Forming a C corporation to take advantage of fringe benefits when your business doesn’t fit the C corporation model. (Can you spell nightmare?)

Asset Protection and Business I.Q.

Question # 6: Which are reasons NOT to form a C corporation?

A) C corporations have lower tax brackets than individuals
B) Double taxation
C) Too much profit to reinvest
D) When a flow through entity may make more sense
E) Focusing on business expenses may be more important than fringe benefits
F) All the above
G) A and B
H) B, C, D and E

Costly Mistake Number 7:

Forming an entity in Nevada and NOT knowing when to foreign register, and for what reasons. (“Can’t you just get a mailbox?”)

Asset Protection and Business I.Q. Question # 7: Which are common reason(s) that would cause an entity to need to foreign register (or qualify) to do business in another state?
A) An employee in another state
B) An office located in another state
C) Equipment located in another state
D) An independent contract in another state
E) All of the above
F) A, B, and C

Costly Mistake Number 8:

Forming an entity and hiring independent contactors and employees WITHOUT knowing the rules. (It makes a difference as to which states you’ll need to foreign register.)

Asset Protection and Business I.Q. Question # 8: Which statement is false concerning employees?

A) They create less liability than independent contractors for your business
B) Employees create nexus for your company in the state they are doing the work
C) Your company will pay half of the 15.3% payroll taxes on each employee
D) The IRS is mostly attempting to convert employees to independent contractors

Costly Mistake Number 9:
Forming an LLC taxed as a partnership WITHOUT having an”official” partner. (Maybe the IRS won’t notice.)

Asset Protection and Business I.Q. Question # 9: What entity or person (assuming you are one of the partners) will qualify as a partner for an LLC taxed as a partnership?

A) A single member LLC owned by you
B) An S corporation owned by you
C) A C corporation owned by you
D) A foreigner
E) All of the above
F) B, C and D

Costly Mistake Number 10:

Selecting an inexperienced or disreputable company to help you form your entity. (There’s no excuse for not checking references with the BBB, local professional organizations and testimonials.)

Asset Protection and Business I.Q.
Question # 10: Which characteristics should be considered when choosing an entity formation company?

A) A company that has been in business for at least five years
B) A company that has a national known attorney
C) A company that has research and invests in internal training
D) A company that provides other business development services
E) A company that is recommended by top local organizations
F) All of the above

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Costly Mistake Number 3:

Forming an LLC and having it managed by members instead of managers* (A sure way to lose flexibility and control)

Asset Protection and Business I.Q.

Question # 3: What is/are the benefit(s) of having your LLC managed by managers?

A) Many times you do not need to disclose the owners (members) in annual state reports
B) Managers have more authority than members
C) Members added in the future will not necessarily have a say in management
D) It looks more like a limited partnership
E) An operating agreement is not required
F) There are more tax advantages
G) All the above
H) A and B
I) A, C and D
J) C and E

* “Managers of an LLC” is defined as the person or entity that manages the day to day operations of the LLC.

Costly Mistake Number 4:
Forming an S corporation and NOT knowing the shareholder rules (Imagine discovering years later that you’ve violated an S corporation shareholder rule — and that you now owe years of expensive C corporation back taxes.) Asset Protection and Business I.Q.
Question # 4: Who can be a shareholder of an S corporation?

A) A U.S. citizen

B) Another S corporation
C) C corporations
D) All LLCs
E) A living trust
F) All of the above
G) A, B and D
H) A, B and E

Costly Mistake Number 5:
Forming an S corporation when your company anticipates future value (There must be a better approach, and indeed, there is!)

Asset Protection and Business I.Q.

Question # 5: When is an S corporation NOT your best choice?

A) When you are considering investors for your business
B) When you are considering foreign partners
C) When the company will develop a great asset value
D) When you are going public
E) When you live in California
F) All of the above
G) A, B and C
H) A, B, C and D

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Costly Mistake Number 1:

Forming an LLC and NOT knowing how it’s taxed (Are you a single or multi-member LLC? Will you be disregarded for tax purposes, taxed as a partnership, a C-, or an S-corporation?)
Asset Protection and Business I.Q.

Question # 1: If you have two members in an LLC*, how will the LLC be taxed?

A) A limited partnership
B) An S corporation if you file Form 8832 and 2553
C) A disregarded entity
D) Federally only
E) All of the above
F) A and B
G) A, B and D * “Members in an LLC” is defined as the owner of the LLC. Costly Mistake Number 2: Forming an LLC for real estate and NOT knowing how it should be taxed when you have dealer and/or investor property? (Make the wrong choice, and be doomed to a life of unnecessary taxes.) Asset Protection and Business I.Q.

Question # 2: What is a “real estate dealer”?

A) Someone who goes to real estate auctions
B) Someone who holds onto real estate for more than 12 months
C) Someone that will be subject to SE taxes on the sale of the property
D) Someone that will be subject to short term capital gains
E) Someone that flips properties in less than 12 months
F) B, D and E

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP

has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Advertising is the driving force, and that’s what’s going to separate the men from the boys in this market, to say the least.

There is less business out there.  You better be ready to put your gloves on and fight for it.

A seasonal business can be a great thing:

Merchant Account Case Study: The merchant was actually doing $10,000 a month the month I got him to write the check and fund this merchant.  I said, “Listen, I came across a guy who owns a nursery.  The nursery was about $100,000 to $200,000 a month from the months May through October.”

He says, “It’s January, and the guy did $10.53 last month, Bob.  I can’t exactly write him a check and not collect anything back over the next 3 months.”  I said, “Well, let’s do the numbers and let’s figure his out.”

I asked the merchant, I said, “What are you going to do with the money?”  He says, “Well, I’m going to go buy some inventory.”

I go, “How much of a break are you going to get on the inventory?”  He said, “I’m going to save 5% to 10%.”

I said, “If you borrow money at 35% to save 5% to 10%, you’re going to go out of business pretty quickly.”  I sent him on a hunt.  I said, “Why don’t you go to the guy who sells you your trees or your plants and see what you can do?  Because I’m sure he’s not making a ton of money right now and he’s as seasonal as you.”

He made a few calls and he got back to me the very next day.  He says, “The guy that sells me my mulch, Bob, says he’ll give it to me for 40¢ on the dollar.  I buy about $100,000 of mulch every April and then I do it again in July.”

I said, “If I give you $50,000 you’ll go buy that mulch for $45,000,” which he did.  He paid me for the $45,0000, $65,000 total.  Guess what?  By May 31^st, he’s sold his $100,000 worth of mulch and made himself an additional $35,000 that was locked in, in profit, for the year.

That’s a heck of a way to start out the beginning of your year.  That’s a merchant that I’m going to fund, and that’s the difference between myself and the bank.  I’m not looking at their cash flow; I’m not looking at their ability to pay today necessarily.  I’m looking at the ability to make a difference in the business.

I’m sure that if there’s anybody out there with the ability to make an additional $35,000 to $40,000 over a simple purchase just having cash available to them, it’s more than worthwhile to do it.

Renovating and remodeling is one of the biggest things out there.  To give you an example, you’d be very surprised how a small shift, a change in a sign, even in your own town, will draw the eye of everybody who passes.

Any type of a renovation is going to get people to talk about your business.  It’s going to get people to go back in there.

You may have a good restaurant, you may have a good theme.  You know what?  That little bit of a change is like starting a brand new company

To redo the front of most retail businesses, can cost between $5,000 and $15,000.  Just doing that will increase the foot traffic anywhere from 11% to 20%.

Advertising is the driving force, and that’s what’s going to separate the men from the boys in this market, to say the least.

There is less business out there.  You better be ready to put your gloves on and fight for it.

A seasonal business can be a great thing:

Merchant Account Case Study: The merchant was actually doing $10,000 a month the month I got him to write the check and fund this merchant.  I said, “Listen, I came across a guy who owns a nursery.  The nursery was about $100,000 to $200,000 a month from the months May through October.”

He says, “It’s January, and the guy did $10.53 last month, Bob.  I can’t exactly write him a check and not collect anything back over the next 3 months.”  I said, “Well, let’s do the numbers and let’s figure his out.”

I asked the merchant, I said, “What are you going to do with the money?”  He says, “Well, I’m going to go buy some inventory.”

I go, “How much of a break are you going to get on the inventory?”  He said, “I’m going to save 5% to 10%.”

I said, “If you borrow money at 35% to save 5% to 10%, you’re going to go out of business pretty quickly.”  I sent him on a hunt.  I said, “Why don’t you go to the guy who sells you your trees or your plants and see what you can do?  Because I’m sure he’s not making a ton of money right now and he’s as seasonal as you.”

He made a few calls and he got back to me the very next day.  He says, “The guy that sells me my mulch, Bob, says he’ll give it to me for 40¢ on the dollar.  I buy about $100,000 of mulch every April and then I do it again in July.”

I said, “If I give you $50,000 you’ll go buy that mulch for $45,000,” which he did.  He paid me for the $45,0000, $65,000 total.  Guess what?  By May 31^st, he’s sold his $100,000 worth of mulch and made himself an additional $35,000 that was locked in, in profit, for the year.

That’s a heck of a way to start out the beginning of your year.  That’s a merchant that I’m going to fund, and that’s the difference between myself and the bank.  I’m not looking at their cash flow; I’m not looking at their ability to pay today necessarily.  I’m looking at the ability to make a difference in the business.

I’m sure that if there’s anybody out there with the ability to make an additional $35,000 to $40,000 over a simple purchase just having cash available to them, it’s more than worthwhile to do it.

Renovating and remodeling is one of the biggest things out there.  To give you an example, you’d be very surprised how a small shift, a change in a sign, even in your own town, will draw the eye of everybody who passes.

Any type of a renovation is going to get people to talk about your business.  It’s going to get people to go back in there.

You may have a good restaurant, you may have a good theme.  You know what?  That little bit of a change is like starting a brand new company

To redo the front of most retail businesses, can cost between $5,000 and $15,000.  Just doing that will increase the foot traffic anywhere from 11% to 20%.