End of Year

We hope that everyone had an enjoyable Christmas and that Santa brought you what you wanted! Unfortunately after Christmas comes the New Year. That means it is time to wrap up last year and get ready for the new year. We can help you with both aspects. Give us a call and we can consulate with you to ensure that you have the proper setup going into the new year.

We can also assist you with the end of year tax forms and filings. Remember you do not want to wait until March 14 (for Corporations) or April 14 to review and prepare your return.

New Year's Business Resolutions

As the year draws to an end it is sometimes helpful to review our past actions and set new goals for the upcoming new year. The following information may be helpful with making a business resolution for 2009.

ADVANTAGES OF THE SOLE PROPRIETORSHIP

Ø Control and management is vested in one owner.
Ø Pay taxes at one level – your individual rate.
Ø Requires no effort or expense to form or maintain.
Ø Sole ownership of profits. Easy to take profits out.
Ø Needs no government approval.
Ø Requires less formality and fewer legal restrictions.

DISADVANTAGES

Ø Proprietor has full and unlimited liability for all business activities. This may include debts that exceed the proprietor’s total investment. Potential liability extends to all of the proprietor’s personal assets.
Ø Unstable business life, due to risks associated with death or disability of the owner, which could force the business to close.
Ø No difference between business and personal assets
Ø Business income is taxed at personal tax rates, which is often higher than corporate tax rates at certain income levels.
Ø Additional self-employment taxes.
Ø Certain business expenses are only partially tax deductible.
Ø Limitations on available benefits.
Ø Difficult to raise additional capital, depending upon credit worthiness of the individual

Asset Protection

The corporation is traditionally the first line of defense in any Asset protection strategy because of the long record of statutory and case law that supports the goal of achieving limited liability. This liability protection is only available because of the way the law separates the corporation from any associated individual. The lawsuit protection features of the corporation will generally be available only if the integrity of the corporation as a separate and distinct entity, apart from the individual, is respected by a court and by the Internal Revenue Service. The “corporate veil” refers to the separation between the individual and the company. It is the most valuable quality that the corporation offers. Care must be taken to preserve the corporate veil, because if it is “pierced,” the corporation may have no asset protection value whatsoever. In matters involving a lawsuit by an injured party, especially if a corporation has no significant assets, the plaintiff will attempt to convince the court that the corporate entity should not be respected and that the principals of the company should be held personally liable. In these cases, the plaintiff is attempting to pierce the corporate veil in order to obtain a judgment against the principals, who may have personal assets sufficient to satisfy a judgment. In these turbulent financial times it is more important than ever to establish an effective asset protection strategy. Silver Shield Services, Inc. can guide you through this important process. Give us a call at (775) 577-4822.

Corporation Opportunities

State legislatures have unlimited power to create corporations that must function according to their laws. There have been many attempts to standardize the corporate laws of the various states. At different times committees of attorneys have drafted sample provisions of corporate laws and introduced them to the world as models for all to follow. Two of the most notable models are the Uniform Business Corporation Act and the Model Business Corporation Act. In the case of the Model Business Corporation Act the American Bar Association in the 1980’s encouraged uniformity within the corporation laws of each US state. The Act is not a law, but is only a guide for state governments. Since its creation, most states have adopted significant portions of the Act for their corporate laws. However, these acts have never been adopted by any state without significant changes. Therefore, the world of corporate law finds great variety as states adopt only the portion of the uniform law in which they are interested. Most, if not all, states engage in a series of partial revisions of corporation law over time without undergoing a total statutory transplant. Naturally, this creates differences between the various states’ laws. Where some see differences, others see opportunities. Silver Shield Services, Inc. would be happy to explain the many opportunities available our telephone number is (775) 577-4822.

Separation of Individual from Company

To create a corporation the formation must comply with the laws of a specific state or country. The corporation then is a form of business that individuals cannot create simply by agreement as they can a partnership. They can do so only with the authority of the government. The corporation can be composed of human and artificial entities, but is recognized separately from the entities that comprise it. Under the law, the corporation is primarily treated as if it were a human even though a corporation is an artificial being, invisible, intangible and existing only in contemplation of law. It possesses only those properties which the charter of its creation confers upon it. Among the most important properties are immortality and individuality, by which a perpetual succession of many persons are considered as the same, and may act as a single individual.

An example of a corporation’s individual treatment is shown when a corporation enjoys the Constitutional protection against unreasonable search and seizures. The corporation may also invoke the attorney-client privilege of confidentiality or may sue for defamation of its good name. But it can also be punished if it violates the law.

HAPPY HOLIDAYS

FROM ALL OF US AT
SILVER SHIELD SERVICES, INC

WE HAVE ENJOYED HELPING
YOU SAVE ON TAXES AND
PROTECT YOU ASSETS FOR
16 WONDERFUL YEARS.

BEST WISHES FOR A GREAT YEAR!

Corporate Viel

Because of the presence of the corporate veil, the corporation is often recommended as the entity of choice whenever a business has employees or sells products or services. This is because these activities bring with them certain risks that demand liability protection for the ownership of the company. But to maintain the corporate veil, certain formalities must be followed. And when followed the corporation is usually much more effective in protecting the owners and managers from liability than using a general partnership or proprietorship.