Subject: RE: LLC members
husband and I are co-owners of a LLC. He is a physician and I
am a RN. The LLC is a medical practice in the state of
NJ. My accountant is telling me this is illegal unless we are
two physicians. I cant prove this to be true or untrue.
He wants me to leave the LLC and be a paid employee. Could you
tell me if there is any truth to this claim? My accountant
seems to think he is our lawyer at times and I he is confusing
us. Thank you for your time. I really appreciate it
Subject: Re: RE: LLC
First, you are right; this matter should be discussed
with your business and tax attorney. Normally, if the LLC is for
rendering medical services, then licensed physicians would need to
be the members. Nevertheless, careful structuring of the services
and interrelated llc's may resolve the issue. See your
I hope this helps!
Question: I am
selling my small business. It is a s-corp. What can I expect to pay
in taxes and is there any way to lower that
Answer: Marc: First, it is
good that you have an S corporation rather than a C corporation for
tax purposes. This means you will not be stuck with the burden of
double taxation. If you sell the STOCK of your corporation, then you
will have a capital gain. If you sell the assets, you may have
depreciation recapture and ordinary income. You must have your tax
attorney help you negotiate the transaction BEFORE you sign anything
to assure the best tax treatment.
I hope this helps!
Subject: buying stock in an electrical
compamy that is a corporation
Question: the owner says i can buy as little or 49percent of
his stock and start a sub division of his business . My part would
be set up in different location and different books kind like two
businesses one license . The owner said my business would be mine
and his is his . Is this deal truly possible also the owner is going
to sign that he will sell me more stock up to 49 as i grow
Answer: First, the arrangement seems a little odd. The current
owner obviously wants control because of his retaining a majority of
the shares. A carefully drafted Agreement to Purchase the shares,
with a good Buy-Sell shareholder agreement can protect your rights.
Secondly, there are many ways to structure the transaction.
After the deal is done what do you expect? What does the seller
really want? A well-designed transaction can meet your goals and
maximize the benefits for both parties. Remember, this is more of an
economic partnership rather than a business acquisition. You and the
seller must both be satisfied in order to start off your
I hope this helps!
Subject: Bringing in a partner into a existing
Question: Curious; looking to bring in a partner
into my business. A few points of concerns;
1. How much
percentage should I offer him?
2. Should I ask for a capital
investment? What if he doesn't have any $ to invest?
do I protect myself if it doesn't work out?
4. How can we set his
salary ( i can't afford his market value)
would be greatly appreciated. Also, if any books exist that can
provide additional guidance, let me know.
Answer: Here is my
1. How much percentage should I offer
ANS: It depends on what he brings to the table. Maybe,
you should offer "phantom" stock with options to buy.
Should I ask for a capital investment? What if he doesn't have
any $ to invest?
ANS: Then why do you want him as a partner
rather than an employee? What about a buy-in?
3. How do I
protect myself if it doesn't work out?
ANS: A good Buy-Sell
agreement and legal representation. Also, consider the form of your
business. If it is a Limited Liability Company, then you can
establish a different type of membership interest for the employee
restricting his rights.
4. How can we set his salary ( i
can't afford his market value)
Ans: Why not base his salary
on performance rather than a fixed salary.
do anything, you need sophisticated legal assistance.
hope this helps!
Hello, I am actually reporting for FORTUNE Small
Business Magazine's Ask FSB
online advice column. I came across
a question from one of our reader that I
think is right up your
alley. I'd really appreciate your expert input. I'll post the
< < I want to buy an existing
business which (a meat and grocery store). How
do I know that
the business is being priced correctly and all the financial
statements claimed by the seller are true such as gross sales
and net profit?
The seller said that it has $1.5M worth of
gross sales and $14K of net
monthly. With regards to financing,
is Bank the right way?
I'm a full time worker now with 48K
annual salary. Do I need to leave my job
and manage the business
full-time? And how can I get my lost wage back if I
store myself? > >
Also, if you have a phone number or
email where I could reach you for any
further inquiries, that'd
be great. You can reach me at the email and number
below if you
have any questions. Thanks in advance for your
Answer: Thank you for the question and I am sorry for the
delay in answering. First, you need to remember that a retail store
requires you to be there FULL-TIME. Do not be surprised if your
typical week is 70 - 80 hours! You need to forget about maintaining
your present employment and running the store.
Also, do you have meat cutting experience? If not, does the store
have a butcher who will stay on? The typical small store has a niche
or boutique emphasis. What is this store's specialty?
need expert assistance of a business and tax attorney to review the
financial statements and tax returns. If this store has been in
business for a long time, at least 5 years' statements and tax
returns should be reviewed. Also, many small stores receive most of
their inventory from a handful of suppliers. You should review their
actual invoices and possibly confirm the purchases directly with the
You need to have your attorney work with you to
prepare a pro forma budget and business plan to help you determine
how much capital you need. Banks are reluctant to finance a business
unless the owner has a substantial investment. If your funds are
limited, the bank may demand a SBA guarantee. This will cost you
additional money but may be worth it.
If you have any more
questions, please e-mail me directly.
I hope this