PRACTICAL LESSONS LEARNED

Though the Limited Partnership has been adopted in all states of the USA, not all limited partnership statutes are created equal. Some are much better than others, and some are worse. It’s important to be in compliance with state law requirements, remembering of course that some states have far more formality requirements than do others. Here are some useful suggestions.

• As a preference, make use of those jurisdictions where the limited partnership statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner.
• Be sure to file any Annual Report. In the better jurisdictions, this is normally just a statement of who the general partner is, along with their address. In others, it is more detailed and requires a financial report.
• Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc.
• The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes.
• Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney.

A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:

• Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
• The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
• The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limite
  Fear And Courage In Starting A Work At Home Online
  From the free encyclopedia Wikipedia, courage, it also has been known as bravery and fortitude, it is the ability to confront fear, pain, danger, uncertainty or intimidation. These nouns appear as a contrast of the courage one.For many philosophers, the courage is associated with the the soul largeness. It is a sort of virtue. There are many species of courage. It has the courage for the fight against the injustices; the fight against the poverty; the courage to marry and to assume commitments with a person; the courage to take risks in new businesses and enterprises.But the principle feeling that contrast with courage is the fear. Since early children have learned to have fear of the dark one, of the animals, monsters and the other oldest resources of scaring them, in order to make them to obey us. Later, when they have grown, we demand them courage, even so we have prepared them all the time to feel fear.For some studious the fear is a creation of the proper man
  far more formality requirements than do others. Here are some useful suggestions.
  • As a preference, make use of those jurisdictions where the limited partnership statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner.
  • Be sure to file any Annual Report. In the better jurisdictions, this is normally just a statement of who the general partner is, along with their address. In others, it is more detailed and requires a financial report.
  • Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc.
  • The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes.
  • Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney.
  AVOIDING IRS PROBLEMS

  A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:

  • Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
  • The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
  • The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limit
    Combine Postcard Marketing With Your Online Marketing Strategy
    Letting people know about your business Web siteYou can’t set up in cyberspace and expect customers to just come to your business Web site. You have to let them know you are there. And, while there are people who look online, there are still plenty of others who are not as Web savvy as you would like them to be. For those folks, you need an offline marketing strategy to get them to your business Web site. This is where the postcard comes in. Put your Web address on an attractive postcard to create interest in your business Web site. Postcard marketing is uniquely compatible with online marketing:Postcard marketing is low cost. You can generate several thousand for a relatively small amount of money and they are inexpensive to mail. They are a low cost way of generating Web traffic.Postcards arrive at the home or business, in a place where a computer is readily available. This makes it easy to simply take the postcard immediately to the computer and enter the Web a
    i>Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc.
  • The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes.
  • Have the Limited Partnership Agreement drafted by an attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney.
  AVOIDING IRS PROBLEMS

  A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:

  • Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
  • The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
  • The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limit
    Mobile Oil Change Business for the West Virginia Market
    Is a state-wide Mobile Oil Change Business viable for the West Virginia Market? Recently we were asked to consult an upstart entrepreneur interested in the mobile oil changing industry sub-sector and looking to target his state of West Virginia. Are there any such businesses now like this in the Great State of West Virginia?There are folks engaged in the mobile oil change business doing this now in West Virginia and yet there are only a few decent markets there worthy of a large enough population to make it viable. That is to say make the economies of scale work for the business. One concept would be to concentrate on a different area or city each day and schedule accounts to fit that.Of course consider too that most real West Virginians are quite capable of changing their own oil or have family that are part of that DIY (Do It Yourself) crowd or market segment. Indeed, I have personally seen units in South Charleston, Huntington and Elkins and believe there are already
    g and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers. The partnership agreement should be drafted by an attorney.
  AVOIDING IRS PROBLEMS

  A series of cases which culminated in 2005 (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:

  • Don’t set up a Limited Partnership as part of your estate plan primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
  • The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
  • The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limit
    Are You Branded Yet?
    One of the best ways to increase your chances of success, whether you work for someone else or have your own small business, is to find an effective way to tell people what you have to offer.You can do this by creating your own brand, according to author, consultant, movie producer and director, Tom Marcoux, who is known as America's Communication Coach. "In order to make your dreams come true you need to effectively tell the world what you offer.And, the essence of telling the world is to clearly and concisely express what you're best known for. This is your personal brand," Marcoux says. Corporations spend millions of dollars to keep their brands in people's minds and wallets.What is a brand? You see them every day -- Apple, McDonald's, Starbucks, Calvin Klein, Toyota. Brands are effective because they quickly tell consumers what they will be getting for their hard earned dollars. Perhaps more importantly, people often decide to choose one product over a
    tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble.
  • The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Limited Partnership that will provide for your lifestyle for the rest of your life expectancy.
  • The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Limited Partnership.
  • It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
  ADMINISTERING THE LIMITED PARTNERSHIP

  One of the areas where problems can arise is in the proper administration of the FLP. This includes not only the day-to-day operations, but also the funding of the Partnership. For example:

  • Change title on assets intended for ownership by the Limited Partnership. Failure to do so means that the asset is not actually included in the Partnership even though the Partnership Agreement may list the asset on its initial list of partnership property. Changing title means more than just including an item on a list. Trading accounts at a brokerage for example might require that you close the previous existing account and open a new one, in the name of the Limited Partnership.
  • Real estate that you intend to transfer to the Limited Partnership will need to be re-titled by means of a deed which conveys ownership and is recorded with the County Recorder where the property is located.
  • If there is any confusion over which assets belong to the Limited Partnership itself and which belong to the individuals or entities that are the limited partners, such confusion needs to be clearly resolved with a paper trail that can be traced and audited.
  • Avoid using assets belonging to the Limited Partnership for purposes other than those stated in the business purpose section of the Partnership Agreement.
  • Keep accurate books and records, and have a paper trail that is clear and unmistakable. The books and records of the Limited Partnership should be kept in an orderly and efficient manner that reflects attention to detail and your intention of administering the Partnership in a fair and business-like manner.
  • When distributions are made, they should be equitable and fair. Unless there is an agreement signed by the Partners to make unequal distributions favoring one partner more than the others, distributions should be allocated among the Partners on a pro-rate basis equal to their percentage of Partnership interests (i.e. their percentage of ownership).
  • Funds that are retained inside the Partnership should be re-invested for the good of the Limited Partnership as a whole, not for the personal use as a piggy bank for one