I have seen situations where clients are concerned about the contracts that they have entered into because they are not in writing. The general rule, however, is that oral contracts are as enforceable as written contracts. Unfortunately, the terms of an oral contract are more easily disputed.
I recently had occasion to help a client with a problem. She had sold her husband's insurance agency to a family member after her husband died. Rather than engage the services of an attorney to draft the contract, my client and her family member got a form contract that was woefully insufficient. They filled out the internet contract, signed it, and the family member began making payments in accordance with the agreement.
Limited liability companies (or "LLCs") have become a very popular form of business entity because they combine the limited liability aspect of a corporation with the pass-through tax treatment of a partnership. Unlike a partnership, an LLC does not require that an owner (called a "member") take the risk of being held personally liable for the entity's actions. At the same time, an LLC receives "pass through" tax treatment, meaning that its members claim the LLC's income as their own. This avoids a double taxation situation, where the business pays taxes, but the members must also claim income from the entity on their personal tax returns.
As the world's economies become more and more integrated, an increasingly large portion of the agricultural products produced by California farmers are exported to other countries. In addition to the obvious advantage of expanding the product market, the export of products also creates an opportunity for the farmer to enjoy potentially significant tax savings through the use of an "IC-DISC."
Under the Affordable Care Act, if an employer has more than 50 full-time employees for more than 120 days of the year, it is required to provide health insurance to its employees.[i] The Obama administration postponed the effective date of this employer mandate, but most business must comply within the next couple of years.[ii] This creates some difficult choices for business that are just over the 50-employee threshold. It also creates an interesting question about whether an employer can split its business into two or more entities to avoid the employer mandate. Unfortunately for most business owners, the answer is no.