by eclewis | Jun 10, 2014 | Business News
A mentor in your industry can help set you down the right path for your business, or expose you to opportunities you had not even considered. They are not afraid to give frank advice by letting you know a new idea needs refining or when to take that risk you have been considering. They can also help you realistically determine your business goals and how to achieve them more efficiently. Mentors are important because they have been in your position, and you can learn from their experience in ways books are incapable of teaching you and more candidly than a friend or family member might.
Trying to find a mentor does not have to be intimidating. Finding a mentor starts with networking, but the better question is where and how to get started.
A great place to start is within. Think about whom you know in your industry. Think about your business partners, clients, co-workers, friends, and family. These people can all be potential contacts to discover your new mentor. Ask if they have had a mentor or if their parents worked in the same line of work. If you are still having trouble connecting with a possible mentor this way, it may be time step outside your comfort zone.
Start searching for conventions, organizations, or even classes designed for those in your line of business. Go to an event or class with a colleague and strike up a conversation with other attendees. Ask if they have ever been to an event like this to get conversation going. Be sure to introduce yourself to the officers of the group or speakers at the event, because there is a reason why they are leading the group. These people have unique knowledge from their experiences, and they could make for a great mentor. Look for ways to connect with these new acquaintances beyond work by discussing hobbies, vacations, and family. You never know what else you may have in common. Get their business card and follow up soon and let them know you enjoyed meeting them.
When setting up additional meet-ups remember to be flexible and work around their availability, since these people are using their time to meet with you when they have no obligation to do so.
These tips should help set you on your way to discovering a mentor in your industry and getting closer to your business goals. If you need legal assistance with your next business goal, do not hesitate to reach out to the Law Office of E.C. Lewis, PC, home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Sep 1, 2009 | Business News
What is an operating agreement?
An operating agreement is the blueprint for how your business operates. It describes what happens when disputes arise between members, how membership interests can be transferred, and who runs the business. For instance, it usually talks about whether an LLC is member-managed or manager-managed. It will also talk about the membership interest, who owns them, what compensation was paid for those interests, and how those interests are given up. In some cases, it may talk about what percentage of membership interest votes allows certain measures to pass. It may also state what happens if a member goes bankrupt, gets divorced, or dies.
Why do I need one?
If the LLC has more than two members, an operating agreement talks about what happens between the members. It talks about voting percentages, how much was paid for the membership interests, and how membership interests can be transferred. I like to think of it as the operating manual for a business – without, a business can still operate but has no idea what to do during a crisis.
So does a single member LLC need one? The single member LLC doesn’t need to worry about disputes between members. The single member LLC doesn’t need to worry about how a transfer occurs because the single member has full control of transfers. However, even with this in mind, a single member LLC does need an operating agreement!
An individual starts an LLC or corporation for two reasons: 1. to gain a tax break and 2. to gain limited liability. The tax break occurs because, depending on the tax structure chosen, an individual may be able to plan better for retirement, take more business deductions, or lessen the employment tax liability. The limited liability occurs when the LLC is treated like a separate entity. However, this limited liability is not handed out easily. An LLC must earn this limited liability. This means that an LLC must be treated as a separate entity from the business owner. When an LLC has multiple owners, it may be easier to show that the entity is separate from its owners. The business owners can probably show that they established a separate banking account and that control is vested in several people (i.e. the multiple owners). However, when the person is a single member LLC, it can be difficult to show the business was really operated in as a separate entity. For instance, even though the business has a separate business account, the person that controls that business account is the sole owner. Due to the nature of a single member LLC, it will be difficult to show that control is vested in multiple people.
This is why it is important to have all the paperwork in order to show that the individual operated the LLC as a separate entity. For an LLC, an operating agreement is the first of many documents that will show the entity truly is separate. The operating agreement, in addition to the correct state, federal, and additional documents that are kept by the business owner are the building blocks for showing the entity is truly separate. By showing that the building blocks are followed, along with the other things that need to be done to show that in practice it is separate, individuals who own LLCs can help ensure that the LLC keeps its limited liability.
To find out if you have everything in order to show your LLC is a separate entity for limited liability purposes, call Elizabeth Lewis at 720-258-6647 or email her at elizabeth.lewis@eclewis.com today.
by eclewis | Aug 25, 2009 | Business News
Why should I use an attorney rather than an online site to form my business?
I was recently asked why someone should spend the money on an attorney rather than form his or her (or their) company through an online site. The answer, I found, was rather simple. There are two main reasons to use an attorney: an attorney will help ensure that you pick the right entity for your situation and an attorney *should* create (with your input) and explain all the documents necessary to get you company up and running.
When someone who isn’t skilled in the law goes to an online website, he or she may choose to set up a limited liability company thinking that is the best entity structure for his or her company and disregard forming a corporation. However, if that same person had gone to a skilled business lawyer, he or she may have been led through a series of questions, like those I ask my clients, to determine whether an LLC is correct. A skilled business attorney may discover that for one reason or another, a corporation is best. Or a skilled business attorney may discover that an LLC is correct and be able to guide clients through the choice of whether to make it member-managed or manager-managed.
In addition to helping a client choose the best business entity, a business attorney will help a client prepare the documents necessary to run the business including paperwork through the state, federal, and possibly city level. For instance, when my clients walk out the door after I set up their business, I try to ensure that all their documents are done (unless it is something that they personally have to do and I cannot as their attorney) and that they understand exactly what is in them. The last thing I want is someone to leave unsure of what their by-laws or operating agreement says. If you get a document from an online site, you don’t know if the provisions in it are what you need (for instance, the last thing you want is an uh oh, I don’t have any provisions for when my partner gets divorced and now the business is facing failure because of it). In addition, you may not understand all the provisions in it (for instance, the last thing you want is an uh oh, I didn’t realize that the way that clause was worded, a personal bankruptcy means a lot of problems). When you hire a business attorney (and again, I caution that you need to find out what services your attorney is providing – is he or she just writing the documents and throwing you out the door or is he or she going to go over the documents with you?), your business attorney will probably ask you lots of questions to see what you need in your documents and then explain them to you.
Filing online is quick and it is easy. However, if you don’t know what you are doing, it could end up costing you big time down the road. Hiring an attorney gives you the peace of mind knowing that someone who knows the ins and outs of forming a business is taking care of you and ensuring that you know what you are doing and why.
*I say should, because you have to check with your attorney to find out exactly what he or she is doing for you. Some attorneys may only prepare the major company documents (Articles with the Secretary of State and your operating agreement or by-laws) while others may do much more to ensure that you are set up with the Secretary of State, any other state agencies, the IRS, and any other entities you need to file with. Always ask what are you doing for me and what do I need to do once I leave to make sure you don’t think you are totally set up and find out you aren’t.
Need An Attorney to Help Form Your Business?
Elizabeth Lewis is an experienced software licensing attorney in Denver. If you have questions about how to create a license for a software, Contact the Law Office of E.C. Lewis today!
