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Kenneth Vercammen & Associates, P.C. 2053 Woodbridge Avenue - Edison, NJ 08817

Thursday, January 3, 2008

Starting a Business

Starting a Business
There are four main types of Business Organization:

1. Sole Proprietorship 2. Partnership * A. General Partnership * B. Limited Partnership 3. Corporation 4. Limited Liability Companies


Sole Proprietorship


1. Low start-up costs 2. Greatest freedom from regulations 3. Owner in direct control and asset ownership 4. Single level of taxation and both federal and state levels of taxation 5. Profits belong to owner 6. Reduced levels of annual reporting


1. Unlimited liability 2. Lack of continuity 3. More difficult to raise capital 4. Limits in tax deductions of medical and group life insurance



1. Ease in formation 2. Low start-up costs 3. Additional sources of capital 4. Broader management base


1. Unlimited personal liability 2. Lack of continuity 3. Divided authority 4. Hard to find suitable partners



1. Limited liability 2. Ownership is transferable 3. Continuous existence 4. Legal entity


1. Closely regulated 2. Most expensive to organize 3. Difficult to liquidate investment



1. Tax deferral @ l5% for first $50,000 of income 2. Medical Insurance is deductible 3. Group term life insurance is deductible


1. Maximum tax rate is 34% 2. Double taxation 3. Favorable liquidation tax treatment is no longer available resulting in double taxation.

S Corporation


1. Single level of federal taxation 2. Single level of taxation upon sale or liquidation of business


1. Medical and group term life insurance is not deductible

Limited Liability Companies

An LLC is a new, non-corporate entity combining the operational flexibility and tax status of partnerships with the limited liability protection traditionally associated with corporations. Profit and non-profit activities may be pursued through LLC's.

Generally, in New Jersey as well as other states that have adopted LLC legislation, an LLC expressly constitutes a separate and distinct legal person. The basic components which are derived from both corporate and partnership laws, are as follows:

* Articles of Organization * Management * Operating Agreement * Limited Liability * Membership * Limited Life


1. Prepare/Review lease agreements or purchase agreements 2. Prepare/Review franchise agreements 3. Prepare/Review buy-sell agreements 4. Obtain licenses, zoning variances 5. Provide specific legal advice 6. Prepare/Review and File Certificate of Incorporation and establish Registered Agent 7. Prepare/Review By-Laws 8. Prepare/Review initial meeting of shareholders documents 9. Prepare/Review and File Trade Name Certificate 10. Prepare/Review Partnership Agreement 11. Prepare/Review Agreement of Sale 12. Prepare/Review Promissory Note 13. Prepare/Review and File Annual Report 14. Suggestions on workers' compensation coverage


1. Is the minute book up to date? 2. Are the minutes signed? 3. Do the minutes reflect the following? * a. Annual shareholder's' meeting? * b. Annual directors' meeting? * c. Special meetings? * d. Retirement plan contributions? * e. Bonuses? 4. Are stock certificate books properly up to date? 5. Are by-laws properly up to date? 6. Are proper records of expense reimbursements being kept?

You should have your accountant contact your attorney to be certain these and the following questions are taken care of:

1. Has corporate tax been estimated? 2. Have deposits on federal and state taxes been paid? 3. Are there any earnings accumulation problems? 4. Have state and federal tax returns been prepared? 5. Have all tax returns been filed on time? 6. Should a subchapter S election be made or recorded? 7. Are proper depreciation guidelines being followed?

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       Kenneth Vercammen's Law office represents individuals charged with criminal, drug offenses, and serious traffic violations throughout New Jersey. Our office helps people with traffic/ municipal court tickets including drivers charged with Driving While Intoxicated, Refusal and Driving While Suspended.

       Kenneth Vercammen was the NJ State Bar Municipal Court Attorney of the Year and past president of the Middlesex County Municipal Prosecutor's Association.

       Criminal and Motor vehicle violations can cost you. You will have to pay fines in court or receive points on your drivers license. An accumulation of too many points, or certain moving violations may require you to pay expensive surcharges to the N.J. DMV [Division of Motor Vehicles] or have your license suspended. Don't give up! The Law Office of Kenneth Vercammen can provide experienced attorney representation for criminal motor vehicle violations.

       When your job or driver's license is in jeopardy or you are facing thousands of dollars in fines, DMV surcharges and car insurance increases, you need excellent legal representation. The least expensive attorney is not always the answer. Schedule an appointment if you need experienced legal representation in a traffic/municipal court matter.

       Our website provides information on traffic offenses we can be retained to represent people. Our website also provides details on jail terms for traffic violations and car insurance eligibility points. Car insurance companies increase rates or drop customers based on moving violations.

Contact the Law Office of
 Kenneth Vercammen & Associates, P.C.
 at 732-572-0500
for an appointment.

The Law Office cannot provide legal advice or answer legal questions over the phone or by email.  Please call the Law office and schedule a confidential "in office" consultation.  The Law Office now accepts payment by American Express, Visa and Master Card.