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Rochester Business & Commercial Law Blog

Business formation types that limit personal liability

When you own your own Minnesota small business, you have a lot to potentially lose in the event that someone falls a lawsuit against that business, and if you are not careful when setting it up in the first place, your personal assets could be at stake. At Dunlap & Seeger, we understand that there are certain business structures you can choose when forming your business that can help protect your personal assets, and we have helped many entrepreneurial clients establish business structures that best reflect their needs.

According to QuickBooks, all business owners have areas where someone could potentially attempt to hold them liable, even though there are some types of businesses that are undeniably riskier than others. If protecting your personal assets in the event that someone sues you is a priority of yours, you may want to think about establishing your business as either a limited liability company or an S corporation.

Here's what your next business contract needs to do

Never sign a contract that you do not feel 100% comfortable with. It can harm your business for years to come. Signing it is legally binding. In a lot of cases, you can't back out after the fact. Even with specific escape clauses, which allow you to legally break the contract, certain conditions must be met before you can do it. It's not always easy.

To avoid a serious mistake, here are some of the key things that you should look for:

Why is estate planning so important for blended families?

If you have been divorced or widowed before and now met a new person that you would like to get married to, that is certainly something to celebrate. However, Minnesota residents in this situation should be sure to use their heads as much as their hearts when making this decision. If either you or your new partner have children from a prior marriage, it is extremely important that you engage in frank, open and honest discussions about your assets, debts and wishes for the future.

As explained by CNBC, if you remarry without an estate plan that has been well reviewed and communicated to your spouse, children and other pertinent parties, your wishes may never be executed. In many states, the surviving spouse is the default beneficiary of a person's estate if no documentation exists to state otherwise. Even if you and your spouse have discussed that you want certain things to be passed on to your children, your spouse is not required to ensure that happens unless your wishes are in writing via a will or trust.

How Do You Start a Business in Minnesota?

Starting a business in Minnesota does not have to be difficult. However, you should take care to do everything correctly. The right business model and legal structure should protect you from liability. Conversely, inappropriate structures could have the opposite effect.

Of course, one of the first things you would want to do is establish a sound business plan. This article will assume that you already have your plan worked out and you are ready to move on to making everything official.

When should you use an irrevocable trust?

Minnesota could offer you a range of options when it comes to estate planning. An irrevocable trust is one of these tools. When you create one of these trusts, you basically set up a separate legal entity over which you have no control and supply it with assets. In this role, you would be the grantor, trustor or settlor.

This naturally begs the question of why you would want to create an irrevocable trust. Although it would largely depend on your circumstances, there are some indications that this type of estate planning tool could be useful to you. Please read on for a brief description of some of these conditions.

Should you register your trademark?

Whether you are a small business owner or you are in charge of a larger corporation, you may have adopted a mark for your company. Marks are designed to alert customers to your brand, and can be a name, symbol or sign that represents your company. Although marks are not required to be registered with the United States Patent and Trademark Office, there are several benefits to doing so. There are also some things you should keep in mind before applying for a trademark registration

You want to make sure your mark will not get confused with any other mark that is being used by another company. This can mislead your customers into thinking they are purchasing your product or services when they are not. Instead, you should look through the registered trademark database to ensure there are no other marks similar to yours. 

What is the difference between a guardian and conservator?

Guardians and conservators are both, generally speaking, types of custodians under Minnesota law. However, the general idea of caring for someone is more or less where the similarity ends.

As detailed by the Minnesota Conference of Chief Judges, the basic difference between guardianship and conservatorship is that guardians perform personal or healthcare decisions while conservators handle finances. Please read on for a brief discussion of both of these in more detail.

How does the probate process work?

It is never easy when a close friend or family member passes away. Often there are strong emotions involved, and it can be difficult to make the final arrangements. One of the most overwhelming items to deal with may be that of finalizing the estate and distributing the deceased’s property. The difficulty of doing so depends on how the final terms were set up and whether the estate will be required to go through the probate process. The probate process is designed to finalize matters involving paying off creditors, collecting life insurance policies and other assets, finding property and ensuring items get to the proper beneficiaries. 

During the probate process, an administrator is appointed to see the estate through the proper procedures. The administrator is either chosen by the deceased and named in the last will and testament or is appointed by the court. Once they have gathered all of the proper documents and notified creditors and insurers of the death, administrators are responsible for gathering up the property and assets in the estate. Any debts, such as taxes, are then paid out of the estate. The property and assets that are remaining are then distributed to the beneficiaries named in the will. 

The primary advantages of Chapter 7 bankruptcy

The decision to file for Chapter 7 bankruptcy is never an easy one. Even if you understand the pros and cons, you may still have some reservations about pushing forward. This is natural, as filing for bankruptcy is one of the biggest financial decisions you'll ever make.

Understanding the primary advantages of Chapter 7 bankruptcy will help you decide if it's the right decision for you at the present time:

  • A new financial beginning: For the most part, Chapter 7 bankruptcy gives you the fresh start you've been looking for. In addition to eliminating some of your debts, it also gives you the opportunity to better understand the mistakes you've made in the past.
  • No repayment plan: For some, the biggest issue with Chapter 13 bankruptcy is the repayment plan. This forces you to catch up on your debts over the course of three to five years. Subsequently, you have to give away almost all of your expendable income. Chapter 7 bankruptcy doesn't have a repayment plan component. Once the process is complete, you can move on without anything tying you down.
  • No debt limit: With Chapter 7 bankruptcy, there is no limitation on the amount of debt you can have. This doesn't hold true with Chapter 13 bankruptcy, as there are limits both for secured and unsecured debt.
  • It's fast: As long as you do your part along the way, the discharge of debt in Chapter 7 bankruptcy typically occurs within two to three months. Also, the process as a whole usually comes to an end within six months. This is in contrast to Chapter 13 bankruptcy in which a repayment plan remains in effect for a minimum of three years.

Getting the right licenses for your business

If you have a small business in Rochester, Minnesota, chances are that you are busy enough already without having to worry about licensing and renewal. At Dunlap & Seeger, P.A., we understand the need for an efficient and expedient solution to your legal requirements. That is why we keep up to date on the local and state requirements for licensing that affect a variety of businesses and trades in the city and the surrounding communities.

Whether you are starting a new business or expanding your operations, it is important to do your new licensing correctly. Even if you have simply become too busy to relearn the licensing requirements every year, we might provide services that make your life easier and guard your business from legal risk.

Contact Us Today Our lawyers listen carefully to your goals and concerns while helping you obtain the best results possible. Call 507-316-0628 or fill out the form to email our team.

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Dunlap & Seeger, P.A.
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Rochester, MN 55904

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