Compensation Arrangements can be part of any small business owner or company. Creating legally solid documentation, and establishing appropriate deferred compensation arrangements is critical in business planning.
Common Compensation Arrangements
HEAD OF HOUSEHOLD
Compensation arrangements are another area of the law that affect many businesses. For example, many people are familiar with the concept of Florida’s protection for the wages earned by the head of the household. An individual who financially supports a spouse, child, or parent may qualify for protection from garnishment by creditors under the Florida Statutes. However, this protection is not automatic and the right to head of household treatment must often be shown in court.
Small business owners may have a particularly difficult time claiming head of household protection when there is little in the way of documentation to support their claim. In these situations, it is important to distinguish between the individuals role as an owner of the company and their role as an employee. Failure to do so may leave the business owner without the benefit of this valuable statutory asset protection.
Another common example is deferred compensation arrangements. Deferred compensation arrangements are those in which a portion of an employee’s income is paid out at a date sometime after that income is actually earned. Examples of deferred compensation include pensions, retirement plans, and stock options. Deferred compensation arrangements provide many benefits to business owners. They may serve as a valuable incentive to convince talented potential employees to join the business.
They also can provide tax benefits in the form of an immediate deduction for the company, while the employee may defer the payment of income tax until the date they actually receive the income. From a legal perspective, deferred compensation arrangements can be very complicated, and many business law practitioners are not comfortable discussing these issues. However, at Ourednik Law Offices, our attorneys are frequently advise business owners on establishing and maintaining their deferred compensation arrangements.
How We Can Help You
At Ourednik Law Offices, our attorneys are knowledgeable and experienced in the laws surrounding compensation arrangements.
We will work with you to review your compensation situation and determine the best course of action that will protect your income now and in the future.
Contact us today to learn more about our legal Compensation Arrangement Services, or to schedule a free consultation to discuss your business needs.
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