businesses

Protecting Yourself from Your Partner’s Creditors

by Paul Joseph July 18, 2011 Featured

Many entrepreneurs would rather not  think of what could occur to their businesses if creditor troubles arise, however, it is often very important to structure the ownership of business assets to provide flexible and effective limited liability should something unexpected transpire. In the United States, although many people are familiar with limited liability as it applies to the debts of a business, i.e. protection from creditors of the business (sometimes called inside liability), there is also limited liability for the debts of business owners, i.e. protection from creditors of other business owners (sometimes called outside liability). Inside Liability Protection Inside liability protection is somewhat basic. Unless a creditor can “pierce the corporate veil” because business owners engage in illegal/wrongful activities, personally guarantees the debts of the business, etc., creditors of the business cannot pursue the business’ owners’ assets to satisfy a judgment against the business. In contrast, outside liability is more complex and requires some background on two court-ordered remedies that creditors may seek to satisfy court-ordered judgments against a business: foreclosure & charging orders. Possibly the most common means through which creditors can satisfy judgments against a person’s interest in a business is via court-ordered foreclosure. If a creditor successfully forecloses upon a person’s interest in a business, the creditor may seize that person’s ownership interest and the rights associated therewith including any control over the business’ operation. In comparison, a charging order does not permit a creditor to exert control over the business’ operations or its assets and limits creditors to receiving distributions, if any, that the business makes to the owner. Which Types of Limited Liability Interests are Subject to Foreclosure, Charging Orders, or Both? While there are multiple types of entities that provide limited liability, two are of particular note: corporations and limited liability companies (LLCs). If a business is a corporation, a creditor may seek to foreclose upon a shareholder’s ownership interest in the corporation, which is represented by shares of stock, and thereby acquire some control over the corporation and the corporation’s assets. While many corporations’ bylaws prohibit the involuntary transfer of shares, without allowing the corporation to redeem the shares at their fair market value, such arrangements require that a corporation possess resources that are sufficient to redeem the shares. If a business is organized as an LLC, however, in a state where charging orders are the only permitted remedies against an LLC, e.g. an Arizona LLC, an LLC owner’s (called an LLC member) creditors will not be allowed to seize the LLC member’s interest and any control over the business’ operations or assets. Steve Cook is an attorney at Cook & Cook in the Phoenix, AZ area. He focuses his legal practice on forming limited liability structures to protect the assets of businesses and individuals. During his undergraduate studies, he co-founded a digital advertising business that received over $1 million in venture capital.

Tagged as: become an entrepreneur, business, businesses, entrepreneur, united

0 comments Read the full article →

1M/1M Strategy Roundtable For Entrepreneurs: Continued International Participation

by Paul Joseph July 1, 2011 Featured

Recap of the 30 June 2011 roundtable by Sramana Mitra True to the international dynamic of 1M/1M, during today’s roundtable we had entrepreneurs from the U.S., India, and Israel pitch their businesses. And in the audience, there were people from at least 30 different corners of the world. (Visit Yourstory.in for full news, other content, and much more!)

Tagged as: businesses, content, frontpage, international, sramana, sramana-mitra, world

0 comments Read the full article →

Student entrepreneurship

by Paul Joseph May 19, 2011 Featured

A lot of newsprint is now devoted to student entrepreneurship. Business newspapers are running a series on student entrepreneurs and how they form and run their businesses. At the NASSCOM Product Conclave 2010, there was a pitched battle between Prof. Vivek Wadhwa who saw student entrepreneurs as a bubble and Vishal Gondal, the gaming entrepreneur, who was gung-ho about student entrepreneurship…. (Visit Yourstory.in for full news, other content, and much more!)

Tagged as: businesses, frontpage, product, yourstory-in

0 comments Read the full article →

1M/1M Strategy Roundtable For Entrepreneurs: Two Really Cool Companies

by Paul Joseph May 13, 2011 Featured

Recap of the 12 May 2011 roundtable by Sramana Mitra During today’s roundtable, we had two 1M/1M premium members discussing their businesses alongside Penworks, a new company we looked at for the first time. The premium members have been working with us for a bit and have made progress, so this was an interesting roundtable where we were able to discuss some more advanced issues. (Visit Yourstory.in for full news, other content, and much more!)

Tagged as: businesses, content, frontpage, other-content, sramana, sramana-mitra, yourstory-in

0 comments Read the full article →

Young Entrepreneur Interview: Sarah Prevette of Sprouter.com

by Paul Joseph March 28, 2011 Featured

Entrepreneurs looking for advice on starting, growing, and managing their businesses have a lot of options online. Of course YoungEntrepreneur.com is a quality source of practical information, a number of entrepreneurial blogs are available to anyone who can perform a Google search, and there is a site called Sprouter.com . Sprouter is (now) a site where entrepreneurs can get their specific questions answered by other entrepreneurs who have been there and made it happen. We don’t all have physical access to great mentors, and Sprouter helps bridge the gap between entrepreneurs in need and successful business people with advice and guidance. We recently caught up with Sarah Prevette, the Founder and CEO of Sprouter.com. Sarah is a true entrepreneur in every sense of the word and always has fantastic advice for those looking to start and build their own business. Enjoy the interview, and don’t forget to share your thoughts in the comments section! You recently announced a redesign and re-focus of Sprouter.com.  Can you tell us a little about this new direction? We launched our Q&A functionality last summer, and we’ve been blown away by the response from the community and from expert entrepreneurs who have come forward to provide startup advice. We’ve had some amazing entrepreneurs give their advice on the site – people like Aaron Patzer from Mint.com and Mark Suster, a prominent investor and blogger. We decided to simplify the site to focus on the Q&A platform, instead of offering several services. What prompted the changes you’ve made to Sprouter? When we launched the Q&A functionality it was buried on a sub-domain, ask.sprouter.com. We wanted to bring the Q&A to the forefront of what we do to help entrepreneurs around the world, and make it easier for startups to ask questions and browse through answers. You seem to truly care about entrepreneurs and want them to succeed. What is your philosophy behind this focus? The reason I started Sprouter was because I had questions while building my last business, and I couldn’t find anyone to answer them. Being an entrepreneur can be very isolating, especially if you don’t have a strong network of fellow entrepreneurs, or if you don’t live in a startup hotspot like Silicon Valley. My philosophy is that successful entrepreneurs want to pay their knowledge forward to the next generation of entrepreneurs, helping them learn and succeed with their businesses. It’s been incredible to see entrepreneurs helping other entrepreneurs around the world. What three pieces of advice do you have for a young entrepreneur just starting out? Test your idea. Talk to everyone to do informal market research. Find out if what you think is a need is actually a need. Don’t be afraid to ask questions. Take advantage of resources like Sprouter to tap into existing knowledge bases and learn from other entrepreneurs’ mistakes. Network, network, network. The old adage is true – it’s all about who you know. How do you personally define success? I’m not sure there is a definitive end-game success. To me, it’s about little wins every day and ongoing progression. Success is continually elusive – as soon as a milestone is achieved, it’s on to the next one. Personally, I want to feel like I’m contributing, having impact, and pushing boundaries.

Tagged as: business, businesses, entrepreneur, entrepreneurs, entrepreneurship, knowledge, startup, thoughts

0 comments Read the full article →