Baton Rouge Legal Blog

When someone buys or sells a business in Louisiana, the resulting capital gains will affect their annual tax returns. Capital gains are handled differently than typical income that's based on profits from the business; instead, they come from the sale of a capital asset. There is a tax assessed on all capital gains, and this can apply to the direct sale of a company as well as shares of stocks and similar securities. Capital gains tax assessment only comes into play if the seller makes a profit or takes a loss on the sale of the asset.

While short-term capital gains for assets held less than one year are taxed at the same rate as regular income taxes, long-term capital gains, for assets held for over a year, are taxed at a 17% rate. Most types of property held by a business, whether physical or intellectual property, can be considered capital assets, especially when they are sold as part of the company. For example, merchandise, inventory, patents, copyrights, real estate and investments are all considered capital assets and subject to capital gains tax if sold. Even accounts receivable that can be sold are considered capital assets. However, personal property and raw materials are not considered capital assets.

Business owners who are looking to sell their companies may want to consider selling them to their employees. To do so, a company can establish an employee stock ownership plan, or ESOP. An ESOP allows an interest in the business to be held in a trust for the employee's benefit. When the CEO is ready to step down, the ownership stake is transferred to those who are beneficiaries of the trust.

There are many reasons why a business owner would want to sell his or her company to its workers. One reason could be to instill a greater sense of loyalty in an organization's workers. Loyal workers tend to be more productive and less likely to leave, which cuts down on turnover. Furthermore, selling a company to the employees means that the transition to new ownership can be a gradual one.

Louisiana car owners may have heard that Toyota recently announced a recall of 928,000 vehicles with defective Takata air bags. The recall is the last phase of the automaker's multiyear effort to replace the explosion-prone air bags with safe ones.

Faulty inflators in Takata air bags could cause the devices to deploy with extreme force, shooting shrapnel into a vehicle's cabin. The risk gets higher as the inflator ages. The latest recall involves Toyota, Scion and Lexus vehicles that initially had their faulty Takata air bags replaced with new Takata air bags of the same type. The replacement was intended to buy time until the automaker could acquire alternative air bags from non-Takata suppliers. Those air bags are now available, and dealerships will replace the interim air bags for free.

Before you launch your new business, you make one of the most crucial decisions in the entire process: You pick a business partner. The person you choose could make or break your new company. They simply have to be a good fit. You must be critical and carefully consider what it will be like to work together moving forward before you commit to anything.

Finding the right person can be hard. What do you look for? What is most important? What red flags should you be aware of? There are a lot of questions to ask, so here are some tips that can help you get started: