All jokes aside, when you sell your business the purchase price is usually paid in three ways.

First there’s the down payment that is made during the initial signing of the agreement, usually called the escrow, the earnest money, the deposit, whatever you want to call it. Usually 1%-10% of the deal price.

Secondly, there will be a cash portion, paid a closing to the Seller. Again, no real issues here.

Plainly put, a registered agent is a person or entity that receives service of process for a business entity (think limited liability company, corporation, not for profit corporation, partnership, etc.) The logic comes from the idea that business entities are incorporeal, literally meaning without a body. So if you wanted to sue the business entity, to whom would you give the summons, or complaint, or service of process if the entity has no body? Could you simply leave it at the front desk of the principal address of the entity? Imagine slipping and falling in a fast food restaurant, who would you sue? Could you go back to the fast food joint and simply leave the complaint or summons on the window? Needless to say, without registered agents, the way law suits would start would get ugly. So, the state of Florida and every other state created the institution of the registered agent. The registered agent is a person designated to receive such notice on behalf of the business entity. Thereby, avoiding many of the issues I’ve noted above.

Usually, you can serve as your own registered agent, so long as you are in the state that you are conducting business in. So, if you are registered to do business in Florida, and you live in Florida, you can be your own registered agent. However, if you are registered to do business in another state and live in Florida, you need to hire a registered agent in that state. Namely because the registered agent has to be in the state in which you are operating the business. Lots of people form businesses in Delaware but, don’t live there. For those who don’t live there, they need to hire a company, like CT Corporation, to act as their registered agent.

Bay Area Corporate Counsel, a Tampa Bay business law firm and I, a business attorney, act as registered agent for many of my clients. Usually my clients feel more comfortable knowing that if they are served with a law suit, that I will get it first and contact them and they don’t have to worry about missing the notice. You only have 20 days to respond to the notice, so you really don’t want to miss it.

If you have found this post I encourage you, if you haven’t already to read Part 1. This post and its predecessor explains just a few of the provisions in a standard purchase agreement for a business.

  1. What is the Purchase Price? But, more importantly, are there any adjustments?

It is common in the purchase of the assets of a company to adjust the purchase price for inventory at the time of sale. Below are some sample clauses of how buyers and sellers deal with inventory:

close-up-contract-document-48148-300x199 The title of this post is misleading, all clauses in a purchase agreement are important. But, there are a few that are usually more argued over than others. Here is some information to improve the purchase agreement and protect yourself. This is part 1 of a series of blog post that will help you analyze your purchase agreements. When in doubt, consult a business attorney. Bay Area Corporate Counsel, in Tampa, Florida can help.

  1. Who is entering into the agreement?

A business selling its assets must be the “seller” because it is the owner of the assets. The owner of the assets is the business, not the individual that owns the business and therefore the business should be listed as the seller. Example. Buyer is buying a restaurant. Restaurant, LLC is the owner of the assets and should be listed as the seller, not Owner of Restaurant, LLC.

You read that correctly but, it’s more likely your retirement adviser is really a salesmen for a company that is trying to make money by investing your money. Good return or bad return, they get paid. But, for the small business owner, there are so many products out there to choose from, rare is the retirement account salesmen not in bed with one of the investment companies. Nonetheless, this post is for business owners who want to avoid paying taxes by saving for their future or want to save in alternative investments (gold, real estate, art, etc.). Avoidance by the IRS is fine. Evasion is not-so-fine. While, there is a little bit of a grey line as to what is avoidance and evasion, these plans are 100% legit and legal. The government wants you to save money and therefore has provided these generous tax benefits. So let’s start avoiding taxes:

  1. SEP-IRA. This is an IRA for the owner of a business. It will allow you to save up to $50,000 per year. Not to bad. At the highest rate of tax, that saves you $18,500.00 in tax. Most people do not pay 37% (as of 2018) so it most likely saves you about $12,500. This is the most basic model and should be used for anyone who is beginning a business and wants a safe, easy way to sock away money. But, contributions to the plan are limited to 25% of compensation. Therefore, you can only contribute 25% of your income. Thus, to max it out, you’d have to pay yourself $200,000 in payroll and you don’t want to pay yourself that much because you’re going to be paying large amounts of payroll taxes on your salary. So, perhaps there’s a better way.
  2. 401(k) + Profit Sharing Plan. This allows $18,500 of your compensation to go into the 401(k) plan and then 25% of your compensation, up to $250k, so another $62,500. This would give you the ability to put away $81,000. Better than the last plan and sometimes in an S Corporation you have to pay yourself a larger salary so that you are paying yourself a “reasonable” salary, and in that case this makes the most sense. But, see the next paragraph.

I love this photo. I’m in Tampa and I hope to have a gigantic company and the ability to take my board members skiing in the Alps, all the while making it a deduction to the company. This post explains how I would do just that.

You should deduct every cent of travelling, hotel, and food associated with any board meeting or meeting of the managers. Lots of people don’t take advantage of this. It takes a little planning but can be worth it in the end.

Lets begin briefly with the basics. You can deduct ordinary and necessary expenses from your businesses income. What is ordinary? It’s everything that’s not extra-ordinary. For instance, buying a truck for 99% of tax payers is extra-ordinary, it’s not something you do often. But, Ford may purchase from its subsidiaries thousands of trucks, and therefore it would be ordinary. So, it’s fact dependent. If it’s extra-ordinary and necessary, then it will be amortized and depreciated over time. Whether or not something is necessary, is also up for grabs, but let’s not get silly. We know our Ferrari is usually not necessary but, if you’re a high-end broker and all your clients have Ferraris, you just might need one to fit in. I’m just saying, you can’t exactly stroll up in a Pinto to Tampa Palms and expect to be taken seriously. Nonetheless, board meetings are always ordinary and necessary but, that doesn’t stop the IRS from balking at the deduction. So here are some rules for deducting your week-long, Paris board meeting.

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