Family Businesses: Taxation The Logistics Of Hiring Children

In a competitive market, family businesses require the assistance of each and every family member in order to get ahead. Of course, business owners must be reasonable when recruiting family members, for not only do parents want to avoid depriving their kids of a happy childhood, they also must remain in compliance with federal and local labor laws. The maintenance of full compliance may not be possible without regular feedback from business lawyers chester county. In addition to providing targeted advice regarding current labor regulations, the right business lawyer can also help family businesses make the most of child employees when that dreaded tax season arrives. The following are a few of the potential benefits available to business owners who hire their own children:

Children's Earnings And Tax Rates Although many family business owners are accused of employing their children merely so that they can pay substandard wages, the Fair Labor Standards Act (FLSA) mandates that child employees are paid fair wages for work that, without their help, would be completed by other employees. As such, earnings above minimum wage can be expected for most family businesses, with many kids actually earning more than they would while working at fast food restaurants or in other common teenage positions.

The true benefit of employing children (other than the ability to truly be referred to as a family business) involves significantly lower tax rates. Money paid to a child does not have to be taxed as business income. Because most kids simply work on a part-time basis during the summer months, taxes on this income are generally wiped out after the standard deduction is taken. Family Employees And Payroll Taxes Significant payroll tax exemptions may be available to sole proprietors who employ their own children. Children under the age of 18 who are employed by parents are exempted from FICA taxes, while those under the age of 21 may be eligible for FUTA tax exemptions. These exemptions are not available for all family businesses; incorporated businesses or those involving non-parent partners are not eligible for FICA and FUTA exemptions for child employees.

By hiring children, parents can save significantly on taxes, all while teaching their kids the value of a dollar and preparing them for their own future careers. However, parents who choose to take this route must be very careful; tax benefits do not necessarily outweigh potential compliance issues.

The Basics of Merging a Business

Merging a business with another business can be profitable but it can also be dangerous. If the merger is not done properly, it can spell disaster for both companies. Following are some tips that one will want to keep in mind before, during and after the merger. Getting Legal Help Business lawyers Chester county that are considering a merger should hire business lawyers as soon as possible. Good business lawyers will ensure that the merger is not breaking anti-trust laws and/or any other Federal, state or local laws. Legal assistance at the onset can spare a well meaning business owner the pain of having to amend a contract or even undo the merger.

Considering Operational Details It is important for both businesses to determine just how the new company will operate before completing the merger. This includes making a plan outlining who needs to be hired and/or let go, determining who will be responsible for what aspects of business operation, making a marketing plan for the new company and more. If both businesses cannot come up with a plan to cover important aspects of how the new company should be run, the merger may not in fact be a good idea. Perhaps the most important operational detail to be considered is the company vision. Both business owners must be in agreement as to what the target audience is for the new company and how sales goals will be reached.

Pay Attention to Employees It is not easy to keep a potential merger a secret. While a business owner will naturally not want to tell employees every single detail about the potential merger at the onset, he or she should be prepared to address questions and concerns regarding the merger. What is more, employees should hear about the merger from the company owner rather than the local gossip or the town newspaper. Merging with another business has its pros and cons. A merger has the potential to enable two companies to reach a shared goal while cutting back on operational costs. It can also help both companies better compete in the local or national market.

At the same time, a merger can be problematic if not properly planned and/or executed. Getting experienced legal help and making a solid, realistic plan for the new company is imperative to the present and future growth and prosperity of the new business.

Hire Business Lawyers in Chester County, Pennsylvania for Companies Big and Small

Starting one's own business is a fantastic opportunity for growth both personal and professional. Partnering with a preexisting company or merging together can also lead to increased revenue and better overall success. In both cases, small and large companies should consider working with business lawyers Chester County, Pennsylvania area.

A law firm in the county may have more than 30 lawyers and attorneys that work in a variety of practices to accommodate clients in every area of life. Besides business, lawyers may also specialize in trust and estates, family law, land use law, criminal defense, criminal defense with investigations and corporate compliance, personal injuries, and litigation.

There are a number of areas where businesses new and old should have a trained and seasoned lawyer present. When creating a new business, becoming a part of a family business, or making transitions or transactions, these important phases are make-or-break times. When working with a lawyer, the new business owner can discuss their goals and long-term plans to figure out ownership structures, liabilities, finances, taxes, and management levels. Even once a new business owner gets more established, they may still want to check in with their lawyer before any big company changes.

Family businesses can also benefit from a business lawyer in Chester County. Whether a younger family member is taking over from a parent or the business is expanding, the lawyer can help all working family learn more about risk management, governance, hiring new employees, and succession planning so that the company can survive and thrive long into the future.

When a company changes, like through expansion, sometimes the owner needs more money in the form of loans. Rather than navigating this area alone, let a trusted lawyer work with credit unions, banks, finance companies, or savings associations to get the right kind of loan. Real estate loans, letters of credit, construction loans, and lines of credit are all different factors for a business owner to consider as well as private placements, how to document credit, financial transactions, negotiating, and equipment leases. Before a business owner's head starts spinning, let the lawyer guide them through these matters.

If a business acquires another one or merges with a company, this is definitely the time to hire a lawyer. The steps that the newly united company takes to handle reorganization, asset purchases or sales, strategic alliances, stock purchases or sales, or joint ventures can be the difference between success or failure. Lawyers can help clients learn how to figure out regulatory compliance, write a letter of intent, negotiate various terms, and maintain due diligence throughout the process.

When Are Business Lawyers in Chester County Necessary?

Business lawyers Chester County can help business owners with a wide array of business scenarios. Whether it's providing assistance in the process of incorporation, working up contracts, or courtroom litigation, business lawyers are helpful and often a necessary component of doing business. While there are several things business owners can do themselves, the following information explains a few scenarios when a business lawyer can prove to be infinitely helpful.

Patents

Filing for a patent is a tumultuous, trying, and extremely time consuming process. At the same time, patents are expensive and can take several years to be approved, which is the reason there are so many "patent pending" messages floating around the marketplace. When a business owner is considering whether they should seek a patent, it pays dividends to consult with a business attorney to determine whether the patent will actually grant the desired rights.

Starting a Corporation

Although forming a business partnership or LLC may not require the services of business lawyers in Chester County, forming a corporation is a much more complex process. Corporations involve a board of directors, shareholders, highly complex tax issues, and countless administrative tasks. The majority of theses tasks and functions require the services of a business attorney to ensure they are executed properly.

Business Lawyers for LLC

Business lawyers are not just for corporations. There are a wide range of situations that an LLC or partnership may require the services of business lawyers in Chester County. For example, if a business owner wants to make "special allocations" of losses and profits in a partnership agreement, a business attorney would be necessary to facilitate these changes. Another example is if the business wants to contribute property that has appreciated to the LLC or partnership. In both of these instances, the business would need the assistance of an experienced business attorney in Chester County to effectively execute the changes.

Litigation

Anytime a business is facing litigation, it's best to consult with a business lawyer to protect the business. Litigation can include a variety of incidents such as, 

• Lawsuits by former or current employees 

• Lawsuits by customers 

• Government investigations for violations 

• Environmental lawsuits 

• Discrimination lawsuits 

 • Harassment lawsuits

In any of these instances, it's imperative to have an experienced business lawyer in Chester County protect the business from insolvency.

Selling or Buying a Business

In the event of purchasing or selling a business, it's almost necessary to have a business attorney. In addition, business attorneys in Chester County can assist with negotiating lease agreements, sales agreements, and much more. Simply put, any time a business makes a significant purchase or signs an agreement, it's best to have a business attorney review the contract.

How Declaring Business Bankruptcy Affects Owners

One of the major reasons business owners take action to separate their business legally from their personal finances is to ensure that one is not affected by the financial issues of the other. That being said, there are still some ways that a bankruptcy can affect an individual's personal finances.

Debt Liability in an LLC

Debt liability in an LLC depends on the individual's standing within the company. General partners in a liability may be responsible for a company's debts on a personal level, whereas limited partners will usually be protected.

Other elements may also play a factor, such as arrangements made to guarantee a debt. As an example, a limited partner might guarantee a business loan; in that event, the fact that they are a limited partner will not protect them from that particular debt.

Corporations and Bankruptcy

In most situations, individual owners are protected from a corporation's bankruptcy proceedings. But like an LLC, if the individual owner had personally guaranteed any of the debts in question, the individual owner may become personally responsible for that debt. Loans that have been cosigned by owners in their personal name will also fall under this category.

Bankruptcy in a Partnership

In a partnership, the bankruptcy will first affect the assets of the partnership itself. Once the partnership has been liquidated, partners may become liable for any still existing debts if they were considered to be personally liable for them.

Thus, different partners may incur different amounts of liability during the bankruptcy, depending on the debts that they themselves either cosigned or guaranteed.

Issues With a Sole Proprietorship

The above assumes that the business is a standalone entity. Some business owners have their businesses registered as a sole proprietorship instead. Though this is sensible for some, a sole proprietorship is, in many ways, simply considered self-employed income; it does not afford the same levels of protection that having a separate business would. Thus, business assets and debts will usually be treated as personal assets and debts during a bankruptcy.

Business lawyers Chester County can advise business owners on the appropriate actions to take should their financial situation need to undergo any modifications. Bankruptcy, debt consolidation, debt settlements and other issues can all interact with a business in unanticipated ways depending on the structure of both the business and the debt.

When Business Issues Turn Into Legal Issues

Business ownership comes with certain inherent risk of business legal issues. Some issues are relatively minor such as disputes between employees and employers while others can be far more significant. For example, an intellectual property dispute can cause a number of challenges for businesses, especially when they depend on that property for branding. These are a few of the reasons why a business owner may need to work with business lawyers Chester County.

Making the right initial moves

When a business is being launched there are often many benefits to working with Chester County business lawyers. Not only does a business have to be concerned about using the proper business structure for reporting and tax purposes but having an attorney can help a CEO craft employment and vendor agreements can help prevent legal problems down the road. While a start-up operation may not think there are many legal issues to deal with, they are often surprised to discover the number of pitfalls that not having the proper legal advice can create.

Nurturing financial relationships

Business owners who are considering seeking financing often have to deal with complex contracts regardless of whether the funding comes from a local bank or a venture capital firm. These contracts often contain onerous clauses that may not be particularly helpful for a business. Having the ability to contact business lawyers in Chester County to review all contracts before signing them can prevent costly mistakes.

Expanding property ownership

When a business decides it is time to purchase real estate to expand their operation there are a few things that must be considered. Negotiations over purchase price, issues that can occur with zoning and financing matters may all require the assistance of Chester County business lawyers. Businesses need someone who understands the laws as they apply to real estate purchases, financing of real estate and zoning issues. An attorney can be a valuable partner when dealing with all types of real estate issues.

Every business is unique but regardless of the size of the business, there are always potential legal issues which must be dealt with. Whether the business is a start-up or well-established, it is never a good idea to try to deal with the complex legal issues alone. Having the services of business lawyers in Chester County from the inception of a business can help save many hours of work trying to resolve business issues later.