I’m in the market for a local attorney and need help in finding one. We need an attorney to protect our interest in the signing of a business lease and also how best to protect our home against future business losses (if possible).
I think I probably need a business attorney, but maybe it’s a CPA instead?
Money matters too. I need the least expensive help with this that I can get.
Any suggestions would be appreciated. I was going to use a cousin of mine because she is free, but she is also out of state and it’s just not going to work.
So how do I start my search? What do I look for? How do I approach the tight finances issue? I’ve never needed an attorney before, so other than picking a name at random, I’m at a loss.
This is my suggestion also. Your county bar association may also have a referral service. Normally you pay a small flat rate (~$25) for a 1/2 hour initial consultation with the referred attorney, and then you can make further arrangments from there. The Small Business Association district office may also have a list of attorneys with appropriate expertise.
In all liklihood, you need an attorney AND a CPA - the CPA is for tax things. The attorney can help you figure out the most advantageous way to incorporate. The point of incorporation is to erect a wall of protection between business assets and personal assets. However, there are a number of different corporate structures to choose from. That’s where you need some advice.
IAAL, though not a business lawyer. In fact, I did dreadfully in my Business Organizations class in law school. However, if there is one thing I did learn, it that you must never, ever commingle money between your personal and business accounts. never ever ever ever ever just deposit a business-related check in your personal account, thinking you’ll transfer the money back to the business account later. Never ever ever pay an employee out of a personal account. Don’t. Do. It. Keep business transactions in business accounts, personal transactions in personal accounts.
Thanks to you both. I do have a CPA. He is not suggesting incorporation or even LLC, but rather sole proprietor. I hope he is correct there.
I do know how important it is not to commingle personal and business. I worked for a guy once that liked to blur the lines. No thanks. I’ve survived many accounting audits with the state.
I just don’t know how best to protect my home and I need a lease read. I have to add a way to protect ourselves from delays that are caused by the building owners.
Thanks again. I’ll check out the link and the bar association.
Without putting it too bluntly I am sure his advice is off base if, as you say, protecting your home is a very high priority for you. A sole proprietor is personally responsible for harms caused by the business (meaning that if you owed someone a debt as a result of the business, they could reach your home – the exact situation you wish to avoid). A principle in an LLC or any other form of corporation is not personally responsible and has total protection from attacks on their personal assets as long as corporate formalities are observed (not commingling money, registration with the state, etc).
Why does he suggest a SP? I bet it’s because some of the tax and regulatory matters are simpler, and since he’s an accounting guy, he knows that choosing the simpler structure will save you money in compliance costs. But if protecting your home against business liability is a very high priority for you, IMHO you should be at least considering an LLC. If you choose against it, you should do so with a very firm reason why. And anyway, aren’t you planning to own this business with your husband? I’m pretty sure two people can’t be “sole proprietors.”
Yes, my husband and I. Well, now I don’t know what to think.
I’ll need to ask him again, but I think he said California LLC does not work the same as other states?
All these delays have my memory failing me. Perhaps I should seek a second opinion on this matter as well. Or at least clarify the supposed advantages. Thanks for the response.
That is very possible. California has a lot of legal stuff that kinda marches to the beat of its own drummer. I really have zero California-specific knowledge, other than what I read on the CA Secretary of State’s website (Business Entities :: California Secretary of State)
I don’t think you need a second CPA’s opinion - you need a legal opinion. But that last part is the key. Going forward, whenever you meet with your fiduciaries (your trusted advisors whose training means they have a duty to act in your best interest: financial advisors, CPAs, attorneys) take lots of notes about what they say and the basis for their advice. I know a lot of times, things make sense to me as they are described and I feel like I have 100% grasp on the options, but later they get foggy. It’s a lot easier (and more financially effective, since you ooften pay them for their time) to shoot them a short to-the-point email with a specific question than ask them to re-explain all their reasoning. That means being super organized in advance and keeping a binder or something for your meeting notes.
I could never own my own business; its a lot of work, most of it boring. You are one brave and hardworking woman! best of luck!
Regarding finances, if the first attorney or firm you talk to is out of your price range, they can probably recommend a firm to fit your needs or advise you if your price expectations do not match the market reality.
At the end of the day, you may not become a firm’s client for this item, but you may in the future if you have a good experience and your business grows, so they have a vested interest to see that you are satisfied.
It definitely sounds like you need a business attorney. I would ask around at a few local firms and see if any are able to help you out within your budget. If not they might be able to provide alternate recommendations.
Your local bar association will almost certainly offer a referral service; find your locale in the dropdown here and give them a call.
Nitpick: principal. Sole proprietorships have their advantages, too, and if the business is low risk than potentially favorable tax treatment and reduced cost may outweigh the risk to personal assets.
I didn’t say they didn’t have any advantages (in fact I mentioned their lower cost and greater ease), only that they specifically don’t offer one advantage – an advantage the OP specifically sought to have. And, it’s still unclear to me whether it’s even possible to enter a sole proprietorship jointly.
I’m curious if the OP did ultimately seek legal advice and what she decided, because this discussion is from a while back.
I’m not saying you didn’t point out the advantages; just saying that the CPA may have determined that not incorporating was best given the interests of the OP.
Per the IRS regulations promulgated under the Small Business and Work Opportunity Tax Act of 2007, married couples can be elected to be treated as “joint sole proprietors” for federal income tax purposes. Previously, any jointly owned business was treated as a partnership, with the attendant record keeping requirements and so on.
No idea whether similar provisions exist in state tax/property law.
And my point is, the OP did not understand why that choice was best, she did not even understand that SP specifically did not offer the one protection she sought, ergo, the CPA, whether or not s/he was legally correct, did a crap job of advising the client.
Well, given that the OP didn’t know those things, he/she may not actually have mentioned the asset protection thing to the CPA. But fiiiiiine. flounces off in huff
Call a successful local commercial (not residential) real estate agent who does leasing in your market and ask them for a good atty they would recommend to review a business lease.
I am a commercial RE agent and just by the nature of our business doing commercial leases and sales we usually know several competent lawyers that can analyze business leases.
We ended up with a local business attorney that was recommended to us. He agrees with the CPA that sole proprietor is the way for us to go. He didn’t see anything in the lease that he was worried about.
The building was sold and the new owner is great. There have been many delays and they have given us additional time rent free. We still have final inspections with the city to get through, but we are hopeful that we really are just a couple of weeks from opening. Finally.
However, if there is one thing I did learn, it that you must never, ever commingle money between your personal and business accounts. never ever ever ever ever just deposit a business-related check in your personal account, thinking you’ll transfer the money back to the business account later. Never ever ever pay an employee out of a personal account. Don’t. Do. It. Keep business transactions in business accounts, personal transactions in personal accounts.
I’ve survived many accounting audits with the state.