Everything You Need to Know About Limited Liability Company and Subchapter S Corporation

Both entities are created under the laws of the State of Michigan. Articles of Organization are filed to create an LLC; the end of its name must use “LLC.” Articles of Incorporation are filed to create a Corporation; the end of its name must use “Inc.” or “Corp.” Please note that a Michigan Corporation becomes an S Corp when it files an election for tax status with the IRS.

Owners of an LLC are called “members” whereas owners of S Corp are called “shareholders.” Members can choose to manage the LLC themselves. On the other hand, shareholders must elect a board of directors, who then choose the officers to manage the S Corp. The shareholders can elect themselves to the board and then choose to become the officers of the S Corp.

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If you’re interested in learning more about business law or whether LLC or S Corp is best for your new business, please call Marty Bodnar at 734-665-4441 or email him at mbodnar@psedlaw.com. 

Starting a Business? How to Choose Between Limited Liability Company and Subchapter S Corporation

People often contact PSED to start a business after a career in corporate America. Usually, these people just want to keep it simple and want an entity that will have limited liability, meaning that creditors can’t go after their personal assets but can only go after the assets of the new entity.

The two types of legal entity that offer simplicity along with limited liability are Limited Liability Companies (“LLC”) and Subchapter S Corporations (“S Corp”). 

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For more information or to speak with us about your legal issue or business law questions, please contact us in Ann Arbor at 734-665-4441. To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.

What Are the Payroll Protection Program Rules on Payroll?

The Application confirms the PPP rules on payroll. Payroll includes cash compensation, employer contributions for group health insurance and retirement plans, and state and local taxes assessed on employee compensation. Under PPP rules and the Application, payroll doesn’t include compensation in excess of $100,000, qualified sick leave under the Families First Coronavirus Response Act or federal income taxes and FICA withheld from an employee. 

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Have Questions About the Payroll Protection Program?

If you have questions about the Payroll Protections Program legislation, or need advice about your business, please contact us today at (734) 665-4441. 

What Are the Payroll Protection Program Loan Forgiveness Rules?

The Application confirms the public rules on PPP forgiveness. Loan forgiveness depends on how the loan proceeds are spent over an 8-week period. To qualify for forgiveness of the entire PPP loan, at least 75% of it must be spent on payroll, while up to the remaining 25% of it must be spent on mortgage interest, rent, and utility payments incurred before February 15, 2020.

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Have Questions About the Payroll Protection Program?

If you have questions about the Payroll Protections Program legislation, or need advice about your business, please contact us today at (734) 665-4441. 

Is Mortgage Relief Available?

Are you struggling to pay your mortgage?

There may be some relief available!

Upon a simple affirmation that the borrower is experiencing a financial hardship due, directly or indirectly, to the Covid-19 emergency, and submitting a request to the loan servicer, the borrower may obtain a forbearance without a fee or penalty.  Section 4022(b)(1).  In fact, the statute states that the servicer “shall,” with no additional documentation and with no fees or penalties, provide the forbearance.  Section 4022(c)(1).  As such, it is a broad order that allows many borrowers to obtain a loan forbearance.  The period of the forbearance is 180 days, which may be extended upon the borrower’s timely request for an additional 180 days.  Section 4022(b)(2).  This forbearance is available even if the loan had been delinquent.  The borrower can also shorten the forbearance period upon request.

In a typical forbearance, a borrower would not have to pay principal and interest payments on a loan.  The legislation states that during the forbearance period, no other fees, penalties, or interest shall accrue other than what would otherwise apply.  Section 4022(b)(3).  The legislation, however, provides no further details about the forbearance.  Congress may pass clarifying legislation or Fannie and Freddie may issue guidelines for servicers regarding the forbearance details.

Nevertheless, a forbearance does not reduce or forgive the principal owed, and interest would typically continue to accrue at the loan rate.  Moreover, a forbearance would not typically excuse payment of taxes or insurance, so if those are included in a monthly payment which is made to an escrow account, the borrower should consider continuing to make that portion of the monthly payment.

Have Questions About Your Mortgage?

If you have questions about your rights under the federal stimulus legislation, or need advice about negotiating the terms of your lease, please contact a real estate lawyer in Ann Arbor at PSED. 734-665-4441

Does Your Mortgage Qualify?

Many mortgage borrowers can obtain a “forbearance,” which is a limited delay in their obligation to re-pay the mortgage loan.  This forbearance is only available, however, to borrowers whose mortgages that have had some reliance on the Federal government in their creation or processing.  These mortgages, defined as “Federally backed mortgage loans,”
include mortgages purchased or securitized by the Federal Home Loan Mortgage Corporation (Fannie Mae) or the Federal National Mortgage Association (Freddie Mac).  The term also includes mortgages insured 1) by the Federal Housing Administration, 2) under the National Housing Act, 3) by the Department of Veterans Affairs or the Department of Agriculture; or mortgages made 4) under the Housing and Community Development Act or 5) by the Department of Agriculture.

Learn more here!

Have Questions About Your Mortgage?

If you have questions about your rights under the federal stimulus legislation, or need advice about negotiating the terms of your lease, please contact a real estate lawyer in Ann Arbor at PSED. 734-665-4441

Remote Signatures Under Governor’s Executive Order

It was impossible to complete the estate planning process without the physical presence of two witnesses and a notary. Until now!  

How is this possible?

How can we get electronic signatures during the CoronaVirus?

On April 8^th, Governor Whitmer signed Executive Order 2020-41 allowing electronic signatures and remote witnessing and notarization, which is effective immediately and which will remain in place until May 6, 2020.

Get Started Today: Schedule Your Consultation!

If you would like to learn more, contact Marty Bodnar, an estate planning attorney at PSED today! Attorneys at Pear Sperling Eggan & Daniels, P.C., can help assist you with virtually everything law related. Consult your attorney for details.