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

When it comes to growing your internet business, new tools and resources are available all the time. What I will tell you up front is that the majority are looking for the latest technology, graphics, or tools to help make more money online. Many times it is not the cool new tools or strategies, it comes down to the basic fundamentals for success. First, let’s address a few of the fundamentals to improve your results: That is the ability to sell in print. If your headlines, subheadlines and copy are ineffective, no mater how good your videos or graphics are you will get little or no results. Find a great copywriter and buy their books or programs, such as Bill Glazer, Dan Kennedy, Jay Abraham, John , Mike Dillard and many others. Invest in tools and resources to improve this skill. Even if you outsource your writing, the better you have a basic knowledge the better.

Model the best websites that convert at the highest level. Notice how they set up their headlines, subhead lines, the color and font they use. The spacing of the lines. What does the copy say on the opt in button to get your free report or videos. When I say model, model exactly. Most of your websites do not look like the pros. An opt in page to build your list. Many call it a landing page. Your goal is to always build your list. You probably opt in less and less frequently when on others websites because you do not want to be blasted with emails.

Advanced Internet Strategies to Grow Your Business! You must be more and more compelling and add more value before someone will even part with their email address these days much less do business with you. Here is a great example of a powerful opt in page, and leading to another opt in page for a book being promoted by Harvey Mackay: I noticed on this link, how Alex Mandossian’s audio played to get people to opt in for the book offer for Harvey MacKay. http://footinthedoorbooktour.com/ It is brilliant how he directs you to opt in, refer a friend, and print out the page…all little distinctions that can add to building your list. These are tools you can copy, all which effects the results. Once you opt in notice the great video by Harvey Mackay and how he lays out the bonuses you will
see on the other side. It is very hard to resist opting in. You want to have a similar standard for your website, a similar pattern.

It’s becoming harder and harder to bring traffic to your website. All the search engines are much competitive and flooded with new websites every day. Quality traffic to your niche market is key to your success. The first lesson: Are you marketing to a niche market? If your key words are broad that may be the reason you are not converting or making any money. Here are the big four: Videos that teach, add value and give strategies are very good for traffic. You can go to individual sites like YouTube or engage a service like Traffic Geyser to do it for you. If you feel uncomfortable being on video, do a Camtasia video on your screen or a PowerPoint video to teach. Go to Google, click on videos and search “Scott Letourneau” you will find examples of how to do PowerPoint videos. Articles. It’s best to write your own. Write 1-2 a week and submit through ezine articles or article marketer.com which will get them out to many sites. You must have a great headline, teach in the article and have a great offer to go to your web link in the Johnson box (the end after your article). Most get too busy and do not submit articles on a weekly basis. This is imperative to your long term traffic strategies.

Joint Ventures. This is the most powerful marketing strategy available today. Imagine someone promoting you to their data base where they have invested millions of dollars to acquire clients at no cost to you. The key is to offer value and have the tools in place to help someone else make more money first, increase their conversions first…This means you have to ask better questions and offer solutions to help conversions. You need to have an outline in case they want to interview you, a bio ready, an email to send to their list and questions to ask you. You must make it simple. Several times per year I have the pleasure of speaking at the World Internet Summit along with many of the top internet marketers in the world. I get exposed to many discussions and conversations as to what is working and what is not working. There are two sides to that. What you the consumer want to buy and what is working in their business. They are related in many ways. Just to be clear up front, a large part of your success is to be very honest with what your customer wants or needs. There is a very important pattern in selling. Most people are poor because they want to buy simple solutions to complex problems. Rich people realize there are complex solutions to complex problems.

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

Go to http://www.TheUltimateJointVentureBootCamp.com to find out how you can master this ultimate form of leverage in Las Vegas on January 29, 30 and 31st!

The KEY QUESTION: “ARE THESE PROFITS SUBJECT TO SELF EMPLOYMENT TAXES?”

According to an IRS official and a national issue specialist in its Examination Specialization Program, until the Service issues further guidance, it will not challenge limited liability company (LLC) members on self-employment (SE) tax if the member and the LLC conform to the most recent (1997) proposed regulations (REG-209824-96). These regulations, however, need clarification now on the definition of limited partner (LP).

General Rules

Under Prop. Regs. Sec. 1.1402(a. 2(h)(5), if substantially all of a partnership’s trade or business activities involving the performance of services (i.e., consulting), any individual who provide such services as part of that trade C business will be a general partner (gross income for self employment tax purposes).

In a “non-service” partnership, Prop Regs. Sec. 1.1402(a)-2(h)(2) treats partner as a Limited Partner for self employment tax purposes unless he or she:

1. Has personal liability for the partnership’s debts by reason of being a partner;

2. Has the authority to contract on the partnership’s behalf-, or

3. Participates in the partnership’s business for more than 500 hours during the entity’s tax year.

Even if a member does not meet the hours test or is not personally liable for a partnership’s debts, an individual serving as a manager in a member-managed LLC would be subject to self employment (SE) tax. If the LLC agreement does not precisely give the managing rights to a specific individual, all members would be subject to SE tax.

Exceptions and Clarifications

In general, under Sec. 1402(a),”net earnings from” self employment include the gross income derived from any trade or business carried on by an individual, less any allowable deductions attributable to such trade or business, plus his or her distributive share of income or loss from any trade or business carried on by a partnership of which he or she is a member.

Under Regs. Sec. 1.1402(a)-2(f), a “partnership” includes a syndicate, group, pool, joint venture or other unincorporated organization that carries on a trade or business, but is not a trust, estate or corporation.

For this purpose, gross income includes payments received by a partner from the partnership for services rendered to the partnership or for the use of capital by the partnership.

www.nvinc.com Call within 72 hours of downloading this free guide at 1-877-515-0505 and

receive a Bonus GUIDE, a $47 value, The Top 20 Costly Mistakes BEFORE And AFTER Incorporating! and a 30 minute free consultation, a $200 value plus a special one time offer after you call!

Here’s a great example of a business that would typically benefit as an LLC taxed as a partnership.

(Keep in mind, changing only a few of the answers here could dramatically change the type of entity we’d recommend.  Hence, online research and “guessing” at what entity is best can turn out to be very costly. After all, you can’t afford to guess when it comes to creating the foundation of your business.)

LLC Partnership Illustration

Question: My partner and I own rights to computer software, and we’re going to market it across the US as a new security program for computer systems.

1. What are you expecting in the way of Gross Sales during your first 12 months?

• 900k

1. What will your business expenses and net profit be?

• 300k expenses
• 600k net profit, before paying myself and partner.

1. Do you have a partner for your business?

• Yes

1. What is your personal income level (aside from this new business)?

• We each earn over 150k from a computer-consulting contract.

Let me ask you a few other questions to help determine which entity will be best for you:

1. You mentioned you’re selling a product.  Will you be providing services as well?

• 100 percent product, computer software.

1. Will your business develop a net worth? Meaning, will it develop systems and have a net value over time? Or is it based upon your efforts so that the day you stop working is the day your company stops generating revenue?

• Yes, this product already has net worth and as it becomes known in the market place, the value will skyrocket! Yes, this will be a very profitable business where we only need a couple of employees, and we won’t have a lot of overhead.

1. Will your company hold large inventories or receivables?

• No, only some computer equipment. The software is replicated as orders come in.

www.nvinc.com Call within 72 hours of downloading this free guide at 1-877-515-0505 and

receive a Bonus GUIDE, a $47 value, The Top 20 Costly Mistakes BEFORE And AFTER Incorporating! and a 30 minute free consultation, a $200 value plus a special one time offer after you call!