Atlanta Business Lawyer Blog

In my many years as an experienced Atlanta, Georgia business attorney, I have witnessed countless business persons begin business partnerships with the best of intentions, only to find themselves in drawn out litigation or disputes. In a high profile partnership dispute case, the Atlanta Journal-Constitution reports that the Atlanta Spirit co-owner Steve Belkin has until Thursday, February 25th to pay $2 million or lose his stake in the partnership. The eight-person partnership has been fighting in court since 2005 to determine how much seven of the group must pay Belkin to buy out his 30% interest.

Belkin is part of a partnership bought the Hawks, Thrashers and Phillips Arena operating rights from Turner Broadcasting System in 2004 and shared voting power equally among three subsets of owners. Like many failed business partnerships, the group almost immediately began having disagreements and losing money.

Our Atlanta, Georgia, business partnership lawyers see partnership disputes arise all the time, between partners, shareholders and family members. This is true for all kinds of business and over a wide variety of business matters. Moreover, the poor economy has caused more and more businesses to lose money. As such, business partners are blaming each other for the company’s failure and fighting over the company’s assets and future. As a result, many partnerships all across Georgia and the nation are floundering.

If your business is suffering from internal disputes, disagreements and financial losses, you need an experienced Georgia business partnership dispute lawyer to be on your side and help you determine several issues such as:

• Do you want to sell your company?

• Do you want to retain control over the business?

• Do you want to operate the business yourself?

• Do you want to retain your personnel?

It is crucial you have an experienced Georgia business attorney with you to determine what your options are in the case of a break up. Typical solutions include settlement, buy-out, sale or distribution of the business, and arbitration.

If your partnership or business is failing or if you are in the midst of a partnership dispute, please contact the Adams Law Offices to help you undertake to protect your business interests.

Continue reading "FIND A DEDICATED ATLANTA, GEORGIA, BUSINESS LAWYER TO PROTECT YOUR PARTNERSHIP INTERESTS AT THE FIRST SIGN OF FAILURE TROUBLE" »

The Atlanta, Georgia, business litigation lawyers at our firm find that most plaintiffs and defendants involved in Georgia business lawsuits turn exclusively to the state or federal courts to resolve their cases. In fact, most clients assume state and federal courts are their only option for resolving their disputes. However, there are excellent dispute resolution alternatives, which may have exhaustive benefits for our clients.

Arbitration can be an effective means of dispute resolution, especially for parties who desire a fast resolution on a complex issue. The Official Code of Georgia contains a section laying out the necessary procedures for arbitration in Georgia. This section is generally referred to as the Georgia Arbitration Code, and is located at O.C.G.A. §9-9-1, et seq.

Arbitration, though very similar to the court system, can provide parties involved in business disputes with some unique advantages. First, the parties dictate how they want the arbitration to proceed by designing their own timelines. Unlike the Georgia court system where it typically takes at least a year (or sometimes much longer) for a case to proceed to trial, the parties to an arbitration can schedule a final arbitration hearing within a few months after initiating the arbitration process. This is why many business contracts specify that arbitration is the required form of dispute resolution if a conflict arises. Another advantage to arbitration is that the parties can select an arbitrator who has specialized training or experience in a technical or specialized area of the law. This is in marked contrast to the court system where judges, though generally knowledgeable on the law, may not have any pertinent experience related to a complex business matter, such as construction, intellectual property, or employment. When parties use the court system, it is also important to note that they have no say in which judge is ultimately appointed to oversee their cases, while in arbitration, the parties typically collaborate in choosing a specific arbitrator.

Whether you may be involved in a Georgia business litigation case or are presently engaged in an ongoing business dispute, our Atlanta business lawyers would welcome the opportunity to evaluate your situation and advise you of your options.

Continue reading "ATLANTA, GEORGIA, BUSINESS ATTORNEYS WHO KEEP OPTIONS OPEN FOR THEIR CLIENTS – FROM ATLANTA (FULTON COUNTY) TO CUMMING (FORSYTH COUNTY) TO MARIETTA (COBB COUNTY) TO DECATUR (DEKALB COUNTY) -- WE WANT A FAVORABLE OUTCOME IN YOUR CASE" »

As an Atlanta, Georgia Business Attorney, I advocate many different forms of business entities under which a Georgia company can operate. One of my favorite entities is the Georgia Limited Liability Company (LLC). This is an entity recognized by the State of Georgia and affords its owners and investors (members) significant protection from liability as well as significant tax advantages. Such protections and savings are the primary benefits of setting up and operating under a Georgia LLC.

It is important to have an experienced Georgia business law firm set up your Georgia LLC. The costs are relatively inexpensive considering the time, investment, and serious nature of operating your Georgia LLC. Our Atlanta, Georgia, business attorneys can give you an overview and guidance on how to keep records and conduct business. Moreover, while it may seem easy to operate an LLC, seeking and following the advice and guidelines of an experienced Georgia Business Attorney is critical. Our Georgia business lawyers will walk you through the steps to protect your business as well as your personal assets. This could very well prevent “Piercing the Corporate Veil” and accessing your personal assets to pay liabilities and debts of the LLC. This is just one reason it is so important to have an experienced Georgia business lawyer work with you in setting up your LLC.

NOTE: Buying some “operating agreement” form over the internet to set up your business affairs likely is an immense and potentially costly mistake. This type action can get you in significant legal trouble with dire legal consequences. Likewise, setting up an LLC online and/or without the representation of a Georgia business lawyer is a dangerous and likely costly and poor business decision.

Once the initial research has been performed and information has been gathered concerning the structure of the Georgia LLC, the LLC’s application, By-Laws, Articles, Registered Agent, and other important matters are submitted to the Georgia Secretary of State for processing. Georgia law firms with significant experience in this area also can set these matters up online and a proper Georgia LLC can be set up in just a couple of days. Provided everything is in order, the Georgia LLC is created and its members will be authorized to do business as the LLC in the state in which the LLC is organized.

Continue reading "YOUR ATLANTA, GEORGIA, BUSINESS LAWYER AND OPERATING AGREEMENTS FOR YOUR CORPORATION: DEFINING THE ROLE OF THE MEMBERS AND THE LLC" »

The Atlanta tax attorneys as well as the Atlanta Business Attorneys at The Adams Law Offices are always informing, educating, and assisting individuals and business owners about incurring taxable income (tax liability) without the liquidity to pay taxes on this income. This scenario can be a taxpayer’s worst nightmare and often generates significant internal struggles, infighting, and conflict between business owners. The Atlanta business lawyers and Atlanta tax lawyers at our Firm refer to the scenario of incurring tax liability without producing the liquidity to pay these taxes as “phantom income.” “Phantom income” means you have taxable income but no cash to pay taxes on this income.

“Phantom income” occurs most frequently in Subchapter S corporations and limited liability companies (LLCs), which are presently the most common and popular business entity forms for doing business in Georgia. This is especially true in small businesses owned by taxpayers who may not be aware how “phantom income” can be incurred or what “phantom income” is.

“Phantom income” occurs when Subchapter S corporations and LLCs are taxed. The income in these business entities is passed to the owners whether or not cash is actually distributed to the owners. Moreover, if a business makes a profit, at least for tax purposes, but the business owner(s) keeps most of the money in the business as so often is the case (especially in small businesses), then a “phantom income” scenario can result.

For example, suppose your business has a tax profit of $100,000, but you only distribute $10,000 because you need the rest of the money in the business to keep operating the business. However, you are taxed on $100,000 even though you only received $10,000. This is one instance where you have been the unknowing casualty of “phantom income.”

Thus, the question arises: How do you avoid phantom income? The answer is the proper drafting and prudent use of a well-crafted operating agreement.

Continue reading "TAX AND BUSINESS LAW FIRMS -- BEWARE OF “PHANTOM INCOME” IN YOUR CLIENT’S LIMITED LIABILITY COMPANY (“LLC”) OR “SUBCHAPTER S” CORPORATION" »

One of the most important services an experienced Georgia business lawyer can offer you and your business is knowledge, expertise, personalized legal guidance, and greatly increased chances your GA business will be successful, profitable and sustainable. Lawyers, unlike legal document services, know the problems encountered by GA businesses similar to yours, the GA state and federal courts and the government agencies you will inevitably interact with and the consequences a minor mistake or careless assumption may cause. These consequences can be costly, permanent, or even fatal to your business and your personal finances and welfare. As an experienced business lawyer in Georgia, I have found many of these problematic business situations arise out of faulty legal documents, improper business contracts, agreements or transactions. These are just some of the compelling reasons you should consider hiring a Georgia business law firm to assist and guide you in your business dealings.

Moreover, if your business is successful, the chances are good that you will need a good GA business lawyer again. Our Firm receives repeat Georgia business referrals constantly from clients who I have helped start their own Georgia business, and who later found that they needed other legal services, like reviewing a Georgia lease or taking their business to the next level of growth and profitability. In contrast, I also receive a large number of referrals from business owners send troubled colleagues my way so for resolution of a Georgia business dispute which otherwise could have been avoided had these business owners taken the time to get their businesses off to a good start with proper legal representation. I firmly believe, and have seen time and time again, that it is commonplace prudent business judgment for business owners and entrepreneurs alike to seek the services an experienced GA business lawyer. These services are invaluable and should at the very least, be considered.

A short list of the benefits a GA business lawyer can provide are as follows:

• Advice on which business entity is best for your situation and the best family or friends to involve;
• How to run your business and keep your books in order to get the maximum benefits from incorporation and avoid personal liability by another party “Piercing the Corporate Veil” and being able to access your personal assets for collection on any judgment against you or your corporation;
• An honest discussion of legal liability for the business and for you as an individual;
• Analysis of Georgia laws, county laws, city laws and local requirements will affect your business;
• Assistance with for permits, licenses and zoning and other requirements which will have an impact of your business and are necessary for its operation;
• Advice on the tax consequences and benefits of your GA business entity is subject to or entitled to;
• Assurance that your papers were completed correctly;
• Assistance with GA business contracts in your dealings with your clients and vendors;
• A local experienced GA law firm to call on when issues arise; and, you can be rest assured they will.

Continue reading "PRUDENTLY, PROFITABLY AND LEGALLY DOING BUSINESS IN GEORGIA – BE CAREFUL OF THE MANY TEMPTATIONS AND PITFALLS OF “BEING YOUR OWN LAWYER” " »

As an experienced Atlanta business lawyer, I find that one of the most rewarding parts of my business practice is helping clients set up a brand-new Georgia business or re-establish and existing one. In doing this, the basic issues which first need to be addressed, are choosing the correct legal entity under which the Georgia Business will operate and filing the necessary papers with the GA Secretary of State. In addition, the business must establish and confirm any necessary business relationships and memorialize these in legally binding contracts per GA law. Any business must also understand the legal requirements and ramifications of local, State of Georgia and federal tax requirements, and licensing.

In recent years, my colleagues and I have begun to notice “client perceived” competition from do-it-yourself companies, called legal document services or elawyering. Essentially, they offer legal forms and instructions for filling them out, claiming you will pay a much lower price for using their services than you might pay if you go to a licensed GA Business Attorney. Naturally, these services are only offered for common legal matters, which assume and lull you into a false sense of comfort that you have set up your business correctly. These elawyer and internet form companies maintain and make you believe your business is “cookie cutter” and without unusual circumstances. These services claim to offer such services as deed transfers, startup papers for a new business, etc. In the many years I have practiced business law, I have found that there is not a business without unusual circumstances, needs, and dynamics. This is a fact, not conjecture.

IN FACT, THESE ELAWYER INTERNET COMPANIES WHICH PURPORT TO PROVIDE LEGAL SERVICES EVEN STATE, THAT YOU NEED TO HAVE AN ATTORNEY AND THEIR INFORMATION IS NOT A SUBSTITUTE FOR LEGAL ADVICE AND IS LEGAL INFORMATION – IN FACT, WHAT THESE ELAWYER INTERNET COMPANIES ARE DOING TO CONSUMERS IS DISTURBING AND WORRISOME TO SAY THE LEAST.

Continue reading "DO YOU NEED A GEORGIA BUSINESS LAWYER? -- FORMING AND OPERATING A BUSINESS IN GEORGIA" »

The three letters “IRS” strike fear in a lot of people, and for good reason. Nobody likes to be audited by the IRS. An audit is time-consuming and nerve-racking. An audit can also be expensive, with not only professional fees, but potentially having to pay a deficiency in taxes (plus interest and maybe penalties).

A primary cause for drawing an IRS audit is business deductions that look out of the ordinary. Even if legitimate, you still have to provide documentation, etc. So why would you want to draw attention to yourself? Yet I see many taxpayers do exactly that when they form a single member limited liability company (“LLC”).

If you are starting a new business, and select an LLC as your business entity (which I frequently suggest is the best entity), then you need a multiple owner LLC. If you have a business partner, then the LLC will be a multiple member LLC. But if you are starting a business by yourself, then make a spouse or family member a 1% owner.

The advantage of a multiple member LLC versus a single member LLC is in how the business deductions are reported. In a multiple member LLC, the business deductions are reported on the LLC’s business tax return, and only the profit amount is reported on a single line your personal return (Form 1040). On the other hand, a single member LLC is treated as a sole proprietorship for tax purposes. This means the LLC does not file a business tax return. Rather, all the business deductions are reported on your personal Form 1040. At The Adams Law Offices our experts will review your business plan and assist in the formation of the entity that best suits your business needs.

Business deductions on a business tax return look normal. A lot of business deductions on a personal Form 1040 raise red flags. So find someone to be a 1% owner, and stay under the IRS radar.