| Copyright (c) 2007 Juli Walsh | | | | Liability Company structures do allow you to separate |
| The mere thought of an audit or a lawsuit strikes | | | | your business and your personal assets and offer |
| abject terror in the hearts of most small business | | | | liability protection. The same is true of Limited Liability |
| owners. No one wants to find their business the | | | | Partnership. You have worked hard for your home |
| target of an IRS audit - in fact, most of us shudder | | | | and your possessions, not to mention your savings |
| at the mere mention of the phrase. Lawsuits are also | | | | and retirement plans and investments. Don't risk |
| frightening prospects. Yet small businesses and | | | | losing everything because your company isn't |
| entrepreneurs frequently leave themselves open to | | | | structured correctly. |
| failing audits and losing lawsuits by not taking steps | | | | Scary Fact #3: Many small businesses and |
| to prepare or plan for them. | | | | entrepreneurs fail to properly and adequately |
| Scary Fact #1: A study released in March of 2007 | | | | document decisions, agreements and business |
| estimated that U.S. citizens pay about $865 billion | | | | activities. This failure puts the entire business at risk. |
| every year in expenses related to lawsuits. A | | | | You must record business decisions and summarize |
| significant amount of these lawsuits are brought | | | | them in your Annual Meeting. If you don't, your notes |
| against doctors and other professionals. But a | | | | will not stand up in court. |
| sizeable amount of this cost is tied to suits brought | | | | Every agreement made by a business needs to meet |
| against small businesses. | | | | three criteria: |
| Small businesses and entrepreneurs are particularly | | | | 1. It should be in writing. |
| susceptible to lawsuits because they are often so | | | | 2. It should clearly state how disputes will be |
| focused on starting and growing the business - often | | | | resolved. |
| with a minimal staff - that they just don't get around | | | | 3. It should be reviewed by an attorney before it is |
| to doing the paperwork needed to protect their | | | | signed. |
| businesses and their personal assets. Further, many | | | | Finally, ensure that every product you release and |
| believe that a business license and articles or | | | | every property you own and use for business carries |
| incorporation, articles of organization or partnership | | | | appropriate warnings, disclaimers, and the like. No |
| agreements are the only documents they need in | | | | matter how much we might like to think otherwise, |
| order to do business. | | | | we live in a society in which people are more than |
| Depending upon the state in which your business is | | | | ready to take others to court if they think they will |
| located, this may be sufficient to allow you to do | | | | gain financially. Once a lawsuit is brought, your legal |
| business. But it is woefully inadequate to protect your | | | | fees begin to accumulate. Even if you win, you will |
| business. | | | | incur significant financial loss. |
| Scary Fact #2: If you didn't form and structure your | | | | Kari VanNoy and Juli Walsh are both paralegals. They |
| business correctly, your personal assets could be at | | | | have spent the last ten years building their mission to |
| risk in the event of an audit or a lawsuit. | | | | educate and protect small business owners. They |
| Incorporation is a great thing, as is formation of a | | | | created Just A Minute, LLC to assist busy |
| partnership. Without proper structure and continued | | | | entrepreneurs and small business owners with their |
| documentation, the business is susceptible to | | | | corporate and company minutes and resolutions to |
| disallowed deductions and personal assets are well | | | | keep their company assets safe, secure and |
| within the reach of those who bring lawsuits. | | | | protected. To learn more about how they can help |
| Business structures cannot prevent audits or lawsuits. | | | | with Annual Meeting planning and documentation, visit |
| But S Corporation or C Corporation and Limited | | | | . |