Commingling Funds – Why you should NEVER do it
Corporate Direct » Asset Protection
by Ted Sutton
4M ago
    By Ted Sutton, Esq. Ryan was always ambitious and hard working. As a teen, he would regularly work on house flips with his dad. But when Ryan turned 18, he decided to start his own house flipping business.   After listening to his dad’s advice, Ryan formed an LLC for his house flipping business. A service helped him form an LLC with the Secretary of State, provide a registered agent address, and draft an operating agreement for his business. Once he began flipping houses, Ryan held himself out as the manager of the LLC.   But he skipped the step of forming a separate ..read more
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Corporate Transparency Act Alert!!
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
2y ago
New Notice Requirements Coming Are you aware of the new filing nearly EVERY Corporation and LLC must file beginning in 2022? The Corporate Transparency Act (“CTA”) passed by the Senate and House now requires annual reporting of an entity’s beneficial owners to the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”) database. The new law defines a beneficial owner as any individual who directly or indirectly (i.e., through a second entity) exercises substantial control and holds at least 25% interest in an entity. A few exceptions to the filing requirement do exist. Publicly traded ..read more
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California: Pay to Play
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
California continues to fight for its $800 minimum franchise tax. If you live outside the state but passively own real or personal property worth over $50,000 inside California you are doing business in the state. Sayeth California’s Franchise Tax Board: Please pay the $800 or we’ll sue. In The Matter of the Appeal of Aroyo Investments I, LLC, OTA Case No. 19074982 (July 7, 2020), that’s what happened. The Facts in Aroyo Aroyo Investment I, LLC (“Aroyo”) appealed an action by the Franchise Tax Board (“FTB”) denying its claim for refund of the annual $800 limited liability company (“LLC”) tax f ..read more
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Why Manager Managed Instead of Member Managed?
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
One of the biggest questions we’re asked when clients are forming an LLC is: Should we be manager managed or member managed? The LLC allows for great flexibility. You can be managed by all the members, which is actually the case in most common business settings. The owners (or members) come together and agree on what is next. But such member managed informality, while suitable for on-the-go entrepreneurs and investors, is not always best from a legal stand point. By contrast, a manager managed LLC is one in which one or more persons are appointed in the Operating Agreement to serve as manageme ..read more
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Has the Time Come for Cyber Bounty Hunters?
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
The Colonial Pipeline shutdown last week raised troubling questions. How vulnerable is our own infrastructure to  cyber attacks? Should cyber pirates be paid, as they were by the Colonial Pipeline authorities? Most importantly: What can we do to prevent such attacks? Incentives usually work. I wrote about this in Chapter 13 of my newest book, Scam-Proof Your Assets: Guarding Against Widespread Deception A bounty hunter is someone who captures criminals for a “bounty,” a payment for providing a public service. Like this chapter? Get your copy today! In the Old West, local she ..read more
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ADA Compliance and SEO
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
By: Melissa Matheson Corporate Direct Webmaster Back in 2017, we published an article regarding ADA compliance on websites. The Winn-Dixie case was the case that defined websites as “public spaces,” thereby requiring that they be accessible to those with disabilities. This in itself is not an issue, I think we can all agree that we want all people to be able to freely access information and services. And in brick and mortar business, these requirements are clearly outlined in the Americans With Disabilities Act Standards for Accessible Design (ADASAD). These standards are now embedded in build ..read more
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What’s New in 2021?
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
Let’s start with the good… California Raises their Homestead Exemption The homestead exemption is an excellent creditor protection strategy for personal residences. It all started in Texas when they were an independent republic from 1836 to 1846 and in need of settlers. Texas passed a law whereby creditors could not reach the equity of your homestead (your farm, ranch or dwelling). It worked like a charm and other U.S. states followed suit, While the homestead amounts in Texas as well as Florida, Kansas, and Oklahoma are unlimited, other states have their own dollar limit. In Arizona, for exam ..read more
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Distributing LLC Money
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
3y ago
You’ve set up your LLC. Now it’s time to make money, and flow the profits into your bank account. In the example we’ll use in this article you have transferred title in a real estate rental property (a duplex) into your new LLC, which is called XYZ, LLC. You have also, as is required to follow the corporate formalities, set up a bank account in the name of XYZ, LLC. You haven’t hired a property management company yet as you are going to try managing the property yourself. In the first month, your two duplex tenants pay the rent on time. You are thinking to yourself: “This is good. This is how ..read more
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California Does Something Right (Temporarily) for Small Business
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
4y ago
California’s minimum tax on business entities is $800.00 per year. It is the highest in the nation and also comes with franchise taxes, corporate income tax and personal income tax. California traditionally is a tough state to own a small business due to all the taxation and ever-changing business regulations. Interestingly, corporations have been exempted from that high fee for their first year of business since 1998. However, only 75% of about 100,000 new corporations that are formed each year claim the exemption because of complicated tax filing requirements. And don’t forget, California de ..read more
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The Crimes of a Nominee Officer
Corporate Direct » Asset Protection
by Garrett Sutton, Esq
4y ago
Matt wanted to open a confidential mail order business and he needed to operate with absolute privacy. No one could ever know that he ran a business that sold sensitive supplement products over the internet. Matt lived in Las Vegas and knew he needed a Nevada LLC for his new business. He had heard that the state of Nevada allowed both corporations and LLCs the use of nominee officers, whereby someone else’s name, a nominee, was used for all the state filings. In this way, privacy was achieved because Matt’s name would not be listed on the Nevada Secretary of State’s website as an LLC manager ..read more
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