Business law is all about how you build and set up the legal foundations and structures of your company. What few business owners and professionals think about is how to clearly, legally, and thoroughly separate their assets and interests from those of their business.
At The Vermillion Law Firm, we work specifically with Texas professionals and business owners, advising them on these vulnerabilities and helping to shore up their protections with essential business law services. In this article, you can discover:
- How business law can become a tool for asset protection.
- Two crucial areas of vulnerability every professional and business owner should know about.
- How The Vermillion Law Firm will shield your assets for succession and protect them from liabilities.
What Business Law Services Does The Vermillion Law Firm Provide To Companies And Individuals?
There are many different types of business entities: limited liability companies, corporations, S-corporations, partnerships, and limited partnerships. Each business entity can be used for different purposes, and we can certainly help set any of them up.
In our hands, they also become essential tools for asset protection and estate planning, just as much as conventional ones like irrevocable trusts. Our firm can help anyone form a business and get it up and running, which should always be done well in advance.
Most of The Vermillion Law Firm’s focus, however, is on protecting your business or professional assets from two key sources of danger: succession and liability. To do so, we implement business law at its finest without sacrificing your options, which range from corporations and LLCs, to partnerships and limited partnerships.
When Should I Hire An Experienced Business Law Attorney For My Business Planning?
The earlier you tackle any legal or business problem, the better. If you want to start your business with impeccable legal foundations and protections, it is vital to consult with an experienced attorney before you get to the signing process.
At The Vermillion Law Firm, we are not mere business transaction lawyers. We are estate planning attorneys who create business entities for asset protection purposes as part of estate plans. This means we are thinking further ahead than anyone, including many of our clients. But that is what makes starting early so important.
When you come in for a consultation to determine your needs and the best options for pursuing them, we help you choose the appropriate options and make a plan. This is a discussion that should be had early on to give you the broadest range of possible options based on your particular circumstances. Then, as your attorneys, we take care of the tedious minutiae involved in filing for the business.
How Can Succession And Estate Planning Be Integrating Into Business Creation?
Nothing is as important as ensuring your legacy is passed on correctly, which is why we build businesses from the ground up with the end in mind. When it comes down to business succession planning, your legal entity is an asset which should be addressed in your estate plan as part of the process. You’ll need to ask yourself important questions, such as:
- Will only certain people receive that business?
- Will it be liquidated, and the benefits be passed on?
- Do you want your family to just divide it up according to their whims?
- Do you wish to entrust it to a partner or child?
There are an impossible number of questions and options, but once we have helped you find the answers, we begin building the solutions.
What Are Some Examples Of Business Law Succession Dilemmas?
Let us look at a few examples…
In one consortium of 25 restaurants, there are four children set to inherit and split it. Two of them want to sell the businesses, and two do not. This is an example of a complicated situation where the client must decide how the business will be distributed when they die. If there is no succession plan, it will be even worse: there will be chaos and, often, a termination of the business.
Most likely, due to the way the succession is set up, the business is going to be sold when the owner dies because there will not be unanimity amongst the four heirs. That will be the end of a very successful tenure of running these restaurants in this family.
Other times, the situation might initially seem straightforward but offer complications down the road, such as when their business is a majority of a client’s assets. In one case we handled, there were two sons working in their father’s business. He wanted them to receive the business, which was worth a considerable sum already. But there was another child in the family who was not planning to work in the business and wouldn’t be included in the succession.
This might seem fair now, but in 20 years this business could grow to be a $50 million business. Then, at the time of death, the third child might object to not getting any part of it. All these things have to be decided in advance while also being balanced in a way that’s equitable to the goals of the client. If he wants to leave his estate equally, he is going to have to take that into account.
Have you thought ahead about the details of your business and its succession? If not, it is time to give The Vermillion Law Firm a call!
What Are Some Common Challenges And Pitfalls That Business Planning Can Help Me Avoid?
Our primary focus at The Vermillion Law Firm when creating businesses is to help our clients protect their assets. When businesses or business entities become part of their estate, that has to be handled with an estate plan in mind. But other problems can arise well before death that need to be taken into consideration.
One of the most common and harmful issues arises when getting sued. Unfortunately, we often see people who want to create their entity after the liability exposure has occurred.
That can cause problems because they can then be accused of fraudulently conveying assets to an entity that is impervious to attachments from judgment creditors. Instead, it is far better for clients to think of these issues in advance and spend a lot less money to protect themselves from liability than they risk losing later if they do not.
What Are Some Unusual Or Unexpected Business Liability Risks I Can Plan Ahead For?
Airline pilots are a good example of what can happen without careful estate and business planning. Most people don’t realize that if a plane crashes, the surviving family members of the deceased passengers can sue the airline, but they can also sue the estate of the pilot.
If the pilot has a mix of assets that are protected, like a Texas homestead, an IRA or 401K, annuities, or insurance, for example, then his estate might be impervious to such claims. On the other hand, the couple of million dollars he inherited from his father and mother would not be creditor-protected.
The Vermillion Law Firm creates entities that provide creditor protection to professionals like airline pilots, state troopers, policemen, firemen, and even other business professionals like certified public accountants and attorneys. After all, it is possible for one malpractice lawsuit to bankrupt an attorney.
In one notorious example, it was found that the in-house accountant of a large Texas law firm had been fraudulently filing their employee tax returns for withholding and 941 liabilities for several years. Millions of dollars were at play. When the scheme came crashing down, it was all discovered by the IRS. Worse, each and every one of the partners of the law firm was liable individually.
Someone in this situation would want to have their personal assets protected from anything that could happen to their firm. Even if you are not personally the one responsible, as a partner or executive or owner, you could be. Even professionals like attorneys have to take steps to protect their personal assets.
How Does The Vermillion Law Firm Lay Legal Foundations So I Can Run My Business Without Worry?
The great thing about working with The Vermillion Law Firm is that once the foundations and legal structures of your enterprise and estate plan have been laid down, we will only step in if you need us. By working more on the side of asset protection for our clients, we create entities for business purposes but do not interfere in any of the nuts and bolts of running that business.
Our job is to make sure that your personal assets are always protected from liability and that your business structure is compatible with your succession preferences and estate plan.