Articles Posted in Business Transactions

In a recent decision (Olmstead v. FTC, Supreme Court of Florida, June 24, 2010), the Florida Supreme Court held that Florida’s general collection statute authorizing liens and levies on all assets was not limited by the charging order statute even though the plain meaning of the charging order statute provides that it is the exclusive remedy for a creditor pursuing an LLC membership interest.

The text of the decision follows:
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The Business Entities Section of the California Secretary of State’s office processes filings, maintains records and provides information to the public relating to business entities (corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships and other business filings).

Filing Tips: Tips for filing most corporation, limited liability company and limited partnership documents

Forms, Samples & Fees: Forms, document samples and associated fees

The California Franchise Tax Board offers free webinars and the one on Wednesday, May 5, 2010, at 10 a.m. (PST) is designed for those who must withhold on California source income payments to resident and nonresident independent contractors. The FTB webinar will take a look at:

• The basics of resident and nonresident independent contractor withholding, including backup withholding.

• A summary of the three phases of withholding and what to do before payment (FTB Forms 587, 588, 589, 590), at the time of payment, and after payment of California source income to independent contractors (FTB Forms 592, 592-V, 592-B).

When closing a California business, you must file the final employment tax returns in addition to making final federal tax deposits of these taxes if you have employees. You must also file an annual tax return for the year you go out of business and attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.

The annual tax return for an S corporation, corporation, partnership, limited liability company or trust includes check boxes near the top front page just below the entity information. For the tax year in which your business no longer exists, check the box that indicates this tax return is a final return. If there are Schedule K-1s, repeat the same procedure on the Schedule K-1.

You will also need to file returns reporting the exchange of like-kind property, reporting the disposition of business property and/or changing the form of your business.

The IRS has a website built to help the small business owner with a multitude of resources. Check out the IRS website used by small businesses and the self-employed. Here is what it looks like:

A-Z Business Topics

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Next month, the Internal Revenue Service will begin its Employment Tax National Research Project (“ET NRP”). The last one was performed 25 years ago. The study is needed because business practices regarding employment tax issues may have changed significantly since the last IRS employment tax study.

Examinations comprising the study will be conducted to collect data that will allow the IRS to understand the compliance characteristics of employment tax filers.

The IRS will randomly select 2,000 taxpayers each year for the next three years. The examinations will be comprehensive in scope. Taxpayers will receive notices describing the ET NRP process.

Small business workshops on the topic of Federal and State Payroll Taxes are currently being offered throughout California.

Other workshop topics vary from a general overview of taxes to more specific topics such as recordkeeping and retirement plans.

These seminars are sponsored and presented by IRS partners who are Federal Tax specialists. The workshops are designed to help the small business owner understand and fulfill their federal tax responsibilities. Most are free but some workshops have fees associated with them. Any fees charged for a workshop are paid to the sponsoring organization, not the IRS.

In previous blog posts, I addressed California’s rules regarding a worker’s status as an independent contractor versus an employee. Click here and here to revisit those posts.

The Internal Revenue Service recently posted tips regarding federal rules that apply to a worker’s status. As an owner of a small business, whether you hire workers as independent contractors or as employees will impact the amount of taxes you withhold from their paychecks and how much taxes you pay. Additionally, it will affect what documents and information they must provide to you, what tax documents you must give to them and how much additional cost your business must bear.

Here are the top ten things every business owner should know about hiring people as independent contractors versus hiring them as employees.

Attention California business owners: A Restricted LLC (limited liability company) and a Restricted LP (limited partnership) are special entities that will be allowed under Nevada law starting October 1, 2009. Nevada is the first and only state to allow these types of entities.

With a restricted LLC, the new statute imposes restrictions and limitations on the LLC’s ability to make distributions. The statute provides, in part, that unless otherwise provided in the articles of organization, a restricted LLC shall not make any distributions to its members with respect to their membership interests until ten years after the date of formation of the LLC (or amendment of the articles of an existing LLC to become a restricted LLC), so long as the LLC has remained a restricted LLC.

Why set up an LLC which by its charter may not make any distributions to members for up to ten years? The reason is Internal Revenue Code Section 2704(b), which provides that when valuing an interest in an entity for gift tax purposes, the liquidation restrictions contained within the LLC operating agreement have to be disregarded by the appraiser if the LLC is owned by family members both before and after the transfer. Code Section 2704(b)(3)(B) provides however that a restriction that is imposed by state law cannot be ignored.

Starting a new business? Be aware of your federal tax responsibilities. Here are the top six things the IRS wants you to know if you plan on opening a new business this year. Also be sure and look at the IRS website for more information.

1. Decide the type of business entity you are going to establish either in California or some other state (such as Nevada or Delaware). The most common types of business are the sole proprietorship, partnership, corporation and S corporation.

2. The type of business you operate in California determines which tax form you have to file, what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.