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Ventura Bankruptcy Lawyer
Behind on your credit card payments? Unable to pay your medical bills? Receiving threatening phone calls from debt collectors? Concerned your wages will be garnished – or worse, a lien placed on your home? If you are feeling overwhelmed by debt, you need skilled guidance in order to determine whether bankruptcy is the right option for you. Let the experienced staff at The Law Offices of Daniel A. Higson give you debt relief by filing Chapter 7 or Chapter 13 personal bankruptcy. Contact us today to schedule a free consultation and begin your fresh start on the road to financial freedom with a lawyer on your side.
What is a Limited Liability Company (LLC)?
Limited Liability Company
An LLC is a newer form of business entity. It has advantages over corporations and partnerships. The LLC’s main advantage over a partnership is that, like the owners (shareholders) of a civil law corporation, the liability of the owners (members) of an LLC for debts and obligations of the LLC is limited to thier financial investment. However, like a general partnership, members of an LLC have the right to participate in management of the LLC, unless the LLC’s articles of organization and operating agreement provide that the LLC is to be managed by the managers.
For California income tax purposes, an LLC with more than one member will be classified as a partnership, and an LLC with a single individual member will be treated as a sole proprietorship, unless the LLC chooses to be classified as a corporation for income tax purposes. To be taxed as a corporation, the LLC files an election on a Form 8832, Entity Classification Election, with the Internal Revenue Service. California treats the LLC and its owners for income tax purposes in the same manner the LLC is treated for federal tax purposes.
How is an LLC different from a Sole Proprietorship or Corporation?
An LLC may have one or more owners, and may have different classes of owners. In addition, an LLC may be owned by any combination of individuals or business entities. An LLC that is taxable as a partnership can achieve both conduit tax treatment and limited liability protection under civil law, similar to an entity taxable as an S corporation. However, an LLC taxable as a partnership does not have the ownership restrictions that apply to entities taxable as S corporations.
If the LLC has a single member, it will be disregarded as separate from its owner, and will be treated as a sole proprietorship or a division of its owner, unless it elects to be taxable as a corporation.
In general, all the owners (members) are shielded from individual liability for debts and obligations of the LLC.
An LLC is formed by filing “articles of organization” with the California Secretary of State prior to conducting business.
Forming an LLC is simpler and faster than forming and maintaining a civil law corporation.
LLCs do not issue stock and are not required to hold annual meetings or keep written minutes, which a corporation must do in order to preserve the liability shield for its owners.
Either before or after filing its articles of organization, the LLC members must enter into a verbal or written operating agreement. A formal, written agreement is advisable.
An LLC is typically managed by its members, unless the members agree to have a manager handle the LLC’s business affairs.
Generally, members of an LLC that are taxed as a partnership may agree to share the profits and losses in any manner. Members of an LLC classified as a corporation recieve profits and losses in the same manner as shareholders of a corporation legally organized as such.
An LLC’s life is perpetual in nature. However, the members may agree to a date or event of termination.
For further information about a LLC, or to discuss your business formation issues, please schedule a free consultation by calling us at (805) 642-6405.
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What is a Limited Liability Partnership (LLP)?
Limited Liability Partnership
In general terms, a partnership exists any time two or more persons carry on a business for profit as co-owners. Each partner has unlimited personal liability for all the partnership’s debts and implied authority to legally bind the partnership.
Although the law requires no formal partnership agreement, it is highly advisable to adopt a written agreement and set up a Limited Liability Partnership (LLP) or other arrangement. Unless there is a written agreement to the contrary, partners share profits equally, share losses in the same portion as the profits, and are personally liable for partnership debts.
A Limited Liability Partnership (LLP) is a partnership often used in the practice of public accountancy, the practice of law, the practice of architecture, or services related to accountancy or law. A Limited Liability Partnership is required by law to maintain certain levels of business insurance, and may provide limited liability for some partners.
In each LLP, there must be at least one general partner that acts as the controlling partner. The liability of non-controlling partners, known as limited partners, is normally limited to the amount of control or participation they have engaged in. General partners of limited partnerships have unlimited personal liability for the partnership’s debts and obligation.
At the Law Offices of Daniel A. Higson, we understand the advantages and disadvantages of a limited liability partnership and can provided partnership formation advice that is tailored to your specific situation.
For further information about a LLP or to discuss your business formation issues, please schedule a free consultation by calling us at (805) 642-6405.
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What is a General Partnership?
A general partnership must have two or more persons engaged in a business for profit. Unless otherwise provided by the partnership agreement, all partners are liable jointly and severally for all obligations of the partnership unless agreed by the claimant. Profits are taxed as personal income for the partners.
Advantages of a General Partnership
A general partnership shares with other buisness partnership structures LLPs and LLCs the attributes of flexibility of management styles, flexibility of capital and contribution structures, “pass through” tax treatment, and lack of corporate formalities. Under most state laws no written partnership agreement is even required. A corporation, by contrast, must have articles and bylaws, and an LLP or LLC must register with the state and in almost all states must have either a written partnership or operating agreement.
Disadvantages of a General Partnership
The biggest disadvantage of a general partnership is its lack of business liability protection for its individual owners. Under the general partnership law of most states, each and every partner is jointly and severally liable for all of the partnership’s debts, liabilites and obligations. Worse yet, under joint and several liability principles, an injured party could choose to sue only one of the partners and recover entire judgment solely from that partner.
Another worst-case scenario occurs when an injured party sues all of the partners, but because one or more of the partners is financially insolvent or “judgment proof,” the solvent partners are held responsible for the entire amount of the judgment. As with an LLP or LLC, a general partnership must have at least two partners. For two-owner firms, this business partnership structure presents continuity problems should one of the partners die or become disabled.
For further information about a general partnership, or to discuss your business formation issues, please schedule a free consultation by calling us at (805) 642-6405.
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What is a Sole Proprietorship?
Sole Proprietorship
This is the simplest and most common form of starting a new business. It has no existence apart from its owner. A sole proprietorship consists of only “one” individual; ownership by more than one person creates a partnership. (Note: A husband and wife can be classified as a sole proprietorship. A business conducted by registered domestic partners must be classified as a partnership.)
Key Features
The cost to start a sole proprietorship is inexpensive.
A separate bank account should be established to run the operations.
The owner of a sole proprietorship controls all facets of the business.
The business and owner are one. There is no separate legal entity and thus no separate legal person.
The sole proprietor is personally liable for all debts and actions of the company.
The life of the business continues to exist as long as the business owner is still alive. Once the owner dies, the sole proprietorship no longer exists.
Purchasing insurance to cover the risks of running your business is advisable. Consider consulting an insurance specialist on the matter.
For further information about a Sole Proprietorship, or to discuss your business formation issues, please schedule a free consultation by calling us at (805) 642-6405.
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Civil Litigation
What is Civil Law?
Civil law is the law that applies to the private rights (as opposed to criminal matters) and defines how we are to treat and interact with each other. It encompasses primarily contract, property, and tort law. It basically defines how we are to interact with one and another in our dealings and code of behavior (non-criminal)
How is Civil Law different from criminal law, business law, or family law?
Matters commonly considered a civil matter are breach of contract, negligence, international torts (civil assault and battery, trespas, etc.), strict products liability, invasion of privacy, defamation (slander & libel), civil fraud, wrongful death, personal injury, etc. Our civil law practice has experience in a variety of general civil litigation matters including contract, property, and tort (fraud, defamation, negligence, etc.) actions and has provided representation in both a plantiff capacity and a defendant capacity from the initial pleadings all the way through trial and even through post judgement remedies.
For further information please schedule a free consultation by calling us at (805) 642-6405.
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What is a Chapter 13 bankruptcy?
Have your credit card balances or medical bills gotten out of control?
Are you being threatened with wage garnishment or other debt collection actions?
Do you make too much money to file Chapter 7?
Chapter 13 bankruptcy may be a solution. We can advise you on your Chapter 13 options and guide you through the process. If you are in debt over your head but are ineligible for Chapter 7 bankruptcy or have assets that would be liquidated if you filed Chapter 7, you have another option. Chapter 13 bankruptcy allows you to put your debts on a court-ordered payment plan. Right now, your creditors are in control, dictating the repayment terms for your debts. Chapter 13 puts a trustee in control, with the goal of setting up payments you can afford.
Under a Chapter 13 payment plan, you may be able to reduce the total amount you owe on unsecured debts, and you can repay your debts over the course of three to five years.
When you file Chapter 13 bankruptcy, you will get immediate protection from creditor harassment, garnishment, foreclosure and repossession. This automatic stay will remain in place throughout the process, as long as you comply with the terms of the payment plan. Chapter 13 may be a first step toward reorganizing your finances so you can make a fresh start. If you become eligible for Chapter 7 during the process, it may be possible to convert your case at that time.
For further information about a Chapter 13 Bankruptcy, please schedule a free consultation by calling us at (805) 642-6405. HOME
What to Do Before Filing Bankruptcy
On the day you file bankruptcy, all of your property that is not exempt can be seized by the trustee and used to partially repay your creditors. Since you are only allowed to keep $150 in cash or bank accounts ($300 if you are married), it is important to spend down any savings you may have.
Savings must be used to meet legitimate expenses, and you should keep the receipts for any purchases over $100 you make while preparing for your bankruptcy filing.
It is also important to plan the bulk of filing around the receipt of commissions and tax refunds which are usually non-exempt and seizable by the trustee.
If you are planning to keep your home or car, you need to get current with your mortgage and auto loans before filing bankruptcy and stay current throughout the process.
Don’t hesitate to contact us to learn more about what to do while preparing to file bankruptcy.
