Veterinary Medical Board

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Make sure that your registered office and/or registered agent and principal office are current on the records of the Secretary of State. Your company must do this in every state that it has an office. If a plaintiff’s attorney is unable to find your company, he can serve his lawsuit on the Secretary of State, and you may find that a default judgment has been entered against your company in a suit that you never knew about.

Our law firm has provided exceptional legal services to clients throughout the state and the U.S. for more than half a century. Since our firm was established in 1955, we have built a reputation for helping clients solve difficult problems with sound counsel, sophisticated analysis and superior performance.

North Carolina law requires manufacturers to compensate franchised dealers at a reasonable rate for "parts, work, and service in connection with warranty service." N.C.G.S. §20-30S.1. Basically, the law requires manufacturers to pay for diagnostic work, repair service and labor, and the associated administrative requirements for the warranty work. [d. The rate of compensation must be reasonable, it must be what the dealer would charge a retail customer for similar non-warranty work, and it must be competitive with other franchised dealers in the dealer's market. [d. Basically, the manufacturer should pay you at the same rate that you normally charge customers.

Making the “S” election. Under the current federal tax law, if your corporation is a “C corporation,” the profits on the sale of your business will be taxed twice, once at the corporate level and again at the shareholder level. Long term planning is required to avoid this problem. The effect of C corporation earning can continue for ten years after making the S elections. The “double taxation” problem disappears ten years after making the “S” election. Another possibility is to obtain a formal valuation of your business. Then make the “S” election. The increase in value of your company after you make the “S” election will escape the double tax. Caution is advised, however; making the “S” election can sometimes trigger tax consequences, especially if you rely heavily on LIFO (Last In First Out) accounting and have a large LIFO reserve.

Structure S Corporation Loans to Raise Shareholder Basis . Shareholders in an S corporation may deduct their share of the S corporation's net operating losses. However, the deduction that a shareholder may take is limited to the sum of the adjusted basis of the shareholder's stock in the S corporation and the adjusted basis of any debt of the S corporation to the shareholder. (Code Sec. 1366(d)(1)) Thus, if a shareholder wishes to deduct his or her share of S corporation operating loss in excess of the shareholder's stock basis, the shareholder may extend a loan to the S corporation, thereby increasing his or her basis. Significant care should be taken in planning a loan transaction with one's S corporation. An undesirable possibility to avoid is having the circumstances surrounding the loan result in the loan's not creating the desired increase in basis.

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