Many People Start New Businesses After Age 50

A large percentage of Americans launch new companies and careers after turning fifty. In fact, the term “encore entrepreneurs” has been coined to describe this steady trend. In her book, “Your Life Calling: Reimagining the Rest of Your Life,” Jane Pauley profiles some rather amazing people who’ve transformed their “retirement years.” Many of them are now realizing personal dreams that are helping others both locally and in distant parts of the world.

In a recent New York Times article addressing this topic, one man in his early sixties said that he’s so happy with his new company (which creates educational and training videos) that he may never retire. Fortunately, many larger cities often have “incubators” designed to help people get new companies off the ground — and venture capitalists who are eager to consider funding start-ups with a strong likelihood of success.

Texas remains a great state for new businesses

Every year, many media outlets rank multiple Texas cities as great places to design and build new companies. Be sure to review our Texas governor’s office publication entitled “Texas Business Incubators.”

Once you’ve got a great idea for starting a business, consider scheduling an appointment with your experienced Houston business law attorney to obtain the valuable legal advice you’ll need.

Here are some additional facts and figures that can provide useful insights into some of the best fields to enter (and others to avoid) as you move forward with getting your new company up and running.

Facts and statistics about older Americans starting new companies & becoming self-employed

  • Fifty-one percent (51%) of new start-up business owners are between the ages of 50 and 88. In fact, those aged 35-49 only start about 33% of new companies — and those age 35 or younger only form about 16% of them. Fortunately, you don’t often need a lot of money to get a new company off the ground. Many older entrepreneurs start their companies with $2,000 or less.
  • The Dallas Morning News reports that during each month in 2017, roughly 400 out of every 100,000 Texans became entrepreneurs. A large percentage of those individuals were seniors. Many of their businesses were formed in Austin, Dallas and Houston.
  • About 80% of new Texas business entrepreneurs start their businesses based upon immediately available opportunities – rather than the simple need to find work.
  • Between the year 2000 and 2016, the number of self-employed New Yorkers rose by 63.7 percent. While the country’s economic downturn back around 2008 certainly influenced that trend, it clearly isn’t the sole or main force behind it.
  • About 69% of Americans start their businesses at home.
  • Roughly 42% of all new businesses are formed as S-corporations and 23% are LLCs. Of course, a very large number of small businesses are simply run by solo entrepreneurs.

Which types of new businesses tend to succeed the most often?

  • Those offering insurance, real estate or financial services. After four years, about 58% of these are usually still viable.  Businesses in the financial realm often offer tax preparation, bookkeeping or payroll services.
  • Companies renting or leasing automotive equipment.
  • Legal service businesses.
  • Medical, dental and other healthcare services.
  • Religious organizations.
  • Specific types of administrative or company management services.

Types of new businesses that frequently fail sooner than others

  • Stores selling beer, wine and liquor
  • Auto dealerships
  • Oil and gas extraction service companies
  • Grocery stores
  • Beverage manufacturers
  • Furniture stores
  • Companies selling lawn and garden equipment

After going over your business plans with trusted family members or friends, consider reading more about the different types of business structures you can choose from and what’s normally involved with starting a new Texas company.

Hopefully, you’ll decide to join the many other Texans who’ve discovered that running a business when you’re older can be a very gratifying experience – one that can add even greater purpose to your life.

Our law firm invites adults of every age to contact one of our Murray Lobb attorneys for legal advice when either starting a new business – or simply needed help with one that’s already thriving.

The Key Stages of Buying a Home in Texas

Even if you’ve bought a home in the past, it’s always wise to hire an experienced lawyer and real estate agent to help you buy a house in Texas. Contract clauses often change and you’re likely to need special provisions added to your formal offer and purchase agreement to fully protect your interests.

After contacting your Houston real estate lawyer, you’ll need to select a qualified real estate agent. When searching for one, ask close friends for recommendations if they’ve recently bought a home in one of your target areas. You can also search for an agent by visiting the Texas Real Estate Commission website —  and Trulia.com and realtor.com.

What follows is a general overview of the key stages of finding and purchasing a home in Texas when you’ve hired qualified professionals to help you.

Determining if it’s the right time to buy – what your needs are — and what you can afford

Always take time to decide if it’s really the right moment for you to purchase a home. You must be able to afford a monthly mortgage, homeowner’s (and title) insurance and the other expenses that go with buying a home and making repairs. Once you’re sure you want to buy now and know what you can afford to pay, contact several highly recommended real estate agents (who have brokered properties in your preferred area) and interview them over the phone or in person.

After checking each candidate’s references and hiring the most knowledgeable and pleasant one, you’ll be ready to start conducting your search for the right home.

You’ll first need to discuss your preferred price range and the preferred parts of town where you would like to buy a home. Be sure to note the property features that are “must haves” or “deal breakers” for you. Of course, remaining flexible is important so you can avoid missing the chance to buy one of the best homes available.

Where will you and your agent find the listings that you’ll want to see?

In addition to visiting publicly advertised “open house” events in your target areas, you and your agent can also view many available properties online. Savvy sellers often offer online visual tours of their homes to help attract prospective buyers — who can then request showings.

You can also visit the Multiple Listing Service (MLS) online and then discuss the properties that you like most with your agent. If your agent is well established in the area, you may even become privy to some private listings before others learn about them. Websites like trulia.com and realtor.com should also provide lists of many homes still on the market.

What other initial tasks can a realtor help you handle?

After you’ve met with a mortgage broker and located several properties that meet your needs, your realtor can prepare a written offer for the seller. Prior to making an offer, be sure to ask your agent if the seller has any recent home inspection reports to share with you. If none are available and you still want to make an offer on a house, your agent can make obtaining an acceptable home inspection report one of the contingencies in the home purchase agreement that must be met before you’ll purchase the house.

You’re now ready to go over the legally required disclosures that Texas requires property owners to make to parties offering to buy a home. Repairs currently needed must be detailed – along with notes about all recently completed ones. If you haven’t already received a thorough (recent) home inspection report, you really should obtain one now — so you won’t be suddenly surprised by major plumbing or other serious home repairs in the future.

Should certain repairs be needed – and you’re still willing to buy the house – your real estate agent can negotiate these matters with the buyer on your behalf. Also, you must have a title search run on the house. You don’t want to buy property with any troubling liens, easements or other encumbrances that can greatly limit your ability to fully enjoy the use of your new home.

At this point (if not already done), you should purchase title insurance so that if any future claims are made against the property by third parties, you’ll be able to properly protect all your legal interests.

Once all these matters have been fully negotiated between your agent and the seller, you’re ready to move forward into escrow.

What basic, final tasks should be handled right before — or during — escrow?

Your lawyer will make sure that the home purchase agreement contains all the necessary clauses required to protect your interests before escrow closes. If it hasn’t already been done, you should also have the home appraised to make sure your offered purchase price is reasonable and fair.

Next, all new home inspection reports should be carefully analyzed, and all financial arrangements finalized. On closing day, you’ll go to the title agent’s office to sign all the documents and pick up the keys to your new home. As the buyer, you’re not responsible for paying your real estate agent’s fees – they are covered by the seller.

After closing day, your Houston real estate attorney can check to be sure that the title to your new home has been properly recorded in the correct local government offices – and then provide you with official copies of the newly recorded title deed for your records.

Please contact Murray Lobb so we can provide you with the clear advice you’ll need while buying your new home. Since we have the necessary experience to address any problems that may arise, we should be able to minimize any stress for you. Your lawyer will remain available to answer all your questions as you prepare to move into your new home.

How the Texas Business Opportunities Act Seeks to Help Consumers

One the main goals of the Texas Business Opportunity Act is to protect consumers interested in starting their own businesses from scam artists eager to defraud them out of their money. When ads appear on TV or via email — promising large profits in exchange for a small, initial investment – it’s never wise to assume a valid offer is being made.

Some of the most common business opportunity ads often claim that you’ll need to do very little work before you’ll start receiving your first profits. That’s rarely an honest offer since running a business is often hard work. Now that so many older Americans (and others) have been laid off from their jobs, it’s critical to carefully review each offer and look for “red flags” warning you of possible fraud.

The following information will help explain some of the different ways that the Texas Business Opportunity Act tries to regulate the way that many programs go about seeking investors and operating in this state.

Types of business offers governed by the Texas Business Opportunity Act

  1. Those that require the buyer to pay at least $500 to begin setting up the business that’s being sold;
  2. Where the seller claims that you’ll earn back your initial investment (or more) in profits; and
  3. The seller promises to do one or more of the following acts to close the deal:

a). Provide you with a location – or help you find one (that’s not currently owned by you or the seller) where you can use or operate the goods or services being leased or sold by the seller;

 b.) Help you create a marketing, sales and production program (unrelated to a formal franchise business governed by separate laws);

 c.) Promises to buy back products, equipment or supplies (or goods made from them) provided to you so you can run the business.

To further protect the public from dishonest business offers, the Attorney General of Texas requires parties making offers that meet the description above to first register with the Secretary of State and provide any applicable bond or trust account required.

Whenever you become interested in investing in any business opportunity that even vaguely appears to be covered by the Texas Business Opportunity Act, it’s always best to review the matter with your Houston business law attorney. Our firm can check to be sure the seller’s company has formally registered with the Texas Secretary of State’s Office and posted all required funds.

As a potential investor, you should also be provided with key information (required by law) about any company – before ever tendering any money.

Legal disclosures companies must provide

When a business offer is made in Texas and is covered by the Texas Business Opportunity Act, the seller must provide specific information to the buyer ten (or more) days before any contract is signed by the parties and before any money is paid to the seller.

Here are some of the disclosures that must be provided.

  • Names and addresses of all parties directly affiliated with the seller in the business being marketed;
  • A specific listing of all services the seller is promising to perform for the buyer (such as setting up a product marketing program);
  • An updated, current financial statement covering the seller’s finances;
  • All details covering any training program being offered by the seller;
  • How all services will be provided by the seller regarding the products and equipment being sold – and all key terms involved with the leasing agreements covering business locations being provided to the buyer;
  • Information pertaining to any of the seller’s bankruptcies (or civil judgments obtained against the seller) during the last seven years.

The importance of distinguishing multi-level marketing offers from pyramid schemes

Make sure the business you’re interested in requires you to do some type of work (such as selling products or services) before paying you any profits. If you are only being urged to solicit additional participants in the business, there’s a strong chance that you’re being “tricked” into building a pyramid scheme that may earn you short-term gains before the entire investment program collapses.

Always obtain legal advice regarding any business that sounds too much like a quick way to earn a lot of money. Attractive shortcuts to huge profits – especially those promoted in many weekend hotel and restaurant seminars – are often sham operations.

Please contact our law firm so we can provide you with the legal advice you’ll need before investing in any new business opportunities.

Choosing Reputable Charities for Your Texas Estate Plan

Many Americans now name one or more charities in their Wills or other estate planning documents to help these important cultural and humanitarian groups maintain adequate funding. However, others less familiar with charitable giving need to understand that, before arranging these types of gifts, they must carefully evaluate each charity or non-profit group to be sure their funds will be shared properly. 

Fortunately, there are several reputable organizations that will readily help consumers decide which charitable or non-profit groups are properly using all their donations while minimizing administrative costs. These same “watchdog” groups often urge all charitable groups to maintain open donation and expenditure records. In addition, our Texas Attorney General’s Office has put together some useful tips that can help all of us do a better job of deciding which charities will be the most responsible recipients of our testamentary gifts.

Here’s a list of basic tips that can help all of us better evaluate all non-profits and charities. That information is followed by a list of different websites and groups dedicated to providing consumers with current news about charitable activities. Of course, it’s always best to start your search by first visiting with your Houston estate planning attorney who may already know about the reputations of many charitable organizations.

Important Information to Obtain While Choosing Charities to Include in Your Estate Plan

  • First, be sure to obtain the full legal name of each group, its address and telephone number. Next, ask if the IRS has formally recognized it as a public charity that’s tax exempt. Then, ask if your donations will all be fully tax deductible.
  • Find out how long the non-profit or charity (hereinafter just referenced as ‘charity’) has been in existence.  While longevity doesn’t always ensure completely honest and frugal management of funds, it does mean that it should be easier to research the group’s reputation by visiting several of the online sources named below.
  • Request a recent annual report that clearly indicates how much money the group spends on administrative costs and how much of every donated dollar will directly benefit those the charity is seeking to help.
  • Find out if the charity’s main goals are related to education, medical services, scientific and medical research – or perhaps providing scholarships to those pursuing careers in specific vocational fields.
  • Do not give the group any of your private bank account or credit card information during your investigative calls – although it’s best to be honest about your intentions. Also, if you’re not ready to receive numerous emails or letters to your home address, avoid giving that type of information out right now.

Be sure to ask members of your professional or business circles if any of them have had positive experiences with the charities that interest you the most. When any charity has a publicly named board of directors, consider contacting those individuals directly by phone to ask them about their experiences with handling tasks on behalf of the charity.

When you’re ready, start visiting some of the websites set forth below to see what you can find out about each of the charities that seem to be highly reputable.

Online Websites Offering Detailed Information About Various Charities

  • Give.org. This website includes the sub-title, “BBB Wise Giving Alliance.” On its page dedicated to donors, it states that you can look up information about each charity’s effectiveness, governance, finances – and current brochures or other materials available to the public.
  • The American Institute of Philanthropy (Charity Watch). Among its various offerings, this website offers a list of charitable groups involved with some highly specific causes and issues.
  • Guidestar. This online resource offers a wide array of information about many reputable non-profit groups.
  • Charity Navigator. Like the other websites already named above, this one offers timely information about many charities. It also provides a “hot topics” link that will tell you more about charities currently in the news for one reason or another.

All four of the oversight groups listed above are noted on the Texas Attorney General website. You can also find out additional information about specific charities by visiting this Consumer Reports page.

If you haven’t already thought about giving to a charity or non-profit when you pass away, please consider doing so now.  All Texans need to do a bit more to help others so our state can become more compassionate — and improve our current ranking for charitable giving.

Please feel free to contact our firm so we can explain some of the best ways to include charities as beneficiaries in your estate plan. There are specific legal ways of handling this task so that your estate will reap the best tax advantages available.

All Stock Purchase Agreements Must Include Key Provisions

Every stock transfer is important, regardless of its size. Therefore, your corporation must draw up a comprehensive stock purchase agreement to govern all such transactions. If you fail to do so, shares of stock could easily wind up in the hands of company outsiders whose interests are at odds with those of most shareholders.

Corporations usually choose to prevent this type of problem by including a “right of first refusal” in their written agreements so that their shareholders’ interests remain fully protected. As the term implies, the corporation itself (or one of its current shareholders) will always have the right to try and purchase all shares being sold before an outsider can try to buy them. This is just one of the many basic provisions your Houston corporate law attorney will address when drafting a stock purchase agreement for you.

The following information covers some of the other basic provisions that should normally be included to fully protect your most important corporate interests during sales of stock.

Added Legal Protections Offered by Professional Stock Purchase Agreements 

Even when a buyer and seller know each other well, it’s always best to capture all the terms governing their sales transactions in writing. In addition to describing different warranties, your lawyer may suggest that you also cover some of the topics set forth below in your stock purchase agreement.

  • Details about the parties and the specific stock being sold. For example, you’ll need to state the names of the seller and buyer, the number of shares being sold, and the current dollar value of each share of common stock. The date of the transaction should also be noted, along with a statement that the seller is conveying all ownership of the endorsed stock certificates to the buyer. It’s also customary to note that the seller will pay all applicable taxes on the sale;
  • Proper warranties and representations should be included. It’s important to state (1) that the corporation is legally entitled at the time of the sale to transfer ownership of the stock and that the corporation itself is in good standing with all governing agencies; (2) that the seller is currently the valid owner of the stock and has the right to fully convey all rights in the shares to the seller; (3) that all federal, state and local laws and guidelines intended to govern such transactions are being followed; and (4) that all critical facts have been disclosed regarding the transaction;
  • In some cases, you may want to state that the buyer will pay in two installments. When this happens, a percentage of the purchase price is paid upon both parties signing the stock purchase agreement. On a second date set forth in the agreement, the remainder of the purchase price is paid for the shares (when the contract is fully executed). It’s always preferable to have at least one witness sign the agreement in case either party later tries to challenge the entire transaction in court;
  • Clear definitions should be provided in the opening paragraphs of the agreement. These should always include a description of how the corporation currently pays stock dividends to shareholders. A paragraph should also clearly indicate which dispute resolution or mediation groups may be consulted if any problems arise later concerning the sale of the shares;
  • A specific statement as to whether this sale is governed by the SEC (Securities and Exchange Commission). Depending on the type of corporation you’re running, it may be necessary for your attorney to file paperwork regarding the sale with the SEC.

While the list above isn’t intended to be comprehensive, it should provide you with a clear idea of the many critical topics that most stock purchase agreements should cover. It’s always best to have your lawyer go over your corporation’s specific needs with you before drafting this type of document since federal, state and local laws are constantly changing.

Members of our firm are readily available to provide you with professional legal advice concerning all your corporate needs and interests. We look forward to meeting with you soon.

Not Having a Valid Will and Testament Can Become a Burden to Your Family

Many people assume that if they dies without a Last Will and Testament (“Will”), their property will just automatically pass to their spouse or children without any action required to be taken by their heirs, such as having to go to probate court. However, without proper estate planning, this is rarely the case.

While some assets in your estate necessitate having to go to probate court even with a Will, the process of probate court when you do not have a Will is much more time consuming and costly.

So long as there is a Will to probate that allows for independent administration, the probate process is relatively simple and straightforward and generally proceeds as follows: An application to probate a will is filed by the proposed Executor/Executrix with the probate court in the county in which you had your primary residence. Once the application has been on file with the court for a certain number of days, the Executor/Executrix will be allowed to set a hearing with the court where the court will appoint that person as Executor/Executrix, and that person will then take an oath. Once the Executor/Executrix has been appointed and taken their oath, Letters Testamentary (often called “Letters”) will be issued. It is these Letters that let third parties know the Executor/Executrix has the authority to act on behalf of your estate. Within three months after receiving Letters, the Executor/Executrix will be required to file an inventory, appraisement and list of claims or an Affidavit in Lieu of Inventory, which must be provided to all beneficiaries in the Will. Once Letters have been granted, your Executor/Executrix is able to take whatever steps and actions are necessary to administer your estate without any further court involvement.

When there is not a Will to probate, then there are several options that your family will need to consider and then decide on the best probate option based on the particular facts, circumstances and type of assets in your estate.

Dependent Administration: A dependent administration is the most common type of administration that is created when you die without a Will in place. In order to have your assets distributed, someone, usually a family member, must apply to the court to be appointed as dependent administrator. A dependent administrator MUST have court permission to take any action with regard to your estate such as distributing money, selling property, etc. The dependent administrator must also file an annual report every year that the administration is open, which is usually several years. Because of these factors, a dependent administration is very time consuming and costly to your family.

Independent Administration with Heirs’ Consent: There is a possibility that, if all of your heirs agree, they can ask the court to allow the agreed-upon applicant to serve as an independent administrator, without the requirement of court supervision (much like if you had died with a Will that allowed independent administration). However, this means that all heirs must agree upon the same person to serve as independent administrator and that all heirs are adults who have not been adjudicated incapacitated. While that seems easy enough, you will be surprised how the possibility of money can turn family against one another, and if you had a child who predeceased you but left grandchildren, then you may end up with a minor beneficiary who does not have the legal capacity to agree to such an appointment.

No matter if your family chooses to go the route of a dependent administration or an independent administration with consent, each of those options requires an additional step that is not required when you die with a Will. The court will be required to determine who are your legal and proper heirs, which is accomplished via a process called a “Heirship Determination” or “Judgment to Declare Heirs”.

In an Heirship Determination, the court will appoint an “attorney ad litem” whose job it is to determine that the heirs that are listed in the application for either dependent administration or independent administration with consent are true and accurate, that no heirs have been omitted, and to confirm that there are no unknown heirs. The cost for the attorney ad litem is paid by the decedent’s estate, and the costs can range anywhere from about $500 to a $1,000 or more depending on how much work the attorney ad litem is required to undertake to determine the heirs. However, as an estate has not yet been officially opened, the cost usually has to come directly out of the applicant’s pocket until the estate is opened, and then the applicant can be reimbursed by funds from the estate.

Even if you believe that you have taken all the steps necessary to have your assets pass directly to your heirs, it is important that you also execute a basic Will as a safety net for assets that are later acquired, assets that you forgot you owned, or in the event a direct beneficiary predeceases you. For example, 401(k) plans can pass outside of probate and directly to a specific beneficiary by listing them as a beneficiary on the required forms with your plan administrator. However, if you don’t list a beneficiary or the beneficiary you list predeceases you and you fail to update your beneficiary, then in order for your 401(k) funds to be distributed, the plan administrator will want authorization from the probate court. If you did not have a Will, then this would be accomplished via a Heirship Determination, at the minimum. However, if you had a Will, then this could be accomplished via the simpler and cheaper independent administration with the issuance of Letters Testamentary.

The extra steps that are required to administer your estate if you die without a will can be time consuming and a drain on your loved ones, both financially and emotionally.

At Murray | Lobb, we have the expertise in estate planning and probate matters to ensure that your passing does not become a burden on your family. We can assist you with executing a Will, updating a Will, executing a Statutory Power of Attorney, a Medical Power of Attorney and a Physician’s Directive (also known as a Living Will). While you are at our office executing your Will, be sure to ask us about the steps you can take to have most of your assets pass outside of probate and directly to your heirs.

“Series, LLC” -The Next Generation of Asset Protection for Investors

A series limited liability company allows a traditional limited liability company to separate into an unlimited number of multiple parts or “cells” with the establishment of one or more series of members, membership interests, managers, or assets – each a series – and each series is essentially treated like its own limited liability company (“LLC”). Currently, only the following states have statutes authorizing some form of series LLCs: Alabama, Delaware, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Utah, Wisconsin and Texas. Texas enacted its statue in 2009 and it can be found in the Texas Business Organizations Code (“TBOC”), title 3, subchapter M, sections 101.601 – 101.621.

Typically, each series (i) owns its own assets and has its own liabilities; (ii) has the availability to have different members, managers and types of membership interests; (iii) has the ability to sue and be sued; (iv) can have its own business purpose; (v) has the ability to contract in its own name; and (vi) can grant a security interest in its own name.

Generally, the debts, liabilities, losses, obligations, and expenses of one series will not be enforceable against another series’ assets or the assets of the “parent” limited liability company. This makes it a viable option for any business where it is desirable to separate assets or business lines into distinct entities, such as investment companies, real estate development companies, oil and gas companies and licensing or regulatory companies. The TBOC provides that in order for the liability shield to exist three requirements must be satisfied: (i) the certificate of formation of the main LLC must contain a “notice provision”, which references the liability protection provided for by TBOC section 101.602(a); (ii) the company agreement of the main LLC must contain a statement setting forth the liability protection provided for by TBOC section 101.602(a); and (iii) records must be maintained for each series that “account for the assets associated with that series separately from the other assets of the [parent LLC] or any other series”.

One of the great benefits of series LLCs are the cost savings related to organizational filing fees. In Texas, the filing fee to create a series LLC is the same as an individual LLC; $300.00 (non-expedited). Thus, to create six LLCs would be a minimum cost of $1,800.00 versus the cost of creating a series LLC of $300.00. Oftentimes, series LLCs may also result in lower legal costs as it reduces the need for separate operating agreements and some document preparation.

While there are still issues to be considered when determining whether a series LLC might be right for a particular business, series LLCs are growing in popularity and are an additional tool in any investor’s or businesses’ proverbial toolkit.

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