Thursday, June 22, 2017

Attorney Shannon Wynn: Avoid these five small-business-crushing scams

small business, scam, law

Consumers aren’t the only victims of fraud. Wynn at Law, LLC hears about thousands of small business scams every year. A reward of our business is being able to work with entrepreneurs to get a business off and running (see related article). It doesn’t take much more than a single scam to derail that dream.

These days it’s fairly simple to pop up an official-looking website and professional – but fake – letterhead. Aside from the possible remuneration from and legal ramifications for the scammers, if they’re caught, once the business owner parts with the money for a scam, the money is gone.

Wisconsin’s Better Business Bureau notes, “We continually see various scams against small businesses and they seem to be increasing each year.” Some of the common small business scams reported to the BBB include:

1.       Phony invoices. Businesses receive fake invoices demanding payment for product or services they never ordered or received. Often, if you look closely, you’ll see fine print that identifies the bill as an actual solicitation for business. Generally, the amount is small enough to not raise a red flag. Make sure that the business billing you is a business with whom you are familiar. If not, question it. Wynn at Law LLC’s best small business clients limit the employees authorized to place orders or pay invoices.

2.       Directory scams. A problem that has plagued businesses large and small for decades involves deceptive sales for directories. Scammers call claiming they want to update the company’s information for an online directory… when they could be using the info to set up your business for identity theft. Otherwise, they may also try to upsell your listing in a directory that’s irrelevant to you or your customers, or doesn’t exist at all. Do not give out information about your business to anyone, unless you know for what the information will be used.

3.       Charity pitches. Even new businesses are routinely asked to donate funds to needy causes. While many requests are legitimate, every year small businesses become victims of fraudulent or deceptive charitable solicitation schemes. If the charity isn’t on, don’t give.

4.       Coupon books. Small business operators are often approached to participate in coupon book promotions. They seem like an inexpensive way to advertise your start-up. Problems occur if the promoters change the terms of the coupons to make them more attractive to buyers, when the books are oversold or when books are primarily distributed outside our area.

The fifth scam is among the most prolific – with terrifying outcomes. Internet & phone scams are a common nightmare. Watch out for ransomware, phishing, URL hustles, and spoofing scams. Scammers play on fear, convenience and lack of technical knowledge. Installing a protective software program like Norton or McAfee is a good start. A ‘firewall’ is recommended because it keeps your inside information inside… which includes your customers’ information. These days, you’re flirting with disaster by clicking on any links in unsolicited emails. One recent tip we heard was to shut off the preview pane on email inboxes to avoid emails a spam filter missed.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 Photo by Brian Jackson, used with permission.

Thursday, June 15, 2017

Attorney Shannon Wynn: ‘By-Owner’ real estate sellers need protection

FSBO, law, seller, real estate

One article earlier in the Wynn at Law, LLC archives mentioned our current real estate market cycle as being a seller’s market. There’s not much supply, and plenty of demand. Even in a hot seller’s market, there’s a temptation to increase the net price received for the property by offering it For Sale By Owner, or FSBO. (Real estate pros pronounce it ‘fizzboh.’)

Professional realtors have a home-selling advantage by having access to the realty company’s ad money, marketing and presentation resources, and buyers. However, the cost of that advantage is about six percent of the sale. So, FSBO sellers take over the job of the listing agent hoping to pocket that six percent. Many solo sellers do hire professionals to appraise, stage, photograph, video, drone, design flyers, and help them with the paperwork. Some don’t, and just bank on it selling easily because of the market.

Even a realtor-oriented source like Realty Times concedes that a part of a hot market will go FSBO. That website’s tip – and ours – for those sellers is to get a lawyer: “If you have opted to do a realtor-free FSBO transaction this is definitely the time to call an attorney.”

Every real estate transaction requires a deed. It has to be accurate. It has to be on-time. Anyone can access the records at the register of deeds office to pull that off. As much fun as that sounds, can he or she also assure that deed is legally sound? No. Realtor transactions always have an attorney: The title company and lenders insist upon it for that very reason.

Something else to consider: Another way a good attorney has your back when you go solo is by being your surrogate if negotiations get sticky.

Getting a lawyer involved early – as soon as you decide to go it alone – gives the owner an edge by being ready for closing. It provides the peace of mind that comes from having trained eyes look for other factors impacting the closing… before the closing. (See our previous article)


*The content and material in this original post is for informational purposes only and does not constitute legal advice.


 Photo by Andy Dean, used with permission.

Thursday, June 8, 2017

Attorney Shannon Wynn: Form your company first

small business, operating agreement, law

Wynn at Law, LLC counsels many business owners when a legal situation arises. However, the best opportunity for us to help a business happens at the front end, somewhere between the inspiration to start the business and the day the first customer arrives. We totally get the excitement and energy every business owner exudes when the lightbulb burns bright to start an enterprise.
Forming a general partnership doesn't require any legal paperwork, but it wouldn’t hurt to have a written agreement amongst partners. The fact is, partnerships are formed every day without even intending to do so if you and another person start working together on a business.
Other business structures require a bit more organization. A tax adviser is going to help with the tax advantages or disadvantages of organizing a business as a partnership, a limited liability corporation (LLC), or incorporate as an S-corp or a C-corp. I’ve listed these in order from the easiest to form to the more complex.
An attorney is your lifeline to help you form the business within the state guidelines while protecting your best interests. As one of my clients puts it, ‘Everything is great when it’s great… when it goes south you’re glad to have an operating agreement.’
She has an LLC, which needs an operating agreement among the LLC members. It governs the business and the members' financial and managerial rights and roles. For a corporation, they’re also known as by-laws.
Remember what the two L’s stand for: Limited Liability. The operating agreement separates the owner’s or owners’ liability from the business’ liability. In short, you separate your business finances and personal finances, shielding the liabilities of each from the other. That’s a huge deal, especially if a suit is brought against the business – or, just as crushing – at some point you face personal bankruptcy, a frequent topic of Wynn at Law LLC’s articles. (See our archive, below right, please)

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

Photo by Andrew Lobov, used with permission.

Thursday, June 1, 2017

Attorney Shannon Wynn: Graduation, gifts, and financial aid

One of the great rites of spring is the new crew of young adults graduating high school and heading off to their futures. When I'm not at Wynn at Law, LLC, I teach at Marquette University Law School, so I may see a few of them further in their academic journeys.
For students, parents, and grandparents, the issue of affording tuition is best tackled a few years before high school graduation. If you're blessed with a full-ride scholarship or a generous gift from family, the Free Application for Student Aid (FAFSA) is a challenging hurdle you'll skip. For families planning to apply for financial aid, here are a two estate planning things to keep in mind long before commencement. 
Inheritance – Inherited income impacts a student’s eligibility for certain amounts of financial grants (which don't have to be repaid) and can affect the amount of loans (which have to be repaid after graduation). The FAFSA looks at finances of the entire family including the previous tax years income. Inheritance or gifted money, even to a parent, can affect the amount of financial aid for the student. 
Generally, one-time events, like inheritances, are handled by adjusting the income and counting the sum as an asset. The asset protection allowance (APA) allows a certain amount of money in retirement and non-retirement accounts, like an inheritance, to be spared assessment. But the federal government does expect parents to use a percentage of their unprotected assets to pay for their child’s education. The APA looks at the age of the oldest parent to determine the amount spared from assessment, assuming a younger parent has more time in the workforce before they'll need the assets.  
For parents, a way to legally lower the total amount of assets recorded on the FAFSA is to use any gift or inheritance to pay off credit card debt and auto loans because consumer debt is not considered when a student applies for financial aid. Paying off that high interest revolving debt in an important part of avoiding bankruptcy, a frequent topic at Wynn at Law, LLC. 
Savings and investments – We all hear about the tremendous burden of student loan debt new college grads have to repay. Saving up a ton of money on a summer, minimum wage job isn't likely to reduce the amount borrowed by much. However, keep in mind two things: 1) reducing any amount they'll have to borrow is a good thing, and 2) If they do save summer earnings, the government expects that 20 percent of it be used for college, so make sure savings are set aside for the teen. 
On that note, if parents wish to transfer to their accounts assets held in a child’s name its best to do so at least two years before the FAFSA. Moving assets like this could trigger other issues when it comes to both financial aid and taxes so be sure to contact professionals for seasoned money management advice. 
*The content and material in this original post is for informational purposes only and does not constitute legal advice.  
 Photo by Monkey Business, used with permission.