I saw this video on my friends site at http://www.monyeandyou.com
I think it says it all. Check it out…
Entrepreneur vs Employee from FIVOSZ on Vimeo.
If you thought filing the paperwork to form a corporation or LLC was all that was required to maintain the benefits of the entity, you were wrong. There are several things required to maintain the corporate veil and benefits of a corporation or LLC structure.Every state has a requirement that you maintain specific documents for your corporation each year. In every state there has been case law that shows owners of businesses, who failed to maintain these corporate records and had their personal assets at risk because the corporation was deemed invalid.
I often hear, “I thought a corporation was there to protect my personal life no matter what.” Well, sorry to those dreamers who feel this way. Remember, there is no such thing as a free lunch.
If you are going to form a corporation and want the protections and tax savings the corporation provides, you must do something in order to maintain those privileges. As in any relationship—marriage, children, friends, employees—you have to work at keeping the relationship strong. It doesn’t just happen automatically because you get married or have a child.
With a corporation, three key areas that you need to maintain are:
• Annual meeting minutes of the shareholders
• Stock ledger and stock certificates issued with shares to each shareholder
• Resolutions that track the activities of the corporation
Most business owners understand the need for these items, but aren’t sure how to track them or put them together. There is a great software program I recommend to track all of this for you called the BizDoc Software. The program tracks each of these areas for you and much more. www.businessdoc.com
It is also helpful for business owners to understand the various terms associated with the corporation and LLC. The following is a list of some of the key terms.
State Statutes – Laws developed by each state that govern how a corporation or LLC can operate in their state. Articles of Incorporation – The document that is filed with the Secretary of State in order to form the corporation. It indicates the name of the company, number of shares, etc. Articles of Organization – This is the LLC equivalent to Articles of Incorporation.
Bylaws – The bylaws in most states do not need to be filed with the Secretary of State. The bylaws are the corporation’s requirements for running the business. It says what officers there will be, how they are elected, when meetings will be held and how voting of the shareholders will take place, to name just a few of the items. Operating
Agreement – This is the LLC equivalent to Bylaws. Officer List or Member/Manager List/ Annual Report – An annual list of officers filed with the Secretary of State indicating the names of the officers of the company, as well as other information.
Stock Ledger – The stock ledger is where all names of shareholders must be recorded. Each transaction of a stock certificate is written down in this booklet.
Stock Certificates – The Corporation’s paper that represents the number of shares owned by the shareholder written on the Certificate. Certificates of Ownership – The LLC’s paper that represents the percentage of ownership by the members of the company.
Resolution – A resolution is a written document that provides permission for a corporation to perform a specific task. The permission is granted by either the Directors or shareholders depending on the activity.
David Gass – Founder
Business Credit Services, Inc.
www.bcscredit.com
“Men are not prisoners of fate, but only prisoners of their own minds.” – Franklin D. Roosevelt
To begin, let me ask you some revealing questions. As a business owner, can you walk away from your business today for one or two months and come back to find it operating smoothly and profitably? Can you even escape for two weeks? Have you ever had a work-free vacation? If your answers are “no”, you don’t have a successful business, you have a glorified job in which you are trapped! You don’t have an effective business system; you are the business system! In a large sense, you are a prisoner of your own success.
No matter what industry you are in, you should not be a prisoner to your business! If you are, you have it backwards. Your business should serve you and your dreams. It should give you greater freedom, not less. In fact, your business, properly designed, should function practically without you, not because of you. It should run predictably and automatically whether you are in the office or not, in the store or not, out in the field or not, on vacation or not. Your business should not depend upon your presence, personality, problem solving and perspiration for its daily survival. If so, your business does not work, you do!
Bottom line, you should run your business; it should not run you, your family or your life. Your business should work harder so you don’t have to. It should be systems-dependent and not owner-dependent or expert-dependent for its success. It should have its own heart, mind, and soul – it should not steal your vital organs and spirit!
Stop for a moment and think of the consequences. If everything in your business flows through you and is dependent upon you, then you are restricting dramatically the growth and profits of your company. As a single human being, there are natural limits to the amount of work, transactions, problems, and decisions that can flow effectively through you in a given day. Stop being a bottleneck or clog. Otherwise, you will continue to restrict the potential of your employees and business and ensure your persistent exhaustion. Stop missing out on greater personal freedom, money and happiness.
If you would like to achieve greater freedom, fulfillment and financial returns from your business, visit www.earn.com. Earn.com is our new community for entrepreneurs and we are registering the first 1,000 members at no cost to you. You get free access for 30 days for providing us feedback on how to improve the community. After 30 days it’s only $24.95 per month to continue.
David Gass – Founder
Business Credit Services, Inc.
The much anticipated ‘It’s Only Business’ Workshop on the East
Coast has come to a close and we are very excited to share our
experience with those who were unable to attend.
This was the very first time we have ventured to the East Coast
using the new workshop format of ‘It’s Only Business’ and I have to
admit that we were welcomed with opened arms. We kept this workshop
closed to the public and were joined by an intimate group of
entrepreneurs and small business owners laying out a number of
strategies that could be immediately implemented into their
businesses.
Our Nationally renowned trainers, David Francis, Mark Del Guercio,
and Scott Fritz along with myself, discussed topics directly
related to the current economy and focused on the importance of
having an action plan.
“To love what you do and to feel that it matters, how can anything
be more fun” said David Francis about this training session. This
was a very emotional workshop, with the economy in the state it is
in, business owners large and small face times of turmoil and
without knowledge business owners are finding themselves having to
close up shop. “Education is the key to survival,” Francis added,
“we are here for just that, to educate and help in times where
there seems to be no hope.”
The media has focused on the bad for far too long…
Now is the time to focus on your goals and educate yourself as a
business owner or entrepreneur in order to see yourselves through
the dark times and this workshop has proven that you are able to do
just that.
Structuring your organizations with a step by step action plan is
critical, especially when funding is the main source of stress. The
first step is to know what business credit really is and how very
important it is today.
If you could just turn back the clock to when you were 18 years of
age and start all over again with your personal credit. If there
were a class or seminar at your high school where you could have
attended to guide and educate you on how personal credit works and
the impact it will have on your life, knowing what you know now,
how much would you be willing to pay for that seminar if you had
the money? This is a question we have asked audiences all over the
country. The answer is always the same, “tens if not hundreds of
thousands of dollars”.
Well, we cannot go back to high school or to the start of our
personal credit record, but what we do have the opportunity to do
is start our business credit the right way and allow ourselves to
save tens if not hundreds of thousands of dollars of the life of
our business.
According to FAIR Isaac, the issuers of personal credit scores
(FICO); the average number of credit inquiries for the American
consumer is one per year. An inquiry is when a credit granter
purchases your credit report to determine if they will grant
credit. Based on our experience if someone has more than the
average numbers of inquiries, each inquiry tends to drop their
personal credit score 5-10 points. Now, as a business owner will
we have more or less than the average number of inquiries? Of
course, MORE.
The good news is that as business owners we have the ability to
develop a credit profile personally as well as one for each of our
businesses. If proper steps to establish and build excellent
credit history have not been taken, applicants for business credit
are in for a rude awakening. However, unlike what many people
think, it is not an easy process to obtain the credit and capital
most small businesses need. There are specific steps a business,
or individual, must take in order to have a realistic chance at
gaining approval for an application of credit. The steps one needs
to follow may seem deceptively simple on the surface; however, it
is very important to note that the implementation of these steps
can become complicated. Each step has to be carried out with a
great deal of preparation and it is very important to know that
each step is thoroughly choreographed. You wouldn’t want to skip a
step and have your foundation crumble would you?
As Mr. Francis stated, it was a very emotional workshop. Our
attendees went down a path of enlightenment and were truly thankful
to all of the trainers. You can look forward to hearing some of the
testimonials soon.
Business owners can avoid a personal bankruptcy with implementing a few simple steps when first setting up their business.
First, protect your personal assets and liability by forming a Corporation or LLC. By forming a corporate entity a business owner puts a level of protection around their personal assets. If the business fails, the personal assets of the owners and officers are protecting from creditors coming after them. In the case of a sole-proprietorship or general partnership the personal assets are not protected. In addition, by using a corporate structure the liability of the individual owner and officers are limited as well. Whereas in a sole proprietorship or general partnership there is no liability protection.
Next, make sure you separate your personal and business credit. Entrepreneurs who have made the decision to use a corporate entity to run their business still need to separate their personal and business credit reports. Too often entrepreneurs rely on their personal credit and personally guarantee debt. This eliminates the advantages of the corporate structure for asset and liability protection. You can learn more about building business credit separate from your personal credit at www.bcscredit.com
Last, makes sure you don’t spend money you don’t have.
David Gass
The following is an email I recently received from one of our newsletter subscribers:
“Dear David:
I work fulltime, i am a single mother with a twelve year old daughter involved in extracurricular activities. I am “trying” to start a business, I desire to start a business, but I don’t have the time or necessary capital at this time. I have a boring dead end job and I don’t have much energy to pursue my business desires fulltime. Again I do apologize, but I am at a standstill and don’t really know what my next move will be.â€
I am surprised at the number of emails I receive every day from individuals telling me how much they would love to start a business “Only if…†– Only if they had the money, Only if they had the time, Only if they had the energy, Only if they didn’t have so many other things happening in their lives, Only if circumstances were different etc. etc.
When deciding to start a business you first need to ask yourself – “Am I passionate about the (whatever the business is)?†Passion will direct you to do what you want. Too many will look at all the reasons they can’t open a business instead of looking at all the reasons they should. Just think if our reader above had started her business a few years ago she may have had the time to spend with her daughter, the money to do more of what she wants and the energy to enjoy life.
People will do what they are passionate about. People will spend their time on what they set as a priority for their life. People will find the money to spend where they want to spend it. The “Only If…†statements are just an excuse to not move forward with something. To say “Only if†you are taking your responsibility and trying to give it to someone or something else. People that do this try to make themselves feel better, but rarely ever do.
I recently had the in-laws at my house and they were talking about how they just don’t have money to do certain things. I sat and listened for a while about how they just can’t seem to get ahead and how if we had a different President we would have more opportunities and money, etc. I have a very fundamental belief that some have told me is just ignorant – I believe that those who want to make a difference in their lives can do so, no matter where they live in the United States, no matter where they grew up, no matter how much money they have, no matter what politician is in office, and no matter what others tell them they can or can not do.
I was told I was ignorant because I haven’t lived in the shoes of those in desperate situations and areas of America where people “don’t have the opportunity to do thingsâ€. They are correct, I haven’t lived in the shoes of everyone in America, but what I can do is give an example of someone who has and has made it out of their shoes and into something better. There are thousands of examples of Americans living in poverty only to become multimillionaires. Why did they make it out? How did they make it out of their circumstances?
One answer: “They believed in themselves and didn’t let anyone tell them it couldn’t be done.†That’s it, belief in yourself. That’s all it takes. Sounds easy and for some it will be very difficult.
The great thing about America is that everyone has the opportunity to believe in themselves and make a difference not only in their own lives but the lives of others.
I know, some of you are asking how does this relate to me starting my business right now? I still don’t have any money and work full time and have a family.
My answer: Prioritize! Then Act! You need to decide the priorities in your life first. For some of you starting a business won’t be a priority, but that’s because you said it’s not – not because someone else told you it wasn’t or because you think there are too many reasons you can’t. It should only come down to whether or not you believe enough in yourself and are passionate enough about your idea. Once you have made the choice to start take action! Action will create more action and more action creates the reality of accomplishing your priorities.
David Gass
President & Founder
Business Credit Services, Inc.
Success Steps to Business Credit
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