This blog is a part of the "Cleaning House" series on preparing your business for fundraising.
This blog is a part of the "Cleaning House" series on preparing your business for fundraising. Follow our blog and Hertz Schram on Facebook and Twitter to stay up to date.
The sale of a C corporation's assets generally results in double taxation on the sale proceeds, first, at the corporate level, and then, upon distribution of proceeds to its shareholders, at the personal level. However, individual business owners of C corporations who can establish that their personal goodwill is integral to the business and is not an asset of the corporation have an opportunity to improve their tax position upon the sale of the corporation. Such owners may (i) avoid the double taxation on a portion of the sale proceeds by allocating a portion of the sales price to personal goodwill as an asset owned by the business owner, and not the corporation; and (ii) recognize long term capital gain (LTCG) on the portion of the sales price allocated to personal goodwill, instead of ordinary income which the business owner would recognize for payments related to other intangible assets (i.e. covenants not to compete).
You had a great idea and created a business out of it! Congratulations! You took the initiative to form an entity, such as a corporation or limited liability company, to operate your business for a few good reasons. Not the least of which is to protect you, as a business owner, from being personally liable for the creditors of your business. So, you should be all set, right?
Technological advancements are usually aimed at improving various aspects of society. However, a new company looking to bring its technology to the marketplace will have to have solid business planning backed up by startup capital. This is what two startup technology companies are doing with their recently obtained grant funding.
If a person has a good idea in business, he or she may be able to make a hefty profit. However, it is also important for an entrepreneur to be able to convince investors that his or her ideas for a new business are worth investing in for a profitable return. One way to test if entrepreneurs are able to successfully present their business ideas to investors is through start-up competitions. Two Michigan companies recently proved themselves in this way by coming home with awards from national and international competitions.
Growing pains is a universal phenomenon for human beings. This can also be said of any new business within any industry. When a business begins to grow, a business owner will have to make adjustments to the structure of the business operations in order to fully capitalize on the company's growth. One new agriculture company in Michigan is now experiencing its own growing pains as it predicts rapid growth in the near future.
I've dealt with hundreds of start-ups and established closely held companies over 30 years of practicing law.
Sometimes people are good at asking for help and sometimes not. Good counsel and a good CPA can be invaluable relationships for any closely held business. But what if you can't afford it? There are still ways to obtain the involvement and advice of seasoned business veterans and it is an opportunity too often overlooked.
The medical industry has always been an important part of society. Medicine has the ability to enhance the quality of life of those suffering from illness. This is why many advocate for the further development of the medical industry in order to better help those in need of medical care. One program created by the Michigan State Medical Society attempts to help develop the medical sector by assisting with business planning for startup medical businesses.