There are many different entities you, as a business owner, can choose to have your business fall under.
A sole proprietorship is the easiest way to start a business however there are many risks that come with setting up your business as a sole proprietor. Page, Lobo, Costales and Preston APC would like to share the top 5 risks associated with running your business as a sole proprietor:
You run the risk of being sued personally. If you incorporate your business it provides a layer of protection between you and any losses your company may encounter. If you get sued as a sole proprietor, you can lose all your personal property in addition to your business holdings.
It is more difficult to get a business loan. If you apply for a loan as a sole proprietor, a lender will look at your personal finances. If they are less than stellar it may be difficult to receive a loan to help your business grow.
You are more liable as a sole proprietor. As a business owner you are held directly responsible for any losses, debts or violations coming from the business. If the business must pay any debts, they will be satisfied from the sole proprietor’s own personal funds.
You must pay self-employment tax. Some other tax benefits may not be deductible as well such as health insurance premiums for employees.
There is less stability of the business. If the owner becomes deceased or incapacitated, the business cannot continue. If the owner passes, the business is liquidated and becomes part of the owner’s personal estate to be distributed to its beneficiaries. This can result in heavy taxes to the beneficiaries.
Congratulations! Owning your own business is exciting and rewarding. Page, Lobo, Costales and Preston APC would like to share some tips for starting up your own business.
Page, Lobo, Costales and Preston APC helps small businesses get setup legally and would like to share some questions and answers for all you entrepreneurs out there. If you are setting up a new business, call The Law Offices of Page, Lobo, Costales and Preston.
Q: What type of business entity should I setup my business as?
A: You can begin as a “sole proprietor” to start doing business. It is easy and inexpensive to start as a sole proprietor however there is no legal protection for your personal assets. This means you have no limit to your personal liability for business failures or mistakes. If you want to limit your liability, set your business up as a corporation instead.
Q: Do I need a Federal Tax ID number?
A: If your business is a corporation, an LLC or has employees you need a Federal Tax Identification Number. Even if you are a sole proprietor you might want to get an EIN. If you do not have one as a sole proprietor, you can use your social security number however an EIN is more professional and less risky than giving out your SSN.
Q: What is a resale license?
A: A resale license will enable your company to purchase goods or materials for manufacture or resale without paying sales tax.
Q: Do I need to file a fictitious business name?
A: If you use any name other than your own, you will need to file a “doing business as” name. This will enable the public to know who is actually operating the company.
Have questions about setting up your business? Call us to get answers: 951-461-2500.
Planning to build a home or remodel your existing home?
The Law Offices of Page, Lobo, Costales and Preston come across many construction cases where the contractor either does not have a license or the license he or she carries is out of date.
It is important to know how to hire a contractorwhen starting a construction project at your home. Here are some tips to choosing a contractor:
Make sure he or she is currently state licensed in your area. Has the construction company paid its employees legally and carry workers’ compensation, property damage and liability insurance? You should also find out how long he or she has been in business along with a list of references you can contact.
Does the contractor have a work crew or do they subcontract the work? Protect yourself from a mechanics lien by asking the contractor, subcontractors and suppliers for lien releases or waivers upon each payment.
Ask if the contractor can supply you with a fixed start and completion date included in a formal written agreement. If you aren’t normally onsite during the project it is a good idea to check in regularly to make sure everything is coming along.
Ask for an itemized price estimate from each potential contractor when getting bids. Examine each carefully paying attention to those that seem too high or too low. Lower bids may mean you will get a hasty job that won’t leave you with a quality finished product. Remember, in most cases you get what you pay for.
Ask the contractor for a schedule of the work from start to finish. If you want regular progress reports, ask for them in writing.
Don’t let your payments get ahead of the work. We recommend paying 10 percent down before they start the project. If it is a stable company they won’t need a large amount of money to pay for materials or overhead.
If you have questions about a mechaincs lien or construction issues, contact Jonathon Preston with Page, Lobo, Costales and Preston APC.
Don’t let your business get caught up in a lawsuit.
Page, Lobo, Costales and Preston APC has a lot of experience with assisting businesses in legal matters and would like to share some tips to avoid a lawsuit as a business owner:
Be Safe – Of course accidents can happen but if you take the proper steps to avoid accidents you will be much better off. Keep areas where employees and customers walk safe and free of obstacles which can cause danger
Keep Things Documented – Creating a well drafted contract will help avoid misunderstandings and prevent lawsuits. Keep all emails, invoices, contracts and even telephone messages to resolve future problems.
Understand The Law – Make sure your business is not in violation of any property laws. Make sure no one else owns the trademark on your business name.
Protect Files – Make sure all your computer’s files are backed up. Files can also be lost and/or stolen and that can lead to legal action. Make sure they are protected.
Handbook – It is a good idea to create an employee handbook which contains all sensitive employment issues such as maternity leave, sick leave, compensation, termination, benefits, etc.
Hire A Lawyer – It is smart to have a lawyer hired for your business and to make sure you are in compliance while running your business. Call our offices for all your business needs!
With new construction coming up around town, our office sees a lot of construction lawsuits popping up.
Page, Lobo, Costales and Preston, APC, would like to share some helpful tips to staying safe and stress free on the construction site:
Use Proper Tools – Tools are designed to make your life easier. Make sure the tools you use are ergonomically engineered to avoid injury such as carpal tunnel syndrome or tendonitis. Use tools which need less force and don’t strain your hand when you hold them.
Proper Lifting – If you have to lift heavy objects, always bend at your knees and avoid twisting to the side when lifting. It is easy to injure yourself carrying heavy objects however it is not difficult to avoid injury.
Avoid Squatting – Sit on a stool or chair to work instead of kneeling or squatting if you have to work at lower levels.
Stay Safe Around Equipment – When getting on and off heavy equipment, exercise caution. Avoid carrying objects while climbing into equipment and make sure to have a tight grip when lifting or lowering yourself into equipment.
Tool Belt – It is very important to make sure your tool belt is well balanced or else it will throw your body out of alignment. Make necessary adjustments so the tool belt is well balanced on both sides.
Avoid Shortcuts – Accidents occur when workers look for shortcuts to cut costs or get the job done on time if weather and/or supplies cause a delay.
It is important to set goals for not only your personal life but also for your own business.
Setting goals for your businessfor the New Year is something you should take time to work on. It is important to make sure your goals will be attainable and realistic. Every business is different and you need to take time to know what is best for yours.
Here are a few tips to get you started on your business’s goals for 2014:
Expand – Is there a new niche your business could profit from? If you can expand your business into a different market you can substantially increase your business’s profit. Take time to plan it out though!
More Traffic – Not only do we mean to your business’s doorstep, but also to your website. It is rare these days that a business would not get business through their website. Do some research to decide how you will go about increasing traffic to your website and make it a goal in 2014 to make yourself have a larger online presence.
Bookkeeping – Take advantage of automation tools that can take care of your bookkeeping without your interference. Automate your bookkeeping process this year, you will thank yourself in December, we promise!
Education – It is important to keep up with your industry if you want to continue making money. Take classes, read books and invest time into improving your own abilities.
Streamline – Take time to do some research on streamlining the way you work and the tools you use.
Delegate – If there is a task you don’t like doing, think about hiring someone or outsourcing the work. Make it a goal this year to find out how you can make this change. It may mean increasing business to a point you can justify hiring someone. How much more will you enjoy what you do when you don’t have to do the one task you loathe doing?
Whether you work in a high stress environment or you deal with stresses from others in the workplace, Page, Lobo, Costales and Preston would like to share some tips to make sure your 2014 workplace is as stress-free as possible:
Work On Communication – Stressed is many times caused by a lack of communication. Make it a goal to focus on clear to the point communication when speaking with anyone at work. When you receive a new responsibility or task at work, make a point to clarify your understanding by reviewing the work process with the appropriate person.
Dealing With A Difficult Personality – When you are working side by side with someone with a difficult or demanding personality, you will need to practice your patience. Carefully choose your words and draw on your professionalism by being respectful. You may even want to approach your manager or mentor for advice on dealing with a difficult co-worker.
Handling Your Workload – It is important to strategize in order to be more efficient. Before you go home, organize your desk and write down a quick list of things you need to complete the next day. If your workload is too much, you may want to explore the option of delegating tasks to others.
Be Appreciative – Practice being gracious at work and giving praise to people for a job well done. You may notice your attitude will improve with simply saying something positive to someone rather than negative.
Contribute To A Greater Good – Avoid participating in office drama and create positive energy by volunteering outside the workplace. Volunteer at a place that interests you and if you’d like you can tell others at work about your experience and they may even join in on the good deeds too!
How do you stay positive at work? Share some tips with us by commenting on our blog. Visit our website!