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Actual for You - Protecting Your Limited Partnership
Top 3 Myths About Internet Marketing
Lack of understanding and old thinking has long cost small business owners their competitive edge and despite a steady stream of research proving the effectiveness of Internet marketing, yet again, it has mostly been larger firms taking advantage of this new advertising medium.According to projections by eMarketer.com, online ad spending in 2005 grew by more than 30%, surpassing the $10 billion mark for the first time. But many small and medium-size business owners (SMEs) are still wary of introducing Internet marketing to their business plans. If you listen to their reasoning, the Internet might be considered as the fax machine once was: unnecessary, unproven and not cost effective.Well, today ignoring the benefits of an Internet marketing strategy can cost them far more in lost profits than choosing postal mail over faxes. Recently a study was done to determine the top 3 reasons small businesses have been reluctant to fully embrace the increasingly relevant Internet in
nership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership. Lack of understanding and old thinking has long cost small business owners their competitive edge and despite a steady stream of research proving the effectiveness of Internet marketing, yet again, it has mostly been larger firms taking advantage of this new advertising medium.According to projections by eMarketer.com, online ad spending in 2005 grew by more than 30%, surpassing the $10 billion mark for the first time. But many small and medium-size business owners (SMEs) are still wary of introducing Internet marketing to their business plans. If you listen to their reasoning, the Internet might be considered as the fax machine once was: unnecessary, unproven and not cost effective.Well, today ignoring the benefits of an Internet marketing strategy can cost them far more in lost profits than choosing postal mail over faxes. Recently a study was done to determine the top 3 reasons small businesses have been reluctant to fully embrace the increasingly relevant Internet in
One of the areas where problems can arise is in the proper administration of the FLP. Th
You're Fired! Tips for Avoiding the Termination Blues
With almost daily news reports of companies laying off workers, or filing for bankruptcy, or going out of business altogether, losing your job suddenly doesn't sound all that unlikely. Here are some strategies either to avoid being laid-off, or to cushion the blow if it comes.1. Keep your resume current. If you haven't looked at your resume in over a year, drag it out and review it. Make sure you've included your latest work accomplishments and that it adequately represents who you are. Whether or not you are looking for a new job, you should update your resume every time you get an award, finish a big project, or get a promotion.2. Stay up to date on the latest news about your company and in your field. Read the business sections in the newspaper. Look at trade journals. Read your company's annual report. Pay particular attention to stories that might indicate the market for widgets (or whatever your company does) is going south.3. Get to know people in different
The use of the Limited Partnership has grown in popularity over the last 25 years as both a way to limit liability and reduce exposure and risk as well as a tax and estate planning tool. Like any other business or investing tool, it can be used properly for its intended purpose or it can be misused, resulting in problems.With almost daily news reports of companies laying off workers, or filing for bankruptcy, or going out of business altogether, losing your job suddenly doesn't sound all that unlikely. Here are some strategies either to avoid being laid-off, or to cushion the blow if it comes.1. Keep your resume current. If you haven't looked at your resume in over a year, drag it out and review it. Make sure you've included your latest work accomplishments and that it adequately represents who you are. Whether or not you are looking for a new job, you should update your resume every time you get an award, finish a big project, or get a promotion.2. Stay up to date on the latest news about your company and in your field. Read the business sections in the newspaper. Look at trade journals. Read your company's annual report. Pay particular attention to stories that might indicate the market for widgets (or whatever your company does) is going south.3. Get to know people in different
PRACTICAL LESSONS LEARNED
Though the Limited Partnership has been adopted in all states of the USA, not all limited partnership statutes are created equal. Some are much better than others, and some are worse. It’s important to be in compliance with state law requirements, remembering of course that some states have far more formality requirements than do others. Here are some useful suggestions.
- As a preference, make use of those jurisdictions where the limited partnership statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner.
- Be sure to file any Annual Report. In the better jurisdictions, this is normally just a statement of who the general partner is, along with their address. In others, it is more detailed and requires a financial report.
- Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc.
- The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes.
- Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney.
A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:
- Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
- The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
- The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership.
- It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
One of the areas where problems can arise is in the proper administration of the FLP. Th
7 Great Business Books You Must Read
If you are serious about business, we really recommend you read this books. They would inspire you, they would make you learn, and they would make you more closer to creating the company of your dreams. We have selected the books carefully. So, let's start.1) Book: Made In America by Sam WaltonIf you know Walmart, you should know Sam Walton. Mr. Walton is the best example of the American dream. He started small, with little money, but a great desire to make a great company. This book is his biography as well he gives us advice on business.2) Book: Built To Last by Jim Collins, Jerry I. PorrasGreat companies are the ones you must learn of. In this book, the authors researched America's greatest companies and their habits to success. Companies like 3M, Motorola, Nordstrom, Marriott, just to name a few. It really is a great book and you'll learn this successful habits as well and apply it to your business.3) Book: Think And Grow Rich by Napoleon Hill of those jurisdictions where the limited partnership statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner.Be sure to file any Annual Report. In the better jurisdictions, this is normally just a statement of who the general partner is, along with their address. In others, it is more detailed and requires a financial report. Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc. The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes. Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney. AVOIDING IRS PROBLEMSThe Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes. Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney. AVOIDING IRS PROBLEMSIt’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes. ADMINISTERING THE LIMITED PARTNERSHIP
If you are serious about business, we really recommend you read this books. They would inspire you, they would make you learn, and they would make you more closer to creating the company of your dreams. We have selected the books carefully. So, let's start.1) Book: Made In America by Sam WaltonIf you know Walmart, you should know Sam Walton. Mr. Walton is the best example of the American dream. He started small, with little money, but a great desire to make a great company. This book is his biography as well he gives us advice on business.2) Book: Built To Last by Jim Collins, Jerry I. PorrasGreat companies are the ones you must learn of. In this book, the authors researched America's greatest companies and their habits to success. Companies like 3M, Motorola, Nordstrom, Marriott, just to name a few. It really is a great book and you'll learn this successful habits as well and apply it to your business.3) Book: Think And Grow Rich by Napoleon Hill of those jurisdictions where the limited partnership statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner.
A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:
- Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
- The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
- The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership.
- It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
One of the areas where problems can arise is in the proper administration of the FLP. Th
Types of Floor Coverings and Basic Floor Care Tips
There are so many different types of hard floor coverings these days, it's hard to keep up with learning how to care for each of the different kinds. And if you're a cleaning contractor, you don't want to make a costly mistake by using something on a floor that could be harmful or damage the floor.Listed below are some of the common floor coverings and basic floor care tips:1. Resilient Floors, especially VCT (vinyl composition tile) flooring is used commercially on high traffic floors such as retail or grocery stores. VCT tile is durable and holds up to heavy traffic. However there is a lot of maintenance involved in keeping these floors looking good. They should have a sealer or finish applied to them, which gives the floor a high-gloss look. The floor also needs to be swept and mopped with a neutral pH cleaner on a regular maintenance schedule to keep the floor looking shiny and clean. The floors may also need interim maintenance with slow speed or high speed floor ma
ding accounts, mutual funds, etc. There are so many different types of hard floor coverings these days, it's hard to keep up with learning how to care for each of the different kinds. And if you're a cleaning contractor, you don't want to make a costly mistake by using something on a floor that could be harmful or damage the floor.Listed below are some of the common floor coverings and basic floor care tips:1. Resilient Floors, especially VCT (vinyl composition tile) flooring is used commercially on high traffic floors such as retail or grocery stores. VCT tile is durable and holds up to heavy traffic. However there is a lot of maintenance involved in keeping these floors looking good. They should have a sealer or finish applied to them, which gives the floor a high-gloss look. The floor also needs to be swept and mopped with a neutral pH cleaner on a regular maintenance schedule to keep the floor looking shiny and clean. The floors may also need interim maintenance with slow speed or high speed floor ma
A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:
- Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
- The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
- The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership.
- It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
One of the areas where problems can arise is in the proper administration of the FLP. Th
To Tag Or Not To Tag?
A tagline is a succinct phrase that communicates some of the basics of your brand. Ideally, your tagline is also memorable and helps your target audience relate to your business.If used correctly, a tagline can be a powerful part of your marketing strategy. Creating a phrase of a few words to uniquely identify you (or your business) in all of your marketing materials helps you to cover two of the major ways that a prospect can immediately gather information in your business communications - the prospect sees both the images of your logo and Visual Vocabulary and the text in your tagline to learn more about your brand.The advantage of adding a tagline to other text that describes your business is that a tagline can appear on all of your marketing materials, including your business card, stationery, and other applications, where descriptive text either will not fit or is not appropriate.Here are some tips on using a tagline in your marketing materials:Pick on
p tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:A tagline is a succinct phrase that communicates some of the basics of your brand. Ideally, your tagline is also memorable and helps your target audience relate to your business.If used correctly, a tagline can be a powerful part of your marketing strategy. Creating a phrase of a few words to uniquely identify you (or your business) in all of your marketing materials helps you to cover two of the major ways that a prospect can immediately gather information in your business communications - the prospect sees both the images of your logo and Visual Vocabulary and the text in your tagline to learn more about your brand.The advantage of adding a tagline to other text that describes your business is that a tagline can appear on all of your marketing materials, including your business card, stationery, and other applications, where descriptive text either will not fit or is not appropriate.Here are some tips on using a tagline in your marketing materials:Pick on
- Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
- The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
- The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership.
- It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
One of the areas where problems can arise is in the proper administration of the FLP. Th
Successful People Are On Time!
I recently attended a Microsoft event at their corporate headquarters in Redmond, Washington. This event was a fantastic opportunity to meet with fellow leaders in the Microsoft partner community from around the world and spend quality time with each one of them. The event was held over four days and we had a very tight schedule and the importance of timeliness was critical to its overall success.The timeliness factor really didn’t hit me until I was ready to head back to the airport for my trip home. My town car arrived a few minutes early to collect me and I noticed that the driver was there waiting so I signaled to him that I would be ready in the next few minutes. I collected my personal belongings from the hotel concierge and met the driver for the trip from downtown Seattle to SeaTac Airport.When I was seated in the car and we were on our way, the driver looked in his rear view mirror and thanked me for being on time. He continued to say that “successful peop
nership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership. I recently attended a Microsoft event at their corporate headquarters in Redmond, Washington. This event was a fantastic opportunity to meet with fellow leaders in the Microsoft partner community from around the world and spend quality time with each one of them. The event was held over four days and we had a very tight schedule and the importance of timeliness was critical to its overall success.The timeliness factor really didn’t hit me until I was ready to head back to the airport for my trip home. My town car arrived a few minutes early to collect me and I noticed that the driver was there waiting so I signaled to him that I would be ready in the next few minutes. I collected my personal belongings from the hotel concierge and met the driver for the trip from downtown Seattle to SeaTac Airport.When I was seated in the car and we were on our way, the driver looked in his rear view mirror and thanked me for being on time. He continued to say that “successful peop
One of the areas where problems can arise is in the proper administration of the FLP. This includes not only the day-to-day operations, but also the funding of the Partnership. For example:
- Change title on assets intended for ownership by the Limited Partnership. Failure to do so means that the asset is not actually included in the Partnership even though the Partnership Agreement may list the asset on its initial list of partnership property. Changing title means more than just including an item on a list. Trading accounts at a brokerage for example might require that you close the previous existing account and open a new one, in the name of the Limited Partnership.
- Real estate that you intend to transfer to the Limited Partnership will need to be re-titled by means of a deed which conveys ownership and is recorded with the County Recorder where the property is located.
- If there is any confusion over which assets belong to the Limited Partnership itself and which belong to the individuals or entities that are the limited partners, such confusion needs to be clearly resolved with a paper trail that can be traced and audited.
- Avoid using assets belonging to the Limited Partnership for purposes other than those stated in the business purpose section of the Partnership Agreement.
- Keep accurate books and records, and have a paper trail that is clear and unmistakable. The books and records of the Limited Partnership should be kept in an orderly and efficient manner that reflects attention to detail and your intention of administering the Partnership in a fair and business-like manner.
- When distributions are made, they should be equitable and fair. Unless there is an agreement signed by the Partners to make unequal distributions favoring one partner more than the others, distributions should be allocated among the Partners on a pro-rate basis equal to their percentage of Partnership interests (i.e. their percentage of ownership).
- Funds that are retained inside the Partnership should be re-invested for the good of the Limited Partnership as a whole, not for the personal use as a piggy bank for one partner.
- Properly drafted Partnership Agreements should certain rights for limited partner – such as the power to replace the General Partner and Amendment rights as to the Partnership Agreement.
- The General Partner should be expected to make an Annual Limited Partnership Report. This is different from the annual filing required by the Secretary of State. This Annual Limited Partnership Report is from the General Partner to the Limited Partners and serves as a report card as to how the Partnership is doing financially with its holdings and investments. It should highlight any changes (positive or negative) and any upcoming business opportunities, as well to set forth a cash flow statement and balance sheet for every Partner to review.
- If a family’s Limited Partnership is created close in time to the death of the founder, and if the founder contributed the bulk of the Partnership’s assets at that time, this may lend itself to an attack by the IRS and would likely be successful. It is best to form a family’s Limited Partnership for a proper business purposes (i.e. m
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