Ever notice all the music around you? 

It’s played in grocery stores, restaurants, elevators, doctors’ offices, nail salons, car dealerships, gas stations (yes, while you are pumping gas), business offices and even the parking lots!

Is music appropriate in the workplace? You bet it is.

Does music boost employee morale? Yes to that one too.

Music plays a positive role in most of our lives personally and professionally.

Music acts as an important component in building a customer service culture in the workplace.

• It improves alertness
• Creates team interaction
• Increases employee morale – break out in song once in a while and see what happens!
• Stimulates productivity
• Music makes us happy! (We love happy)
• and the beat goes on

Your favorite music automatically puts you in a good mood. And most importantly, an employee’s good mood means a happy customer!

Back in the corporate days on my way to work, I would pop in a CD and listen to, ”We Are the Champions”  by Queen for quick motivation.  Don’t know why this song had the impact it did, but it helped me motivate my team for sales contests at work. (Really, crank it up and see!)

If you know you have a tough day ahead, try listening to some of your favorite songs before you get to work or right before an event. Seriously, this works.

We recently attended a workshop and observed our speaker putting on a headset just prior to starting the event.  Watching as she moved to an unpopulated area, we instantly knew she was listening to a song(s) that moved her mind and soul into the motivation and energy she needed for a long day ahead.  Wow, the impact and power of music. By the way, it was by far one of the most informative workshops we have ever attended.

We are big believers that starting off your day with music can set the tone for the entire day.  We would be remiss if we didn’t make a comment of how it has its place at home too.  Being Motown gals, Aretha and Smokey continue to be our constant motivator for some serious house cleaning!

About Client Retention
Client Retention is a customer service company. Keeping businesses connected to their valued customers and clients is our passion. Our mission is to help business owners and entrepreneurs consistently follow up with and connect with their customers in an effort to build customer loyalty. We create and implement customized greeting card programs for you that promote business growth.
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In essence, a Charging Order allows a judgment creditor to receive such distributions from certain forms of companies (e.g., partnerships, limited-liability companies and now, Nevada corporations) as a judgment debtor would have received. It is important to note that a judgment creditor does not have access to the company’s assets and has no management or voting rights.

There are important points relating to Charging Orders:

(1) the charging order is a lien against the judgment debtor’s interest and does not allow the judgment creditor to foreclose against the debtor’s interest;

(2) the creditor cannot exercise any management or voting rights because the creditor has “only the rights of an assignee of the member’s interest;

(3) the creditor has no other remedies available but the Charging Order.

Charging Orders and Single Member LLCs or Single Shareholder Corporations:

In In re: Ashley Albright, a Bankruptcy Court in Colorado held that a the charging order protection does not apply to single-member LLCs since, the Court held, charging orders were intended to protect non-debtor “partners,” and in single-member LLCs there is no one to protect. As the language of the Colorado LLC statutes does not exempt single-member LLCs from the protection of the charging order and so, many practitioner’s are uncertain as to the true applicability of Albright.

In community property states, a Court following Albright would probably treat a married couple as a single member and thus would likely not afford the owners of the charging order protection.

This is the final entry in CenterPoint Corporate Service’s discussion on business entity forms.  For more information, please visit CenterPoint Corporate Service’s Frequently Asked Questions.  Don’t hesitate to contact us for a more detailed discussion.

Corporations are creatures of state law and accordingly must satisfy certain formal requirements for legal recognition. Nevada law does not govern whether a corporation is to be treated under Subchapter “C” or Subchapter “S” of the Internal Revenue Code (the “IRC”). By default, all corporations are deemed to be taxed under Subchapter “C” of the IRC. The owners must opt out of Subchapter “C” by the filing of a Form 2553 with the IRS in order to be taxed under Subchapter “S”.

An "S" corporation is identical to a "C" corporation for most non-tax purposes. But, for tax purposes, "S" corporations and "C" corporations differ dramatically. Whereas a "C" corporation is a separate entity for tax purposes, an "S" corporation is a flow through entity, much like a partnership.

Why “S” Corporation?

The choice of "S" corporation status is most often made for either or both of the following reasons: simplicity and pass-through of tax items. It may be desirable to use "S" corporation status in early (loss) years of a corporation and then convert to a "C" corporation when the corporation becomes profitable.

Organization and Operation:

An "S" corporation is organized in the same way as a "C" corporation and the tax aspects of organization are the same. Once organized, the operation of an "S" corporation for non-tax purposes is identical to that of a "C" corporation. The difference between the two is in the manner of taxation.

Only certain corporations, called "small business corporations," are eligible to be "S" corporations. The term "small" may be misleading, because there is no limit on income or assets. The limit is on the number of shareholders, which presently cannot exceed 75. Other limitations on eligibility exist. All shareholders must consent to the "S" corporation election. It is critical to file the "S" corporation election in a timely manner.

Taxes:

The taxation of "S" corporations and shareholders is quite similar to the taxation of partnerships and partners. With the exception of certain capital gains and certain "passive" income, the corporation is not generally taxed. Instead, items of income, loss, deduction and credit are passed through to the shareholder. Also, tax items retain their character (i.e., as "ordinary" or "capital" items) in the shareholders' hands.

The pass-through of tax items occurs regardless of whether the corporation makes any distributions to shareholders. On the other hand, actual distributions are non taxable to the extent of the recipient's basis. The amount of a distribution reduces the recipient's basis in the stock. Distributions exceeding shareholder basis are taxed as capital gains.

Check back in a few days for a discussion of Limited Liability Companies.  This is part 6 of 8 in the CenterPoint Small Business Blog’s series on Business Forms.

Corporations are creatures of state law and accordingly must satisfy certain formal requirements for legal recognition. Nevada law does not govern whether a corporation is to be treated under Subchapter “C” or Subchapter “S” of the Internal Revenue Code (the “IRC”). By default, all corporations are deemed to be taxed under Subchapter “C” of the IRC. The owners must opt out of Subchapter “C” by the filing of a Form 2553 with the IRS in order to be taxed under Subchapter “S”.

Ownership of the corporation is evidenced by corporate stock. A "C" Corporation may issue various types of stock for the purpose of allocating control or varying the nature of the various shareholders' potential risks and return on investment. The most frequently used classes of stock are "common" and "preferred." Common Stock ordinarily represents potential growth while the Preferred Stock may allow for a more predictable return on investment.

The "C" corporation offers maximum flexibility in allocating control and varying the nature of the shareholders' equity in the corporation.

A corporation is a separate legal entity from its owners (shareholders) and is managed and controlled by directors and officers. Fundamental corporate policy is set by the board of directors while responsibility for the day-to-day operation of the corporation rests on the President. All corporations must have a President, Secretary and Treasurer. Additionally, corporations may have multiple Chief Officers, Vice Presidents and Assistant officers.

As a separate entity for tax purposes, the corporation reports all income, losses, deductions, and credits on a corporate income tax return and pays tax at the corporate rates prescribed in the IRC. Shareholders are not taxed unless they receive dividends or other distributions. Of course, shareholders may also be employees and, as such, are taxed on their compensation income (which is deducted from the corporation).

Of all the forms of business organizations, corporations have the most freely transferable interests. Also, the transfer is the least complicated for tax purposes. Since corporate stock represents each owner's equity in the corporation, the transfer is achieved by transferring the stock. In closely held corporations, restrictions on transfer are often imposed, usually by means of an option, or right-of-first-refusal.

For tax purposes, a transfer has no effect on the corporation itself and no effect on the shareholders who are not parties to the transfer. Upon the sale of stock, the selling shareholder realizes a capital gain or loss to the extent of the difference between the amount realized for the stock and the adjusted basis in the stock. The buyer takes a basis equal to the cost, including expenses of purchase, such as legal fees and brokerage commissions.

A corporate termination (also known as a liquidation or dissolution) generally occurs only in the case of closely held corporations or publicly held corporations that have failed. A liquidation is a corporate act requiring shareholder approval.

A corporate liquidation is generally a taxable event for both the liquidating corporation and its shareholders. The corporation will generally recognize any gain or loss on the difference between the amount realized and its basis in the assets. Similarly, the shareholders will recognize any gain or loss on the difference between the amount realized and their basis in the stock.

The corporation offers protection against personal liability. Limited liability in a corporation can be lost by the “piercing of the corporate veil” due to "thin" capitalization or failure to follow appropriate legal formalities in operating the corporation.

The principal non-tax disadvantage of the corporate form (whether a C or S corporation) is that it entails more formalities, closer supervision by regulatory bodies, and greater administrative expense than do the non-corporate forms.

Incorporation:

For a business to exist in corporate form, it must file its articles of incorporation with the Secretary of State. A Registered Agent must execute and file a certificate of acceptance of appointment with the secretary of state. By the end of the month following the incorporation, the new corporation must then file, also with the Secretary of State, a list of its officers and directors and a designation of it Registered Agent. At the time of organization the corporate bylaw and organizational minutes will be prepared and executed so the corporation and its officers will have the authority to conduct corporate business. The corporate bylaws are, essentially, the written rules under which the corporation will operate.

Shareholder’s Agreement:

Just as the bylaws are the written rules under which the corporation will operate, the Shareholder's Agreement contains the written rules under which the shareholders will conduct themselves. Included in the shareholder's agreement are such things as the buy-sell provisions whereby a procedure is designated for the buy-out of a selling shareholder. These provisions are important as much for the remaining shareholder as for the selling shareholder since they may govern to whom the shares may be sold and at what price.

Corporate Maintenance and Record Keeping:

Nevada law requires that the corporation must make a yearly filing of a list of its officers and directors and a designation of its Registered Agent in the state. If the corporation fails to file this yearly report, the corporation may: (1) lose its right to transact any business in the State of Nevada, (2) forfeit its charter, and (3) distribute the corporation's assets.

Annual Meeting of the Shareholders:

Since a corporation is ultimately responsible to its shareholders, the law requires a shareholder consensus for fundamental corporate actions that are beyond the powers of the directors and officers. Actions typically requiring shareholder approval include the election of directors, adoption or amendment of the bylaws, amendment of the articles of incorporation, merger or consolidation of the corporation, sale or mortgage of substantially all of the corporation's assets, or dissolution of the corporation.

Shareholder approval is acquired in one of two ways, either by a vote at a meeting of the shareholders or by written consent of the shareholders in lieu of a meeting. Shareholders must act collectively, as opposed to individually, and may only act at a properly called shareholders' meeting or by consent action in lieu of this meeting.

A failure to hold the annual meeting at the designated time or to elect a sufficient number of directors to conduct the corporation's business will not ordinarily mean that the corporation automatically dissolves. Further, any stockholder or director may petition the courts for an order requiring the holding of an annual meeting if none has been held within 30 days of the date designated or if 13 months have elapsed since the corporation's organization or last annual meeting.

"Special" shareholders' meetings may typically be called by the board of directors or by persons authorized in the articles of incorporation or bylaws. Generally, any corporate business may be conducted at the annual meeting. At a special meeting, however, the corporation may generally only deal with the business specified in the notice of meeting.

Business may not be conducted at a shareholders' meeting unless a quorum is present. Quorum requirements are typically set forth in the bylaws and must comply with all relevant statutes. A majority of shareholders in attendance may adjourn a shareholder's meeting.

Directors – Duties and Liabilities:

All corporations are required to have at least one director. The number of directors may be increased or decreased in such manner as provided in the articles of incorporation or bylaws. Unless otherwise provided in the articles of incorporation, directors need not be stockholders.

In case of willful or negligent violation of the statutes as to dividends or distributions to stockholders, the directors who did not properly oppose the violation are personally liable at any time up to three years. Directors may also be liable for fraudulently conveying property against the interest of creditors and for making false reports.

In Nevada, it is possible to include a provision in the articles of incorporation to limit or even eliminate personal liability of a director (or officer) to the corporation or its stockholders for damages resulting from a breach of fiduciary duty. Such a provision, however, does have certain statutory limitations.

Subject to restrictions contained in the statutes, a corporation may indemnify any person made or threatened to be made a party to any threatened, pending or complete action, suit or proceeding by or in the right of the corporation or other than by or in the right of the corporation by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation.

Additionally, a corporation may be able to purchase indemnification and liability insurance to protect its directors (and officers) or make other financial arrangements for their protection.

Stock Issues with Restrictions:

It may be desirable to issue stock to employees as incentive compensation. Stock may be issued to employees subject to certain conditions where until the conditions expire, the employee's right to the share is subject to substantial risk of forfeiture. For instance, the stock may not be transferred and must be sold back to the corporation at the original grant price if the employee terminates employment within the specified period.

Qualifications to do Business in Foreign Jurisdiction:

Most states require out-of-state corporations to "qualify," i.e., to register and pay taxes if they "transact business" within that state. Typically, other states require the "qualifying" corporation to file a copy of the articles of incorporation with the secretary of state, file a formal application for qualification to transact business in another state, and pay the appropriate filing fee and required taxes. It is also important to check with the appropriate agencies for the ability to transact business in the corporation's name.

What Must be on File at Registered Office:

Nevada law requires that every corporation must keep at its registered office a certified copy of its certificate of incorporation or articles of incorporation along with all amendments, a certified copy of its bylaws along with all amendments, and a stock ledger containing information about all shareholders or a statement regarding the whereabouts of the stock ledger.

Pre-Emptive Rights:

For corporations organized on or after October 1, 1991, absent a contrary provision in the articles of incorporation, no stockholder has the right to purchase his prorata share of new stock at the cash price offered to others.

Securities Laws:

When forming a corporation, the issuance of shares to the shareholders must comply with both federal and Nevada securities laws. If the issuance is made improperly, the organizers of the corporation may be made a target for lawsuits from discontented investors in the corporation. Additionally, the organizers may be subject to criminal prosecution.

Typically, the business will be able to qualify for exemptions from the procedures of registering with the SEC under the federal securities laws or "qualifying" with the Nevada Secretary of State under Nevada's securities laws, however, the issuance of stock must be carefully orchestrated.

Check back in a few days for a discussion of S-Corporations.  This is part 5 of 8 in the CenterPoint Small Business Blog’s series on Business Forms.

In this series of posts, we will be discussing the advantages and disadvantages of various business entities.  These entries are meant to be tips and to guide your thinking on business forms.  But, they should not take the place of a discussion with your lawyer, tax advisor, or accountant.

Selecting the form in which to operate a business is one of the most significant decisions an owner will have to make. The choice of business form can have broad implications, not only for the manner in which the enterprise will be conducted, but for the personal affairs of the owner. A strong corporate shield can also shield your personal assets from your business liabilities. Forming a business entity is vital to protecting yourself and gaining the legal and tax benefits from operating a business.

Among other issues, the choice of business form can directly affect:

• The decision about what property the client will contribute to the business.
• Whether the owner or the business will be responsible for the business' obligations.
• Whether, and in what form, the business will continue after the client has ceased to participate in it.
• How interests in the business may be transferred and other participants brought in (or allowed out)
• How the owner's personal income tax liability will be calculated.
• What the client's optimum estate plan should be.

The choice of business form will also have a significant impact upon the relative complexity or simplicity of the client's legal and financial affairs and upon the degree of financial risk to which the owner(s) will be exposed.

Making a sound decision on the choice of business form often requires the owner to look beyond his or her current business situation to examine such matters as the business' long and short term prospects, as well as the general tax and financial affairs of the owner and, in many cases, those of the owner's family and business associates.

There are a number of basic forms of business presently in Nevada but there are six worth discussing – Sole Proprietorship, General Partnership, Limited Partnership, "C" Corporation, "S" Corporation and Limited Liability Companies. Each form has various advantages and disadvantages.

Stay tuned to the CenterPoint Small Business Blog for a discussion of the benefits and limits of each form of business.  A discussion of the first form, a Sole Proprietorship, is forthcoming.