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Archive for March, 2010

A limited liability company — more commonly known as an LLC — is one in which the corporate structure is set up so that executive decisions rest in the hand of a small collection of partners rather than an owner, CEO, or a Board of Directors, sharing the tax burden among all partners rather than concentrating it on one specific person. As such, LLC agreements are more popular for law firms and institutions in which multiple senior members make financial and corporate decisions. LLC taxation operates differently than standard businesses or institutions, depending on the number of individuals and the set up of the operation.

A one man LLC is very rare, usually only occurring in the case of start up firms or companies. For a one man LLC, there is almost no difference in the limited liability company taxation policies in comparison to state and federal business ownership taxes. It is only when another partner or a group of partners are added to the company that LLC taxation options open up and become far more favorable. While in a one man company, all the purchases, deductions, real estate, and other factors of tax preparation and entirely shouldered by one person, the taxation of LLC firms with multiple members allow each one to claim their personal stake of the money owed or refunded. A form known as a K-1 binds all members within a partnership to their legal stake in LLC taxes.

An LLC can elect to disregard their status and file as a corporation, but this is a very rare occasion and usually only happens when one partner controls a disproportionate amount of the firm’s finances, was the sole founder, or is the only one who can meet financial demands. This rare not only because few partnerships have this imbalance in power, but also because startup LLC taxation options may be reduced or even negated if the firm files as a mutual partnership. Unlike companies that have to pay start up taxes or fees, these partnerships enjoy much greater freedom when beginning operations. There is a concern, however, that as a limited liability company purchases or starts their own separate operations, they cannot transfer existing debt or capital onto the new company without paying a premium.

The fear of LLC double taxation is a genuine concern. An individual who has not properly registered their taxation status will accrue monies owed on both their income taxes and their payroll taxes, and thus be paying double what they would owe in a standard corporate tax scheme. Tax attorneys can assist with the proper procedures necessary to avoid double taxation, so that even employees or partners classified as “self employed” do not have to risk paying as much as thirty percent of their income to both payroll and income taxation.

An LLC is a premier business agreement to benefit partners in firms or businesses to avoid corporate tax structure. Legal and financial professionals can help any company set up an LLC if they believe it would be beneficial to their ownership structure, or individual financial needs.

The advantages to being in the home based business industry are seemingly endless. Being your own boss and setting your own schedule are all nice perks. More importantly, there are many financial advantages to having a home based business.

Job security is hard to come by these days, but with a home based business you have the ultimate income security. You are in the position to make wise decisions for yourself to maintain a lucrative business. You don’t have to rely on anyone else’s managing skills and you certainly do not have to worry about being laid off. You are in control of your business’ future as well as your own.

Being in the home based business industry also gives you the opportunity to achieve financial independence. You control how your prices are set, who you do business with and how you invest. These decisions can either boost business or bring it down. By making smart and informed decisions you can put your business on a lucrative path, therefore bringing in more income. Financial independence is achieved by minimizing debt and maximizing profits.

Another huge advantage to working in the home based business industry is the short and inexpensive commute to your home office. Working from home reduces many traditional job expenses such as business attire and lunches out. Plus, you no longer have to worry about spending excessive amounts of money on gas because of a long work commute, and you won’t be late for meetings because of traffic congestion. These time and money savers do eventually add up and will put a lot more money in your pocket over time.

These are just a few of the many advantages of being in the home based business industry. The money you save with no commute, smart marketing and the ultimate job security will put you on the path to financial independence.

Leave it to the federal government to make things more complicated than it has to. If you think record keeping for your home based business is a nightmare now, wait until 2011 hits and the new tax laws take effect regarding PayPal, if they pass of course. You’ll be inundated with more paperwork than ever imaginable. This article explains.

In a nutshell, here’s how this disaster works. Starting in 2011, all income that comes through PayPal is going to have a 1099 attached to it IF you earn over $20,000 and have over 200 transactions. PayPal will be required to send a 1099 on your behalf to the IRS. Now, on the surface, this doesn’t seem like such a big deal. The problems, however, are plenty.

For starters, if you’ve been doing your taxes as you should have been doing from the start, and are making any kind of decent money (actually, anything over $600) you should have already been sending a 1099 to the feds to let them know what you’ve been earning and/or paying out to contractors. So now, the feds are going to be receiving a 1099 from the people who have already been sending them PLUS a 1099 from PayPal. That translates into duplicate paperwork.

But it’s not JUST duplicate paperwork. How is the IRS going to know what is a duplicate and what is in actuality a different 1099? How are WE going to let them know this so that they don’t end up thinking that we’re just paying part of our taxes? Oh, but the nightmares don’t end there.

Let’s say you spend more than $600 with any one vendor through PayPal, regardless of whether it’s business related or not. For example, I play a video game online where I could easily spend over $600 a year on game tokens. I’m going to now have to report THAT because of the fact that the payments go through PayPal and THEY are going to report them to the IRS. This is where it becomes messy. Now we’re not just talking business expenses. We’re talking ANY amount of money that goes through PayPal in excess of $600 a year to one vendor. Have fun with that one.

I pity the poor person who takes payments from thousands of people in excess of $600 a year (think the poor guy who owns the Warrior Forum and the WSO section) who is going to be inundated with thousands of 1099s from all the people who spent more than $600 per year. He’s going to need a team of accountants just to sort through that nightmare.

Yeah, leave it to the federal government to totally screw things up beyond belief. Anyway, that’s what you’re in for next year IF this new tax law regarding PayPal goes through.

Heaven help us all.

To YOUR Success,

Steven Wagenheim

Many successful business people would agree that networking is a very important skill to have, and this is specially true for entrepreneurs. Effective networking can help you get more customers, partners and investors for your business. Creating strong business relationships is critical for success of any business, big or small. Many entrepreneurs do not foresee the importance of business networking for the future growth of their enterprise. Business networking is a cost-effective small business marketing tool through which entrepreneurs can generate business opportunities and build new relationships.It is a way to express and share your small business ideas and therefore learn more from other people’s experience and possibly get some very useful contacts.

You can engage in business networking in your local business community or expand your network of business contacts via the Internet and share business leads and referrals. There are many business networking websites that connect people from all over the globe. Business social networks are also gaining more popularity with entrepreneurs every day since they are realizing a potential they offer for growing their business circles and promoting themselves online. Still, many entrepreneurs decide on traditional business networking events where they have the opportunity to meet people face-to-face. However, it is not enough to visit a networking group, talk to as many people as possible and gather their business cards. There are several things you can do to take a full advantage of this type of events and eventually produce wanted results-clients, resources and referrals.

Networking brings the best results if you concentrate at the appropriate networking groups or events for your particular industry, such as trade shows and conferences. When participating these events, try to concentrate on building quality relationships; its better to make couple of quality new contacts than go around giving out and collecting as many business cards as possible. Remember that first impression matters, and you only have one chance to make it a good one.

Showing a genuine interest in what your new acquaintance do before you start talking about yourself is what will spur more interest about you and your business. If you are a careful listener, other person will take notice. It starts with you remembering the name of your new contact, so do not hesitate to ask them to repeat it if you dint exactly understand the first time. From that point on, listen to what they have to say, and be prepared for the next step which is delivering your “elevator pitch”.

You must realize that anyone you meet at these occasions could become a potentially powerful member of your network. Your introduction as well as the presentation of your business should be short and concise. Introduction should encourage the other person to ask for more information. Your pitch should include an example of your work and the results you have help your clients achieve. Introductions need to be rehearsed and perfected so you can recite them at any time. You must be able to present your company in the best light when a new contact asks you the inevitable “what do you do” question.

When it comes to business networking, you should not forget the importance of follow-up. The usual practice here is to send an email or call people you met immediately after the event and express your interest to keep in contact. After a week or so, contact that person again and arrange a meeting, learn more about their business and how you can be of help to them over lunch or coffee. Networking can really help you get new business. It allows you to not only promote your products and services to others, but also to educate people about your business and enroll them into finding you new prospects and leads.

“I Can Keep It in My Head”

No you can’t! No matter what size your new business is or will be, you’ll need to set up a system to keep track of your financial status. This must be done to prove your income to the government for tax purposes at the end of the year, to prove your status to the bank when applying for a business loan and to show you your own profitability and where you might make improvements to it. As you grow and perhaps incorporate, it will become the law for you to keep good accounting records and have them regularly audited by certified accountants.

For now you don’t need that, but you might as well start out right.

The Very Least You Can Get Away With

In some situations, you don’t need to get a fancy accounting system. You can create a perfectly adequate system for accounting for your business with just a spreadsheet program, or even columned pad of paper and a pencil!

Now mind you, these situations are very rare. They include such times as:

o You sell your own craftwork part time

o You’re just testing a new opportunity

o Any other money-making venture that has yet to achieve even minimal potential and has no debt

It’s always a great idea for even these small businesses to have their own checking accounts. In other words, have a bank account set up only for your business. You can put money into it from your personal bank account (capital), but no money ever leaves it that is not related to business expenses. Therefore, you have a pretty good record of your business accounting just from your bank statements!

You may want to organize this information into lists, using your spreadsheet software or paper pad, including, but not limited to:

o Revenue Log – Every time someone pays you for your service or product, record it in this log. Almost every time your business checking account shows money coming in, one or more entries should go in your “Revenue Log”. The only time incoming cash shouldn’t go in your Revenue Log is when you have contributed cash to the business. You did not buy anything.

Your Revenue Log should include columns for:
customer name date item # and/or description quantity purchased price subtotal sales tax collected total

o Expense Log – Every time you spend money on behalf of your business, so cash goes out of your business checking account, you need to keep track of the type of expense it was. If for nothing else, this is to properly deduct them from income for tax purposes. You’ll create a list that can classify expenses into these and maybe more, categories:

Inventory – what you pay for the product you sell, or the raw materials to make it Advertising or marketing expense – website expenses, traditional media ads, related graphics and copy expenses Training – any attended classes, seminars or conventions related to your industry or running your business; books or eBooks purchased for same, Sales expenses – display cases, show entry fees, eBay fees, Pay Pal or credit card vendor charges. Postage – stamps, packaging Office supplies – paper, pencils, software, other small-cost and/or expendable items. Office furniture – desk, computer, other large-cost, long-term assets.

You can then provide your outside accountant with this information along with all your monthly checking account statements at tax time and he/she should be able to create appropriate tax returns or financial statements for you or your business.

In the past, the area around Plymouth had silver, tin and lead mines with the River Tamar being the centre for ships exporting the mined ores for over one thousand years. Those mines are now exhausted and yet still contribute to the economy of the local area. In the south west tourism brings in around three quarters of a billion pounds in business and is, therefore, a significant factor in the local economy of Plymouth. Plymouth has many tourist attractions and tourist accommodation facilities both within and nearby the city. To help service all the tourism there is of course a wide selection of bars and restaurants in the area offering employment opportunities. Plymouth is, of course, home to Plymouth Gin which is manufactured at the Black Friar distillery in Southside Street. Southside Street has been the home of the Black Friars distillery since 1793. It is now the only producer of Gin in the UK.

As for any port in the United Kingdom Plymouth has a fishing industry that stretches back across the centuries and is first recorded in the Doomsday book. Sadly, along with many other ports, the fishing industry in Plymouth virtually collapsed in the mid-1970s as European/international restrictions on fishing began to bite. Despite the increasing restrictions on fish quotas, fishing out of the port of Plymouth continues to play a part in the local economy, but on a much smaller scale. Apart from landing fish, the coast around Plymouth is well known to have a rich supply of scallops. Many local fishing boat owners supplement their income with ‘Pleasure Fishing Cruises’ for tourists. Plymouth port does not handle the volume of shipping it has done in the past. However, operating out of the Millbay docks, it is still used as a ‘roll-on roll-off’ port by Brittany ferries on their Roscoff (France) and Santander (Spain) routes, carrying both passengers and freight. The docks also provide berths for other ships and can facilitate the servicing of ships moored in Plymouth Sound.

A major employer in Plymouth is the DML group. DML was established in the 1980s to run the Royal Dockyard and, since 1997, it has owned it. The Royal Dockyard was, once upon a time, the most important and significant naval dockyard in the country. Now it is mainly in the private sector under DML with only a small part of it retained by the Royal Navy, which is now known as the ‘Plymouth Naval Base’. DML in turn is owned by three other companies; Haliburton KBR, Balfour Beatty and the Weir Group. Therefore, as a group, DML has interests in oil extraction and production, building construction, transport infrastructure and defence engineering. Whilst DML is still involved in small ship and yacht manufacturing, its main source of work comes from the refurbishment and maintenance of ships and railway locomotives. Employing nearly 5000 people and with an annual turn-over of £400 million, it is a major employer in the south west of England.

The international conglomerate BAE Systems has a site in the Southway area of Plymouth, which is used in the construction of Platform Solutions, namely Gyros and IMUs (Inertial Motor Units). Such devices are widely used by military operators to provide platform stabilisation for gunfire systems, as well as flight controls for manned and unmanned machines. Originally known as UK Sperry Gyroscopes, Plymouth has over 90 years experience in the production of inertial sensors.

Toshiba Carrier UK, on the Belliver Industrial Estate in Plymouth manufactures air conditioning units ranging from small domestic ones to ones suitable for light commercial activities. Founded in Japan in 1875, Toshiba is now better known as a manufacturer of electronics goods. It has, however, been producing air conditioning units for over 30 years now.

Bluestone is a major national construction company which has its south west base located in Plymouth. The company works mainly on publicly funded contracts such as building schools and hospitals.

Although relatively one of the smaller employers in Plymouth, Gleason’s has a long tradition of working in the town. Gleason’s is a manufacturer of cutting tools and gear, which were vital to the development of the once large ship building industries that were here. Now employing 150 people with an annual turn-over of about £20 million, it still provides tools to other local industries and companies across the UK such as Toyota, Ford and Black & Decker.

Present in Plymouth for over 20 years, Rittal-CSM, in Roborough Plymouth, manufactures enclosures and work-stations for IT equipment located in business and industrial settings. It employs some 700 personnel and exports its products world-wide and has an annual turn-over approaching £70 million.

At the Tamar Business Park, Plymouth has the Information Technology Transfer Centre. The function of the centre is to develop and apply digital technologies in innovative ways, thereby encouraging ‘high tech’ businesses to locate themselves in the Plymouth area. It specialises in finding ways to develop the use of imaging technology such as 3D scanning and rapid prototyping.