Corporate Formation and Development

What 90% of All Business Owners Don't Know

If you are starting a business, you should be aware of some of the legal obligations and responsibilities you have as a business owner. This is especially true if you are depending on your business for your sole means of support.

Businesses can be organized in a number of different ways: sole proprietor, partnership, corporation, LLC. If your business has employees, you'll need to think through the type of compensation you're offering (salary, fees, commissions) as each type of compensation requires different record keeping and procedures.

If you are depending on your business as your sole means of support, you should consider life insurance to protect your family. Remember that if your business involves you providing a service, your estate may be worth very little when you die. For example, the widow of a deceased doctor or lawyer can only sell the tools of the trade, not the clients (the true bread and butter of any service business). While you can sell your service business prior to your death, many people do not do so.

You should also consider disability insurance in case you're incapable of running your business because of illness or injury. Disability insurance will usually give you close to 60% of your income for a period of time while you recover. The benefit may be taxable or non-taxable (depending on whether or not you deducted the premium as a business expense).

In addition to disability insurance you should consider Business Overhead Insurance. This insurance can cover the costs of running your business (utilities, insurance, salaries) while you're out of commission. Disability Insurance will not cover your business overhead expenses, unless it is an add-on.

If your business is a partnership you may want to create a Buy-Sell Agreement. This can protect your interest in the business, should your partner suddenly die. Suppose your partner dies and his spouse claims their share of the business. Do you really want your deceased partner's relatives to take over their share of the business? This type of coverage would allow you to buy out your deceased partner's share of the business, avoiding any conflicts or interference by outside parties.

If your partner doesn't die but becomes disabled you may need Disability Buy-Out Coverage. This can help prevent the business from paying him (or her) for work he cannot do, possibly for years. After a period of time, this type of coverage would force your disabled partner to sell you his share of the business, based on a previously signed equitable agreement.

Of course, many of these situations may not occur, but it's your business. Decide which types of coverage you deem most important...then speak to a professional who can give you the types of coverage you need to protect your enterprise.

We hope the following corporate formation and development resources will be be helpful to you.

Corporate Social Responsibility

Business Respect - Corporate Social Responsibility News

Coca-Cola defends Olympic sponsorship
The chairman of Coca-Cola has hit back against critics of the Olympics games sponsors in an interview with the BBC, where he said that Coke supported the credo of the Olympic movement which was a good thing for the world. (7 Jul 2008)

What makes for leadership in CSR?
Having run three workshops on corporate social responsibility across three very different countries in the South Caucasus during the last week, the key theme again and again has been leadership. Unfortunately, to be precise, the lack of it. (5 Jul 2008)

Austria: Former bank boss jailed for fraud
The former head of Bank Fuer Arbeit und Wirtschaft (Bawag) has been jailed for over nine years for fraud following the collapse of US firm Refco. (4 Jul 2008)

France: Caisse d'Epargne launches sustainability labelling
French bank Caisse d'Epargne has launched a labelling system to rate the sustainability of financial products, with a plan to extend the scheme to insurance and loan products by the end of the year. (3 Jul 2008)

UK: Tesco to stop sourcing from Zimbabwe
British retailer Tesco has said that it will stop sourcing products from Zimbabwe so long as the current political crisis persists there. The company currently buys around 1m UKP of goods from the country. (30 Jun 2008)

British American Tobacco under fire for practices in Africa
A BBC investigation has alleged that British American Tobacco is breaking its own marketing code in selling single cigarettes, thought to be particularly attractive to under-age smokers, in Nigeria, Malawi and Mauritius. (29 Jun 2008)

Japan: Index to be introduced to rate companies on environment
The Ministry of Economy, Trade and Industry has said that it intends to introduce an Environmental Stock Index to evaluate business engagement with environmental issues within a year. (27 Jun 2008)

If at any time your wish to communicate with us, please feel free to contact us.

We are happy that you visited Reciprocal Link Management Software.