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Monday, April 13, 2009

LLC Vs. Subchapter S Corporation - Which Makes More Sense For Your Business?

For years smaller businesses used the structure of an S-corporation to benefit from "pass-through taxation" while avoiding the double taxation imposed on a C Superman movie Then in 1988 the IRS decided to get in sync with several states which had passed legislation allowing the formation of a legal entity called a "Limited Liability Corporation" or LLC.

It wasn't long until other states began to pass their own versions of this legal entity. Today all fifty states offer the LLC as a choice of legal 1933 Goudey Sport Kings entity formation alongside the traditional C Corporation, Subchapter S Corporation, General Partnership, Limited Partnership and possibly others.

Are the differences between the LLC and S Corporation significant enough to justify all the hoopla? Let's take a look and you can decide for yourself.

"Forming an LLC is much less complicated than forming a Subchapter S Corporation. A Subchapter S Corporation requires forming a corporation with the state then making an election to be taxed as an S Corporation (pass-through taxation) with the IRS. Forming an LLC simply requires submitting Articles of Formation to the state and creating a written document declaring how the business will be managed and operated.

"Corporations have stringent requirements for how they are formed and operated and an S-corporation is not exempt from these.

-Corporations must hold a formal stockholder meeting each year. An LLC is not required to do car for donation It doesn't have stockholders.

-Corporations have a myriad of legal requirements around the issuing of stock and dividends. Again, an LLC does not issue stock to its owners nor does it pay dividends.

"An S Corporation is limited to 100 owners. There is no such limit with an LLC.

"All stockholders in an S Corporation must be U.S. citizens or residents. LLC owners do not have to meet this Charlie's Angels In fact, even other business entities are allowed ownership in LLCs.

"Profits are split among stockholders in an S Corporation based upon the number of shares held by each. Profits from an LLC may be split among the owners disproportionately to each member's percentage of ownership. What a concept!

As you can see, there are quite a few differences to consider. Your set of circumstances and the vision held for your company will determine which entity can best serve those interests and purposes. It is possible that the S Corporation structure will cost more to form as well as to operate to meet the additional state requirements of a corporate structure. However, each state varies in its requirements for formation and operation. The more obvious choice may not always prevail upon a more thorough investigation of all requirements and costs.

Before you embark upon forming your business as a Subchapter S Corporation or an LLC, be sure to seek adequate counsel from professionals who are well versed with each entity in your states of interest.

Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.

Melissa Gordon is the publisher of href="LegalBuffet.com">LegalBuffet.com, a complete online resource that compares the legal services offered by various online companies. Find the best company for your LLC formation needs at legalbuffet.com/llc-services/legalbuffet.com/llc-services

How Lawyers Can Work With Publicists to Win Cases

Frequently, after lawyers are approached by potential clients they wonder if this case might be newsworthy. But, because of the nature of legal training, most lawyers are reluctant to go public with the story. Keeping the matter private can actually harm the client in the long run, especially if the opposing party goes to the press first. Whereas working with the media can result in larger and faster settlements and other benefits, if done right.

To Conan this point, here is an example using two entities, a government agency and a business. The perception created of each entity can be dependent on who contacts the media first. It is safe to assume that when one party is a public entity they are very likely already talking with the press to explain their budget woos or other problems. It doesn't matter if they are fiscally irresponsible. They Gold Key comics blame your client - The reason they don't have any money is because terrible rogues like you and your client are sucking away valuable tax-payer dollars by filing frivolous lawsuits. Even if your clients' case is very worthy, even if the agency is at fault, people will not approve of your client's legal actions. Clients give up under this sort of pressure. However, if the media strategy is created at the same time as the legal strategy, your client's side might be publicized first. A David-and-Goliath story can be espoused - where some individual or business is being picked on by behemoth 1933 Goudey baseball cards brother. Since people tend to rally around the underdog, your client will feel donating car supported.

Fighting government or big brother

This scenario points out that he who speaks first and openly, often becomes becomes the more trusted reference. He who is second usually takes a defensive stance and looks guilty from this position. It is always best to proactively communicate something that could come into the public view, rather than the "ostrich approach" of burying one's head in the sand. To the public silence means guilt or an inferior position. He who is loudest wins.

Reasons to go to the media:

  1. If you win in the court of public opinion your client is more likely to get a large settlement: The opposition may settle just to end the negative coverage.
  2. Publicity creates news stories. These are considered persuasive, credible and objective and can sway public opinion and/or a jury.
  3. If your name is in the news, it is akin to "free advertising" and will bring more clients to your practice, if you have something newsworthy to report.
  4. You can build a professional reputation in your community through the positive reportage of your cases. In other words, people will recognize you at cocktail parties and be impressed.

Why work with a publicist?

Reasons to work with a publicist:

  1. Publicists know which writers and reporters to work with and who to avoid.
  2. Publicists will listen to the story and are artfully adept at choosing press angles that are likely to get coverage.
  3. Publicists are objective and can tell you how to do prior damage control so this doesn't spin out of your control.
  4. Involving the media in the early stages of a case may taint a legal outcome since controlling what is reported is difficult. A publicist will manage the timing to coincide with your legal strategy.
  5. A good publicist will become part of the team with you and your client, manage the media so you do not have to worry about this, and you can focus on what you do best.

I've found that legal training leads to adversarial orientation, and journalists are not the trusting sorts and can sometimes be downright confrontational. These two personalities together do not lead to a good conclusion for the client. In fact, it can lead to the opposite. A journalist can go after your client and make you look really bad. It doesn't take long to recall multiple examples when lawyers spoke directly to the press, without prior training in media relations, and came off looking very pompous.
How to interact with the press

Timing is critical. The media must be alerted to big settlements and verdicts in a timely manner. It's great publicity in which you look good because you already won. But no one cares two days after the fact; reporters have short attention spans, and especially on the web, news is old in a few hours. So planning media strategies in case of a win and lose ahead of time is crucial. What's newsworthy?

What is newsworthy? Sometimes a small case is an example of a larger trend. Sometimes an individual or business has an interesting story. Just about any confrontation whether civil or criminal can be told as a reportable story or put into a context related to timely events. Do not call the press and tell your story without writing the necessary background materials first! You run the risk of providing a "loose story." Once alerted to the event, the reporter will end up doing all the research without your input. Meaning, the story may not contain "the facts" as you would have provided them. And if the other side is very cooperative, your client could end up in the defensive position, and you'll look unprofessional. There are several ways that publicists get paid depending on the duration and quantity of work required. Most of the time I've worked with attorneys, they have had their clients pay our agency directly and stayed out of the financial arrangements. Others have had us bill them and added an administrative fee, then passed the expense along to the client. Thus, our work becomes a profit center for their practice. And when a case is taken on contingency, the law practice pays for the PR services. This could range from a few hours at an hourly rate, to many months at a reduced monthly retainer rate. When the stakes are high, the PR fees are a small price to pay to win in the court of public opinion.

What not to do

How much does this cost?

Reporters have a lot to do, are under deadline pressure, and need to understand the facts objectively. Our goal is to make their jobs easier by providing the facts they need to report the story. Generally, this is done by writing fact sheets, background explanations, timelines, contact lists, and/or pre-writing the story so that they can read our version of what happened in the context we think is pertinent. If they decide to follow up, they will want to contact the other side. So why not give them the contact information and other details that the opposing party would give to them? Honesty is always the best policy with the media. A publicist understands how to "shape" a story in a way that gets a reporter to focus on an aspect of your case that is newsworthy and provides reportage to your favor. While there are some lawyers whose jovial and easy-going nature makes it possible for them to meet the press, in general, a publicist is better at this.

About the Author

Jenifer Levini is president of Web Presence, Inc., ( href="webpresenceinc.com">webpresenceinc.com), a marketing communications company in Northern California for 13 years. She has handled numerous legal-press interactions but can't tell you any of the details for confidentiality reasons. She wrote a magazine column for several years and received many pitches from publicists that taught her what not to do.

website: href="webpresenceinc.com">webpresenceinc.com, blog: maketing.webpresenceinc.com, email: href="mailto:info@webpresenceinc.com">info@webpresenceinc.com