Why Do I Need a Lawyer?

A lot of people think that lawyers are only for when you’ve done something wrong or you are being sued. The thought process is that lawyers are for responsive actions not preemptive ones. Obviously, an attorney can provide more assistance than simply defending tough situations, in fact lawyers may be most useful when they are used to prevent tough situations. One area that this is definitely the case is in business dealings. Most small business owners may or may not use an attorney in setting up their LLC, or S Corp, but afterwards almost all business owners see no further need for an attorney. This misconceived thinking, however, can lead to situations that necessitate legal defense, such as a civil suit or criminal charges.

Benefits of Having Legal Counsel

When forming your business, you may notice that there is a lot of competing thought on whether or not you should seek legal assistance or simply figure it out on your own. Although you may be concerned about the cost of an attorney the more cost effective route is actually to get the help. By using a lawyer you can be sure that your business has been formed correctly and that you will be protected from future liability that may arise. If you try and pinch pennies now by figuring out the process on your own, the likelihood that you do it wrong and exposes yourself to unnecessary liability; is significant. Therefore, dollars saved today could costs hundreds or thousands of dollars in the future.

Utah Business Attorney

If you are starting a business or already have, its important that you have an attorney on hand to make sure that your business is running legally and that you are protecting yourself in all of your contracts, negotiations, and filings. Instead of bringing in an attorney after the fact you can save thousands of dollars now by making sure that your business dealings are ironclad and can be defend in court. Call us Salcido Law Firm today to see what we can do for you.

Business Attorney – Salt Lake, Provo, St. George

At Salcido Law Firm, we represent small business owners and start up companies in Salt Lake, Provo, and St. George. We offer a variety of legal services to help get your company off the ground and running, speak with a Utah small business lawyer today. From corporate formation services to contract drafting and employment matters, we can help ensure you succeed in what you love to do. Some of the most common reasons business owners get place us on retainer include initial legal structuring and set up, general contract drafting and review services, and of course corporate litigation matters. We are ourselves small business owners and love working with fellow enterprenuours and local companies. No matter your legal question involving your company, we can help. One of the worst things a company can do is to put off a legal need, fail to respond to a law suit, or not pursue a legal interest on behalf of the corporation. We are a trusted advisor to numerous companies throughout the state. Call us today to find out how we can help protect what you have built and give you peace of mind.

Forming Your Company

One of the number 1 mistakes a business owner makes starts at the time a company is first formed. It can’t be stressed enough how important it can be to at least consult an attorney before legally organizing and forming a company. At our law office, we provide affordable formation services. We have setup numerous LLCs, S Corps, Inc’s and other business structures. We know what makes sense for your type of business. We understand what agreements should be in place for the owners. We draft highly specialized operating agreements, share holder agreements, bylaws, etc. When it comes to business, an ounce of prevention is definitely worth a pound of cure. Let us help you prevent law suits and legal disruptions. The amount it may cost you to hire us is nothing to the potential savings you may realize by setting up your company the right way the first time.

Counsel You Can Trust

As your business grows, you will no doubt have legal issues that arise. We offer counsel on an ongoing basis to many corporate clients. Most of our corporate clients even have our cell phones so they can be sure to reach us in times of an emergency. What if someone is injured on your property? What if an employee causes serious financial harm and risk to the company? Issues arise and it helps to have general counsel on board to help you navigate the waters. Let us be your consigliere.

Salcido Law Firm – Your Corporate Attorney

Call us today. We have the experience necessary to ensure your business succeeds and does not fall victim to devastating law suits. A Utah corporate attorney at Salcido Law Firm is available today to meet with you and game plan a legal strategy to help you succeed. We are available for free consultations every week and you can usually get us on the phone almost any time of the day. Contact us now, we look forward to your call. 801.413.1753. Offices in Northern and Southern Utah.

LLC Formation | Utah Business Lawyer

The past few years have been hard for many people.  Many have lost money in the stock market, businesses have failed, and millions of jobs have vanished.  The recession is still not over, but there are promising economic signs emerging throughout Utah.  Unemployment has not risen, benefit claims for joblessness have declined, and the stock market is steadily rising.  Many people are no longer afraid of the future and are actively trying to grow their business or attempting to start a new business.  With new businesses come new problems though.  This is why it is important for anyone thinking about starting a business to talk to a Utah business lawyer first.

The Benefits of a LLC

Business owners can have many different problems.  The complicated area of taxes is an example.  Tax law is complex and can confuse a small business owner.  Business owners also have to deal with the reality of being sued for something that happens on their business facilities or by their business.  Because small business owners face many different problems, it is important for them to protect their personal assets by forming a LLC.  A LLC has many benefits.  LLC’s protect a business owner from many different liabilities.  A person suing a LLC can only go after the business’s assets so the owner’s house and other personal assets are protected.

A LLC is beneficial for tax purposes.  LLC’s usually don’t pay business taxes.  Business profits and losses are passed on to the owners of the business and reported as personal income.  Taxes are paid on the individual level.  LLC’s don’t have as many Utah State requirements for annual reports and ongoing formalities that S corporations and C corporations do.  A LLC may also be a good option for a small business owner because there are few restrictions on who can be an owner unlike a S corporation.

Utah Business Lawyers Protect Business Owners

If you currently have a business or are considering forming a business, call a Utah business lawyer from Salcido Law Firm to set up a LLC.  A Salcido Law Utah business lawyer will draft and file all necessary papers to form your LLC so you can focus on your business without worrying about the legal issues it presents.  Call 801.413.1753 for a free consultation with a Utah business lawyer and receive the protection you need.

Utah Business Lawyer

A lot of people view these tough economic times with a glass half empty attitude.  Yes, there are significant problems with our economy, government fiscal irresponsibility, and monetary policy.  A lot of people are having personal financial difficulties.  Many families are declaring bankruptcy.

Other people, however, view our current economic problems with a glass half full mentality and we at Salcido Law Firm PLLC believe that the glass certainly is half full.

Opportunities Abound in Utah for Entrepreneurs

One thing we have noticed in representing business clients throughout the Wasatch Front is that savvy entrepreneurs are finding a lot of new opportunities to start businesses.  Business asset prices have declined substantially over the last couple of years and entrepreneurs are spending minimal amounts on obtaining high value assets.

You do not have to have tens of thousands of dollars to start a business in Utah.  In some cases you can start a new venture without seed money.  In other cases you can take on a partner who can front the costs.  The point is, if you have the desire to start a business now is really the time to do it.

If you look back at history, some of the most successful companies were started during difficult economic times. We are in a Great Recession that is likely to turn south before it gets better, but that just means there will be more opportunities for you to grab a market share of an industry you want to pursue.  People are looking to save money, so if you can provide a quality product for a better deal you are sure to capture some of the market.

Every New Utah Business Needs a Good Attorney

One thing we pride ourselves on is that our attorneys are entrepreneurs in addition to being lawyers.  We understand the business mind.  We understand what it takes to succeed in starting a business.  Because of our personal experience in the business world we are primed to help you succeed.  Every business, no matter how small, should have a good business lawyer on retainer so as to avoid some of the many pitfalls we people make time and again.

Contact our law firm to find out how we can help your business grow.  801.413.1753.

Utah Small Business Lawyer | Salt Lake Provo Legal Advice for Start Ups

Starting a Utah Small Business?  Now is a Great Time

One of the things that sets Utah apart is the number of entrepreneurs our it has.  With several universities which inspire and encourage entrepreneurship, many young college graduates begin their post-school life by starting a business.  These days entrepreneurship is becoming a quality that many, young and older, alike are finding is a necessity, not a choice.  The economic downturn of the last few years has put many people who were otherwise comfortably employed into the realm of unemployment.  Many of these newly unemployed individuals have found they have to start a business because the existing companies are simply not hiring.

The economic depression is both a blessing and a curse for entrepreneurs, but if we look at history, economic recessions and depressions are the best times to start new ventures and companies.  Some of the most successful firms and companies were started during economic downturns.  With intelligence, a good work ethic, dedication, and goals, you can build a new business in Utah even with the economic cards stacked against you.

Salcido Law Firm Will Help Your Business Get Going

Part of starting your business off on solid ground is to make sure you have good legal counsel putting everything in place.  Our business attorneys will make sure your new business complies with the many regulations and laws that affect every business.  We are experienced in all aspects of small business law.  A cost of doing business is having an attorney on retainer.  It’s an unfortunate truth that your business will have legal arise every day and you need to make sure you are adequately protected.

Call us at 801.413.1753 and come sit down with one of our business lawyers.  We’ll help you understand how our firm can bring more value to your business and get you started off on the right foot.

Partnerships are Contract Based

A general partnership is a creature of both of statute and contract.  Most business organizations, such as a corporation, are created by filing a public document pursuant to a statute.  Partnerships, however, are not created in the same way.  Partnerships are created when two or more persons’ actions show an intention to associate as co-owners in a business for profit.  These actions can be by word or conduct or both and those actions create a contract between them.

Often times general partnerships have written partnership agreements.  They can be detailed and run hundreds of pages long.  Other time partnerships have no written agreement at all.  Either way a fundamental aspect of a general partnerships is the contract-based relationship between the partners.

Partnerships are Statute Based

Another fundamental aspect of a partnership is the statutory context in which contracts between business partners arise and exist.  In Utah a partnership statute provides that context determining whether a partnership exists.  It also governs the relationship of the partnership and its partners with outsiders as well as when a partnership ceases to exist and what then happens to the interests, assets, and liabilities of the partnership.

Partnership Created by Contract and Statute

Combining the aspects of both contract and statute, a partnership is created.  “A partnership is an association of two or more persons to carry on  as co-owners a business for profit.” (Uniform Partnership Act).  Partnerships are easy to create.  Its creation involves no special formalities.  No magic words need to be said or documents signed.  If a business structure has the essential characteristics of a partnership, then it is deemed one.

Our Lawyers Will Help You Decide if a Partnership is Right for You

Because partnerships are easy to create, many people find them attractive to create when pursuing a business venture.  Partnerships do have many disadvantages, though.  Contact the lawyers at the Salt Lake City based Salcido Law firm to find out if a partnership is right for you.  Our business law attorneys will help you decide if you should form a partnership or if something else is needed such as a corporation.  Call us today at 801.413.1753.

At SLF, we can incorporate, organize, register, advise, and handle your initial legal matters to help ensure your company gets started on the right foot and is protected. We offer full business formation services. Below is a list of our corporate formation services and pricing for LLCs.

1.         LLC  Package (Basic) - $499

2.         LLC Package - $999

3.         LLC Package (Full) – $1499

SLF offers free consultation time with our Utah Business Attorneys to discuss the legal implications of your business and any concerns you may have. Do not trust your company’s legal well being to online incorporation services. Get personalized time with SLF Utah LLC Attorneys to ensure your company is properly established and protected.

SLF’s business representation includes general counsel services for Utah corporations of all sizes. We operate as the general counsel for companies in Utah who do not have in-house lawyers and to law departments seeking additional support. The cost of having a traditional in-house lawyer employed with your company can be significant. When you hire SLF as your general counsel you get an entire legal team for much less than you would pay for an in-house attorney. You also get more experience and expertise than the typical in-house attorney can offer your company. Our general counsel services ensure your company is protected.

Our General Counsel Services Include:

General Commercial Law

• Contract Drafting
• Contract Review/Revision
• Contract Disputes and Negotiation
• Credit and Collections
• Real Estate Matters
• Strategic Alliances
• Product Safety
• Transactional Work

Employment Law

• Anti-Harassment Management
• Disability Management
• Discipline and Discharge
• Employee Handbooks
• FMLA Compliance and other Leaves
• HIPAA Privacy and Security Issues
• Performance Management
• Screening and Hiring
• Wage and Hour Compliance
• Workforce Reductions
• International Employment Law
• Privacy Issues

Preventive Law

• Alternative Dispute Resolution
• Employee and Executive Training
• Legal Audits and Internal Investigations
• Policy Formation
• Settlements and Releases
• Codes of Ethics/Corporate Compliance Programs
• Responses to Federal and State Agency Requests
• Regulatory Compliance
• Cease and Desist Letters
• Licensing

Litigation Management

• Litigation Strategies
• Management of Outside Counsel
• Preparation of Discovery Responses
• Preparation and Selection of Witnesses
• Preliminary Litigation Support

Corporate Governance

• Maintaining Corporate Records
• Advice on Corporate Governance and Financing
• Attendance at Board Meetings
• Recording and Preparing Company Minutes
• Corporate Compliance and Ethics

Internet and Intellectual Property Law

• Copyrights
• Trademarks
• Privacy Agreements
• Terms & Conditions
• Internet Compliance Programs
• Website Audits
• Patents – outsourced to specialty firm

Legal Research and General Representation

• General Legal Research
• General Legal Representation
• Legal Audits

In addition to the services listed above. SLF has an extensive, established network of outside legal specialists to assist our clients in key areas where deep knowledge of particular subspecialties may be required. Key examples are our relationships with specialists in international law, patent prosecution, a wide variety of technical fields, and complex tax matters.

Don’t waste money on hiring an in-house attorney when you can hire a full legal team at SLF to handle the same work at a fraction of the cost. We offer several payment options including; hourly fees, monthly retainer fees, or flat fees for project work. Call SLF today and speak with a Utah Business Lawyer. Don’t take any chances with your business, call Chris Salcido at SLF and Get Protected!

1. Employment Tax Treatment

S corporations are treated more favorably than LLCs for employment tax purposes. This is an important consideration that can be controlling in the decision of many businesses about whether to operate as an LLC or S corporation.

If all members of an LLC are individuals and participate in management of the LLC’s business, all of the LLC’s income is subject to self-employment tax. What’s more, the income is subject to self-employment tax in the year the LLC earns it even if the income is not distributed to members but is retained by the LLC to provide working capital or to acquire capital assets. Only certain limited types of LLC income, such as capital gains and rentals from real property, are exempt from self-employment tax. If an LLC is organized as a manger managed entity and has members who do not participate in management, income allocated to members who do not participate in management may also be exempt from self-employment tax.

In comparison, income of an S corporation is never subject to self-employment tax in the hands of its shareholders. Wages and salaries paid by S corporations to their shareholders are, however, subject to employment taxes in the same manner as compensation paid by to any other employee. The combined rate of employment taxes imposed on the employer and employee is the same as the rate of the self-employment tax, so the difference in tax systems does not create any savings. But what does create a savings is that employment taxes are only imposed on amounts paid out by an S corporation as compensation. Income of an S corporation that is retained by the business or is paid out as dividends is not subject to employment tax.

Self-employment tax is not a nickel and dime issue. The tax is imposed at a rate of 15.3% on selfemployment income of up to $90,000 received by an individual in 2005, and is imposed at the rate of 2.9% on self-employment income in excess of that amount. Although one-half of an individual’s self-employment tax is deductible for income tax purposes, the imposition of self employment tax as well as income tax on LLC income allocated to a member can significantly increase the rate of tax on the income.

2. Cash Basis Accounting

If a business has owners who do not participate in the operation and management of the business, it may be required to use accrual basis accounting if it is organized as an LLC, even if it does not have inventories or does not have a member that is a C corporation. This is the result of tax rules designed to prevent certain syndications from using cash accounting. These rules generally do not apply to S corporations.

3. Familiar Management Structure

Most states base their corporate laws on model legislation that has been widely adopted or base their corporate laws on long-standing concepts recognized in other states. As a result, there is a large body of law relating to the management and operations of S corporations, and this may reduce the number of potential areas for conflict between shareholders, directors, and officers.

In contrast, the LLC laws of many states differ significantly from those of other states, and all LLC statutes are of relatively recent origin. Consequently, there may be more questions about the proper way to operate or manage an LLC. If you have questions about S corporations and are thinking about forming a new company, contact the Utah Business Formation Attorneys at SLF today and Get Protected!

Doing business in the form of an LLC provides limited liability for all members and advantageous partnership treatment for federal income tax purposes. This combination of benefits is not available with any other form of business entity, and members need follow, certain guidelines to be certain that the benefits remain available.

1. Seperate Entity

In order to obtain limited liability for members, it is critical that an LLC be operated as a business entity that is separate from its members. If an LLC is operated as an alter ego of the members, creditors of the LLC may be able to recover their claims from the members rather than being limited to recovery from the LLC.

a. Adequate Assets

In order to function as a separate entity, an LLC needs sufficient assets to operate its business. At the time your LLC is organized you will need to contribute enough cash and other assets to provide the LLC with a reasonable chance of being successful. Ownership of the cash or assets needs to be transferred to the LLC; the LLC should not be operated primarily on money borrowed or assets leased from members. In the same vein, no substantial distributions of cash or assets should be made to members until your LLC has accumulated sufficient profits to fund the distributions.

Applicable state law prohibits an LLC from making any distribution that would cause the LLC’s liabilities to exceed its assets or would prevent the LLC from paying its obligations as they become due in the ordinary course of business. If distributions are made in violation of these insolvency restrictions, the members receiving the distributions may be required to repay the LLC at the behest of other members or the LLC’s creditors. The insolvency restrictions apply to distributions that are required under the terms of the operating agreement, such as distributions to pay taxes or distributions of excess cash flow, as well as distributions made at the discretion of the members.

b. Separate Assets

As a separate entity, your LLC needs to have its own assets. The LLC must have a separate bank account and should hold title to its assets in its own name. Under no circumstances should the personal funds, assets, personal expenses of members, to make personal investments for members, or for any other purposes not related to the LLC’s business.

Cash or other assets should be transferred to members by your LLC in only three situations—to make distributions permitted under the terms of the operating agreement and the applicable state LLC statute, to reimburse members for reasonable expenses incurred on behalf of the LLC, and pay reasonable compensation for services performed by members for the LLC, the amount of which has been agreed upon in advance. Since reimbursement of expenses and payment of compensation can be the equivalent of a distribution, particularly if the expenses or compensation are unreasonable in nature or amount, the insolvency restrictions that are discussed above can apply, and these restrictions need to be considered whenever cash or assets are transferred to members.

If assets owned by a member of your LLC are used by the LLC, appropriate arrangements should be made and documented. For example, if a member leases an office, production facility, or warehouse to the LLC, there should be a written lease agreement, and the terms should be fair to the LLC. It’s a good idea to document loans from members to the LLC with promissory notes and to provide for a reasonable rate of interest that is actually paid by the LLC. In the absence of these precautions, the LLC and its members may appear to be one and the same individual or entity, which may jeopardize the members’ limited liability protections.

c. Separate Operations

An LLC must be operated as an entity that is separate from its members. The business of your LLC should be conducted in the name of the LLC, and the LLC’s name should be used on all agreements, contracts, leases, orders, and other arrangements entered into by the LLC. This name should also be used on all products, signs, advertisements, correspondence, business cards, telephone directory listings, and similar items.

The LLC will need to obtain and carry its own insurance and to file its own income and employment tax returns. Your certified public accountant should be contacted regarding the filing of an application for an employer identification number for the LLC and for assistance with setting up the books and records of the LLC.

An LLC can only act through its members. But when one of you is acting for your LLC, remember that you are acting an agent of the LLC and not in your individual capacity. For example, members should sign all documents on behalf of the LLC as follows: “[Name of LLC] by [Name of Member], Member.” This makes it clear that the member is signing in a representative capacity and is not accepting personal liability for the performance of the obligations spelled out in the agreement.

2. State Registration

LLCs exist under state law. Your LLC was created by filing articles of organization with the state, and this filing will remain effective only if the LLC files annual reports with the state and pays any fees or taxes due with those reports. Failing to file annual reports or pay fees or taxes can lead to dissolution of your LLC, which may cause you to lose the protections afforded by limited liability.

If your LLC transacts business in a state other than the state in which it’s organized, registration in the other state may be required. If so, the registration should be kept current, and all annual reports should be filed and all fees and taxes paid on a timely basis. Although the loss of limited liability is not a concern, the ad-verse consequences of failing to maintain the right to transact business in another state can be severe.

Each year when you review the activities of your LLC or assemble the information for its annual income tax returns, it is a good idea to verify that annual reports have been filed and fees have been paid.

3. Income Tax Matters

Your LLC will be treated as a partnership for federal income tax purposes unless you elect to be taxed as a corporation. Electing to be taxed as a corporation can involve very serious income tax consequences that may be disadvantageous to you either now or in the future. There can be adverse tax consequences even if your LLC elects to be taxed as an S corporation. Consequently, you should not make the election to be taxed as corporation without carefully considering the ramifications with your certified public accountant.

There is generally far less tax cost associated with converting a partnership to a corporation than there is in converting a corporation to a partnership. When in doubt, it’s better to start with partnership classification rather than making an election to be taxed as a corporation.

A partnership must file a federal information income tax return each year. Any income or loss shown on this return passes through to the members and must be reported on their individual income tax returns. Your LLC may also be required to file income tax returns in states and localities in which it operates. You should consult with your certified public accountant regarding compliance with applicable income and other tax filing requirements.

Although the LLC will be taxed as a partnership, it should not be held out to the public as a partnership. An LLC provides limited liability for all members, and a partnership does not. If members of an LLC identify themselves as partners when dealing with third parties, there is a risk that creditors of the LLC will be able to assert their claims against the members individually.

4. Operating Agreement

The operating agreement of your LLC provides a road map for conducting LLC operations in a manner that preserves the benefits of this form of doing business. You should refer to the operating agreement periodically to be certain that your LLC’s operations are being conducted properly.

Among other things, you should hold a member meeting whenever a major decision requiring the consent of the members is to be made. These decisions include changing the nature of the business of the LLC, making optional distributions to members, selling all or a substantial part of the assets of the LLC, entering into transactions involving a conflict of interest with a member, admitting a new member, and continuing the LLC following the death, incapacity, withdrawal, expulsion, bankruptcy, or dissolution of a member.

A permanent written record should be made of all member meetings indicating who was present at the meeting, what action was taken at the meeting, and the number of members voting in favor of or against each action taken. The record of meetings should be kept at the principal office of the LLC.

The operating agreement contains a list of the other types of records and information that must be maintained at that location. The operating agreement contains restrictions on the transfer of members’ interests and provisions for the admission of new members. Members are required to follow a specific process if they want to transfer their interests to others, and formal action by the members is required to admit new members to the LLC. The procedures in the operating agreement should be followed in order to prevent creditors of members or other third parties from acquiring rights as members of the LLC.

The operating agreement also contains provisions relating to the death, incapacity, withdrawal, expulsion, bankruptcy, or dissolution of a member. These provisions should be consulted if any of these events occur. Prompt action may be required to prevent dissolution of the LLC.

Although LLCs are not required to hold annual member meetings, it’s a good idea for the members to review the operations of the LLC at least annually. This may be a good time to review the operating agreement to be certain the LLC remains in compliance with its terms.