If a business with more than one owner has not filed state paperwork to become a corporation or LLC, then it is considered a partnership. Partnerships are the simplest, least expensive structures for business ownership by more than one person. But there are some things you should know before finalizing your business plans. For instance, there are two basic types of partnerships: general partnerships and limited partnerships. In this article The Jayson Law Group LLC will cover some of the basic facts of both types of partnerships. Continue reading →

When creating the business organization to best suit the needs of the business and the owners, it is important to be informed. At The Jayson Law Group LLC, we have noticed that one of the most frequent areas of uncertainty is whether one should be operating a business as a Corporation or a Limited Liability Company (LLC). This article hopes to demystify a few points of major concern here.

Why an LLC?

Most small businesses tend to gravitate towards LLC organization because of the simplicity of organization and flexibility of limited protection. For example, businesses holding property that is likely to increase in value especially prefer LLCs because of the tax laws written for LLCs and property ownership. With C corporations, shareholders and the corporation are subject to tax on the increased property value when the property is sold. But, in contrast, LLC members, as well as S corporation owners, are only taxed once, because the business’ tax liabilities pass to them; the LLC is not taxed on its income.

In addition, LLCs are what is called, “member managed.” This means that one or more of the owners of the business also play active roles in the day-to-day management of the business. But this means that in most situations, unless the operating agreement says otherwise, if one member leaves the LLC or becomes unable to manage the LLC, the business dissolves. Unless there is a buyout provision in the operating agreement, the remaining members must create a new LLC in order to continue the business.

Why a C Corporation?

There are several other factors that may lead owners to favor organizing their business as a corporation. For instance:

If you intend to provide fringe benefits to owners

In a corporation shareholders (owners) are often employees. The corporation can hire an owner as a CEO, pay a tax-deductible salary, and provide fringe benefits as well. The corporation can deduct the cost of benefits and they are not counted as taxable income for the employee. LLCs can only deduct a portion of benefit premiums.

If you intend to offer stock options and stock bonus incentives to employees

LLCs do not have stock to offer employees. While employees can have a membership interest in an LLC, the process can be difficult and unattractive. So, if you plan on offering partial ownership to employees as incentives or bonuses, a corporation may be better suited to your needs.

In addition to the C Corporation, there is the S Corporation. Self-employed owners, due to complex self-employment tax laws, often adopt a S Corporation. S Corporations will be discussed and reviewed in full in a later article. Check back with The Jayson Law Group LLC for more information on S corporations and self-employment tax laws.

Our New Jersey business attorneys try to act as a resource for business operation and organization. We offer a wide variety of business and legal expertise and services. Click here or call us today at (908) 258-0621 for a consultation with one of our experienced and knowledgeable Union, NJ business lawyers.

Thinking about entrepreneurship; already an entrepreneur? The Union, New Jersey business lawyers at The Jayson Law Group, LLC have some things for you to consider. There are several different types of business entities available in the state of New Jersey: a corporation, a DBA or sole proprietorship, a partnership, and a limited liability company. A limited liability company, or LLC, is a business entity that utilizes characteristics of both a corporation and a sole proprietorship. Like a corporation, the owners of an LLC are not personally liable for company debts. Like a sole proprietorship, an LLC has operating flexibility and a “pass through” entity for tax purposes. Meaning that the LLC does not directly pay taxes on its profits, but rather profits and losses are “passed through” to the owners who must then pay tax on their share of the LLC income. Ultimately, an LLC can offer personal protection, reduce taxes, and has fewer formalities than a corporation. Continue reading →

Welcome to Part 3 in The Jayson Law Group LLC’s look at the new derivative suit law passed by the New Jersey legislature.  Part 1 looked at the requirements placed on shareholders to bring a derivative suit.  Part 2 looked at the court’s involvement in the derivative suit.  Part 3 will be examining which shareholders can bring a derivative suit by reviewing N.J.S.A. 14A:3-6.8.

Section N.J.S.A. 14A:3-6.9 makes N.J.S.A. 14A:3-6 et seq applicable to any action brought in state or federal court if the corporation made them applicable through its articles of incorporation. Continue reading →

In The Jayson Law Group LLC’s previous post, we focused on the requirements of the shareholder in commencing a derivatives commercial litigation suit.  This post focuses on the involvement of the courts in a derivative suit under the new law, specifically N.J.S.A. 14A:3-6.4 and N.J.S.A. 14A:3-6.5. Continue reading →

A Shareholder derivative suit occurs when a shareholder of a corporation brings suit against that same corporation.  A shareholder brings a derivative suit when the shareholder or shareholders are attempting to prevent or remedy a perceived wrong committed by the corporation.  On April 1, 2013 New Jersey updated its Shareholder Derivative Statute when Governor Christie signed New Jersey Assembly Bill A3123, codified as N.J.S.A. 14A:3-6 et seq.  The Bill went into effect upon its signing. Continue reading →

Facebook, Google+, LinkedIn, YouTube, Blogging, Twitter, Instagram, the list goes on.  We live in a digital age and people share their information with the world.  The use of social media by people is ever increasing.  However, thanks to a recent law enacted by the New Jersey Legislature and signed by Governor Christie, Assembly Bill 2878 (A2878), employees will not have to share this information with their employers.  The bill takes effect December 1, 2013. Continue reading →

New Jersey corporations and businesses are required to hold yearly shareholder meetings.  As per N.J.S.A. 14A:5-1, these yearly meetings can be held anywhere allowed by a corporation’s bylaws.  If a corporation’s bylaws do not state where the shareholder meeting should be held, or the bylaws do not dictate how it should be decided where the shareholder meeting should be held, then that meeting shall be held at the corporation’s registered office. Continue reading →

In recent years, the Securities and Exchange Commision (SEC) has begun to take a more proactive approach in ensuring transparency among major financial entities. This proactive approach was established in The Dodd-Frank Act. One of these reforms has been to create legislation that requires the institution to provide disclosures about resource extraction payments. This legislation is designed to prevent fraud in the world of alternative investments.

If you are considering applying for a contract with a certain governmental entity, then you may wish to meet with a Union New Jersey Business Lawyer. A New Jersey Business Lawyer can help you to understand the terms of the agreement. Our office also serves Elizabeth and other nearby North Jersey towns and cities.

Any entity that engages in the production of commercial oil or other natural resources will be required to abide by the new legislation. The SEC will now require that these entities make reports on a cash-basis. These entities will need to completely redo the way in which they do their accounting.

Those who wish to ensure that they also abide by this disclosure method may wish to meet with a Business Lawyer in Union or Newark New Jersey. A Business Law attorney can help you to see whether your accounting methods suffice for the new SEC legislation. A Newark Business Law attorney can also work to explain the specific ramifications of this legislation for your commercial oil enterprise. It will be important that you understand the law and abide by it in the future, otherwise you may face a hefty fine from the SEC. In some cases, the SEC may even find that a lack of disclosures constitutes grounds for a charge of fraud. You do not want this to happen to your commercial resource enterprise.

An attorney from The Jayson Law Group LLC can help you to figure out ways to make disclosures and continue to have a competitive advantage. One of the major concerns of this legislation is that oil produces will not be at a competitive disadvantage for sharing certain information. If you prepare ahead of time, this does not have to be you. Just because you make disclosures to the SEC does not mean that you have to lose out on clients to all of your competitors.