Covering Your Assets- Important Formalities

If you have a Corporation, chances are at some point you heard or read information about why you should incorporate your business. The most important reason is to separate your personal assets from your business assets. Corporations are considered a first line of defense. Another reason is the tax benefits. There are numerous deductions available to Corporations that are not available to Sole Proprietorships, for example.

But here’s the thing- if you have not taken the steps to complete certain corporate formalities, your assets are like low hanging fruit just waiting to be picked.

Hopefully your business will never be sued or have to endure an IRS audit. We assure you it is not our intent to frighten you with this post. We simply want to remind you again about these formalities as a preventative measure.

Let’s review a couple of these formalities:

Issuing Stock- Perhaps you and family members or friends are “said owners” of the business. However, did you prepare the Resolution(s), fill out stock certificates and document it in your corporate records? If not, you could have a serious problem down the line.

Here’s why- if your business is sued and there’s no formal record of having issued stock, you have given the court evidence to rule that it’s not a “valid Corporation”. A valid Corporation would have shareholders. If it’s not valid, how can you argue that a corporate veil exists?

SPECIAL NOTE: Nevada allows you to issue stock for services, property, capital, real estate or anything! It’s up the Directors of the Corporation to decide. Per the Secretary of State “their decision is final”.

Maintaining Corporate Records- Keeping your corporate records updated is a must for preserving the corporate veil. Your corporate records are like the “life story” of actions that were of major business consequence to the Corporation. The Directors and Officers are merely conducting business on behalf of the Corporation and the records should reflect this.

For example, have you taken out a business loan? If so, the Corporation should have held a Special Meeting to discuss taking out the loan. Minutes of the meeting should have been prepared, signed and placed in the Corporate Record Book. This helps prove it was the Corporation and not you personally that decided to take out the loan.

If your business is involved in a lawsuit and you have no corporate records, a court can determine that the Corporation was simply an “Alter Ego” of yourself; that is was not acting like a true Corporation; therefore, the corporate veil may be pierced.

We often hear “It’s a one-man operation. It’s just me so I don’t need a record book”. You still need to keep records even if it’s just you.

IRS Audits and Corporate Record Keeping

According to Sara Zaro, EA with Elite Bookkeeping & Tax Services,
“When the IRS conducts an audit on a Corporation, they will ask for the corporate record book. If you don’t have current records, the IRS can determine that your business is operating as a Sole Proprietorship and change the tax rules. In some cases it has cost the business thousands of dollars.”

You should consider your tax benefits as an asset that also needs to be protected.

Additional Note: While LLC record keeping isn’t quite as stringent, it is recommended that you still maintain similar-type records for anything of major business consequence.

If you have not tended to these formalities, you should do so now. The longer you wait the more challenging it will be to catch up.

We can provide you with a Corporate Record Book and assist with updating your records. Just give us a call and we’ll be happy to help.

Corporation Annual Minutes

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Asset Protection and Liability Insurance

When starting and operating a business, asset protection is of the utmost importance. You don’t want to spend years building your business only to be wiped out from a lawsuit.

No matter what type of business entity you’re using, the next level of asset protection should be liability insurance. This is for a couple of reasons. First, liability insurance usually provides competent counsel to defend any lawsuit. With the enormous cost of litigation these days, even if you’re successful at winning, you may lose an exorbitant amount of capital defending yourself.

The other reason is that the face amount of the liability coverage is the first amount paid in the event a judgment is entered against you. However, you need to be sure you read and understand any restrictions and limitations when obtaining your liability policy.

Why Incorporate Your Business
http://www.americancorpenterprises.com/why.html

Other recommended reading regarding your corporate records and asset protection.
http://americancorpenterprises.blogspot.com/2011/12/penny-savedcan-be-fortune-lost.html?spref=bl

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Using an LLC for Real Estate Investing

With the fallout of the real estate market the number of foreclosure sales is increasing dramatically. Many of those purchases are being made with the intent of renting the property rather than for owner occupancy.

LLCs are today’s number one choice for holding title to real estate. Owning either residential or commercial real estate can subject you to significant risk of a lawsuit. As we all know, accidents can happen any time. If someone gets seriously hurt on your property, you may find yourself being sued for damages.

One of the most common mistakes people make is assuming that since they have insurance that they are protected. Sometimes judgments can exceed the insurance coverage, or in some cases the insurance is denied. It’s important that you read your insurance policy thoroughly and understand the limitations.

The LLC is designed to protect your personal assets in the event of a lawsuit. You want to make sure that in the event of a lawsuit that the LLC is the defendant and not you personally.

Here are some things to keep in mind:

If you haven’t done so already, you may want to consider forming an LLC to hold title to your investment real estate. Remember to “not carry all of your eggs in one basket”.

You must sign a deed conveying the real estate to the LLC and record the deed in the county in which the property is located if you wish to transfer the property.

Make sure you are adequately covered with your insurance policy and that the LLC shows as the insured. Remember, the LLC is not you and you’re not it.

If you transfer the property into an LLC but you are making improvements on the property and an injury arises because of the work, you could be sued personally. You may want to hire a licensed contractor for things such as construction repairs, electrical work or plumbing, etc.

If you do hire someone to do significant repairs on your property, be sure to check them out thoroughly beforehand.
For information and assistance regarding forming an LLC, give us a call toll free at (888) 274-1130.

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

The Importance of Corporate Record Keeping

Contributed by Deanna Kelly, Office Manager

Corporate Record Keeping is very important. It’s the difference between being a Corporation or not. At the least you would need Minutes for an Annual Meeting. Minutes are very simple: Who, What, When, Where, Why.

Who was at the meeting?
What kind of meeting (Special or Annual)?
When was the meeting?
Where was the meeting?
Why did you have a meeting (what was discussed)?

You write or type this out and place it in your corporate book behind the Minutes tab. Minutes should be in chronological order.

Day to day business does not require a meeting or minutes. Anything outside of day to day minutes (ie. purchase of property or vehicle by the corporation) requires a meeting, minutes and a resolution. All to be filed in your corporate book.

You should have a meeting each year to elect new officers & directors. The resulting minutes should be filed in the corporate book as discussed previously.

Even though LLC record keeping requirements are not as stringent as for Corporations, you should still maintain a Company Record Book. If you don't have a Record Book for your Corporation or LLC, we can provide one for you. Just give us a call toll free at (888) 274-1130.

FYI we have Annual Minutes forms on our web site that you may print out and complete. To find them go to our web site  at http://www.americancorpenterprises.com and click the link for our Resource Center.

Read our previous post about Corporate Record Keeping and Asset Protection.

Also see IRS Audits and Record Keeping http://elitebookkeepingtaxservices.blogspot.com/2013/05/irs-audits-and-record-keeping.html

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Four IT Security Trends to Master Corporate data is falling into the hands of hackers at an alarming rate. Here are four ways to protect it.

Four IT Security Trends to Master Corporate data is falling into the hands of hackers at an alarming rate. Here are four ways to protect it. Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com.At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Asset Protection Trusts

Contributed by Tracey Padilla, Pres.

I recently had the opportunity to attend some workshops on Estate Planning by Cassandra Jones, Esq., who is a Strategic Partner for the Business Achievement Center. One of the topics she spoke about was using a Nevada Asset Protection Trust.

According to Cassandra, Nevada is one of the best states when it comes to Trust Law, which is why so many attorneys who specialize in Asset Protection continue to form Corporations, LLCs and Trusts here. In order to establish an Asset Protection Trust in Nevada, you need to have an asset located in the state, which can be a bank account.

Another important thing that she mentioned is if you live in Nevada, have assets valued at $20,000, but do not have an Estate Plan, your estate can be subject to probate.

The law firm of Houghton Jones, A. P.C. offers Estate Planning as well as Business Law and Family Law. Furthermore, their firm is one of only a handful in this area that offers a particular level of Estate Planning components.

For assistance with Estate Planning in Nevada, or if you are interested in setting up an Asset Protection Trust in Nevada, contact Cassandra directly via http://hou2plan.com/.

For additional resources visit http://www.BusinessAchievementCenter.com

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com.
At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Warning- Business Identity Theft On The Rise

We frequently hear stories about people who were victims of identity theft. Less often in the media - but unfortunately on the rise – is business identity theft. The thieves look for businesses that have not kept up their annual filings that are either in default or revoked status. They submit annual filings or reinstatement documents and change key company information in order to take control of the business.

As with individual identity theft, these thieves then get credit cards in the company name or establish lines of credit with banks or other vendors- all if which can be devastating to a business.

This is one of the reasons that we suggest that companies file a formal dissolution with the state, file a final tax return and close all open lines of credit for their business.

The National Association of Secretaries of State (NASS) has been working closely with The Identity Theft Protection Association (ITPA), which recently launched the website www.BusinessIDTheft.org to combat this growing threat.

The website has information about ways that theft can occur, prevention information, resources, victim assistance and more.

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

A Penny Saved...Can Be A Fortune Lost

It wasn’t that long ago that we were being bombarded with news updates about the horrific Deepwater Horizon oil spill (a.k.a. BP oil disaster) that occurred back in April of 2010. In January 2011 the Whitehouse oil commission released a report wherein they blamed BP and its partners for a series of cost-cutting decisions as contributing to this catastrophic accident.

One of the so called cost-cutting decisions was to not use a diagnostic tool to test the strength of the cement. What was the cost of this tool? The cost was a tiny fraction of what they lost in oil, paid for cleanup, what they have paid to settlements and what they will pay for future settlements. That’s right- a tiny fraction!

How does this relate to you? Do you have a Corporation but no Corporate Record Book? It’s all too common these days for people to want to start a Corporation and put off obtaining a Corporate Record Book to cut startup costs, figuring that they’ll get to it later or they think they can get by without one.

About 60% of closely held Corporations are in jeopardy of having their corporate veil pierced because they haven't tended to the formalities of issuing stock or have not maintained corporate records.

A couple of years ago a gentleman called to inquire about the cost of setting up a Corporation in Nevada. He mentioned that he did indeed want a Corporate Record Book with his order. He said he had recently lost a lawsuit with a Corporation he had in another state that wiped him out. He stated that the court ruled against him because he had no Corporate Record Book and had not issued stock. He vowed to do it right this time.

Here again is another cost cutting example that cost many times more in the long run. What is the cost of a Corporate Record Book? It varies depending on where you purchase it, the quality, etc. but it most definitely was a small fraction of what this gentleman lost. Typically they are less than one hundred dollars.

Fortunately, Nevada offers greater protection for Corporations, but if you cannot prove you're a real Corporation with shareholders and not just an alter ego of yourself, your assets could be at risk.

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com.At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Nevada LLC Benefits

There are many benefits of forming a Nevada LLC. Many entrepreneurs and business owners consider using this type of LLC instead of many other state LLC options. Once you learn more about the advantages, you may find that forming a Nevada LLC would be in the best financial interest of your business.

Privacy

For many business owners, privacy is a very big deal. With a Nevada LLC, this is not something that you have to worry about. When compared to other states, Nevada is much better at protecting the identity and maintaining the privacy of LLC owners. In short, this means that your name, address and industry type are not going to be made public record.

No State Tax

In the state of Nevada you can choose to have your company taxed as a partnership, as opposed to a corporation. In turn, this allows you to save a lot of money on taxes. In addition to the ability to avoid state tax, as a member of a Nevada LLC you will not have to pay self-employment tax. When compared to other states, Nevada is well ahead of the game in terms of benefiting the company. Many states have very high tax rates and cannot compare. There is also no tax for the following:

•corporate tax

•personal income tax

•franchise tax on income

•gift tax

•inheritance tax

•unitary tax

•admissions tax

Protect your Assets

Just like most states, when you form a Nevada LLC you are keeping your personal and business assets separate from one another. Creditors are unable to come after your personal assets, should something go wrong with your business.

Also, a Nevada LLC can be formed with a single member – there is no need for multiple partners. For an entrepreneur looking to get started on their own, while taking advantage of the many other benefits, this is a big benefit.

Low Minimum Requirements

Some states require that LLCs meet many standards and requirements. This is not the case with Nevada. One of the most important requirements to be aware of is that you do not have to live or do business in Nevada in order to open an LLC within the state. In addition, you have the ability to file all the proper paperwork by phone, fax or email. The process is very easy.

You may need some assistance when it comes to filing the proper documents, but the ability to open an Nevada LLC from other parts of the world is quite possibly the biggest benefit. Finally, Nevada does not have any cash restrictions that you are required to follow. For example, stock can be issued for services, property, or cash, all at the discretion of the LLC.

Establishing your LLC in Nevada will give you the chance to take advantage of the many benefits the state offers. It is important to consult with an attorney or financial planner to be sure that your documents are in order. However, it is a simple process to go through.
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Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Charging Order Protection for Nevada Corporations

The right of a judgment creditor to collect against the assets of a judgment debtor varies depending upon the nature of the assets. Some asset types – primarily liquid assets - can be directly attached, while other asset types have limitations on attachment by the judgment creditor. Assets that cannot generally be directly taken by a judgment creditor usually provide for other recourse, such as potential foreclosure and forced sale of assets, or the imposition of a “charging order” against future income of assets.

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Liability Protection

An affordable and very effective method to shield your assets from attack is to transfer your rental property to a Limited Liability Company (LLC). Holding title to investment property through an LLC limits the liabilities of the business to only those assets held within the LLC. In the same way as shareholders of a corporation are shielded from liability, a properly formed LLC will guard its owners from lawsuit liability, including liability from acts of its employees and agents.

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Start Your Own Corporation

Should your small business become a corporation? This is a question you need to ask during the start-up and evolution of your company. Learn what you need to know about incorporating your small business.

Bill's years of hard work had finally paid off. Bill's company, a sole proprietorship computer business was earning solid profits and had built a large client base. Bill thought he had it made, until a part-time employee had "an accident" that wiped out a customer's computer system.

In a matter of months, Bill's dream business came tumbling down. Slapped with a lawsuit, the sole proprietor lost all his assets, savings, house, and marriage. If Bill had his company incorporated, his business and personal life would have been separated and had an additional layer of protection.

Incorporation reduces disasters. According to BizStats.com, only 22% of all the small businesses in America are a limited liability corporation, S corporation, or C corporation. Over 72% of businesses are solely operated and exposed to liability risk.

The decision to start your own corporation will vary, depending on the needs of the business and yourself. Consider the following benefits of incorporation:

Benefits of Starting Your Own Corporation:

Liability: A corporation exists as a separate legal entity from your personal life. Any debts or lawsuits are incurred by the company, not the owner. Any business with potential for lawsuits should consult with a lawyer and consider incorporation. Incorporating will offer an added layer of protection but it is still adviseable to obtain business liability insurance.

The bad debts will often be the responsibility of the corporation. In the case of bank financing, more and more banks require business owners to sign a personal guarantee; making your personal assets collectible on a defaulted loan. Consider your options before signing.

Taxation: Another main benefit to incorporating is the taxation of a company. Corporations are often taxed at a lower rate and have better taxable benefits. Talk to your accountant about the tax advantages.

Raising Money: Financing a small business as a sole proprietorship or partnership can be difficult. A corporation can sell shares of the company and raise money easier than other business structure types.

Selling the Business: A non-corporate business is hard to valuate properly. A business corporation value will be based on the business, not the owner, therefore making it easy to sell the company.

Contact American Corporate Enterprises today to form your corporation!

Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com/. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.

Why Should You Incorporate?

Because of the length of time corporations have been in existence, there is a long record of statutory and case law which supports the use of a corporation for asset protection.

Consequently, corporations are traditionally considered for use as the “First Line of Defense” to accomplish the goal of limited liability. Following are some important attributes and advantages to a corporation which allow it to be used for limited liability as well as other purposes.

•The corporation is a totally separate entity from any individual- it is not you, and you are not it. This is important to remember in maintaining the limited liability protection. It must be treated as a separate individual

•A corporation can buy, sell, trade, own property, own stock, make loans, etc. and anything else that an individual can do; such actions are governed by the Board of Directors

•The shareholders of the corporation do not have to live in the state in which the corporation is domiciled. Fortunately, here in Nevada, neither do the Officers or Directors

•Corporations have perpetual existence- if a Director or Officer becomes deceased, the corporation will still exist, unlike with some other entities

•There are many tax deductions available to corporations, which are not available to other entities

•It is easy to transfer assets and ownership of a corporation

•Centralized management allows ease of doing business

•Full fringe benefits can be established through a corporation

•A corporation has all of the rights of an individual except for the Fifth Amendment

Please be advised that we are not engaged in rendering legal counsel or accounting services. If legal advise, or other such services and assistance is required, the services of a professional person in that area should be sought. At your request, however, we may consult with you and render our opinion based on our business experience.

American Corporate Enterprises works with and provides services to Attorneys, CPAs, Financial Consultants, etc. in order to meet the needs of our clients. We would be happy to refer you to such a professional at your request.


Find out more about American Corporate Enterprises by visiting our website at http://www.americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.