For many business clients, one set of legal issues are commonly centered on selecting the right legal entity for their business: a corporation, a limited liability company, or one of a variety of general or limited partnerships. All have different tax and liability implications. The most important thing is understanding not all risk is bad; the key is anticipating potential consequences based on current trends. Discussions of risks are generally viewed retrospectively and in terms of experiences through which the company has been. The more difficult task is looking forward, identifying trends to better predict the degree of risk. Advance knowledge of trends enables you to increase revenues and control expenses. Rosenblatt Law Firm can assist in identifying trends and changes in the business environment with the potential to affect your company in both positive and negative ways.
On the revenue side, when the enforcement of business laws are relaxed, strategic opportunities for businesses can open. For example, liberalization of the Federal communication laws in the 1980’s broke the monopoly held by AT&T and the Bell Telephone companies. This enabled many small businesses to earn additional revenue by offering new products and services, including telephone equipment and long-distance telephone service, to new customers previously held captive by AT&T and the Bell Telephone companies.
On the expense side, the toughening of laws and tightening of enforcement may lead to unexpected costs. For example, in the new tax bill which just became effective for 2018, Congress eliminated many tax incentives and benefits available to businesses. The IRS in the last couple of years tightened enforcement of the regulations assessing tax liability on companies improperly classifying employees as independent contractors.
Trends can also change the format of entire industries. Following the housing crisis and loan default fiasco, banks began to increase their loan restrictions. In 2011, one-half of all new mortgages were through JPMorgan Chase, Bank of America, or Wells Fargo. By September 2016, that percentage was down to 21%; the difference was six of the top-ten lenders by volume were non-banks, such as Quicken Loans, loanDepot, and PHH Mortgage. For a period of time, non-banks were less regulated and thus customers came quickly. This too has straightened itself out, however, and regulators began increasing their scrutiny on these alternative lenders.
Rosenblatt Law Firm lawyers watch trends in multiple areas of the law for potential “positive” and “negative” trends to advise our clients regarding appropriate action. Although trends can be tracked in almost any business field based on our current economy, Rosenblatt Law Firm is closely monitoring changes in the following areas: Antitrust, International Trade, Consumer Protection, Labor, and Federal Taxation.
As laws change, Rosenblatt Law Firm is ready to act proactively, provide legal options, and suggest remedial steps to reduce legal expenses.