Welcome to the LLC Mini Course!
The vast majority of LLCs FAIL to deliver the promised asset protection and never yield any more money. What’s the problem?
Over the next 5 days, I am going to debunk many of the myths about LLC asset protection and show you some tax “loopholes” that will allow you to make and keep more profit in your business.
I’m Lee Phillips, United States Supreme Court Counselor, Federal Tax Court Attorney, and asset protection student. Yes, after 40 years, I am still learning, because the attacks keep shifting.
Among the thousands of small businesses I have helped, many had already put an LLC or Corporation in place before they ever saw me, and then they started turning the crank as fast as they could to try and make money.
They paid their lawyer $1,500 (I like that), or a few of them filled out the 5 easy questions on some internet site, and Shazam, they got an LLC.
There’s not a lot of Magic in that! Also, there’s not much asset protection, and there’s no more money. When you have a form LLC (from a lawyer or the internet), all you get is what turning the crank produces – after taxes.
Almost everybody – everybody except the smart people – sets up their LLC, and that’s the last thought they give it. Lots of them don’t even bother to choose a tax structure, and they get the default structure. Let’s face it, that is not tax planning,
If you manage to pay the annual fee and file a tax return, you probably figure you are “using” your LLC and doing a good job. But it turns out that you won’t get the asset protection you could out of your LLC.
You’ve probably never even looked at the operating agreement, or you don’t even have one. You’ve never issued membership certificates. You’ve never done anything to “beef up” your charging order protection. You may not even know what charging order protection is. Your attorney and the internet site just forgot to explain that one. If I have just described your experience with an LLC, I will tell you that your LLC is failing, but you’re making the attorney who’s going to sue you someday very happy!
Did you know your LLC design dictates how much “extra” money you get and what happens when you get sued?
Take a minute to read through the 5 mini courses and see the things you need to have to put a proper business foundation in place.
FACT: When most small business owners are sued, they end up losing a ton of personal assets, if not declaring personal bankruptcy, because their small business isn’t structured to protect them. The sad truth is that with proper structuring and maintenance this doesn’t need to happen.
Big dreams are in every new business owner’s head. But, according to the SBA, over 50% of businesses fail in the first 5 years. Then the big dreams turn into nightmares.
What have you done to protect yourself against the losses, or the complete failure of your business? What legal foundation have you put in place to ensure your business succeeds and you make more money from your efforts? What if you get sick or die?
Are you going to take the time to protect your profit, your spouse, your kids, your employees, and yourself when disaster hits?
In the mid 80s I was called in to help a man who was starting a business. It was a great business idea and it worked really well. By 1990 he had it up to about $75 million a year. I had used some simple techniques that I share in my LLC Wizard training which showed him how to take most of his profit away from his business and put it into a business his wife owned.
We had to follow some basic legal principles that you can easily follow, but over the years we took tens of millions of dollars out of the business and isolated that money in his wife’s business using the exact same legal tools that I share in my free training.
This guy’s business was extremely leveraged, because he had to pay millions in advance every week to keep it going. On January 17, 1991, I was in Martha’s Vineyard actually doing work for this guy. What happened the evening of January 17, 1991? The Gulf War started. People were afraid. We had never seen a war with live coverage on TV. Instantly, people’s spending habits changed. The demand for this man’s business went from 60,000 miles an hour to full stop in 48 hours. He hadn’t done a thing wrong.
There were over a dozen lawsuits that followed because he couldn’t pay his bills. He even owed the post office over $2 million. The cases were consolidated, and the state attorney general took over. That’s unusual.
The AG had named this guy’s wife in the lawsuit. The first thing that happened in court was the wife’s attorney stood up and said that there was no claim that the wife had done anything wrong. She hadn’t been involved in his business. Her husband had never been involved in her business. She had no involvement in these cases. The AG had to agree.
The judge dismissed the case against the wife with prejudice. The wife and her attorney stood up and walked out of the courtroom. There was an audible whisper, “There goes the money.” The man and his wife were in their mid 50’s, and they never worked again. The last time I saw them was in their penthouse on Maui’s Kaanapali beach. This man had taken the steps to protect his wife, his kids, and his assets from a totally unforeseen disaster. If you can see the disaster coming, it’s too late.
It turns out there are lots of things you can do to “hedge your bet” and ensure success in your little company. (Learn more by clicking here.)
Don’t find yourself saying these common words:
“It won’t happen to me.”
Over the next 5 days, you’ll receive my Mini Course where I will cover these basic LLC concepts:
- Which state do you want to form your business in, and what you need to do to make the filings.
- Getting the right name and protecting it.
- The silent killer of many LLCs and how you get maximum tax opportunities.
- The mistake that invalidates many LLCs
- How the Operating Agreement acts as the heart of your LLC–saving you from lawsuits and making you more money.
Each day for the next five days you’ll simply get an email with a link leading you to a writeup on the topic of the day.
See you tomorrow,
Lee R. Phillips, JD
United States Supreme Court Counselor