Hightower Reff Law’s Post

Costly legal Mistakes to avoid as a business owner: No. 1. Neglecting to Draft a Clear Business Structure The single most important thing about a business is its structure. What shape does the business take? Is it a sole proprietorship business or a partnership or otherwise? This is important because the structure of the business determines how it will operate in all spheres- legal, financial, staffing, sales etc. The structure of a business dictates the ownership, management, and its relationship with stakeholders, including employees, customers, suppliers, and government authorities. The structure you intend for your business to take, will determine how you will register it with the relevant agency. In Nigeria, this is the Corporate Affairs Commission and businesses in Nigeria take any of the following structures: - Sole Proprietorship: A business owned and operated by a single individual. The owner has complete control over the business and bears all its liabilities. - Partnership: A business owned and operated by two or more individuals who share profits, losses, and responsibilities according to a partnership agreement. - Private Limited Company (Ltd): A company with an artificial personality different from the shareholders, which has the capacity to own property on its own, sue and be sued and represent itself independent of the shareholders and directors. The liability of shareholders is limited to their investment in the company. - Public Limited Company (Plc): A company whose shares are traded publicly on a stock exchange. It must have a minimum share capital and comply with stricter regulatory requirements. - Limited Liability Partnership (LLP): A partnership in which partners have limited liability, similar to shareholders in a company. It combines features of partnerships and companies. Each of these structures requires different compliance from the law. When a business is unaware or neglects drafting an ideal structure, the business is likely to ignore its legal obligations, tax position, filing requirements and even its personal liability to third parties, leading to several consequences: - Legal Liability: Operating without a defined legal structure exposes business owners to unlimited personal liability. In the event of lawsuits or debts, personal assets may be at risk. - Regulatory Non-compliance: Failure to register the business with the appropriate regulatory authorities due to structure defect can result in fines, penalties, or even closure of the business. - Taxation Issues: Businesses may face challenges in determining their tax obligations and may miss out on tax benefits available to properly structured entities. 👇

As a business owner, it is essential to remain compliant with state and local laws to ensure smooth operations. One of the most important requirements is obtaining your business license and permits and then registering for sales and use tax in each state, locale, or jurisdiction where you have met nexus. Many business owners tend to forget, however, that reviewing and updating these credentials regularly is just as important as obtaining them. Conducting an annual business license and registration review will ensure compliance with the laws of each state where you conduct business. It can help you avoid costly penalties and fines and will identify areas where your business may be at risk of non-compliance.   An annual review will help you identify any changes or updates that should be made to your license(s) and permits(s) and will ensure that you are aware of any new requirements that may have been added since your last review. This is particularly important if you have expanded your business operations to include new products or services, as you may need to obtain additional licenses or permits to ensure that you are operating within the law. At Thompson Tax, we understand that maintaining these requirements can be overwhelming, and we are here to help. Contact us today to learn more.

"Hi Daniel, In most cases they need good accountants not cheaper! I am happy to refer clients to you if we can get a bit of partnership going and clients can come the other way if they are needing any insolvency advice etc?" Above is a great example of a conversation I had with a fellow professional in response to my post about Accountancy clients and the misconceptions that many people have regarding price. Just to be completely clear to my entire network, most of whom are business owners..... You don't need your Accountant to be expensive to be good! Our charges are completely based on nothing other than what we feel is a fair rate for what we do. We do not care what other people charge and have no interest in what anyone else is doing as everyone has their own model which works for them. Our business has traded successfully for more than 50 years! We have over 600 clients who like what we do and appreciate the additional products and services we offer, which help them make/save/protect what's important to them whilst supplementing the firm's income. It works very well for us and I am confident it'll work for your business too. daniel@mcmorlandaccountants.co.uk https://lnkd.in/eKz8K3e2

Reminder, every small business must file its beneficial ownership information (BOI) report by the end of the year, or earlier if formed this year. Be kind to your lawyers, accountants, staff or whoever is filing for you and respond to their emails. I’d love to avoid a mass filing over Christmas. 🙏 #generalcounsel #smallbusiness #helpalawyerout

Under the Corporate Transparency Act, most small businesses must file Beneficial Ownership Information (BOI) reports with FinCEN by January 1, 2025. Read our latest blog post to learn more about BOI reports, how to determine if your business qualifies for an exemption, and how to file reports online: https://lnkd.in/g__QJvVf

Attn: business owners 📣 your business may be required to report Beneficial Ownership Information (BOI) before the end of the year, and failing to comply could result in significant penalties. Check out our latest blog for an overview of what you need to know when it comes to reporting BOI. #BOI #CTA #businessowners #CorporateTransparencyAct https://lnkd.in/ezqwRFBw

Running a business comes with its challenges, and dealing with late or non-paying clients can be one of the toughest. Here are some general steps that business leaders can take when this occurs: 🔍 Review your agreements. Ensure your contracts have clear payment terms and deadlines, including any clauses for late fees or consequences for non-payment such as attorney fees. 📝 Send a friendly reminder. A gentle nudge via email or phone call referencing invoice details and payment terms can often do the trick. 📨 Issue a formal demand letter. If reminders are ignored, a formal demand letter detailing the owed amount and a clear deadline for payment may be necessary. A lawyer can help draft this to ensure it complies with state and federal laws. Your demand letter should include a deadline for payment ⚖️ Make legal action a priority if the deadline passes without payment. The longer you wait, research shows you are less likely to collect. Facing a non-paying client or want to strengthen your contracts? Contact us for a consultation. Our team is here to help you navigate these situations effectively.

Attn: business owners 📣 your business may be required to report Beneficial Ownership Information (BOI) before the end of the year, and failing to comply could result in significant penalties. Check out our latest blog for an overview of what you need to know when it comes to reporting BOI. #BOI #CTA #businessowners #CorporateTransparencyAct https://bit.ly/3Yxgova

Have you checked out our news and insights section of our website lately? We regularly add new articles designed to support business owner managers, SMEs, and individuals on a wide range of topics from explaining how dividends work, to how to exit your business. Recently we have added two new articles written by our Practice Director Sam Paice on ‘Changes to the law for the registration of New Companies’ and ‘A quick guide to Person of Significant Control (PSC)’. Take a look at the blogs and articles on our website – link in the comments. #BusinessSupport #BusinessGuidance #SMEs #Accountancy #Business #ProfessionalServices #MoreThanJustNumbers #WorctesterAccountants #redditchaccountants

Attn: business owners 📣 your business may be required to report Beneficial Ownership Information (BOI) before the end of the year, and failing to comply could result in significant penalties. Check out our latest blog for an overview of what you need to know when it comes to reporting BOI. #BOI #CTA #businessowners #CorporateTransparencyAct https://bit.ly/3YxgqDi