1. Blattfg.com
BUSINESS 101
Starting Your Own Business from Soup to Nuts
PRESENTED FOR SCORE PALM BEACH
BY PETER BLATT, J.D. LL.M.

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CORPORATE FILINGS
LLC vs. S Corporation – Similarities
 Both are pass-through entities
 Liability protection
 No shield from torts or accidents
 Operational ease and profit-sharing

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CORPORATE FILINGS
The Limited Liability Company (LLC)
 Tax simplicity
• Single - IRS form 1040 and Schedule
C
• Partners – 1065 partnership

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CORPORATE FILINGS
The Limited Liability Company (LLC)
 Simplistic governance
• Articles of Organization
• Partnership Agreement
• No board meeting

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CORPORATE FILINGS
The Limited Liability Company (LLC)
 Flexible Structure
• Profits/ownership
• Unlimited members
• File as S-Corporation

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CORPORATE FILINGS
The Limited Liability Company (LLC)
 Limitations
• Members are self-employed; must make
contributions to SS and Medicare on net
income
• Dissolved on death or bankruptcy of
partner

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 Most popular structure in Florida
 A C-Corporation that offers tax benefits
 Limited financial liability for shareholders
(owners)
 Avoids double-taxation

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 Tax advantages
• SS and Medicare taxed on wages only
• Distributions taxed at Cap Gains rate
• Profits/losses pass through to
shareholders

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 Structural advantages
• Separate and perpetual entity
• Shareholders are protected from
liabilities

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 Limitations
• Strict corporate governance
• Limited to 100 shareholders; one class
of stock
• Profits/losses allocated based on
ownership

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 Limitations
• Potential for loss of Subchapter-S
status
• Beneficial employee must take pay

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 IRS/State Forms
• Form 1120S – S-Corp Income Tax
Return
• Form 1120S-K1 – Individual
Shareholders
• Form 4625 – Depreciation
• UCT-6 – Employer’s Quarterly Report

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 IRS/State Forms
• Form 1040 – Individual Tax Return
• Schedule E – Suppl. Income/Loss
• Schedule SE – Self-Employment Tax
• Form 1040-ES – Individual Estimated
Tax

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CORPORATE FILINGS
The S-Corporation (Subchapter S of IRS
Code)
 IRS/State Forms
• Form 2553, 940, and 941
• State of Florida Annual Report
(Whew…)

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CORPORATE FILINGS
Sunbiz.org

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CORPORATE FILINGS
Sunbiz.org

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CORPORATE FILINGS
Sunbiz.org

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CORPORATE FILINGS
Sunbiz.org

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CORPORATE FILINGS
Sunbiz.org

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CORPORATE FILINGS
Legal Agreements In Detail - LLC
 Articles of Organization
• Creates public, legal notice of active
organization
• Specifies member and managing
member’s name, address, and registered
agent
• Corrections are recorded with
amendments

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CORPORATE FILINGS
Legal Agreements In Detail - LLC
 Operating Agreements
• Specifies rights and responsibilities of
members
• Creates enforceable agreement between
members
• Succession planning
• Not required; highly advisable to hire
counsel

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CORPORATE FILINGS
Legal Agreements In Detail – S-Corp
 Articles of Incorporation
• Creates public, legal notice of active
incorporation
• Specifies principle officers and purpose of
company, share structure, and registered
agent
• Corrections are made with Articles of
Correction

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CORPORATE FILINGS
Legal Agreements In Detail – S-Corp
 Shareholder Agreement
• Specifies rights and responsibilities of
shareholders
• Protects shareholder’s equity and
interests
• Plans for the future (succession, M&A)
• Private document; highly advisable to hire
counsel

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CORPORATE FILINGS
Intellectual Property Laws and Protection
 Copyrights – protects original works of
authorship (literature, music, artistic,
intellectual works)
 Patents –protections for novel inventions
 Trademarks – protection for
distinguishable marks

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CORPORATE FILINGS
Intellectual Property Laws - Copyrights
 Exclusive right under U.S. law to protect
original works of authorship from being
reproduced
 Granted to created when created
 General terms: author’s life plus 70 years
 Work for Hire terms: author’s life plus 95
years

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CORPORATE FILINGS
Intellectual Property Laws - Patents
 Offers protection from unsanctioned “theft”
of inventions in exchange for public
disclosure
 Must be novel and “non-obvious”
 Patent granted through the USPTO
 Extremely important for inventive companies or
individuals

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CORPORATE FILINGS
Apple vs. Google
Samsung pays $1B
in settlement…Aug 2012!
LARGE Patent infringement lawsuit
ever…
ST

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CORPORATE FILINGS
Intellectual Property Laws - Trademarks
 Identifies the source of a distinguishable
product
 Service mark identifies that of services
 Can be a symbol, phrase, design, or
combination

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CORPORATE FILINGS
Resources
 Florida Dept. of State (Sunbiz.org)
 Local Tax Collector (county, city)
 Federal Income Tax Filing (IRS.gov)
 State Income Tax Filing (N/A for Florida)
 USPTO (uspto.gov)
 U.S. Copyright Office (Copyright.org)

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CORPORATE FILINGS
Open Discussion

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BEST IDEAS
Business Plan
 Serves as a “roadmap” for your business
 Provides investors with insight
 Refines and defines what you set out to
accomplish
 Demonstrate purpose and commitment

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BEST IDEAS
Contents – Business Plan
 Mission Statement
• Brief, powerful, definitive
• “To refresh the world.” – Coca-Cola
Company
 Core Values
• What drives you and your company?
• “Integrity, knowledge, and fiduciary” -
BFG

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BEST IDEAS
Contents – Business Plan
 Executive Summary
 Company Description
 Target Market
 Organization
 Service/Product
 Marketing/Sales
 Financial Analysis

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BEST IDEAS
Contents – Business Plan
 Executive Summary snapshot of your
company?
 Company Description what do you do?
 Target Market who do you do it for?
 Organization how are you structured?
 Service/Product what do you make
money?
 Marketing/Sales how do you sell yourself?
 Financial Analysis how do you stay in
business?

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BEST IDEAS
Raising Capital – Business Plan
 Debt, Equity, or Combination
• Debt – pay with interest
• Equity – pay with share of ownership
• Combination – convertible debt
instruments

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BEST IDEAS
Sources of Capital – Business Plan
 Debt
• Banks/traditional institutions
• Capital marketplaces (bond market)
 Equity
• Private/public investment (C-Corp!)
• Swaps, mergers, acquisitions

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BEST IDEAS
Sources of Capital – Business Plan
 Greatest sources for capital in the U.S.?

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BEST IDEAS
Sources of Capital – Business Plan
 Greatest sources for capital in the U.S.?
1. your savings
2. Your family’s savings
3. Your friend’s savings

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EMPLOYEES
Payroll Taxes (*Florida only – may differ in other states)
 Employees pay FICA
• Social Security
• Medicare
 Employers pay FICA plus
• Unemployment tax

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EMPLOYEES
Payroll Taxes (*Florida only – may differ in other states)
 Employer Compliance
• Withhold employee FICA
• ADA, discrimination laws,
Fair Pay Act, minimum wage
 If applicable…
• Wage garnishment
• Worker’s compensation

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EMPLOYEES
Payroll Taxes
 Employer collects W-4 and I-9
 FICA – 6.25% to $113.7k
 Medicare – 1.45%
 Federal withholding

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EMPLOYEES
Payroll Taxes
 File tax liability (monthly)
 Payroll form 941 (quarterly)
 Payroll form 940 (annually)
 UCT-6 (unemployment)
 Annual state reporting
 Occupational licensing

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EMPLOYEES
Fair Labor Standards Act (FLSA)
 Minimum Wage (FL) - $7.25/hour
 Overtime – 1.5x regular wage
 Defines “hours worked”
 FLSA poster required to be hung
 Employee recordkeeping
 Child labor prohibited

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EMPLOYEES
Employee Filings

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EMPLOYEES
Recruitment and Hiring
 THINK like a Fortune 500 company…
• Job descriptions – specific and
detailed
• Employee handbook – policies and
procedures
• Definitions of Exempt/Non-exempt
• Probationary period
• Equal Employment Opportunity (EEO)
• Non-disclosure agreement (NDA)

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EMPLOYEES
Recruitment and Hiring
 THINK like a Fortune 500 company…
• Personnel files and performance
reviews
• Standards of conduct (dress, behavior)
• Typical work day (lunch, breaks,
activates)
• Benefits and Services (PTO, military
leave)
• Wage, salary, and pay procedures
• At-will employment termination

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EMPLOYEES
Resources
 US Small Business Assoc. (SBA.gov)
 US Dept. of Labor (DOL.gov)
 IRS Tax Info (IRS.gov/Businesses)
 Florida Dept. of Revenue (DOR.MyFlorida.com)

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EMPLOYEES
Open Discussion

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OFFICES
Rent vs. Own
 Expense versus investment
 Small commitment versus large capital
outlay
 Uninterrupted operations versus
maintenance
In short, it’s all about your situation and
your needs.

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OFFICES
Location, location, location…
 Spend time on market and consumer data
• Demographics and socio-economics
• Distance from competitors and to
value-added
 Parking, space, and lease requirements
 Commercial vs. residential zoning

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OFFICES
Common Issues with Leases
 Have competent counsel review lease
 Perform public records searches
 Pay attention to tenant responsibilities
 Negotiation favorable assignment
provisions

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ACCOUNTING
Software

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ACCOUNTING
Common Reports
 Profit & Loss
 Income Tax Summary
 Balance Sheet
 Accounts Receivable/Accounts Payable
 Full Income Statement
 Cash Flow Statement

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ACCOUNTING
Tax Prep Software

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ACCOUNTING
Turbo-Tax (preferred)
 First, important to have a competent CPA
 Prepares returns for C-Corp, S-Corp,
LLC, PA, Sole Props and virtually every
other entity
 Web-based
 Files forms with the IRS and state online

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ACCOUNTING
Open Discussion

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CONTRACTS
Review and Implement
 Sales contracts
 Vendor contracts
 Partnership agreements
 Lease agreements
 Employment contracts

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CONTRACTS
Look for…
 Specific language of responsibilities of
parties
 Compare to compliance issues in your
industry
 Consideration between parties
 Beware of obvious duplicate contracts
 Read your whole contract
 Hire competent counsel to review your
contracts!

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CONTRACTS
Resources
 Peter Blatt, J.D. LL.M. and Blatt Legal (561) 625-
0900
 Uniform Commercial Code (FloridaUCC)
 Dunn & Bradsheet (MyCredit.DNB.com)
 Better Business Bureau (BBB.com)
 Personal Credit Reporting (Equifax.com)

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CONTRACTS
Open Discussion

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MARKETING
METHODS
Website and Online Promotion
 Website as a resource
 Active user engagement
 Guerilla marketing and PR
 Mailings
 Referrals
 Compliance

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MARKETING
METHODS
Website as a resource
 You are your representation on the web
 Self-managed
 Third-party provider
 Combination of both
 Resources: WordPress, Freelance.com,
referral

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MARKETING
METHODS
Active user engagement (AUE)
 Content is king – blogs, articles,
authorship
 Social Media – LinkedIn, Facebook,
Twitter
 SEO – bookmarking, link building, fresh
content
 Videos and media – YouTube, Vimeo
Best Tip: hire a professional!

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MARKETING
METHODS
Guerrilla marketing and PR
 DIY Marketing
• Add events to community calendars,
etc.
• Submit to business directories
(Google, Yelp)
 PR – written as a news story, submitted
via wire
• Providers include PRNewsWire and
MarketWire
• Free directories and providers not as
effective
• Must be written well and be news-

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MARKETING
Mailing METHODS
 Hard mailing – still effective!
• Providers include RME, InfoUSA
• Promote events, entice and inspire
 Email marketing
 Consistent, promotional message
 Message of expertise
 Providers include MailChimp

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MARKETING
Referrals METHODS
 Build referrals by doing good business
 Join and attend networking groups
 Consider “referral-required” events
 ASK for referrals!

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MARKETING
METHODS
Compliance
 Industry and trade specific
 Join your industry’s trade group to stay up
to date
 Be aware of Federal, State and Local
levels
 Big fines and penalties for indiscretion
 Hire competent counsel!

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MARKETING
METHODS
Open Discussion