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Why you need unique LLCs for your IPs.

An LLC, or limited liability company, is one of the simplest business structures available. It allows sole owners to combine the benefits and simplicity of a sole proprietorship with the limited liability of a corporation. This is why many single-owner business owners choose to start LLCs with our LLC lawyers.

However, an LLC can offer even more benefit where there are multiple members.  An LLC provides all the protection of a corporation, with the flexibility of a partnership.  A limited liability company, and especially an LLC with an Operating Agreement (a kind of contract between the members), can be a great way for members to benefit from liability protection, while having some flexibility in the roles and responsibilities of LLC members. 

Many of our Fernandez Law Firm Clients are software and intellectual property entrepreneurs.  We recommend that each separate  and unique piece of intellectual property be in a separate LLC, and separately managed.  

Here’s why:  your IP is your own intellectual property.  It has the potential to make a lot of money for you.  You do not want to lose it. 

If one of your business transactions goes badly, and that LLC is sued, if all of the intellectual property is in the same LLC, all of your innovations could be lost.  Your life’s work could be lost.

Let us help you protect your intellectual property by properly structuring LLCs to hold your most valuable innovations and assets

Although seemingly complex at the outset, our LLC lawyers will create an LLC and Operating Agreement that is tailored to your business and will be simple to use as your business grows.  We will teach you what you need to know to understand the legal structure, and to properly run the business.

Despite the simplicity of an LLC, starting an LLC can still be very complicated, and filled with irreversible errors even for experienced LLC attorneys.  Our Firm spends considerable time working with new Clients and their accountants to fix expensive problems created years earlier by other LLC lawyers which could have been avoided. 

Therefore, finding the best LLC lawyer before the LLC is created is extremely important.

With the help of an LLC lawyer from The Fernandez Law Firm, you can make sure that all the necessary paperwork and filings are completed properly. Our LLC attorneys will also be able to serve you and create value in your new business as your business continues to grow in the Alpharetta, GA, area.

Creating Your LLC

Here is what we do:  we sit you and your partners down in our conference room and we ask you tough questions about the roles and responsibilities each member will have in the new business, and your goals for the business.  We whiteboard what you want, and from that, we move forward.  We have the experience to know what to ask to get you what you need, and the knowledge to guide you. There is no cookie cutter, one-size-fits all.  Your business, and your business goals, are unique, and the solution we tailor for you is unique to you.   

Then, we teach you LLC 101.  We want our Clients to know the how and why, so they can make good business decisions.  We want you to become skilled and educated professionals, and to be able to grow your business, while taking advantage of all tax benefits.

If necessary, we do a name reservation of your business legal name with the Georgia Secretary of State.  We file your Articles of Organization with the GASOS.  We obtain your FEIN.  We file the relevant documents with the Internal Revenue Service to get you optimal and preferred tax treatment where applicable to save you money in every year your LLC is in business. 

We create a Minute Book for you, which legally memorializes your paid-in LLC percentage ownership, and which contains your LLC Shares / Certificates of Interest in the limited liability company. The LLC Minute Book will also contain your LLC seal, as well as other documentation legally required to show your ownership in the LLC. 

You may also need to apply for a business license, and any other relevant certifications, and we have the experience to guide and assist.

Because an educated Client is our best Client, your LLC Minute Book will contain a Memorandum specially tailored to your needs which sets forth exactly what you need to keep your LLC viable through the years, complete with reminders of dates, explanations, and the names, telephone numbers, and websites of the agencies you may need to contact.  We review this Memorandum with you so that you have a clear understanding of what to expect with your new business, and to know the when and how things will occur, such as when to pay your Annual Registration to the Georgia Secretary of State.

Where necessary, our business lawyers create an Operating Agreement for your new LLC, which sets forth the roles and responsibilities of the LLC members to each other and to the limited liability company, and what financial and time commitments and what will occur if a member withdraws, dies, or is unable to contribute to the LLC. 

Most of all, we simplify things in your business now and in the future so you can focus on making money.

Managing Your Company

As your business grows, our business lawyers can help with your other legal and business needs as well. The Fernandez Law Firm has an excellent reputation in negotiating real estate leases, business contracts, employee agreements, 1099 contractor agreements, equipment leases, financing, and protecting your business from litigation.  Our LLC lawyers will help you reach sound decisions, prepare the correct paperwork, and properly and timely file your documentation.  Your new company deserves the best, and you deserve to know that things are done properly.

Creating and running a company can be complicated, but an experienced LLC lawyer can help. To work with an LLC lawyer in Alpharetta, GA, contact The Fernandez Law Firm. Call us at (678) 667-2402to get started.

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Our Clients often ask our lawyers:  is this a contractor, or an employee?  It matters because with an employee, the employer must withhold taxes.  This can make an employee seem more expensive than a contractor, and employers will try to categorize workers as contractors.  This can be a very expensive mistake, because the Internal Revenue Service will penalize the employer harshly, by charging the employer 28% of everything the employer paid the worker, and substantial interest, fines, and penalties.

If this is a question or issue for you, please do not hesitate to call The Fernandez Law Firm, P.C. at 678.678.2402.  We can help you identify this problem, and we can also help you with numerous solutions.

You do not want the first time you address this problem to be when you sit across from an IRS examiner because the results will be brutal, and probably not in your favor.  This would not be the time to learn the difference between an employee and a contractor for the first time.

The Internal Revenue Service (IRS) has its own method of determining whether a worker an employee or contractor. 

At the Fernandez Law Firm, we tell our Clients to think about the employee v. contractor question this way: compare a secretary in your office to a plumber who comes in to fix a broken pipe. 

Typically, your secretary comes to the office at 9 a.m., sits at the employer’s desk, uses the employer’s computer, phone, and software, takes direction from the employer (is “controlled” by the employer), and then at 5 p.m., the secretary leaves for the day.  The secretary is typically paid on a regular schedule.  The secretary works every business day, for months or years.

Contrast this with a plumber that the employer might call because of a broken pipe.  The plumber comes when he can, arrives with his own tools which he has purchased himself, does not take direction from the employer, fixes the pipe, hands an invoice to the employer, and leaves and does not return the next day.

The IRS is primarily looking for three kinds of control: 

·        Behavioral control: Does the employer have the right to control the worker, like the secretary, or does the worker decide how he will do his own job, like the secretary?

·        Financial control:  Does the employer control how the worker is paid, like with a regular paycheck for the secretary, or does the worker control how he will be paid, like with an invoice for the plumber?

·        Type of Relationship:  Is there a written contract, employee benefits like a pension plan, vacation pay?  If so, the worker is more likely to be an employee.  Also, if the relationship continues, and the work is a key aspect of the business, then the worker is more likely to be an employee.  The relationship a plumber has to a software business, for example is that relationship will not be ongoing, and plumbing work has nothing to do with software programming.

The Internal Revenue Service will look at the entire relationship and consider the degree or extent of the right to direct and control the worker.  The IRS also looks at the below factors.  Each case is considered uniquely, but if the worker hits seven or more of these tests as a “yes” — the worker is likely an employee, and the taxes have to be withheld, or there can be large penalties and interest assessed by the IRS and the state department of revenue.

Now, take the test for yourself — and then give us a call to tidy it all up.  The Fernandez Law Firm, (678) 667-2404:

1. InstructionsIs the worker required to comply with employer’s instructions about when, where, and how to work?If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, and comes mostly every day, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, once in a while, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
2. TrainingIs training required? Does the worker receive training from or at the direction of the employer, includes attending meetings and working with experienced employees? If the worker has to attend meetings with the rest of your workers, that worker is probably an employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
3. IntegrationAre the worker’s services integrated with activities of the company? Does the success of the employer’s business significantly depend upon the performance of services that the worker provides? If the worker’s work is part of what your business does, that worker is probably an employee. If the worker comes in like a plumber, and goes to your bathroom and fixes a leaky sink, and you are a software development company, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
4. Services Rendered PersonallyIs the worker required to perform the work personally? If the worker’s work is rendered by that specific person, the worker is probably an employee. If anyone from the plumbing company comes in and fixes the leaky sink, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
5. Authority to hire, supervise and pay assistantsDoes the worker have the ability to hire, supervise and pay assistants for the employer? If the worker can hire staff for your business, the worker is probably an employee. The plumber cannot hire workers for your software company.  The plumber is more likely a contractor.If you check yes, that worker is more likely an employee.
6. Continuing RelationshipDoes the worker have a continuing relationship with the employer? If the worker has been working for you for a while, the worker is probably an employee. If the plumber comes once or twice to fix a leaky sink, the plumber is more likely a contractor.If you check yes, that worker is more likely an employee.
7. Set Hours of WorkIs the worker required to follow set hours of work? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, once in a while, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
8. Full-time Work RequiredDoes the worker work full-time for the employer? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, once in a while, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
9. Place of WorkDoes the worker perform work on the employer’s premises and use the company’s office equipment? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, once in a while, and works at a lot of different locations, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
10. Sequence of WorkDoes the worker perform work in a sequence set by the employer? Does the worker follow a set schedule?If you tell the worker which project to do first, or how to do the project, that worker is probably an employee. If the worker comes in like a plumber, and does his work the way he wants to do it, with his own truck and tools at any time he wants, once in a while, and works at a lot of different locations, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
11.  Reporting ObligationsDoes the worker submit regular written or oral reports to the employer? If the worker has to tell you how and when he did his work, that worker is probably an employee. If the worker comes in like a plumber, and does his work the way he wants to do it, does not submit any kind of written reports, with his own truck and tools at any time he wants, once in a while, and works at a lot of different locations, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
12. Method of PaymentHow does the worker receive payments?Are there payments of regular amounts at set intervals? If the worker gets paid every week, or every two weeks, that worker is probably an employee. If the worker comes in like a plumber, fixes the leaky pipe and hands you an invoice, and does his work the way he wants to do it, does not submit any kind of written reports, with his own truck and tools at any time he wants, once in a while, and works at a lot of different locations, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
13. Payment of Business and Travel ExpensesDoes the worker receive payment for business and travel expenses? If the worker gets paid for business and travel expenses, that worker is probably an employee. If the worker comes in like a plumber, fixes the leaky pipe and hands you an invoice, does not get paid travel expenses, and does his work the way he wants to do it, does not submit any kind of written reports, with his own truck and tools at any time he wants, once in a while, and works at a lot of different locations, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
14. Furnishing of tools and materialsDoes the worker rely on the employer for tools and materials? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, and comes mostly every day, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools at any time he wants, once in a while, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
15. InvestmentHas the worker made an investment in the facilities or equipment used to perform services? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, and comes mostly every day, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools and insurance that he bought himself, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
16. Risk of LossIs the payment made to the worker on a fixed basis regardless of profitability or loss? If the worker gets a weekly or biweekly salary, or a regular amount of money on a regular basis, that worker is probably and employee. If the worker shows up and does not know whether he will get the work or whether he will be paid, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
17. Working for more than one company at a timeDoes the worker only work for one employer at a time? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, and comes mostly every day, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools and insurance that he bought himself, and then heads out to another job or jobs, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
18. Availability of services to the general publicAre the services offered to the employer unavailable to the general public? If the worker needs to be at your office at 9 am, uses your desk, your computer, your software, and clocks out at 5 p.m. and leaves your office, and comes mostly every day, that worker is probably and employee. If the worker comes in like a plumber, with his own truck and tools and insurance that he bought himself, and has a website or Yellow Pages advertisement or otherwise allows himself to be hired out to others as the way he makes his income, that worker is probably a contractor.If you check yes, that worker is more likely an employee.
19. Right to dischargeCan the worker be fired by the employer? If you can fire the worker at any time, he may be considered to be an employee. (This is not the strongest test because usually an employer can also fire a plumber or any kind of contractor.)If you check yes, that worker is more likely an employee.
20. Right to quitCan the worker quit work at any time without liability If the worker can quit at any time, he may be considered to be an employee. (This is not the strongest test because usually a contractor can quit a job for a number of reasons — a plumber doesn’t have to take abuse, for example.)If you check yes, that worker is more likely an employee.