Category: International Tax Specialists

byAlma Abell

If you are a sole proprietor, you and your business are legally one and the same thing, rendering you personally liable for all its debts. Therefore, in the event that your business is declared bankrupt and there is not enough money in the business to pay the debts, creditors will be entitled to not only take the business assets, they can also take your personal assets. This rule also applies for general partners. If your small business is compelled to file for bankruptcy, it is essential that you seek assistance from someone having the requisite legal knowledge in business bankruptcy. Here are some important reasons for hiring a Small Business Bankruptcy Lawyer.

The attorney has undergone certification

A business bankruptcy attorney will have been duly by the American Board of Certification. A certified attorney is likely to have gone through rigorous testing and met objective standards while demonstrating exceptional knowledge in bankruptcy laws and creditors’ rights. Due to their vast knowledge in the prevailing state laws on bankruptcy, such attorneys are capable interpreting the law to the advantage of their clients.

Experience in bankruptcy proceedings

Choosing a business bankruptcy attorney will guarantee you that they already have experience in bankruptcy adjudications on a business level. You may gauge a particular attorney’s level of experience by getting references from their colleagues, as well as visiting their website and examining the various reviews made by their previous clients.

Help with tackling legal complexities

A small business bankruptcy attorney is capable of helping you with the following:

1. Analyzing your situation and explaining your rights and legal options.

2. Taking the necessary precautions aimed at preventing lawsuits, tax levies, garnishments, foreclosure and any other collection actions that may have been brought against you.

3. Providing legal advice that will help you in rebuilding your credit after bankruptcy.

If your business is on the verge of financial failure and you are considering filing for bankruptcy, it is essential that you hire a Small Business Bankruptcy Lawyer who is committed through certification to keeping up their proficiency through continual practice and education. Contact Hitchcock & Associates, P.C. They have competent bankruptcy lawyers with a winning track record. Visit Tomhitchcock.com for details on their services.

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byadmin

Finance is the basic requirement for starting or expanding any small business. Those who do not have big savings to start it on their own need somebody to help achieve their aspirations. Small entrepreneurs have plenty of sources to get funds for starting their business.

Debt and equity financing are two financial strategies that can help you get going. Incurring debt entails you to borrow money for the business. By gaining equity you can put stakeholder’s cash in to your business or pump in your own money.

Debt financing:

Many small business owners have the misconception that borrowing from financial institutions depletes their cash profits. In reality it is a good option if you have sound cash flows to repay loan with interest amount.

Advantages:

1 The ownership of the business remains with you. You continue to enjoy sole right on profits generated by your business. You also remain the sole controller of your business and the lender has no right to interfere.

2 You can retain entire profits with the company or use it for repayment of the loan.

3 You get entitled to tax exemptions on the amount of interest paid to the lender.

Disadvantages:

1 You are required to maintain sufficient cash flow to repay loan, or part with cash profits to pay back.

2 The lender may charge higher interest if it treats your application for loan as high risk value.

3 Lender gets rights to seize your collateral, in case of non repayment.

4 Large and frequent debts can lower your credit rating and hamper future prospects of raising money.

Equity Financing:

Equity financing is the preferred option for most of the small business owners who find it difficult to qualify for loan and refrain parting with cash profits to repay loan. Equity financing can be availed either from partners in the business or the investors. Just like debt financing, equity financing also has its own set of advantages and disadvantages

Advantages:

1 Equity contributions are not required to be paid back even in the situation of bankruptcy.

2 You do not have to pledge business assets as collateral to avail equity investments.

3 Sufficient equity enhances credibility with lenders and investors.

4 More cash is available for use since no debt payments have to be made.

Disadvantages:

1 You are required to share profits with equity investors and surrender some of your ownership stakes.

2 The investor will have a say in running of the business.

3 Dividend payments are not tax exempted.