Category: Establishing a U.S. Company

You have an 87% Chance of Forming the WRONG ENTITY…

Which entity type gives you the BEST protection for your business and personal assets? Which one helps you pay the lowest legal taxes now and later?

Here are the most common options:

1. Sole Proprietorship
2. C Corporation
3. S Corporation
4. Limited Partnership
5. LLC Taxed as a disregarded entity
6. LLC Taxed as an S corporation
7. LLC Taxed as a C Corporation
8. LLC Taxed as a Partnership

With a minimum of 8 options, there’s at least an 87.5% chance the one you choose is wrong for your business.

That can lead to costly and time-consuming problems that can threaten the survival of your business. Why guess when it comes to protecting everything you’ve worked for?

The conflicting answers you get from paid professionals like attorneys, accountants, or tax planners can often be as misleading as guesswork. Good legal advice might have adverse tax implications.

Choosing your tax position alone might leave your intellectual property at risk. You may be as frustrated as I was trying to get a clear answer that considers your whole business and addresses the big picture.

Unfortunately, most entrepreneurs don’t find out that they’ve made the wrong choice until AFTER they lose assets in a business or personal lawsuit or get decimated by the IRS in an audit.

The exposure is just as risky whether you’re just starting or worth $25 million or more. I’ve consulted with thousands over the years and seen virtually every mistake in the book.

Yes, some do get lucky and get away with the wrong structure, but even if they escape an expensive lawsuit, most have no clue how much they’ve wasted over the years in overpaid taxes.

If your business’s future matters to you, it’s time to STOP guessing and educate yourself with my authoritative and field-tested training. It’s called “Discovering which Entity and State are Best to Protect You and Your Business,” and I’m making it available to you absolutely free… not because this course doesn’t offer measurable value…

(Frankly, my consulting clients gladly pay hundreds of dollars for this kind of information… heck… many professionals prizes this incorporation road map simply because it boosts their confidence and credibility in front of their own clients.)

I love helping people sleep better at night, knowing that their assets are safe and their families are protected. Many times all it takes is one or two little shifts to make all the difference between keeping your wealth or losing all of it.

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Doing Business in Multiple States-When to Foreign Qualify- Part 1

Establishing a separate legal entity is step one in separating your and business assets.

The next step is to ensure you are in compliance, which can mean many things, including compliance from a Secretary of State level to compliance from a business credit level to compliance at a state taxation level (and federal).

All areas are critical.

Let’s discuss an area that is not often discussed until it is too late, and that considers the multistate taxation rules, which will help determine which states your entity will need to register to do business.

In our industry, where Nevada and Wyoming corporations are promoted, this is the reason why benefits such as saving state corporate income taxes or privacy rarely come into play because if you live and do business in another state, the Nevada entity will need to foreign register to do business in that state.

There may be state taxes at your state level, and your name and information are probably going to be more exposed.

Two important points, first, if you are operating as an LLC taxed as an S corporation, for example, it is a flow-through entity with no federal taxes paid and, in many states, no state taxes.

An informational return is required to be filed at the federal and state level (in most cases), and the tax is paid at the owner’s level. This comes into play when someone says, “I live in Arizona, and I want a Nevada LLC taxed as an S corporation to save state corporate taxes here in Arizona.”

There are not any state taxes on LLCs taxed as an S corporation in Arizona anyway.

This is typically promoted in relation to a C corporation, which has state corporate taxes in most states but usually is the wrong entity for the small business owner (because of double taxation and the goals of the small business owner, especially a home-based business owner is to have low overhead and high-profit margins).

The second point is that privacy is often overrated because I find there is a common pattern to strive for so much privacy and that basic asset protection is missing.

Most do not think it through with capitalization, issuing ownership interest…

Back to the subject at hand, when does your company have to foreign register or qualify to do business in another state? There are two ways to look at this, what does the state say about this at the Secretary of State level, and more specifically, what does the multi-state taxation rules say about it?

Each state has some basic rules that may help determine what is considered doing business in their state, and therefore state taxes may be due.

Let’s take a look at California and Texas. California is one of the highest taxed states in the country. They have an annual $800 minimal franchise tax fee that applies to all entities (except in year one for corporations). California has a state tax rate for all entities, and that is why they spend more time on the California Franchise Tax Board website to let you know what is considered doing business. On this site, https://www.ftb.ca.gov/businesses/faq/734.shtml, the California Franchise Tax Board defines doing business in California as ‘doing business’ means actively engaging in any transaction for financial gain. That is a very wide interpretation of what is considered doing business.

Texas does not have a state corporate income tax, but they have a franchise tax.

The franchise tax is a privilege tax imposed on corporations, including banking corporations and limited liability companies chartered in Texas. The tax is also imposed on non-Texas corporations that do business in Texas.

The Texas Franchise Tax fee is just a fancy name for state income taxes. But from a marketing point of view, if the state can promote, it has no personal income taxes and hit the businesses harder to help them from a political point of view.

If you are doing business in Texas, like owning real estate, it will trigger the Texas Franchise tax fee, which Corporations pay the greater of the tax on net taxable capital or net taxable earned surplus.

There are two approaches. One is the taxable capital of a corporation’s stated capital (capital stock) plus surplus. Taxable capital for an annual report is based on the end of the corporation’s last accounting period in the calendar year before the calendar year in which the report is due.

The tax rate on taxable capital is 0.25 percent per year of the privileged period. Earned surplus for an annual report should be reported beginning with the day after the ending date on the previous franchise tax report and ending with the end of the corporation’s last federal accounting period in the calendar year before the calendar year in which the report is due.

The tax rate on earned surplus is 4.5 percent.

There is an easy way that the California Franchise Tax Board will determine if you are doing business in California. They will subpoena your business credit card and look at where the transactions occur.

If they are all in California, for example, and you formed a Nevada LLC. You did NOT register to do business in California.

You will be subject to the California franchise tax fee plus penalties and interest. From California’s point of view, if you were doing business in Nevada and lived in California, most of your expenses should be where you are doing business. This is a good rule of thumb for any state.

Does this mean anytime you go into another state, your LLC or Corporation will have to foreign register? No.

More often than not, you may be doing business in another state and not be realizing it and be subject to state taxes. The best way to blow this is to hire employees in another state.

If you do that, the entity will need to foreign register and pay taxes in that state. You may be thinking, is having independent contractors an exception? Yes, that does not constitute doing business in another state.

Does that mean the solution is to have independent contractors only work for your company outside your state? No.

You must follow the IRS’s test for employees vs. independent contractors. Please don’t wait until it is too late to find out you really have employees working for you! Here are the tests: https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation

When I started NCP back in 1997, several times during the first two years, I spoke to Deloitte, the big global tax firm. They invested $400-$600 per hour to understand these basic concepts because no one in our industry addressed these issues or concerns.

To answer the question; do you have to register your entity in another state as a foreign entity doing business there; you must understand the multistate taxation rules.

To better understand the multistate taxation rules, there are concepts to understand and, once you understand them separately, you should piece them together like a chain.

Then the concept of multistate taxation will make sense. Let’s assume you have a Nevada LLC or Corporation, and the thought is, does that entity need to foreign register in another state? Here are the key terms to understand and points to consider.

Jurisdiction to Tax

Jurisdiction to tax basically means where your business is going to be taxed.

In our context, we will refer to state taxation. It could be possible that if you are doing business offshore, that is a different jurisdiction from the United States and a whole different set of rules come into play as to where those transactions are taxed. This section will be concerned about doing business in the United States.

If your entity is based in Nevada, is that entity subject to tax in other states or jurisdictions? In other words, if you form a Nevada corporation and live in California, are you going to have to register as a foreign corporation in California and pay state corporate income taxes (and other taxes) on a portion of money this Nevada corporation earned?

Nexus

In relation to state taxes, Nexus means the degree of presence or activity required by a business within a state before the state in question has the legal authority to impose a tax on the business. In other words, does California (in our example) have any authority to tax the Nevada corporation?

What Activities Create Nexus?

What activities that your business enters into create Nexus or, another term would be substance, for the entity in question? If you have these in a state, then the entity in question would be
considered to have Nexus:

  • Presence of an office
  • Phone line for the office
  • Fixed property
  • Business license
  • Acts of Employees
  • Acts of independent contractors
  • Presence of intangible property

If your Nevada entity had the above in Nevada, then the entity would have Nexus in Nevada.

Is it quite possible that the same entity may have the Nexus in another state also? Absolutely! Even if you have Nexus in Nevada, you may still have to register in your home state and pay state taxes there. Let’s take a
a closer look at Nexus.

There are some requisite presences for Nexus. That is determined by state statute and limited by both the U.S.

Constitution and federal legislation. The constitutional limits to Nexus are covered in the:

  • Due Process Clause
  • Commerce Clause

The Due Process Clause is concerned with “fair warning.” Also, it requires “some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.” (Miller Bros. V. Maryland, 347 US 340, 1954).

The Commerce Clause is concerned with burdens on interstate commerce. The commerce clause requires substantial nexus, fair apportionment, non-discrimination towards interstate commerce, fair relation to state services (Complete Auto Transit, Inc. v. Brady, 430 US 274,1977).

There are also federal legislative limitations. The main limitation is Public Law 86-272. Public Law 86-272 prohibits a state from taxing foreign corporations’ net income whose only business activities within the state consist of the solicitation of orders for the sale of tangible personal property.

In other words, if you are merely soliciting orders in another state, that is not considered doing business in that state. This is a critical concept to understand how your business functions.

Public Law 86-272 does apply to:

  • Net income-based taxes
  • Activities limited to solicitation of orders.
  • Taxpayers engaged in the sale of tangible personal property. Public Law 86-272 does not apply to:
  • Sales/use taxes, net worth taxes, or other taxes not based on net income.
  • Activities which exceed the solicitation of orders.
  • Sales of services, real property, and intangible property.

Here is a list of certain activities that are unprotected activities under Public Law 86-272. In other words, if you do these activities, you are expected to register as a foreign entity doing business in another state.

  • Providing technical assistance
  • Maintaining a company office
  • Repairing or servicing a product
  • Approving sales
  • Account collections
  • Replacing spoiled product
  • Storing products are not related to solicitation.

Here is the list of activities that are protected under Public Law 86- 272. In other words, if you do these activities, it is ok, and you will not have to register in another state to do business.

  • Stock of free samples for salespeople.
  • Renting space for temporary display
  • Assisting with product display in retail shops
  • Maintaining informal home offices.
  • Recruiting / training/evaluating of sales employees by regional managers.
  • Certain mediations of credit disputes

Let’s give you some examples of one area that demonstrates the limits of the solicitation on orders.?

Example #1: You have a business based out of Nevada. All the nexus for this company is in Nevada, along with the employees. The business sells ski lifts.

You send employees to Colorado to only solicit the order of a ski lift. In other words, your employee makes the presentation, and the acceptance of the presentation as to credit, terms, and financing all have to go to the home office in Nevada for acceptance. That is not considered doing business in Colorado.

Two weeks later, the same employee goes back to Colorado to inspect the ski lifts after being shipped and installed. The art of inspecting the ski lift crossed over the definition of sole solicitation of orders.

Therefore, it was considered doing business in Colorado, and the entity had to register to do business in Colorado! What the Nevada company could have done would have been to have hired an independent contractor in Colorado to do that part of the job.

Then the Nevada company would not be doing business in Colorado.

Example #2: Budweiser sends beer salespeople around the country to solicit the sale of beer.

If the sales fall under the true definition of soliciting sales, Budweiser does not register to do business in these various states. What happened was Budweiser started sending the Clydesdale horses to the same cities as the salespeople, and the horses were considered a business promotion, which is different from solicitation of sales? The horses were promoting the sales of beer!

These two examples presuppose a couple of things:

1. That the companies had nexus in their main state of operations.
2. They had employees who lived and did the work in other states for these companies.

Now, what about a business that can be based from anywhere?

Let’s say you have an e-commerce based business established in Nevada, and you set up all the nexus in Nevada. Let’s say it is a one-person corporation.

Do you have to register to do business in your home state where you are doing the work out of your home? Absolutely! Why?

Because you are physically doing the work out of your home. You are not soliciting orders for the Nevada based office; you are actually getting the order, closing the deal, and collecting the check from your home state.

This is the category most entrepreneurs fall into.

Our company, NCP, incorporates in all 50 states and can support you with a complete formation and foreign qualification into other states as required.

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U.S. Entity Complete Formation Mistakes to Avoid

If you or someone you know is looking to form a U.S. entity for your global e-commerce business, this video will be a big help.

You will want to watch our new video on our process, tools, support, and packages because you will learn what is really involved in the process. The biggest costly mistakes to avoid will be obvious.

[vimeo]https://vimeo.com/295648796/6961ee0d25[/vimeo]

If you are still selling on Amazon.com FBA or any e-commerce platform in the U.S. or looking to protect your assets from your home country with a U.S. entity, our U.S. entity formation video will be beneficial.

Here are some of the big reasons you may want to form a U.S. entity:

Perhaps you have been selling in the U.S. and have never collected or remitted sales tax. Although you are hoping it will go away, that is not likely to happen. This is largely due to the June 2018 U.S. Supreme Court Case, Wayfair vs. South Dakota. This case has opened the floodgates for other states to require sales tax collected even if you have no physical presence.

You may have found yourself way behind on sales tax and don’t have the cash flow to catch up and register under your current entity. Perhaps you are considering launching another product or brand and want to diversify your risk. You may want to put that brand and product under a new U.S. company, one that is not so behind on sales tax. This is where we can help.

After the formation, moving forward, our sister brand, SalesTaxSystem.com, will help you with sales tax compliance. You will find if you don’t already know that having a U.S. bank account is very beneficial.

Which leads to this point.

Why having a U.S. Bank Account will Save You Money Each Month with Sales Tax Compliance.

As you know, a foreign seller remitting sales tax is a challenge without a U.S. bank account. This means there is no ability to do an ACH with remitting companies like Taxjar® or Taxify. As well as this, you have to pay a higher fee for a manual return to be filed and pay the states separately for sales tax.

There are two options, form a U.S. company (which has other benefits) or consider our latest option to establish a U.S. bank account. Update: a U.S. bank account can only be set up with a US entity, not a foreign entity.

When selling to the U.S. market, you may have considered forming a U.S. company for all the benefits incorporated. This includes more sales, easier to sell your business, strong U.S. brand, etc…

Click on this link to discover our best U.S. formation packages.

Grab Our FREE Report...



The Top 5 Costly Mistakes to Avoid
When Forming a U.S. Company 
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How To Get Partners On The Same Page

History is filled with inspiring stories about many successful business partnerships, including Apple, Google, and Facebook.

Having a business partner gives you a great sounding board to help you make the best decisions to grow your business.

When partnerships work at their best, they can help you see through your own blind spots and capture ideas you may have missed on your own.

Ideally, if you and your partner are on the same page, you can help each other stay on the path to growth and success.

On the downside of that equation, my observation over the years is that the businesses with the most issues and lawsuits are the ones involving partners.

There are endless stories about one partner blaming the other for a business failure, taking off with the money from a successful business, or charging huge personal bills on the company credit card.

Here are the top 6 areas of agreement to get partners on the same page:

  1. The vision. You must agree on the company’s vision and what your short and long-term goals will be. You may disagree on how you will get there, but a common understanding of the vision is essential.

    If both partners have a different vision from the start, that usually creates problems unless one partner is the majority owner and has the final say. This is especially important when the business partners are husband and wife. The short-term vision may be “just to pay the bills,” which should be replaced by something more compelling for the long term.

    If you’re not clear on your business vision, take 1-2 hours to brainstorm together about where you want to take the company. You may be surprised at the input from your partner and what they really have in mind.

  2. Capitalization. When partners start up a company, there’s often a lot of confusion over the money used to capitalize.

    Many times when I’ve met with partners in my conference room and asked them how they were going to divide the responsibility for capital, they ended up abandoning their business plans.

    In the end, it was for the best because the business was likely to go nowhere without clear agreement on how much money each partner expected to put in and take out over the life of the business. Here’s the common miscommunication:

    One partner may say, “I will put in $20K into the company, and you do the work.” What does “I will put $20K” into the company really mean? Is that capitalization, which means NONE of the $20K, will be paid back? Or is it mostly a loan that has to be paid back when the company generates profits? What typically happens is a few months into the business, the partner who put in the $20K will expect part of that “loan” to be paid back, and there’s the beginning of the conflict. “What do you mean, pay back the loan? That was your investment in the company!”

    In another scenario, let’s say the company is failing a year down the road. The partner who kicked in the $20K may say, “we need to pay back my $20K loan before we go under.” The other partner may have assumed that the $20K was capitalization. I’ve also seen it work the other way, where one partner puts in $20K, and the company takes off and is bought out for millions. The second partner may say, “Here’s your $20K loan back plus interest.” The first partner might ask, “Are you crazy? That was my capitalization for 50% of this company – NOT a loan!”  Another frequent disconnect is between a financial partner and the one that provides “sweat equity” or services for their company’s percentage ownership.

    Usually, at some point, the “sweat equity” partner regrets the amount of work they’re doing compared to the effort put in by the financial partner unless they were extra clear about ownership value from the beginning.

  3. Roles, responsibilities, and time commitment. Partners must also be on the same page about their roles in the company.

    It sounds easy to throw titles around like President and CEO or Managers of the LLC, but have you really defined the responsibilities of those roles, and have you taken the time to discuss them? Do you have an organization chart for your company?

    If it’s just your spouse and you, do you have roles clearly defined and a way to measure them to determine each other’s effectiveness? What about the amount of time that each person can commit to the company? Does one partner have a family, and the other partner is single? Are you both expected to work 70 hours per week?

    If you agree upon certain roles and one role takes a lot less time because your partner has a skill set in a certain area, you can’t get upset if you’re working more than that the other partner if those are the roles you agreed on.

    It’s important to have realistic metrics in place so that both partners can fairly measure progress and make proportional improvements.

  4. Compensation. A vital question is when and how much each partner will be paid from the business. This is a special concern if one partner has a tighter personal budget than the other.

    The partner who does not need the income is more likely to want to reinvest all the money into the business to grow faster. The other partner that needs to make some money from the business will be more likely to want to take money out of business for income purposes.

    You need to be clear from the beginning how each partner will be compensation. This assumes that you’ve agreed on a budget with real numbers on it as part of your business plan.

    If one partner has loaned the company money, the repayment terms must also be spelled out. Is that money coming out of profits first before the partners are paid? This must be worked out in advance.

  5. Buy-sell agreement. This allows you or your partner to gracefully sell their ownership in the company and exit when desired on agreeable terms versus ending up in a legal battle.

    This agreement sets forth an agreed-upon accounting formula to evaluate the company’s value before you sell and take your share. As you can imagine, the selling partner’s CPA will evaluate high, and the buying partner’s CPA will evaluate low. This also handles the process if one partner wants to sell their shares, and the other partner does not want to buy them.

    Now the selling partner has the option to go out to the open market. The buy-sell agreement also outlines the payment arrangement for the partner selling their ownership stake back to the other partner or the company.

    Typically, the payment may be 20% paid out upfront and the other 80% over a 4 year period of time. Not many companies have enough cash lying around to pay out 100% of your ownership stake when you leave the company. It is also important to have a term life insurance policy for each partner to pass away. The surviving partner will need the insurance proceeds to pay off the deceased partner’s estate and move forward with the business.

    A buy-sell agreement through a law firm may cost about $2500. A standard buy-sell agreement legal form costs under $50, and you can save a lot of money by taking it to a law firm and having them customize it for you. Should you set up a buy-sell agreement from the start of your business? Yes, but it doesn’t happen this way in most cases because owners wait to see if the business is successful before spending money on additional legal services.

    Revisit the buy-sell agreement during the first year to ensure it’s in place and current for year two!

  6. Exit strategy. Do you have an end in mind? Do you know from the start whether you want your company to be acquired, or do you plan to stick with it and make it grow bigger and bigger?

    You and your partners need to talk about your goals in the beginning. If your goal is to sell the business, you’ll also want to talk with your CPA firm about the tax ramifications.

    The buy-sell agreement will be an invaluable tool if you can’t decide on an exit strategy right now but want a mechanism in place to facilitate things fairly should one partner decides to exit earlier than the other.

In conclusion, having a business partner can take a lot of the burden of running a business off your shoulders and offer welcome inspiration and encouragement during tough times.

The partnership also provides extra growth opportunities for a business, especially when the partners have complementary skill sets.

Unfortunately, partnerships also happen to have the highest legal issues that I’ve seen over the years.

This means it’s especially important to get on the same page at the start and during the first year to commit to long term success!

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Don’t Take My Word For It

Anytime you’re visiting unfamiliar territory, it always helps to get travel tips from someone who’s made the trip before you – someone who knows the wrong turns to avoid and how it feels to be a newcomer.

Meet Kevin and Melissa Knecht – a husband and wife entrepreneurial team wrapping up one of their most successful and abundant years ever!

Click here to watch their video:

How did they do it? Kevin and Melissa are happy to share their secrets with anyone ready to take their business success to the next level. Certainly, they already had the desire, determination, and a clear vision of their destination.

What they were missing was a complete business foundation that could multiply and protect their profits. After some heavy comparison shopping for someone to walk them through the process of forming a corporation or LLC, they decided that NCP was the best value.

Sure, we could go on about the comprehensive process we took them through – but no one can explain what this experience did for their confidence and earning power better than Kevin and Melissa. They share the important highlights in this quick video.

If you’re ready to put your business on a powerful new success trajectory in 2021, as Kevin and Melissa did, NCP is ready to help! You’ll be amazed at how fast, complete, and affordable our system is. Please take the next step and call us today at 1 (888) 627-7007 or (702) 367-7373.

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Advanced Secrets to Automate Your Joint Ventures

Here are some advanced tips to put this on autopilot for your own e-mails.
Include a proactive P.S. in your e-mails that will ask for joint ventures. Here is an example:
P.S. If you’ve got a house list of more than 5,000 business owner e-mail addresses, then you’re eligible to apply for Scott Letourneau’s free Fast Start to Profits™ Teleseminar program. In this program, he’ll give you and your customers, clients or members a free $197.00 teleseminar with valuable, actionable, success producing content (he won’t sell anything — just give you straight content). Apply right now by sending an e-mail to scott@nvinc.com. And put “Free Teleseminar Application” in the subject line. WARNING: there may be a wait list due to high demand. Recent Teleseminar Testimonials:
Scott Letourneau is the leading expert in America when it comes to starting your business and knowing how to grow it. He has helped thousands of small business owners thrive and he can help yours perform much better than you ever thought possible.” Jordan Goodman personal finance expert, author of Fast Profits in Hard Times and owner of Moneyanswers.com Many things are happening at one time in the P.S.
1. I am giving a minimum expectation for someone’s list size (5,000 business owners’ e-mails). Without that I may get 5-10 inquires per day with people with no list. Your number may be lower if you are just starting out.
2. I let them know you are “eligible to apply.” That means there is an application process. Not everyone will be accepted.
3. I let them know that their list will receive something of value; $197.00 of value for FREE and I let them know the content is excellent and I won’t be selling (unless you want me too).
4. I give an action step to apply, e-mail me and put “Free Teleseminar Application” in the subject.
5. I let them know demand is high and they may have to wait.
6. Finally, I provide testimonials of other teleseminars I have completed for others (I have many more and I only included one as an example).
Are you the one looking for someone to be interviewed by you. You can have a similar approach in your P.S. but now you are looking for guests to apply. In that situation, here is a powerful e-mail to send out to determine if the guests that are applying are worth your time or not.
Here is a great example from Mike Lorence, a top marketer: Notice many important steps in this e-mail follow up:
1. Lets you know you have taken the first step (meaning there is more than just one step).
2. You will do an exploratory interview to see if you are a fit (or not) with the host.
3. Gives you action steps to see if you can at least follow instructions and take action.
4. You will receive an agenda for the interview. It’s not just ‘off the cuff’ and you better be prepared!
5. You will receive a couple of sample interviews to see the quality of work that is expected.
Doesn’t this put this entire process of looking for JV opportunities at a whole new level? Now you are in total control, you look and sound professional and you will avoid wasting a lot of time with people who are not appropriate for you.
The key is to be proactive when it comes to joint ventures. I would also recommend you schedule on your calendar each week one hour to work on acquiring more joint venture opportunities for you and your company.
Greetings Scott:
You’ve taken your first step in applying to be interviewed on Mr. Lorence’s closed door, restricted access “Interview With a Guru” program.
The purpose of this message is for you to put yourself on Mr. Lorence’s calendar in order to conduct the “See If You’re Fit” exploratory teleconference. The purpose of the exploratory telecom is to assess your fitness, and if appropriate, schedule your “Interview With A Guru” call.
The next step is to get on Mike’s calendar so that he can do a quick exploratory phone interview to assess your fitness. Please do these steps immediately to get on Mr. Lorence’s calendar.
Step A. Click this link right now to get access to Mike’s online calendar
Step B. Click the button that says “organize a meeting with Mike.”
Step C . Select “30 minutes” in duration.
Step D . Choose a date and time during the next calendar week (not this week) between 7:30 pm and 10:00 pm CST (8:30 pm and 11:00 pm EST) for our exploratory interview by left clicking anywhere on the calendar. (Note: I only do these exploratory interviews at night).
Step E : Click “Step 2. Meeting details.” And fill in the subject. Make the subject be “Prospective IWG Exploratory Call”
Step F : In the message section, put your name, and the number of small business owners on your house list, and your cell phone # where he’ll call you.
Step G : Finally click ‘Send Invitation.’ Once a meeting is scheduled, you’ll receive a Word document with the agenda for the exploratory interview. Mr. Lorence viciously guards his time; and he found it most effective to use a simple agenda for this initial interview.
Lastly, here are two sample interviews that Mr. Lorence did with Nick Nanton, a small business branding expert, and Diane Conklin a direct mail expert.
Click here now to hear Nick Nanton’s interview and to hear Diane Conklin’s interview.
Respectfully,
LeeAnn Holmberg
Office Manager
Small Business Blackbelts
www.smallbusinessblackbelts.com
Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com
Worldwide successful entrepreneurs turn to only one person when they want to establish their company in the United States. They want the one person who they know can deliver a truly turnkey experience to position themselves for profits and success. That person is Scott Letourneau! He is the authority on establishing and positioning U.S. companies for maximum profit!
Scott is the prominent entrepreneur and CEO who founded Nevada Corporate Planners, Inc. in 1997.  He also founded the complementary Fast Business Credit, Inc. in 2003, again with great success.
In addition, Scott is a busy lecturer, consultant and author, who is recognized worldwide for helping entrepreneurs get their businesses off to a fast start in the United States.
Contact Nevada Corporate Planners, Inc. at 1-702-367-7373 or e-mail us at ncp@nvinc.com for a complete report on the steps to establish your U.S. Company.

Costly Mistakes to Avoid When You Have a Partner in Business

Starting a business on your own can be a daunting task. It requires a lot of energy. The good news is you do not need a meeting every time you make a major decision. You are the boss, owner, president, manager, CEO, employee and shareholder all wrapped up into one decision-making machine. You have no excuses because you are in charge. The key is to be accountable for your decisions and notice what is working and what is not working and move forward towards success. There is no need for a buy –sell agreement (used when you have a partner in case one wants an early out). Life is pretty simple (as much as it can be when you are running a business).
Now bring in a partner. For the purposes of this article there are two types of partners:
Partner #1: Your spouse or life partner.
Partner #2: An outside partner, friend, business associate, investor…
In the case of partner #1, it can be a challenge. Let’s assume your spouse or life partner is ACTIVELY involved in your business. They are involved in decisions; they do work with you and share in the results. Divorce rates are high enough as it is, and adding the stress of running a business can be difficult. Even though I have been married for 14 years, my wife De Ann is a classical violinist and is not involved in running the business. Yes, she listens to my highs and lows and will give some advice (sometimes unsolicited) and she is not involved in marketing, hiring or investment decisions. She knows I get paid every two weeks like the other employees. If you are running a business together over the years I have seen a few work and many that did not.
Here are a few tips
Be clear on roles and responsibility. Create a job description for what you are responsible for to avoid blaming the other for tasks not completed.
Determine a daily and weekly meeting time and the format of which to report to each other your results and updates. This will allow you to have some sense of a relationship outside of your work so you don’t end up discussing the business all the time, especially at family time.
Establish a monthly and annual budget for the business and a personal budget. Being in a relationship it is too easy to rob the business of profits to pay yourself extra because you are not on a personal comprehensive budget. Both agree how you would each like to be supported in the business. Make sure to take time to acknowledge your partner for a job well done. Work on your strengths and outsource your weaknesses. There is no sense in spending a lot of time on your weaknesses. There are times we all do things that we are not the best at, but spend a majority of your time on your strengths.
With partner #2, you really need to be on the same page and legally protect yourself. It starts with capitalization. What is each person going to “put” or capitalize in the business? Usually this is a very loose conversation and when I meet with the partners I ending up having to help the partners determine who is capitalizing what. If one person is the “money partner” and
the other is doing the labor, typically it is not clear if the “money partner” is loaning the business money, which means he is not a partner from an ownership point of view or if they are capitalizing the company with the money. If you capitalize the company with $10,000, that means you are giving that in exchange for stock ownership and it will NOT be paid back. It is not a loan.
Some people attempt to have it both ways; they want both the ownership and the money paid back. Unless you determine that $2,000 of the $10,000 is for capitalization and the other $8,000 is a loan, it does not work that way. You must be clear. I have ruined a few partnership opportunities because when I started asking these questions it was easy to tell this “tough” conversation never happened yet. The talk was all about how much money everyone was going to make.
Here are a few important tips for this category:
Be clear on capitalization by each partner. If services, you may have a taxable event so check with your accountant. If any part is a loan determine when the loan will be paid back and have a fixed schedule. Get a buy sell agreement. This is an agreement that will basically tell you the steps for a partner to leave and how to evaluate their ownership in the company and when and how payments will be made. It is like a prenuptial agreement for business partners. Plus, it comes into play is one partner dies and you need to pay their estate. It will involve a term life insurance policy on each partner.
Be clear on roles and responsibility. Create a job description for what you are responsible for to avoid blaming the other for tasks not completed. Work on your strengths and outsource your weaknesses. There is no sense in spending a lot of time on your weaknesses. There are times we all do things that we are not the best at, but spend the majority of your time on your strengths.
Create a time to meet and report to each other on a daily basis and at least a weekly basis. When you open a business credit account, require two signatures for any checks over a higher amount for your business. That may be $1,000, $2,500 or $5,000. That means you or your partner could write checks for under $1,000, but once it is over that level it requires both signatures. This can help prevent one partner from cleaning out the account. Take the same approach with business credit cards to agree to certain limits. If only one partner is on the account, you as the other partner have less control and you MUST be on top of the books and numbers weekly if not daily.
Be clear on authorized expenses. Is your cell phone, car  payment, and other expensive to be picked up by the new business or not? Be clear on expectation of hours worked. Many times one person is working many more hours thanthe other, agree ahead of time.
Does one person need an income sooner than the other? This can be a source of stress that can create real problems quickly. Determine when you expect to pay yourself. Don’t make the mistake of paying too much out too early and having to get more capital or put the business in jeopardy too soon. Do you trust each other? If you have not known each other for a long time, do background checks on each other. Don’t just believe someone’s story. If they are too private and don’t agree, there’s probably a reason for that.
Communicate if you are going to do something outside the main operating company that is another source of revenue, especially if it may be considered related to the main business. Your partner may have an issue with why you are not bringing that other source of revenue to the company to be split between you (if 50/50 owner). As you can tell, having partner #2 brings a lot more issues and risks to the table. Yet, just ask the Google founders, the rewards can be life changing!
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