Examining the Advantages and Disadvantages of a Sole Proprietorship

Illinois small business attorneysIn a sole proprietorship, an individual proprietor (the owner), manages and runs their business. They receive all income for the company, but they are also responsible for its debts, liabilities, and tax obligations. Learn more about this widely used business structure, including its advantages and disadvantages, and how an attorney can assist with the setup.

Advantages of a Sole Proprietorship

Of all the business structures that one can choose, sole proprietorships tend to be the most affordable and easiest to start. Paperwork and other legal items are generally less extensive, and the sole proprietor is only required to comply with state and federal tax laws, zoning laws, and other local regulations, such as licensing laws.

There are also few formal business requirements (except those specific to the industry they operate in), and because the owner has full control over the decision-making power within their business, they may sell or transfer it to another owner or entity at any time they deem necessary. The owner may also change the structure of the business at any time, but it is important to recognize that obligations before the switch may still fall on the owner of the company.

Disadvantages of a Sole Proprietorship

Unlike other business structures, sole proprietorships are not protected from liabilities and bad debts incurred by their company. Instead, they may be held personally liable. In extreme situations, this can cause the business and the owner to simultaneously go bankrupt. Furthermore, the sole proprietor is required to pay all federal taxes on any income earned, and they may be penalized if they do not meet their obligation.

Another major disadvantage is that few investors are willing to put money or energy into a sole proprietorship; quite simply, there just is not enough protection for the investor. As such, sole proprietor business owners typically rely on personal loans and assets to finance the company. If the business fails, this can result in a serious financial loss for the owner of a sole proprietorship.

Contact Our DuPage County Business Law Attorneys

Although sole proprietorships are relatively simple and straightforward in terms of setup, there are some obstacles that business owners should be aware of before moving forward. Stock, Carlson, Oldfield & McGrath, LLC can help ensure that these matters are understood by business owners and that they receive personalized attention to fit their needs. Learn more about how we can assist with your business set-up by scheduling a personalized consultation with our DuPage County business law attorneys. Call our offices at 630-665-2500 today.

Source:

http://www.nytimes.com/allbusiness/AB4113314_primary.html

Home Buying Basics for Illinois Residents

DuPage County real estate attorneysBuying a home is a significant milestone that can give you and your family years of joy and a lifetime of fond memories. Unfortunately, the process itself can be highly complex, and missteps along the way can delay home ownership. Thankfully, there are ways to smooth the process. The following information explains, and it provides details on where to find assistance with your next (or first) Illinois home purchase.

Working with a Realtor

While homeowners may want to skip the real estate agent to save money on the sale of their home, this decision can be a grave mistake for buyers. Real estate agents do more than just show potential homes. Knowledgeable on the communities, market conditions, and median home prices in the area you are searching in, real estate agents can work with your family’s needs and budget. They can aid you in preparing pertinent documents, such as your viable offer. Best of all, the agent’s commission is typically covered by the seller (covered in the purchase price) once the home closes. Just remember to shop around. Find one that has experience representing buyers, good references, and an understanding of the area.

Home Inspections and Seller Disclosures

Illinois state law requires that sellers provide potential homebuyers with a disclosure statement, which offers details on whether the home has any major issues that may impact the home’s value. Examples include defects like:

  • Termite infestation (or recent treatments);
  • Cracks in the foundation;
  • Lead paint or pipes; and
  • Previous flooding or fire.

However, buyers should not rely solely on these disclosures. Sellers may not know the full history of the home, or may not be aware of new but potentially serious issues. A home inspection can ensure these potential problems are discovered before you complete your purchase. Just do not use one selected by either the realtor or the seller; instead, practice due diligence and find one that comes with experience and good references.

Why Hire a Real Estate Attorney?

Although home buyers in Illinois are not required to hire an attorney, it is still highly recommended (and it may become necessary if you run into title issues or other legal problems). Real estate attorneys can review your contract to check for any problems, and they can work with you during negotiations. They can even draft or review your real estate agent contract to ensure favorable terms.

If you are purchasing a home in Illinois, contact Stock, Carlson, Oldfield & McGrath, LLC for assistance. Dedicated and experienced, our DuPage County real estate lawyers will protect your interests, every step of the way. Call 630-665-2500 and schedule a personalized consultation to get started today.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=076500770HArt.+2&ActID=2152&ChapterID=62&SeqStart=300000&SeqEnd=1700000

https://www.epa.gov/lead/real-estate-disclosure

https://www.forbes.com/2010/05/25/why-you-need-real-estate-agent-personal-finance-commission.html

 

Transfer on Death Instrument or Living Trust – Which One Should You Use?

Wheaton wills and trusts lawyersHistorically, estate planning has been overlooked by the non-wealthy. Times are changing, however. Retirees and even younger adults are starting to recognize the benefits of an effective estate plan – especially when there is a smaller estate. You see, probate can quickly eat away at the value of a moderate estate, which may lead to significant losses for beneficiaries. In situations where the only transferable item is real estate, the loss may even prevent the procurement of the asset.

Thankfully, there are some preventative strategies that you can use, including Transfer on Death Instruments (TODI) and living trusts. How do you decide which is most appropriate for your situation? The following explores these two solutions and explains where to find assistance with your Illinois estate planning needs.

Living Trusts

Revocable trusts (otherwise known as living trusts) are legal documents that authorize a trustee (beneficiary) to hold and manage the grantor’s assets before death. This authorization can be extremely beneficial for those suffering from a degenerative brain disease, or someone that is at risk for incapacitation. However, it can be used by anyone to avoid probate upon their death. It should also be noted that grantors still own their funds until death, and they can alter or revoke a living trust at any time (provided they are of sound mind).

Unfortunately, there are some limitations and concerns with living trusts. They must be funded, so they can be expensive to set up. It should also be noted that a single mistake – even a minor one – can invalidate the trust and cause the estate to go to probate. Living trusts do not replace a will either, and there may be confusion about what should go in a will and what should be designated to the trust.

Transfer on Death Instrument

A TODI deals only with the transfer of real estate, so it is not a comprehensive estate plan. However, they are less complex (and often less expensive) than a living trust, and they can still be altered or revoked (with a few exclusions). Still, there are some limitations and exclusions that one must be aware of before setting up a Transfer on Death Instrument. For example, a TODI can only be signed by someone of sound mind who is not under duress. A TODI must also comply with all deed requirements, and it must be registered in the county or counties where the property is located.

Contact Our DuPage County Estate Planning Lawyers

Because each situation is unique, it is crucial that estate planners seek experienced legal assistance before moving forward. The skilled DuPage County estate planning lawyers at Stock, Carlson, Oldfield & McGrath, LLC can help. Knowledgeable and dedicated to protecting your best interests and the interests of your heirs, we will examine your situation and then strive to develop a creative solution that works for you. Schedule a personalized consultation to learn more. Call 630-665-2500 today.

Sources:

http://www.bankrate.com/finance/estate-planning/living-revocable-trust-facts-1.aspx

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3382&ChapterID=60