After a business falters, its legal obligations live on – but your personal assets can be protected.

Dianne Fernanadez, Keva Juice, Vacaville, Calif.
My son and I opened a small smoothie business two years ago. We did great until the economy fell. We opened it under an LLC, and he has since bought me out. Now, he has to take money out of his personal account to support it every month. He just got a rent reduction of $600 a month, but that won’t be enough. He has it for sale and has a possible offer coming through. If that falls through he is planning to close the doors. He is afraid the landlord will go after his house. I have lost my home and have nothing left, so I’m not too worried about losing my property.

What is the best way to go about getting out of this? What kind of repercussions are we facing, as we still have three years on the lease? We spent $107,000 on the build-out (new tile floors, bathrooms, etc.) as it was a brand-new complex. The landlord inherits this – does this help? The business has no loans against it as we refinanced our homes and/or paid everything in cash. Please help! Read more…

As credit card companies move to limit their risks, business owners face unpleasant surprises from their credit card providers.

Owen Kusolpaisit, Southhaven, Miss.
I have a very small business and most of our debt is on credit cards. We had a 0% annual percentage rate until January 2009 that would go up to 7.99% thereafter. A few months ago my check got there a day late. The credit card company, Advanta, increased my APR to 7.99%. I just received my current statement and the APR jumped to 25.39%. When I called, a supervisor said it was done for economic reasons. How can they do that? Is it illegal? Can I report them?

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How to keep your retirement savings on track when you’re out on your own.

Joe Vitale, New York City
I recently left a staff job and am working as a freelancer. I’d like some advice on how to best manage my bookkeeping. Do you have any recommendations on interest-bearing checking accounts that I can link with an account to set up a retirement savings plan such as a SEP? Read more…

If your business drop ships, be prepared to investigate state statutes for every location in which your suppliers do business.

Chris Crocker, Smyrna, Ga.
Our business drop ships from its various suppliers. We are having more and more vendors tell use we need sales-tax numbers to be exempt from being charged sales tax when shipping to various states outside our state of residence. But it was my understanding that the federal government struck down this requirement from the states: In the Supreme Court case Quill v. North Dakota, the court upheld Quill’s position that they did not have to collect sales tax for orders shipped out of their state. My suppliers are saying that ruling did not cover drop ship deliveries. But they’re not selling the product to our customers, we are. So how would they be responsible for paying sales tax outside their state? They didn’t sell it, we did. We have no “presence” in any state but our own. Could you please help me with this issue? Read more…

Health Savings Accounts are gaining popularity, but business owners need to take a close look to see if the low-cost, high-risk plans are right for their company.

Normand Savellano, Chino Hills, Calif.
I am president of my own company and my wife is vice-president. We pay ourselves a salary and get our health insurance through the corporation. Are we eligible for an HSA and for the corporation to contribute? Read more…

A downturn can be a great time to become an entrepreneur – but only if you’re prepared, financially and emotionally, to wait out the economic turmoil.

Charlene, Fort Myers, Fla.
I’m interested in buying a small pack-and-ship company. It’s for sale for $70,000 with a gross profit of $245,000 a year. As an owner, after making all my bills and deductions, I would make about $60,000. My husband and I want to run it ourselves, with no employees, but we are worried: Is buying a business in the current economy a smart idea? Read more…

If your business is in a target zone, don’t miss out on the benefits.

Ros Borden, Miami
My wife and I own a convenience store in a federally designated enterprise zone. We have eight employees and we have owned the store for two years. We are struggling to stay afloat and to hold onto our employees. Can you get us information on how to use this designation to benefit us and our employees? I have already cashed out my retirement money. If we can’t get help, we’ll have to put eight people out on the street. Read more…

Tax tips for getting the most bang for your automotive buck.

Mike Vazques, Cincinnati, Ohio
What are the rules governing what tax breaks I can get for a vehicle I use for my business? Read more…

An entrepreneur’s query: Can I write off expenses for a roving business office?

Jim Fong, State College, Pa.
I am thinking about purchasing an RV to use as a business office as I travel around the country for a few months to gather information to write a book. Can I only write off the mileage, or can the purchase of the RV be depreciated just like any other vehicle? I certainly don’t want to draw the attention of an audit, and I want to do this honestly and ethically. Read more…

Austin Wiggleton, Mark’s Office Furniture, Virginia Beach, Va.
My father has been operating a small furniture company for the past 20 years as a sole proprietorship, and I have been begging him to form an LLC. My question is, if he owes a small amount of back taxes, do the balances have to be paid in full in order to form an LLC or does the balance transfer?

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