Common Oversights With Single-Member LLCs
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Gain an understanding of the most frequent oversights that solo entrepreneurs may come across.Many solo entrepreneurs, and the lawyers hired to support them, often do not understand exactly what options are available to them. They often don't know how to decide which option is best. Perhaps most frustratingly of all, they don't know how to obtain or, in the case of lawyers supporting solo entrepreneurs, provide affordable, reliable legal services that meet their need for preventive legal services in the business formation context. For these reasons, many entrepreneurs turn to Do-It-Yourself (DIY) legal 'solutions,' which are not really solutions, at all. They get a template, maybe some document or form registration service, perhaps registered agent service, and carry on with their business, never realizing that the 'solution' they have adopted likely leaves them exposed to legal risk that could have been avoided, if they had hired a lawyer to provide necessary business formation legal services. This topic helps the lawyers assisting solo entrepreneurs considering the question of whether or not to form a single-member LLC to understand how first to determine whether a single-member LLC is the right fit for the client's needs and then how to understand the process required for addressing the client's business formation legal needs and support the fledgling enterprise in a preventive law context. The material also explains and dispels common misconceptions about the benefits of LLCs versus S-Corporations. Failing to adequately consider, reflect upon, and intentionally choose the correct business organizational structure is one of the most common errors solo entrepreneurs make, when starting a business. It often leads to easily avoidable and potentially costly legal liability and risk exposure. This information is critical for lawyers providing business formation legal services, so they can ensure their recommendations are as beneficial as possible for their clients and provide the right balance between the client's level of risk aversion and budget.
AuthorsNoel R. Bagwell III, Esq., ExecutiveLP?
Common (Poor) Reasons for Choosing to Form Single-Member LLCs
• Just to Get Legal Liability Limitation
• Just for Perceived Tax Benefits
• To Establish 'Legitimacy,' as a Business, per Se
Preventive Law for Entrepreneurs Considering Single-Member LLCs
• Limiting Liability
• Addressing Tax-Related Issues
• Building a Respected Brand
Counseling Members of Existing Single-Member LLCs
• Should I Keep My Single-Member LLC?
• My Accountant (or Other Professional) Advised Me to Convert My LLC to an S-Corp - Should I?
• How Can I Get the Reliable Professional Support My Business Needs?