Bankruptcy, whether personal or business, can be used as a reason to ask for tax relief from IRS. For a business, showing financial and income statements proves how badly in shape the business is in. And that paying for tax debts at this point is simply impossible. IRS in turn will consider this and might allow a business owner for a tax relief.

The settlement could mean that this taxpayer will still pay the tax debts but the amount is reduced. It can be that any penalties will be abated, but the taxpayer has to pay the full amount in staggered payments. Alternatively, tax debts can be totally wiped out if the situation of the business really merits it.

Technicalities on how long the tax debt has to will, however, hinder tax payers’ hope for a tax debt relief. Because according to tax codes, tax debts unpaid for three years must be paid full before tax relief is granted. And the very recent tax debts and penalties are ones subjected to legal proceedings. That is to consider the said debts for a tax debt relief.

While the business owner cannot also use tax debt relief as a means to escape from paying for local taxes. It is because local tax debts cannot be included in the declaration of bankruptcy. Instead, this must have paid in full before business income tax debts can reach a settlement.

There is much other tax debt payment that bankrupt business owner settles before finally availing tax relief. Compliance of the business owners is demanded by IRS, lest no tax debt relief will ever be granted. In other words, bankruptcy cannot be relied solely as a way to escape paying for taxes. It is because there are non negotiable tax debts that must be settled first.

If I go bankrupt can I continue to run my business?

For senior business managers or owners, Bankruptcy is not an option if you want to continue managing your business.

Where you have debts which you have no hope of repaying, bankruptcy can be an extremely useful solution, which over 6000 people a month use to solve their debt problems.

For those people who are not a home owner, or do own your home but have little equity in it then you will not lose your property in bankruptcy. You will also be able to retain reasonable household goods and personal possessions. However for those running a business it is not such good news. If you are running a business as a director of a limited company or as a sole trader, you need to be very careful before deciding to go down the bankruptcy route.

The effect of Bankruptcy on company directors

You cannot declare bankruptcy and continue to act as the director of a company or be involved in its management. This means that if you are a company director and want to remain in this position, bankruptcy is not an option for you.

It is also not an option to simply resign as a director and then to keep on running your business as before. Under the terms of your bankruptcy, this activity is not allowed.

As such unless you are able to introduce a new director or can leave the management of your business to other competent individuals, on declaring bankruptcy you would effectively be required to close your business.

The Individual Voluntary Arrangement was introduced into English law to act as an alternative to bankruptcy for company directors and therefore overcome this problem.

The effect of Bankruptcy on sole traders

As a sole trader, you are not a director of a limited company. Therefore under the terms of the law, if you declare bankruptcy you can continue to run your business.

However, the issue that you will face is that once bankrupt, all of your bank accounts including any business accounts will be closed. This will mean that you will lose your business banking facilities such as your overdraft and credit card.

It will be possible for you to open a new personal bank account after you are declared bankrupt. However, this will be a simple account known as a card cash account. You will not normally be given a debit card or an overdraft facility with this type of account.

If you believe that your business will not be able to operate without credit facilities such as an overdraft, then declaring bankruptcy may make continuing to operate your business impossible.

The effect of Bankruptcy on employees

As with a sole trader the law does not stop you declaring bankruptcy and working for a company even in a senior position If your title within the company is known as director, but you are not registered as such at company’s house, then you can still declare bankruptcy.

There are some positions particularly in the finance arena where your contract of employment may may mean that you can be dismissed if you declare bankruptcy. If you believe that this may be the case, it is always sensible to check before declaring bankruptcy.

Bankruptcy is an extremely good way of dealing with a serious debt problem for many people. However, if you are a company director or run a sole trading business , you need to think carefully and take further expert advice before proceeding with this option.

In Thailand, Bankruptcy Laws form part of the Commercial Law. Thai bankruptcy law is devised in such a way not only to help debtors to distribute their property but also to help them in rehabilitating via several reorganization provisions.

In other words, the Bankruptcy Law includes the Bankruptcy Act for Business Rehabilitation. The Business Rehabilitation Law was introduced in 1999 as Chapter 90 of the Thai Bankruptcy Law BE 2483. The main purpose of the Business Rehabilitation law is to assist a debtor facing liquidity problem by giving him an opportunity for rehabilitation before being insolvent.

The procedures in connection with rehabilitation are usually commenced by an eligible petitioner by filing a petition with a provincial or a civil court as per the domicile of the debtor. However, petition for business rehabilitation could be filed only if the debtor’s overall debt comes to an amount that exceed Baht ten million. Likewise, In order to file a petition for business rehabilitation, certain legal and perquisites must be complied with such as:

- The names and addresses of creditors must be specified to whom the debtor owes in total at least an amount of Baht ten million

- Specify reasonable methods in order to rehabilitate business functions

- Proposed planner’s name as well as qualification

- Planner’s consent

- In case the petitioner is debtor, then details regarding assets and liabilities must be given

- Consent of authorities which is applicable as mentioned below :

1.In case the debtor is commercial bank or finance company, then the consent of the Bank of Thailand

2.In case the debtor is a securities company, then the consent of the Office of the Securities and Exchange Commission

3.In case the debtor is a file insurance company or a casualty insurance company, then the consent must be of the Insurance Department

On filing the petition as per the above grounds, the liquidator will start the case once when he confirms and proves that the debtor’s assets could not pay off liabilities. The court’s concern with regard to the business rehabilitation is mostly on the basis of debtor’s balance sheet as well as accounting documents and liquidator’s power of arguments. Discussed further in detail in this article are procedures with regard to business rehabilitation.

According to the Article 90 of the Bankruptcy Act, once the petition for business rehabilitation is accepted, a planner is appointed, who in turn possesses duties and powers to manage the debtor’s business as well as assets. In case, a planner is appointed, then the debtor executive’s power in administering the business and assets would cease. In such a situation, until the appointment of a planner, the court will employ one or more persons or sometimes the debtor’s executive for a temporary period to deal with the debtor’s business and assets under the administration of the receiver.

During this interim period, the receiver has complete right to administer interim executives and to order them to prepare explanation regarding the account details as well as anything pertaining to the management of business and assets. The interim executives would be relieved from the powers of receiver by the court when the receiver makes a motion.

In such situations, the court would employ new provisional executive to presume the office. In case the court does not appoint interim executive, then according to the Section 90/20 of the Bankruptcy Act, the receiver would be given power for a temporary period to manage debtor’s business and assets. Likewise, according to the Section 90/21 of the Bankruptcy Act, until a planner is appointed, all of the rights of the debtor’s shareholders would be suspended except for in the case of right to obtain dividends.

Once the acknowledgement order for business rehabilitation has been received, the debtor’s executive should handover everything from assets and seals to book keeping ledgers and documents pertaining to business, assets, and liabilities of the debtor to the provisional executive or the receiver.

Nowadays, a number of leading law firms is in the scenario to provide excellent services in connection with business rehabilitation and bankruptcy. Many of them undertake a plethora of such services in connection with business reorganization as analysis as well as consultation with creditor or debtor, filing petition for business rehabilitation, plan administration, and planner representation.

Product Description
An essential guide to business valuation and bankruptcy Business Valuation and Bankruptcy helps you-whether you are an accountant dealing with a troubled company, a lender, an investor, a bankruptcy and restructuring lawyer/financial advisor, or a private equity player-to focus on solving everyday and case determinative disputes when creditors, lenders, and debtors have differing views of value. Introducing valuation issues early on in the restr… More >>

Business Valuation and Bankruptcy

One of the more difficult aspects associated with the “good bank and bad bank” analogy is that there are so many competing explanations as to what constitutes a “good bank”. One popular analysis has focused on how much banks are really worth in view of the toxic assets that are so complicated to evaluate. In this perspective, “bad banks” are those whose assets are estimated to be worth less than their liabilities and as a result have been referred to as “zombie banks” and “dead banks walking”.

Not surprisingly we have not yet experienced a bank which has openly agreed that their liabilities exceed their assets and therefore they should be considered to be a zombie bank. This would be tantamount to describing themselves as a bankrupt bank. If a bank is truly deserving of the bankrupt status (and there are a number which certainly appear to be in this category), the current banking laws do not permit such a bank to go through the kind of bankruptcy process being considered by General Motors and Chrysler.

Instead the Federal Deposit Insurance Corporation (FDIC) is supposedly required by law to assume the operation of the bankrupt bank until a new management and ownership arrangement can be established. For a number of smaller banks, this has in fact occurred during the past few months. What has been missing so far from this legal bank takeover approach by the FDIC has been the inclusion of larger banks which appear to have problems that are much more serious than the smaller banks which have already been liquidated and transferred to new owners by the FDIC.

The reason that the FDIC has not liquidated larger problematic banks has not been made public. It is certainly possible that the FDIC and key public officials feel that the public failure of a major bank would create a crisis of confidence for all banks regardless of their financial health. An equally strong likelihood is that the FDIC simply does not currently have sufficient assets to cover the failure of a big bank. This viewpoint is supported by the recent announcement that the FDIC is in the process of raising fees paid by banks in order to replenish the FDIC insurance funds.

To realistically protect the future financial health of their own business, small business owners need their own evaluation standards to determine what constitutes either a “good bank” or “bad bank”. Business owners should include an assessment that focuses on results as to which banks can provide the needed help for their specific business circumstances involving working capital financing and commercial loan needs. The banks themselves are not likely to be helpful in providing the needed data to produce a candid evaluation of their financial status, even though such information would go a long way toward establishing a good bank-bad bank distinction.

As noted above, it might be possible that there are several bankrupt banks still functioning normally because they have not rushed to advise the public that they are in serious trouble. While most banks have been publicizing during the past few months that they are making SBA loans and small business loans in a normal fashion, in most cases these banks have actually reduced commercial lending dramatically. Some specialized business lending such as commercial construction financing has been frozen altogether in many areas.

In addition to the critical importance of identifying “good banks”, we have published a related report which describes the delicate issue confronting many business owners who might need to fire their banker. There are “good bankers” and “bad bankers” just as we have noted that there are “good banks” and “bad banks”.

Business finance consulting has emerged as an important tool to help small business owners work their way through a complicated commercial banking maze. One of the common questions asked in the Bernie Madoff fiasco concerns the repeated failure of investment advisors to analyze internal operations prior to placing investor funds with the Ponzi scheme constructed by Madoff over a period of many years.

Our candid final point is that the use of a commercial finance consultant should be at least considered by commercial borrowers in their search for new working capital loans and commercial mortgage financing. Businesses now need to act more aggressively than before in order to protect their own financial interests.

1. Everyone is on the bridge to nowhere.

 

2. Joe the Plumber is out of work.

 

3. Oil is ten cents a gallon.

 

4. The lines are longer for food than they were to vote.

 

5. Your state looks like Afghanistan.

 

6. People are trading food stamps like baseball cards.

 

7. It takes a hundred dollars to buy a peso.

 

8. Your house is worth about the same as a dog house.

 

9. Your credit cards are no longer accepted everywhere. They’re accepted no where.

 

10. Car dealerships are selling bicycles.

 

Now here is everything (well, almost everything) you need in business about personal injury, car accidents, brain damage, wrongful deaths, business, real estate, landlord-tenant, homeowners association law, construction, patents, trademarks, corporations, entertainment law, advertising, copyrights, food and wine, hotel and restaurant law, and litigation without making any serious legal missteps.  

If you need to know more about business, environmental, international law, election and campaign law, consumer law, class actions, constitutional, internet, publicity and privacy rights, publishing, advertising, media, employment law, estate planning, wills, trusts, water law, agricultural, insurance law, bad faith, psychologist and psychotherapist defense, education law or child accidents, you can find valuable information by searching for those subjects and adding the words Murrieta business lawyer or Murrieta business attorney to your search terms and looking for other articles by Sebastian Gibson.

 

You can also learn more about any of these business areas of law and how we can assist you as Murrieta business attorneys, or as lawyers in any city, by calling the Law Offices of R. Sebastian Gibson at any of the numbers which can be found on our website at http://www.SebastianGibsonLaw.com  .

 

1. Personal Injury, Car Accidents, Drowning Accidents, Brain Damage, Catastrophic Injuries and Wrongful Deaths in Murrieta – If you’ve had a Murrieta auto, motorcycle, truck, pedestrian, bicycle, bus, train, airplane or car accident of any kind, get the other driver’s information, take camera or cell phone pictures, call the police, get a report, seek medical treatment immediately, call us or another good Murrieta personal injury lawyer, follow up with more medical treatment if you are still hurt, report the accident to your insurance agent, file a report with the DMV and don’t talk to anyone else or give a recorded statement until you talk with us. If you’ve lost a loved on in an accident, call us or another good Murrieta personal injury lawyer immediately. If you’ve been bitten by a dog, get treatment, call animal control and then call us. If you or someone you know has come close to drowning, seek medical treatment immediately as death or serious injury can still occur hours later.

 

2. Murrieta Business – Put everything in writing and preferably with our help or the help of another good Murrieta business lawyer. Spend money only as you need to. A Murrieta business attorney can tell you where to save costs and how to do it without risking liability. Limit your promises to employees and to customers. Buy insurance. Protect your intellectual property at the outset. Don’t disclose your inventions or any trade secrets to anyone without a non-disclosure agreement. Incorporate as soon as you are profitable. Get legal advice for problems or indications of pending lawsuits immediately. Keep all costs, including labor costs, to the bare minimum. Always use confidentiality agreements when disclosing valuable information and be careful what information you agree to receive. Tell customers they must pay in advance or on delivery. Do not agree to bill and be paid at a date after delivery. Otherwise you won’t be paid on a percentage of your products. Be wary of the potential for fraud by customers, business partners and employees.

 

3. Residential and Commercial Real Estate, Landlord Tenant Law, Mortgage Law and Homeowners Association Law in Murrieta – Use a Murrieta real estate lawyer who is also a Realtor, or a Realtor who is also a Murrieta real estate attorney. Don’t buy or lease more than you need. Choose the right location. Choose the right mortgage. Don’t refinance if you think you may need to walk away from a home. Don’t buy more than you can afford. Check out the neighborhood carefully. Get a home inspection and a home warranty. Have a Murrieta real estate lawyer look over the documents. Homeowner Associations are facing a host of problems stemming from the number of foreclosures. As fees are reduced by vacant homes and condos, projects must be trimmed back or delayed in order to save money. Some homeowner associations, who were already in trouble, may face additional problems in the future and both homeowners and their associations should consult with legal counsel to help resolve how to deal with such issues.

 

4. Construction in Murrieta – With the construction industry in it’s biggest ever slump, down more than 90% from its peak in many areas, Murrieta contractors need to shift their focus to energy free homes, apartment construction and to take advantage of contracts likely to be offered for bid under the new administration’s plan to create new jobs rebuilding the country’s infrastructure, construction of roads, bridges, the electrical grid and other utility projects. If you are dealing with contractors yourself, always use licensed contractors and have a Murrieta construction lawyer look over your contracts. You can also investigate the contractor online to ensure he is licensed and insured and a Murrieta construction attorney can do an additional investigation at little extra cost. Never pay a contractor the entire sum for a project at the start. Put all agreements in writing, including any changes.

 

5. Murrieta Patents and Biotechnology – A patent should be applied for, for any new, and non-obvious process, or invention and to any new improvement of an invention at first opportunity. A patent is good for 20 years. Depending upon the complexity, most utility patent applications will cost between $8,000 and $12,000.00. A design patent can be applied for by a Murrieta patent attorney, for the look of an item and is good for 14 years. A provisional patent can be applied for, good for one year at a cost of half of the usual utility patent cost but is only good for one year. If the inventor does not upgrade the provisional patent into a utility patent application within that period, usually for the cost of the remainder of the corresponding cost of a utility patent, the inventor loses his or her protection. A patent is pending once it has been applied for, and can be licensed, or sold outright. Without a patent, others can make and sell your invention with no compensation to you. Patent searches help the Murrieta patent lawyer write an application around existing patents and cost an additional sum, usually under $1,000.00. Drawings must also be prepared for the patent application usually for under $500.00. A design patent can be sought for between $1,000 to $1,500 and a European design patent for between $2,000 to $2,500. Accelerated patent applications usually cost an additional 50% of normal patent applications. Foreign patent applications also require additional fees.

 

6. Murrieta Trademarks – Trademark any original logos, designs, words, phrases, symbols or combinations that you use to identify your products or services as soon as possible. Call a Murrieta trademark attorney as soon as anyone else’s trademark or service mark is so similar as to cause a likelihood of confusion in the public or if you receive a cease and desist letter from someone else accusing you of infringement. Trademark applications range from between $2,500 if there has not yet been any use of the trademark to $1,500 to apply for a trademark already in use. Therefore, to save money, create some products and advertising materials and apply for the trademark once they are ready to be sold and advertised.

 

7. Murrieta Corporations – Never incorporate by yourself. Corporations will not protect you from liability if you do not follow corporate formalities correctly. Protect your intellectual property from the start with the help of a Murrieta corporations attorney. Don’t borrow someone else’s employee handbook or fire problematic employees without legal advice. Don’t get investors without seeing one of our Murrieta corporate attorneys. Cut costs to the bone. Use extra money to advertise, and sell in new markets. A Murrieta corporations lawyer can provide you with advice as to which type of corporation or LLC to use for your business.

 

8. Entertainment Law, Sports Law, Marketing, Advertising, Media and Copyrights in Murrieta – Whether you are a musician, an actor, a model, a writer, an athlete, a broadcaster or connected in any other way to the entertainment industry, contact us or another good Murrieta entertainment attorney as soon as anyone gives you a contract to sign. Signing a bad contract can end your career before it’s ever begun. As soon as you have written any body of work, have it copyrighted. You can do this quite easily yourself, but if you need assistance or if someone else infringes your copyrighted work, you can then file suit against such a party.

 

9. Murrieta Litigation – At the first sign that someone may sue you or your business, consult with a Murrieta litigation attorney. Many times, a lawsuit can be forestalled before it has been filed or the matter resolved with letters between the litigation attorneys. If you are served with a lawsuit, hire a Murrieta litigation lawyer like one from our firm who specializes in mediations and non-binding arbitrations so your litigation can be resolved at the soonest possible opportunity and limit your exposure to years of lawyer’s fees and costs as your case winds slowly through the courts.

 

10. Food and Wine Law, Hotel and Restaurant Law in Murrieta – Today, hotels, restaurants, nightclubs, bars and grocery stores face an ever increasing host of new regulations they never faced previously. From the usual licensing problems they face with the Department of Alcoholic Beverage Control for adherence to and violations of ABC rules, to new state regulations involving menus and calorie counts in fast food restaurants and new rules requiring groceries to show the country of origin in labels on most of their produce and meat. The worst case scenario today for an establishment serving alcohol, is to serve a minor alcohol who later dies in an auto accident. Such an establishment will need legal representation by a Murrieta food, alcohol and restaurant lawyer before the ABC as well as legal defense of civil lawsuits filed against it.

 

If you have a legal matter in Murrieta, Ontario, Rancho Cucamonga, Temecula, Riverside, San Bernardino, Moreno Valley, Fontana, Rialto, San Bernardino County, Redlands, Hemet, Perris, Colton, Highland, Yucaipa, Banning, Riverside County, Big Bear, Lake Arrowhead, or anywhere in the Inland Empire, our Murrieta law firm has the knowledge and resources to be your Murrieta Lawyers and your Murrieta Attorneys. Be sure to hire a Coachella Valley law firm with experience in Personal Injury, Car Accidents, Drownings, Brain Damage, Catastrophic Injuries, Wrongful Death, Business, Real Estate and Landlord Tenant Law, Homeowner Association Law, Construction, Trademarks, Patents, Corporations, Entertainment, Sports Law, Marketing, Advertising, Media, and Copyright Law, and who will endeavor to ensure that your rights are properly represented.

 

Additionally, if you have a legal matter which involves Environmental and Toxic Tort Law, Litigation, International, Shipping and Maritime Law, Employment, Election and Campaign Finance Law, Consumer Law and Class Actions, Constitutional, Publishing, Publicity, Privacy Rights, Internet Law, Advertising and Media Law, Food and Wine Law, Hotel and Restaurant Law, Estate Planning, Wills and Trusts, Water, Agricultural and Natural Resource Law, Insurance Law, Bad Faith and Psychiatrist and Psychotherapist Defense, Education Law or a Child Accident in Murrieta or anywhere in Southern California, call the Law Offices of R. Sebastian Gibson, or visit our website at http://www.SebastianGibsonLaw.com  and learn how a Murrieta attorney from our offices can assist you.

One morning of  Tuesday at their agency office, the HRD Manager was interviewing an applicant  SG John Doe, about 30 years old, 5’7 in height, well-built and clean-cut. The interview includes submission of necessary papers, such as NBI and PNP clearances, Neuropsychiatric and Drug Tests, Training and License Certificates and other pre-employment requirements. Having been found qualified for the job, with his documents verified complete and in order; he was eventually hired as Security guard and was temporarily deployed in an on-going construction site.

SG Doe was given a 12-hour tour of duty which started at 6:00pm, and as far as his duty was concerned, his guarding night ordinarily passed without any problem. He was supposed to be relieved at 6:00am the following morning but unfortunately, the next guard who was supposed to relieve him was not able to report for duty for an unknown reason. As it was an emergency absence, the Security In-charge could not be able to look for a replacement and further asked SG Doe to extend his tour of duty for another 8-hour -which he did not contest.

His duty extension went on smoothly as if  he were enjoying his new job, not until pass 1:00pm when he got a text message from unknown sender, informing him that his wife was caught by their son having sex with another man. He immediately asked his In-charge for an emergency replacement so he could check on it but the former failed to provide his reliever. And so he was forced to stay on with a heavy heart.

SG Doe was seemingly agitated by the information he received through text message and at around 3:00pm, he suddenly grabbed his 12.gauge shot gun and ran towards the next post and – without provocation, shot dead his co-guard who was on-duty at the administrative entrance.  Thereafter, he rushed towards the Reception area and fired to death at the lone visitor who was seated near the reception table. As if he were not contented, he again ran towards the construction area where workers scampered for cover, but one of them was hit by another bullet and laid dead. Ironically, when the police arrived SG Doe did not resist the arrest and voluntarily turned over his firearm and went calmly with the arresting officers.

For the next few days, the incident had formed part of the newspapers headlines – in the Radio/TV news and other tabloids. “I was not in my normal mind when I did it. I was probably in total delusion at that time because I’ve been on duty for three consecutive days without eating”, so he claimed. The news and media interviews immediately caught the attention of all existing security clients and at no time, these clients gradually terminated their contracts with the agency and looked for new security service providers. The security agency was forced to engage into amicable settlement with the aggrieved parties. It paid almost a million for the lives of the three innocent victims. It became the subject of investigation of the local authorities, and the worse, the pull-out of security guards from their original deployment due to the clients’ termination of contract suddenly sent the agency into total bankruptcy.

What is the moral lesson in this story?

 

First I want to point out that in some cases advertising in a recession can be a wise move to increase market share and take advantage of a bad market.  But more often what I see is this.

“Our revenues are way down”"That’s horrible”"Let’s spend a ton of money on advertising and hope we can put this behind us”

The problem is that the difficulty for this business is not that they didn’t spend enough on advertising last quarter.  The problem is that we are in a world wide economic depression caused by billions of crappy loans real estate loans given out over the last few years.  And yes everything is interconnected but putting out more ads for a local restaurant is probably not going to change this.

Simply put sometimes business owners make asset allocation decisions based on emotion instead of their current economic realty their business exists in.  A few reasons that increased advertising might be a bad idea for your business.

1) The number of potential customers is decreasing2) In many industries your competitors are increasing advertising to “spend their way out of a recession”3) Increased advertising and decreased customers is a bad market to ramp up your advertising budget4) Spending more on advertising can mean advertising in new venues.  Often when testing new venues you can wasn’t a lot of money discovering mediums that simply don’t work for your business.  5) You can increase your expenditures and your cash burn rate.  So basically the economy might eventually turn around but your business might not be there to see it. 

Ok so if the answer is not doubling or tripling your advertising what is the answer?  Here is my advice

1) Cut Expenses that are not needed.  Comb through your budgets for extras you added during better times but are not needed.  2) Keep current advertising that is working.  Whatever is currently providing you business I would stick with.3) Cut advertising that is not working.4) Adjust

Number 4 is probably the most difficult but important.  If ones business is affected by the recession (and most are) it might be a good idea to simply accept the possibility of a reduced monthly income for awhile.  I am not saying people should give up on their business or not attempt to increase profits.  But during a recession it might be a good idea to keep working to achieve higher goals but at the same time when you are doing your monthly personal budget accept the possibility that a weakened economy often results in less customers and lower revenue.  This means if you planned on buying a new car or taking an extra vacation it might be a good idea to change those plans. 

In the end by operating in a logical manner a business can survive a recession and hopefully be in a position to flourish once the economy recovers.