also have zero protection from personal liability.
Limited Liability Companies and Corporations afford the most protections.
For personal liability protection, it is best to form either a limited liability company (LLC) or a corporation. Both entities shield the owner(s) from the acts or omissions of the entity’s employees and other business operation liabilities. LLCs and corporations are both good choices when it comes to personal liability protection. However, they have different corporate formalities that must be followed. Corporations have more formalities, such as requirements to maintain minutes and have certain meetings, while LLCs do not have such obligations.
Understand the Tax Implications
When it comes to taxation, the entities have different requirements and implications. A partnership is a pass-through entity, which means all income, losses, and credits flow through to the partners’ individual income tax returns. However, partnerships must file a tax return even though the entity itself is not subject to tax. A C corporation is subject to double taxation, which means the corporation is taxed on all the business earnings, and those earnings are taxed again when paid out as dividends. An S corporation is subject to only one level of tax and can reduce the employment tax liability of the owners by managing their reasonable compensation in relation to the S corporation’s net-profit distributions.
For LLCs and corporations, the entities can be taxed as either a C corporation or an S corporation. However, if a dentist chooses a corporation as their entity, they must understand the corporation’s limitations in terms of tax flexibility from initial formation through to the sale of the dental practice.
Choose What Works Best for You
While there is no right or wrong answer when it comes to choosing the right entity and tax structure for your dental practice, there are clear pros and cons to each. Your choice will depend on various factors, including the number of owners, the number of dentists, business objectives, personal liability protection, and tax savings.
Consulting with an attorney to evaluate the options is a crucial step in making the best decision for you and your practice. Call our firm today at 216-644-3359 so that we can help you open your dental practice and protect your interests.
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