Your Legal Status.... Business 101

As we head into the first Thursday of February, I want to refresh you on the different status claims you can obtain for your business-- as well as what the pros and cons are. I've noticed an uptick in private security businesses starting up. I know many of you follow my lead when it comes to the business of security. So, for that reason, please read through these basics and then follow up with your legal adviser on what will actually work for your concept/ idea.

Sole Proprietorship: This type of business does not make a legal distinction between the business owner and the business itself. Although costs can be low (from taxes to licensing fees)the down-side is that you will be personally responsible for any business debt that may occurs, potential law suits, and your personal income tax reflects your entire business' profit.

A General Partnership is the same as a sole proprietorship but with several owners. Again, the set-up costs are low and there are relatively few regulatory requirements. And, again, the owners are completely liable for all the actions and debts that stem from the business.

Limited Liability Partnership(much like a LLC) is very similar to a general partnership. However, there is a separate classification of partners making each person's liability limited. The downside to this classification is it only "limits" a partner's liability, not erase it completely- which is a common myth. Also the filing and administrative requirements are complex.

C-Corporation is only a form of doing business that creates a separate legal entity from the individual owners. This legal entity can act and do business on its own just as a person would do (i.e. borrow money, enter into lawsuits and contracts, etc.).
With a C-Corporation your "owners" are now shareholders who are not personally liable for the actions and debts stemming from the company. However, if a shareholder wants to leave the business then the paperwork involved isn't easy, making a separation a long-one- which in the case of a nasty separation only makes the situation worse. Also, owners (shareholders) are taxed twice.

S-Corporation is a type of corporation but the business is taxed as if it is a sole proprietorship. Its formation is subject to certain legal criteria such as a maximum number of shareholders. The benefits, unlike a C-Corp., include owners only being taxed one time. However, the administrative costs are higher and all owners (shareholders) have to be U.S. citizens.

Many business owners either chose to set-up as an LLC or an S-Corp. Note, I will not advocate for either because you need to discuss your personal situation with a lawyer and a CPA. However, I will state that an LLC may have to pay more self-employment taxes than S-corps due to IRS regulations.

Until tomorrow,

Twyla N. Garrett

Public Speaking - Exposing the Scams!

Part of my career has been, and still is, speaking at public events. I'm invited to talk to groups of all sizes almost on a daily basis. But, this industry is also plagued by scam artists. If you're thinking of hiring a public speaker, or even becoming one, let me share some tips with you to avoid being scammed.

First, get a contract and a payment. This may seem obvious, but I have heard horror stories from newbie speakers and event planners. Don't be afraid to ask for a contract and a deposit. If the other party can't provide this, don't go for it. Too many people have been burned within this industry based on the promise of payment after performance. Contracts are a must and deposits are a must. Never demand payment in full, never accept no payment at all. A 50/50 payment will make both parties involved accountable when it comes to the contract's execution.

You should become affiliate with MPI to avoid any funny business. If you're not speaking at an event sanctioned by a member of MPI, you need to keep your guard up until you become familiar with the client. Not familiar with MPI? Click here for a list of what it is, the types of members you could be working with, and more!

Finally, don't send advanced material without a deposit. There are some meeting planners who like local, cheaper talent. But, this talent might not have the right message. So, the meeting planner has you send your material at no cost (pending a possible job) and then turns that material over to a cheaper, less qualified speaker to present. You should have a video clip on your website- or at least relevant information that will give a planner the basics of your presentation / talk without providing all the materials up front.

Being a public speaker isn't easy. There are a lot of speakers out there, contracts are sparse. You have to protect yourself and your brand from scams. Follow my above steps and you'll be less likely to become the victim of one.

Tywla