Tax Issues
It’s important to keep up-to-date on state and local regulations that govern the purchase and sale of goods within Washington state, including which sales taxes may affect your business. Washington no longer uses resale certificates; instead, it requires every business that sells goods at wholesale to apply for a reseller permit to present to vendors. Reseller permits allow you to purchase goods (or services) that you intend to resell without having to pay retail sales tax on the original purchase. If you run a business that purchases items that you are intending to resell, you… Read the rest
When discussing choosing the right business entity, it’s important to understand the significant (and subtle) differences between the various choices. Today’s post details the differences between the limited liability company (LLC) and the S corporation.
State v. Federal Distinction
For state law purposes there are two primary entities that merit consideration: corporations and LLCs. Corporations and LLCs both offer limited liability to business owners, which means that absent extraordinary circumstances if the business is sued, only business assets are on the hook—i.e. your personal assets would be safe from any judgment.
For federal… Read the rest
Last week, the annual green energy conference convened in Las Vegas to discuss expanding renewable energy efforts in the U.S. Democratic Senate Majority Leader Harry Reid and Interior Secretary Ken Salazar opened the discussion with the announcement that a 12-square-mile wind energy farm in White Pine County, a rural county located in Nevada, will begin producing electricity.
Thus far, U.S. renewable energy efforts have fallen behind those of other countries. Former President Bill Clinton closed out the discussion last Tuesday, recalling the loss of Senate support for the Read the rest
Trademarks
Hershey’s Granted Trademark for Bar Configuration
The US Patent and Trademark Office’s (USPTO) Trademark Trial and Appeal Board granted Hershey’s trademark application for the design and shape of its chocolate bar. The Examining Attorney for the USPTO had refused registration on two grounds: (1) Hershey’s proposed mark was a functional configuration of the goods; and (2) it was a non distinctive configuration that had not acquired distinctiveness as required under Trademark Act Section 2(f), 15 U.S.C. § 1052(f). The Trademark Trial and Appeal Board overruled the… Read the rest
When forming a business, an important thing to consider is how profits will be taxed. Different corporate structures have different tax consequences. “Double taxation” refers to situations where corporate profits are taxed and the corporation’s shareholders are personally taxed upon receiving dividends or distributions of those profits.
“Pass-through taxation” refers to situations where income “passes through” to investors or owners. Common types of pass-through entities are limited liability companies, limited liability partnerships, and S corporations. The partnership or company itself is not directly… Read the rest
Perhaps you’ve heard the term “revocable living trust.” Its ever-increasing popularity has made it a frequent topic of conversation among tax and estate planners. As daunting and complicated as the term may sound, the process of creating a revocable living trust is actually quite simple. This type of trust allows you to transfer ownership of your assets to the trust while still giving you the right to possess and use your assets while you’re living. Furthermore, these trusts enable you to ensure your estate does not pass through probate upon… Read the rest
Today, the use of independent contractors is becoming more and more prevalent. As jobs began to disappear in 2008, unemployed professionals decided to jump into the freelance waters and try their luck. As business try to stay lean, they have substituted a large staff of employees with independent contractors from a variety of industries. The nature of independent contractors involves work done outside the office, which can be difficult to oversee. Today’s post is aimed at giving you tips for how to manage your independent contractors.
Take Time to… Read the rest
With the rise in formation of limited liability companies (LLC), why do venture capitalists (VC) still prefer to invest in corporations? This is a common question within the startup community. With so many choices—partnership, LLC, S corporation (S corp), C corporation (C corp), etc.—it can be a challenging task to pin down exactly what form of legal entity to choose for your new business. However, if your business plan is dependent on seeking VC funding, your entity choice can be narrowed down… Read the rest
In late 2011, the US Department of Labor (DOL) and the Internal Revenue Service (IRS) signed a Memorandum of Understanding that aimed to improve the two agencies’ efforts to put an end to the business practice of misclassifying employees in order to avoid providing employment protections. In addition, labor commissioners and other key agency players in seven states (Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington) have signed similar memos with the DOL’s
The economic structure of a limited liability company (LLC) determines the amount and timing of the distributions to the members (remember that LLC owners are called “members”). Distributions may occur periodically during the operation of the LLC, when the LLC either redeems (or buys back) the member’s interest, or when the company chooses to liquidate.
Washington Law
The default rule under Washington law provides that members will receive distributions and allocations of profits and losses in proportion to the amount of capital each member contributed to… Read the rest
