How To Protect Your Assets Before You Get Sued with Aaron Young

Foreign. This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars.

Worth of property for panties on the dollar.

Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We close nodes, Scott Carson.

All right, everybody.

Hey.

No, we've covered a lot of stuff this morning. Look at that, look at that good looking guy who just joined us on there. I'm very honored to have my good buddy Aaron Young who's the chief bottle washer. Well, maybe he's not washing too many bottles over but the, the main man, the mental legend over at lawfulness. So it's been around for 51 years and who really do an amazing job not only with their clients, but our students and helping them set up entities, help them put things in place to make sure that they've got their assets covered in case of things happening. And so join us from I believe out in, what is it? Amboy, Washington. You moved recently too, right, Aaron?

If I've got the window cracked open just a little bit where the Pacific Ocean is kind of roaring right out there so I can hear the waves. This is our home we built 20 some years ago, Central coast of Oregon. Yeah, we sold the pla. We sold the farm in Amboy and we're out looking around the country trying to figure out what's next.

Very nice. Well, we're honored to have you buddy. Especially a little earlier out there than here for you. But we, we've known each other but friends, I don't know, seven, eight, nine years now, something like that. It.

I think it goes back to around 2012, 2013, something like that.

Yep. Over a decade and somebody just nothing, you know, one, one of the things that you guys will, you heard us talk about a little bit on the, on the pitch deck was you have a team of professionals. Well, you know, Aaron has a team as an inner circle of professionals and vendors and people reach out to. I have the same thing and you guys all have the same thing. And that's one of the great things that I love about Loft and Associates. When I have questions, I might call Aaron, but I know he's busy, but I will always pick up the phone and call his team. When it comes to asset protection or setting up an llc. And as you're working with investors, you're working to raise capital like we're talking about today, one of the most important things you need to do you need to have some things set up in place to protect yourself, protect what you've worked so hard to build. And that's why I want to have Aaron on to talk about that stuff with you today. And you're definitely going to want to grab a pen and paper, take some notes. And here's the biggest thing. You're like, oh, crap, I need to do some stuff. Yes. The important thing, like we all know that we have to do things is start implementing the things out there to take, take advantage of and make sure that you're protected in case of something bad happens to you or you have a deal that goes south. You want to make sure and protect yourself. And that's why we've got Aaron on here. This one is not meant to scare you.

It's.

It's meant to educate you so you can do the right things and be in business for a long term. All right? So.

Morning, Aaron.

How's morning, Spot? Good.

How's the fam? Family's great. Yeah? Yep. Everything's good. We're in. Michelle and I are loving. It's fun to live at your vacation home. I mean, that's, that's a new thing for us and we're, we're really enjoying it, but that doesn't mean we stop working. As a matter of fact, it's the work that provides all these things. Right. So it's great to be here. It is. It's 8:37 here. But that's not early. No, not when I get a chance to be with you and your, your folks. And you're right. The things we're going to talk about today for the uninitiated may be. May seem scary or overwhelming. The point is, all I'm going to talk about for this hour is how to make sure that you got a solid foundation underneath you. So whatever you're trying to build, you can build it safely, securely, you can protect it, you can leverage it. You can make more and more and more money. So you're, you know, we want you to be the deeper pocket out there. We want you to be the one with all the cash on hand. So, Scott, can I share my screen?

Yes, sir. You can take. And then what I'll do is I'll drop my video off, but I'll be here asking questions and lurking like I normally do for you.

I love it when you lurk at Laughlin Associates. Does that look okay? Can you see it?

Yeah. You probably want to maximize it.

I thought it would have maximized. Let's try that. How's that?

That's perfect. Good stuff.

Beautiful. Okay, so folks, my name is Aaron Young. I, I'm the chairman of Laughlin Associates. It is a 51, almost 52 year old company that we, we focus on, on helping get your corporate assets all organized, your tax planning organized, just all the foundational pieces. And I call this building your corporate fortress. Why? Because our mission statement at Laughlin is we build a fortress around our clients personal and business assets. So we want you to go out and do whatever it is that you're dreaming of doing, whatever it is that's making money, whatever it is that's bringing you, you know, fire in your, in your belly. And we want to make sure that it's all done properly, legally and in, in such a way that you're getting the most bang for your buck, for the things that you've put in place. And we'll go through that and you'll, it'll all make sense. Now, I'm not a lawyer, I'm not an accountant. I'm giving you business advice. I've been a business owner making a payroll for, oh my goodness, I guess about 40 years now. And so I know I look so baby faced, but the truth is I started my first company back in 1983. The beginning or April 1980. What? Shoot, it is 40 years, April of 83. Right when I got out of my freshman year of college, my only year of college, I came home, started this business, never looked back. And it's been one thing after another over those years. But I'm not a lawyer, I'm a business guy. I'm going to teach you business stuff. Laughlin Associates is we form corporations and LLC in all 50 states. We help you organize yourself so that if you get attacked by frivolous litigation, I'm not saying we can protect you against fraud or you know, if you're being evil, if you're doing something illegal, we can't help you. But we can help you protect against all those people out there that want to redistribute your wealth. So we can help put up that fortress and keep them out. So we do that in all 50 states. Lawsuit protection, tax planning, state planning, corporate compliance, education. We have a great event that Scott has spoken at many times called the Magnify your wealth Summit, which is coming up in May. So we. Anyway, there's a lot of stuff that we do when you go out to start something new. So you're learning about node investing today. Maybe some of you already have a business, maybe some of you are W2 employees? Maybe some of you are in transition. You know, you. I met a really cool guy the other day, just had gotten out of the military after eight or nine years and was trying to figure out, I've got some ideas, but now I'm trying to learn, what can I do? Wherever you are, you're very successful. If you're struggling to get, you know, two nickels to rub together, if you're looking forward to the thing you want to build, you want to always do as Stephen Covey suggested and begin with the end in mind. Just like you build a house where first you'd have an idea in your head, then maybe you'd go to a piece of paper and a pencil and start to sketch it out. And how many bedrooms? How many bathroom? Where's the kitchen? How. Where's the garage? How many bays of the garage? What's the backyard? You start drawing it on paper. Then you go to an architect, they design it, Then they go to an engineer, and they make sure that the wind load, snow load, all that kind of stuff's all right. And then after all of that is done, after the planning and figuring out, make sure you're doing everything properly. Then you order the lumber, then you get the roofing material, then you get the light fixtures and appliances and the finishing materials. That's when you do it. You don't do it first. You don't run right down to Home Depot and start filling up your truck. You know, and that's what most business owners do. They. They don't think about the outcome. They only think about, how can I make money? How can I sell more cupcakes, how can I write more code? How can I, you know, help with social media marketing or whatever, how do I start doing notes? And the truth is, you can start without anything I'm going to teach you. But you're. If you're successful, you're going to end up regretting not listening to what I taught you. Because what I'm going to teach you is the way to hold on to it all. How to get all the best tax benefits, how to protect yourself from lawsuits. So why build a fortress? Why is it important that we are fortress builders? And why do you need one? Well, there's all kinds of risks when you go out there and engage with the public. And if you look at this little list, there's a bunch of things that seem reasonable. Some people giggle, and it says family. The reason I bring up family is because. So you are going to go out and you're Going to do whatever you're doing, you're going to invest in notes, you're going to start buying and selling this real estate, these real estate assets, or collecting, you know, getting a revenue stream. And you've got kids. So I, I raised five. My wife and I raised five teenage drivers, okay? If you've ever had a teenage driver, you know what I'm talking about. And all my kids, because mom and dad drive nice cars. Kids are all like, hey, why do I have to drive this hoopty, crappy little car? And I said, because you're going to hit something and I don't want you to hit it with a nice car. Well, they all did. They bumped into another car. They bumped into a, you know, a pole. They bumped into a wall. One kid forgot to put the car and break and, and it rolled into the, into our barn. We have a horse breeding operation. We just sold one place. I said, we sold the farm, we have another one, but we don't live there. Anyway, so one kid got out of the car without putting it in park, and it just rolled forward and both smashed the barn and smashed the car. So I couldn't plan this stuff. I couldn't make this stuff up, but it happened. So when you're engaging with the public, when you've got people that you're. That are paying you rent, that you own a piece of property, you're trying to negotiate, you're trying to get them evicted, whatever it is, it doesn't really matter what kind of business you're in. But we're specifically talking about note investing right now. Whatever kind of business you're in, you run a risk because you're engaging with others. If you want to go live in a cave, you're not going to have a lot of outside legal problems unless you're squatting on somebody's property. But there are a lot of risks. So when you go into a, when you go into any sort of risky situation, you have one rental with one renter and it's only making 300amonth and you're going, this isn't even paying off yet. But then somebody slips and falls in the kitchen or in the backyard or on the driveway, and next thing you know, you're being asked to pay bills or you're getting sued or whatever, and you're like, this doesn't make any sense. Why could, how can they do this to me? And it's, they do it to you because they think you're rich and they want some of your money and they think you can handle it better than they can handle it. And you should be responsible for their mistake. And so this is what happens when you go into business. Now, the richest people in the world are all business owners. If you want to be rich, you need to own stuff. Real estate and stock and other intellectual property are the greatest values you're ever going to own. Scott's showing you how to get in in amazing and much less expensive ways than many other real estate investment. That's great. You just, you don't need to be afraid. You just need to know. And when you acknowledge and guys, please write this down. Face the facts, Face the facts. If you acknowledge that there's risk, you'll make adjustments for the risk. And then you don't have to be afraid. If you don't make adjustment for the risk, ignoring it going, I would never happen to me. And then you have a problem, you end up coming back to somebody like me. What in a. I use this expression, event driven. You just had a horrible event and you say, I can never let that happen again. I just got sued, I just got audited. I just lost everything. I still want to go be an investor, be a business owner. But I have to start over again because guess what? I didn't take the precautions early. I didn't believe it was really going to apply to me. And then I got my hat handed to me, okay? So that's why we, we form business entities. That's why we use corporations and LLCs for lawsuit protection and tax benefits. You know what they say, Individuals get taxed, companies take deductions. Just remember that. Individuals get taxed, companies take deductions, protection against creditors. In other words, you can build something up, build up a business if you do it right and the business just doesn't work out, nobody really did anything wrong. It just didn't work. Well, the ship can sink without you having to go down with the ship and take on all the debt and all the, all the liability of the failed project. The reason corporations and LLCs exist in the first place is to separate you from the business stuff. It's to say you as a shareholder don't have to be responsible for this business thing over here. Because after all, the corporation or the properly formed LLC is a paper person separate from you. As Scott Carson, I are good friends, have done many things together, spent lots of time together. Our families know each other, we care about each other, and yet we are utterly separate. And we have to have agreements, contracts, and so on. And if something happens to me, Scott doesn't Have to go down with the ship with me. Right. That's why we use business entities to separate ourselves from. From the project. Please get that part clear in your mind. When you say, that's my company, my LLC, my. Whatever. You're. You're saying, I'm the 100% shareholder. I'm the 100% member, or I'm the 5050 member of that LLC. But the LLC is separate from you. Please remember that critically important state planning companies don't die. They get new shareholders, new board of directors, new officers. They keep going. Prestige and credibility is just sometimes having the title of president or managing member will get you into a meeting, get you into conversations and so on. They might not otherwise get if you're just you. Okay, so the key to getting all the benefits is separation. I want you to write this down. I'm not the corporation. The corporation is not me. As a matter of fact, don't even write down. Just say it with me. I. I'm not the corporation. The corporation is not.

Corporation is not me.

Thank you, Scott. You could also say, I'm not the LLC, and the LLC is not me. I'm not the LLC, and the L.L.C is not me. When we get it clear up here that you're separate, you start making different decisions. And Scott's on, so I'll just say, Scott, are you. Are you there?

Yes, I am.

All right, Scott, we've been friends for, what would we just say, 10, 11 years?

Yep.

We've been through a lot, wouldn't you say?

Yes, sir.

And I'm going to speak for myself and say, I. And this isn't for the audience sake. This is because we've known each other and been through stuff. I trust Scott Carson. I trust Scott Carson. I think Scott Carson trusts me.

Yes.

And. But even still, if I came to your office or your home and I started going through your top drawer and found your checkbook and wrote myself out a $50,000 check and so on. Or just. Or just took all the cash out of your. Out of the change jar. I just put it in my pocket. I mean, how would that feel?

Not good.

It'd feel weird, wouldn't it?

Yep.

Like, why are you doing that? Even though we're good friends, even though you know that I have no evil intent toward you.

Yep.

You still think it's weird. And, folks, that's what we do with our businesses all the time. We think, oh, the company's checkbook is really just my money. It's just my piggy bank under a different Name the, the government and the IRS and the legal system have a name for that. They call it the alter ego doctrine. The alter ego theory. You know, if. If you and the company are acting like one and the same, they're going to treat the company like your alter ego, not like something separate from you. It's only by showing the respect. Scott, do you mind If I take $5 from this, from this money jar? I'm gonna go play pinball. And Scott can say yes or no. And that's a contract. That's an agreement. If I just take it, that's acting like it's mine, not like it's Scott's. If I just take money out of my company, it's acting like it's mine, not like it belongs to the company. And as soon as you do that, you're screwed up. As soon as you're acting that way, you're at huge risk of losing everything you've built. Why? Because you've now commingled your life with the business's life. The key to the lawsuit protection, the key to thousands of tax deductions, the key to getting those tax credits for your business, the key to being able to be protected in an audit or a lawsuit or the way you get the protection is by the separation. Hey, I'm not the entity. The entity is not me. Now, whether you have a C Corp, an S Corporation or an llc, and if it's a one member LLC or a multiple member llc, these are the most common structures that people use. C Corp. S Corp, llc. In real estate, you're going to see lots of llc. I love llc. I'm going to tell you a few things about LLC that you will maybe be interesting for you here in a minute. But the main thing is in order to get that separation, in order to show that you and the company are not one in the same, but that you're separate and that the company deserves all those benefits, by the way, which you get to benefit from too. All of them have something in common, and that is they're all required by law to do what's called board of director formalities. In other words, you need to hold board meetings, you need to keep minutes of those meetings, you need to pass resolutions, things that were decided in those meetings. You have to do that. That's part of the deal. When you do it, you get all these benefits. When you act like you and the company are separate, there's tons and tons of benefits that come along. It's like getting a 30, 40% pay raise. These Are just a couple of examples, like kind of almost silly examples. Health clubs, braces, gardening. What else have I got on their massage? Babysitting. We did this kind of for a little bit of fun, to show you just how broad the tax benefits can be for a properly organized company. There's so much that can benefit you and personally when you do things right, but it requires you doing things right. Because we all know that being a business owner, all the richest people in the world are, comes with huge benefits. Those benefits come with responsibilities. And in our world, the corporate compliance world, the biggest mistake that we see business owners make is the failure to document those business decisions. The board formalities, the things that the law requires to show that you and the entity are separate. Separation is the key. And it's estimated over 94% of companies out there, meaning corporations and all these are not keeping board formalities, which is never a problem. Until it becomes a problem. I say you can drive through a school zone 100 miles an hour every day. It'll never matter. Until what? Until you get caught. So, and folks, let me just tell you, there's stuff coming. There's stuff going on right now and there's. It's only going to get more significant. The government has spent a fortune over the last few years. They've got to be looking at making sure everybody's paying their fair share, doing everything right, because they're looking for revenues. So the biggest mistake we see people make is the failure to act like a real legitimate entity and do those board formalities so that you get the separation. Okay, now that separation has a name. It's called the corporate veil. That is an important term to learn. So if you don't already know what that is, you've heard it, I encourage you to write down corporate veil. Just take a, Just take a chance on me for a minute. Corporate veil. Write it down. Okay. Small companies under $5 million are at the much, much, much higher risk of getting into trouble and having their corporate veil pierce. What happens when the corporate veil is pierced? Either somebody suing you can get all your stuff and get through the veil to your business, or somebody suing the business, the rental property or whatever can get through that and get to all your personal assets. So if you're saying, look, my real estate portfolio is small, I'm not making a lot of money yet. I mean, I really love this idea, but it's, it's in the infancy. There's nothing to get. Au contraire there. If you own anything, if you have equity in your Home if you have an RV in your garage if you have a vacation house, if you have some college money put aside for your kids, if you have some retirement money put aside. If you have other things. And the corporate veil is not firmly in place. That corporate veil, we think of a veil as a little frilly thing. I'm Talking about a 12 foot thick stone wall with a lead line reinforced with Kevlar, 80ft tall. You know, nobody's getting in there except for if you leave a crack, if you leave an opening. A corporate veil is what separates your business stuff from your personal stuff or this business from that business and this property from that property. And small companies are at great risk of having their veil pierced because they don't know the rules. They don't follow the rules because they assume the rules probably don't apply to them or they don't even know what the rules are. They don't even, they don't, they've never heard of them. Now folks, I want to tell you this. Everybody within the sound of my voice right now. You have no excuse, you are learning right now what the rules are. C Corp. S corp, llc, all have a responsibility to do corporate formalities. If you're, we're going to talk about taxes here in a minute, we're going to talk about several things. But I want you to learn you and the company are separate. The corporate veil is the part that separates you. The veil is made up of all those corporate formalities and several other things that I'll teach you in a minute. That's the key. I'm not the llc. The LLC is not me. I'm not the corporation. The corporation's not me. We're separate. If it seems like, God, this guy's just beating this dead horse. Folks, this is super, super important. It's incredibly important. And let me give you some stats here in just a minute. First of all, every 22 seconds, every 22 seconds around the clock, 365 days a year, there's a lawsuit filed against a small business. Every 22 seconds there's a company filed against a small business, a business of 100 employees or less. 57% of those lawsuits. How many of them have happened since we've been, since I've been teaching you? 57% of them are against companies making under a million dollars. Top line, not bottom line, top line, revenue of a million dollars or less. 57% of the lawsuits are against the little guy, the stay at home consultant or coach or real estate investor or the dentist. The Small restaurant, the coffee kiosk, the landscaping company, the. I mean, just go down Main Street. Just go down Main street and see what it is. I know tons of people who are doing four or five hundred thousand dollars a year top line, and they're taking a quarter million dollars or more out of that business because they're small. Maybe it's just them. Maybe they're selling something really cool. Maybe they're a successful real estate Investor. They're making 2, 300,000 a year on a company that's top line is 4 or 500,000 a year. You don't have to be mega rich to live better than almost everybody else. You get up over about 350,000, you're in the top 1% of income earners in the world. You don't have to be Elon Musk. That's the top one thousandth of the top 1%. But a lot of us, including me, have been in that top 1% for a long time. And guess what? I've had lawsuits. Because you know why? People start to go, I think there's something to get over there. There's a little pot of gold somewhere. I think we can find it. Let's see if we can find an excuse to redistribute that wealth. Well, 57 of all those lawsuits every 22 seconds are against small companies. What about audits? Audits have been down the last few years, thanks to Covid and so on. But they're coming back now. And many of you by now have heard that the Congress passed a law and was signed into law where there's $87 billion. 87 billion billion. No, $89 billion. 87. What am I trying to say? 800. Oh, shoot. It's early. My brain just froze. Scott, what is it? 87,000. 87,000 new IRS agents.

Yep.

Yeah, agents about. Sorry, those. The zeros. All of a sudden. $89 billion. 87,000 agents. About half of them will be administrative, and about half of them will be compliant. So they're looking for auditors and for criminal enforcement. Okay. About half of the 87,000 people. Some people are saying, well, yeah, but that's because, you know, the IRS has been understaffed. Okay, I don't. I'm not complaining about that. What's half of 87,000? Right. You're talking about 40. Almost 43,000 individuals. 43 and a half thousand individuals. Think about that. Think. You have 50 states, you got 43, 000 and change. New people with. To go along with whomever's there now. And their job is to audit small companies. They don't audit big companies very often. You know why? It's too hard. It's too complicated. Small companies are so much easier to audit. And the, and that auditor has a commission or not a commission, a quota they're supposed to hit, it's around $4,000. These people are coming for small businesses. And just believe me. And you know what? The most, besides the sole proprietorship, the next most audited business is a single member llc. And that's what almost all real estate investors are using is single member llc. C Corp. A lot less often than S Corp. Less often than multiple member llc, less often than single member llc. Doesn't matter. They're coming. And when they come to you, they are looking for whatever they decide you didn't pay properly. And then they want that money. Plus there's a 45 penalty, plus there's interest on the money from the time you should have been paying or should have paid it. So it can be a big bill really fast. And folks, it's not just because you didn't keep great financial records. I had a client. Well, he's a client now. He wasn't a client when I heard the story. And he's a big home builder down in Utah. He says he built Dick Cheney's home in, in Jackson Hole. And this guy stood up at one of our events and said, you know, it really is true about small companies getting their corporate veil. Pierce and I got an audit notice. The audit day came. I had all of our financials here at the end of the conference table. I had my CFO next to me at our cpa, corporate CPA sitting next to me. The auditor walked in and the first thing they wanted to go through was the corporate minute book. Remember, all companies have a requirement to do board formalities, hold meetings, keep minutes past resolutions, issue stock, or if it's an llc, issue membership. Membership. Anyway, the guy says the auditor came in, flipped through the minute book and closed the book and said, okay, we're dealing with a sole proprietor, not a corporation. Didn't matter how big the guy was. Only mattered that there was nothing in the minute book. He's the only owner. He thought, why would I have a, you know, board meeting with myself that I wouldn't even think of such a silly thing? Well, the auditor said, you're acting like sole proprietor, not like a corporation. So the guy says that that day they disallowed over a quarter million dollars in tax deductions plus 45 penalty plus interest, folks, that's a bad day. It's a really, really bad day. And if you've never been to that level, what if it was over the last several years? What if you had 25 or $30,000 of deductions? They said, sorry, you can't have those. We want that $30,000 plus 45%. So, you know, another, whatever that would be, another $14,000 plus interest. That would be a bad day at work. Okay? So that's what's going on with audits. You've got. The legal system is saying, oh, yeah, you didn't do your corporate minutes. We're going to sue you. We're going to pierce the corporate veil. The IRS and the state taxing authorities are saying, oh, you know what? You didn't do your corporate minutes. You don't get these deductions, right? And we want you to take deductions. The government's given you thousands of deductions. They just want you to follow the rules. So I want you to Write down the 3Ds, okay? Take the deduction, make sure you have the property, both financial documentation, but also board authorization to have done that thing. And I'll give you, I'll show you a list in a few minutes. But imagine board resolutions. Could be anything. As simple as open a bank account, hire a cpa, give yourself a salary, or give yourself a raise. Keep money, keep petty cash in the, in the desk. These are all board resolution issues, right? So your health insurance, cell phones, and so on and so on and so on. So take the deduction, make sure that you have documented why you did it, why you had authorization to do it, and what it costs so that you can defend that deduction. All right? Three D's, deduct document. Defend, okay? Now, if you're ever sued or audited and you didn't do these things I've been telling you, then you lose your lawsuit protection and you lose the tax benefits. Okay? That's the, that's the result of not following the rules. The rules are not overly complicated. They may seem complicated because you're unfamiliar. They're not that complicated. But you do need to know them and follow them. All right? Now, when we talk about the separation, remember I said the formal documents. Please, please listen. Are the only thing that prove that you and the company are separate. The formal board of directors documents are the only thing that show that you and the business are separate. So if this is going to be your new mantra, I'm not the corporation. Corporation is not me. Then we need to make sure we're acting appropriately, acting like a real business. Or even if you don't think of your investments as a business, they are, you're doing something for a business purpose. You're taking some money, you're going to buy notes. You're going to either negotiate with the person in the house and get, you know, get a revenue stream, or you're going to evict the person in the house and you're going to get the house ready to sell, or you're going to turn it into a rental, or you're going to do something for a business purpose to magnify your own personal wealth. Right? So since you are doing business, even if you have a W2 job, this is a business, and you want to ensure that you're not the company and the company's not you, that you're separate. Okay. That piercing the corporate veil thing all comes down to they want to get the company stuff plus your stuff, or they want to get your stuff plus the company stuff. According to Wake Forest Law Review, piercing the corporate veil has become the most litigated issue in corporate law. In every case, the plaintiff's intent is to acquire the personal and business assets of the company. At least half the time, they win. Now put a pin in that. What have I been teaching you up to now? Because the Wake Forest law is. Is endorsing everything I've just said. Every 22 seconds, there's a lawsuit against a small company. 57% of those are against companies that are top lining less than $1 million. Those are the ones who go, what? I don't. Why would anybody sue me? I'm just a little small fish. Why? You know, I have a great little business, but I'm not hurting anybody. But nevertheless, piercing the corporate veil has become the most litigated issue. Why? They're looking for the biggest pot of gold they can possibly get their hands on. If they can get all your personal stuff and all your business stuff, hooray. Right? And remember I said at the beginning what. What Lawful and Associates mission statement is. We build a fortress around our clients personal and business assets. What does Wake Forest law say? In every case? The adversary, you're the person coming against you. The plaintiff's intent is to get the personal and business assets. And unfortunately, at least half the time, they win. So what do you need to do? I hope you're taking notes. What do you need to do? 1, start holding board meetings. I know. If you're the only person on the board, it seems crazy by the way, by the way, I am not, not encouraging you to go ask people to be on your board of directors. Not at all. Matter of fact, in my opinion, if you don't have to have anybody but yourself on the board of directors, that's the best way to be. Now, if you're getting investment capital, I don't mean people that are, are partnering on, on deals with you. I mean people that come in as an equity investor, they may have demands to be on your board, but if you don't have to have anybody else looking over your shoulder, don't do it. But that still, you're still required to follow the law and have a board of directors and hold board of directors meetings at least once a quarter. And when you're small and doing a lot of things and a lot of new things could be every month. All right, so you need to hold board meetings. A board meeting is simply you thinking about forward looking stuff for the company. So imagine, just go with me on this little fun little journey for a minute. Imagine you are thinking about, I wonder if the investment business is do or any, any business you might own. I wonder if we're in a position yet where I could take a car allowance or the company could pay for my health insurance, or the company could buy that building, invest that money, loan that money, borrow that money, do a joint venture. Anytime you're thinking like this, when you're contemplating what's the next right move, what are things that we need? Are we in a good position to do it? When you're doing that, you're in your board of director mode. When you're doing that, you're acting as the chairman of the board of directors, okay? It's not just you. When you're thinking about forward looking stuff for the company. You, you're in a board meeting in your head. And if you're the only member of the board, that is the board meeting, okay? Ask people all the time, where do you, where are you when you're having the board meeting? Where are you having those thoughts? And people say, oh, driving in my car, falling to falling asleep, waking up in the middle of the night. The number one answer I hear is in the shower. Does that ring true for anybody? You ever catch yourself with your, imagine you're relaxed in the shower and your mind drifts off to forward looking stuff. You start making plans in your mind. Well, that's when you're in your board meeting. That's when you're having the meeting, okay? So you need to be aware that you're either having a meeting in your head or that, well, you need to acknowledge you're having a meeting in your head. That's all that really matters. Or if you're two or more people on the board, you need to have regular meetings. And at those meetings you keep minutes which basically just say, on this day, this place, these people got together and talked about this stuff. It's required in all 50 states. All C Corp. Says Corps, LLC, nonprofits, all required to do it. There is no exception. Well, there's one tiny exception, but it's a single member LLC in South Carolina are the only ones that don't have to do this. Single member llc, South Carolina. If you're a two member LLC in South Carolina, you have to do it. And if you're anything else anywhere else in the United States, you got to do it. So board formalities are required. You've got to keep minutes. It's required by all 50 states. And this becomes the history or the memory of the company. Okay. And then when you make decisions. So we talk about stuff and then we decide, yes, we can take a car allowance, you know, $500 a month car allowance. Thousand dollar a month car allowance. Great. Then the board resolves. Resolves that it is resolved that, you know, our employees can take a car lots not to exceed X dollars. Okay? And you write it down in a specific format and that becomes the permission slip from the board to the president to execute on that idea. Now, even if you're the shareholder or the member, you're the only member of the board and you're the president or the manager, you can't skip the steps. The law requires you follow the steps. The IRS requires that you follow these steps that demonstrate what. I'm not the corporation. Corporation is not me. I'm not the llc. The LLC is not me. This is. This is the requirement. This is the rule. In order to get all those tax sections, all those credits, all that protection, all you have to do is learn to act as if I'm not the corporation and the corporation is not me. All right. Some other things that can pierce your corporate veil that go right back to this. I am the corporation. The corporation is me. Commingling personal and business assets, that's a huge one. Failure to sign business documents with your title. So if you just sign with your name and then somewhere down the road you need to go, let's say go through bankruptcy court and you want to expunge all the debts of the company, the court may forgive all those debts. And once the Whole thing is settled. Your debtors or your I'm sorry, your creditors may come back to you and say, hey, yes, all the corporate stuff got forgiven. But see these 15 purchase orders? See these 15 deals? You didn't sign as manager or president. You just signed as you. So you, the human, still owe us the money. And that's how the law works, folks. So a big mistake, a way that. That messes up your corporate veil, is failing to sign using your title. And CEO is not a title, by the way. President, manager, director, secretary, treasurer. Those are titles, okay? Keep your company in good standing is critical. If, if you ever examine, they see that, oh, yeah, you're regularly not paying the state, the company goes out of good standing. You get it caught up. They go, oh, yeah, this is a hobby. This isn't a real business. Or they would never let that happen. The most common mistake is this. Just nobody does anything. They ignore it all. They pretend like it never happened or like it doesn't apply to them. They think, nobody's ever going to look at my record book. I mean, how stupid. Or I don't even have a record book. Why do I need a record book? That's lame. Or, I'm a nice person. Nobody's ever going to hurt me, sue me, come after me. Well, I don't do anything wrong. I'm not. I'm not trying to cheat anybody. Nobody's going to sue me. I'll just. I just settled a. Well, I didn't settle. I won a lawsuit. Somebody came after me. Scott, I don't think you've heard the resolution of this. I bought some property back in 2015. There was an easement.

Yep.

About two years ago, the lady who granted the easement, her daughter got a divorce, moved back in with mom. Mom's like 77, 78, 80, something like that. Daughter moves back in with mom and says, why did you grant that easement across the property? Why did you do that? That in that. That takes away from our use of that section of the property. And so mom comes back and says, I'd like to have you vacate that easement. Give it back. I'm like, well, I would have never bought the property if I couldn't get to it. I would have never bought the property without the easement. So she sues me. And we spent $84,000 in legal fees and another $15,000 with the Mediator and then later to the arbitrator in there. Just their hourly billing. So 99,000 and change in legal bills. I won. You know, what they told me, oh, yeah, you get to keep the easement. You don't get your legal fees back. You don't get anything like that. You just spent a hundred grand to have what you had in the first place. Nobody's going to sue you. It doesn't matter if you did everything by the book. That does not keep you out of a lawsuit. Again, you don't have to be afraid. She. I had all the documents, right. I got to keep the easement, which adds hundreds of thousands of dollars to this large piece of property. But I had to spend almost 100 grand defending it. I still won. They couldn't take away my stuff. But folks. Scott, am I right? Is it. You don't have to have done anything wrong to. Exactly. Lawsuit.

I had a attorney.

I was.

I saw a couple of notes and an attorney in Florida is going to buy it because he lived in the building. And so I called my document company that holds my. Stored my documents. They couldn't find the collateral files. So the attorney signed a contract. But I took $0 in earnest money, $0 in anything. And I call the attorney back up. I say, listen, I can't sell you these notes because the two collateral files are gone. They're missing. They're mia. And so I can't deliver on the due diligence aspect of that, so I can't legally sell you these notes. He's like, oh, whatever. Then he called me. Well, I. I know you're lying to me. I know you're lying. So he sued me. And my attorney went to the. He went in, he said, listen, we can't deliver on these. He never took a dollar from the guy and canceled the contract because he could not provide on the stuff. He'd followed everything in the contract. Well, the guy who sued me for 90 grand because that was supposed to be his lost profit on this deal, and the judge threw it out quickly, but it was still cost me the 25 retainer fees, my attorney to drive from Orlando down to the county to take care of it. And you have that happen.

Yep. It's how it goes. And guys don't. You don't need to be afraid. You just need to know. You need to have your ducks in a row. There's a reason why when you go to a. If you go snow skiing, many of the resorts put every one of the chairlifts in a separate corporation. Why? Because if somebody falls out of that thing and gets hurt or dies, they don't want to lose the entire resort. They just want to lose the insurance money on that one thing. I'm not saying if they're at fault, if they're, if they're negligent, that's different. I'm saying if somebody comes after them. So I'm on the chairlift. I got on there myself, I'm screwing around, I fall out and I've been snow skiing for years. I've never even come close to falling out of the chairlift. So you'd have to, you have to go to some effort to fall out of the chairlift. But the point is they don't want to lose the whole resort, so they separate the assets. Nobody's going to sue me. Well, I'm just going to tell you it's. If you're in real estate, it's probably, I don't want to be definitive, but it's probably when, not if, exactly. Don't be afraid. Just be prepared. That's how you make money. No risk, no reward. Don't forget that. No risk, no reward, folks. You're going to take risks. Some people say, why have an llc? And I was told you don't have to do that. Well, that's true. Limited liability companies were originally statutorily the way the law was written. You didn't have to do the corporate formalities. However, in all 50 states now, without one exception of single member LLC in South Carolina, there's now case law in all 50 states that says even LLC. Even one member LLC must do corporate formalities, period. The end. That is how it is. So if you want to argue, that's fine, but when you are arguing it in court, you will say, dang it, I wish I would listen to that guy on Scott Carson's event. Wish I would have listened to that Laughlin's owner guy because I just got. Well, I just lost. I'll just say it that way. Okay, folks, just, just go with me on this. Just go with me. We want you to be safe. We want you to be successful. The government wants you to be successful. They just want you to follow the rules, okay? Some people say, oh, I'll never get audited. Well, I just told you about the army that is being hired right now, now trained right now. It's been going on for several months as of the, this event, you know, we're in April, I think that all started kind of in the fall and of last year. And so it's picking up steam. They're hiring, they're doing it. Some people say, oh, you know, I have my lawyer do my corporate minutes. All my lawyer do that to which I'm going to say to 99.9 of you, that is a lie. Don't lie to me and don't lie to yourself because guess what, folks, you probably don't have a lawyer. So to say, oh, Aaron, my lawyer does it. I'm going to say, I don't believe you because entrepreneurs don't really like lawyers. We'll Google Doc some. We'll look up something. We'll, we'll go now. People are going to chat GPT create a document for me, do something for. They don't want to go to a lawyer. They don't want to pay 600 bucks an hour for this stuff. They don't do it. Neither do the lawyers want to do it. That's why we have almost 200 law firms that are our affiliates that send us their clients to do corporate minutes and resolutions and do what we call our corporate veil program for those clients. Because the lawyers want to do bigger dollar stuff. They don't want to do minutes and resolutions, but they know it's required by law. So they send them to a company that does it for thousands and thousands of companies. So don't trick yourself in an effort to go, oh, I don't want to think about this right now. Okay, that's the biggest mistake you can make for yourself. Now, some people say, I'll do it myself. I don't know how many of you out there do it yourself first, but I think that that's reasonable and you can learn to do this. You can get the right templates, you can figure out how to fill them out. The main thing is you need to know what things need to be documented. And so I asked my team to put together a short list of the thousands of things that require board resolution. These are just the most common. Don't try to take pictures or write it down. Just sit back, take a deep breath in through your nose, out through your mouth. My wife's life life coach, she always says that in three nose throughout a Sit back and relax and just take a look at the most common items that need to be memorialized as a board resolution. Here we see the one on the top annual minutes. Remember that there's a lot of stuff that you're not expected to know. You haven't been trained to know it, but it doesn't mean it doesn't apply to you. What are you gonna say, Scott?

As they saying, it keeps going and going and going and yeah, that's. This is one of the slides. When I first I was like, holy.

Crap, these are just the most common ones. So you have to ask yourself, are you in compliance? And I'm going to assume almost everybody right now is shaking your head or grinning or saying, gee whiz, I don't know if I even want to get into a business because I didn't know how to do all that stuff. So whichever one you are, if you say I don't even want to get into it because it's hard, then probably you shouldn't be in it. If you're afraid of success, if you're afraid of the responsibilities that come with gaining wealth, then you should resign yourself to being poor. If you want to keep making more money, if you want to build a real estate empire, if you want to learn how to build a new, highly valuable revenue stream by investing in non performing notes and following the advice of Scott Carson, who is a recognized pro in this area, one of the the big fish in this industry, then just accept the fact that there's some, a little bit of effort that goes into it. You don't just get something for nothing. But you're here on a Saturday morning and you're learning right now. If you have a corporation LLC, and you just saw my presentation, my guess is that 95% of you are going, no, I'm not in compliance. So if you failed to keep proper corporate records, then you're ever sued, you have a 50 to 94% chance of losing your personal assets in order to satisfy the judgment. Remember building a fortress around your personal and business assets. If you have failed to keep your corporate records, you have a 50 to 94% chance of losing your personal assets to satisfy that business judgment. Now you say, oh, Aaron, but you said you skipped the part where it says if you're ever sued. I saw an interesting little sidebar a few years ago in USA Today and it said if you own a business, you have a one in four chance of being named in a lawsuit within the next 12 months. If you own a business, you have a 25% chance of being named in a lawsuit in the next 12 months. Cornell Law says, Look, every 22 seconds somebody's getting sued. Small business is getting sued. Most of them are little companies under a million dollars. 50 to 94 chance of losing all your personal stuff to satisfy the business judgment. If you're unprepared, then you're going to lose. If you, if you haven't done this work, folks, you're going to lose. They will pierce the corporate veil and that'll be the end of that, if they can prove any negligence and you haven't put the corporate veil in place, that's it. That's why it's the most litigated issue in corporate law, because it gets them a bigger pot of gold. Now, if you haven't started yet doing these corporate records, but you have a corporation llc, I have kind of a fun little gift for you, all right? If you, if you have not even formed your corporation or LLC yet, I encourage you to write to me at Aaron Young. Is it okay if I do it this way, Scott? Yeah, of course I want to do, I'm going to do something I've never done for your you guys before. And it's going to be free and it's, I think, I don't know, I'm hoping it's well received. But if you haven't formed anything yet, just write me an email. Aaron young@laughlin USA.com the URLs down there in the bottom right hand corner. Laughlin USA.com so it's a, A R O N just well, you can see it on my screen. Aaron Young at Laughlin usa. I just say, Aaron, I saw you on Scott Carson's teaching on his class the, the workshop. And I don't have an LLC yet or I don't have a corporation yet. And I want to set one up. And we'll take great care of you there. But for all of you that already have your first LLC or multiple LLCs or whatever, I'm going to offer you something that I hope you will really like. And this is it. I've never done, Scott, I've never done this. We're going to do your, your 2023 annual minutes for free. Wow. Your 2023 annual minutes. That's not everything you could ever do in a, in a, any board meeting. But we're going to do the part that the law is, is the most sticky on your annual minutes. We're going to make sure that your company is in good standing, that it's be acting like a real business. All right? And if you go to corpvale.com and fill out the I think there's several questions right there. We're going to get with you and we're going to do for free your 20, 23 annual minutes. Okay? This expires on the 25th, so later this coming week. So that'll give time for the, the recording to go out and so on. I'm hoping that a lot of people go, you know what? I've never done any minutes. I'VE never done the resolutions. I'm willing to at least take a chance on doing something for free. And they go to corporal.com. you can call the office on Monday if you'd like to. We're on Pacific time, so we're, we're eight to five Monday through Friday. 775-883-8484. Or just go to corporatevale.com, fill it out. We'll do it for you for free. There you go, Scott.

Wow, that's.

Yeah, we've never done that one before.

No, no, no, no, no. Now, you also have an upcoming event you want to share a little about magnifier wealth in basically a month too.

Sure. I'm, is there a break anything after this or do you have another speaker right after me?

No, no, I don't have a speaker right after you. We, we. I would be teaching for a little bit and then we've got a lunch break at 12:30, basically.

All right, well then, so everybody, everybody that's watching is on a computer. So just open another tab real quick and type in Magnify your wealth dot com. Magnify your wealth dot com. And when you guys go on a break, maybe at lunch break, don't. You don't want to miss out on what's happening live to look at something that's static, that's sitting there. Okay? So don't, don't jump ahead. But maybe when you, if you have any interest at all in learning what Magnify your Wealth summit is about, just go to Magnify your wealth dot com. Watch. There's a video at the top of that page. There's a video at the bottom of that page. You'll see who the speakers are. Scott is, has been a speaker many times and something. We had a conflict, didn't we, Scott? This.

Yeah, yeah. I had the date down as some as another time earlier in May and unfortunately we had something already booked.

So never do that again. Yeah, right, Scott, the next one is November. I think it's 3, 4, 5. I think it's November 3rd, 4th, 5th. Write it down because I would like you to be on the program. Yes, sir. It's going to be in Orlando, believe it or not, not San Diego.

Very nice. I will, I will be there.

I'm trying something new. But Anyway, folks, complimentary 20, 23 annual minutes. There's no catch. If you like what we do. We're always trying to earn your business. We've been around for all these years because, and we keep our clients. We have almost 90%. Let me just be honest. 87% renewal rate. Our clients stay with us forever and ever. We would love to earn your business, but let's first even show you what we're talking about. And you don't need to take a risk on that. We'll do it for free. I noticed that complimentary is misspelled. I just looked at the slide and go, oh, that doesn't look like I'll mention my team. Please use spell check before you send me a slide. But anyway, I can take questions for a few minutes if we have any, or we can wrap now.

I got a question here from YouTube asking what's your thoughts in council on a series LLC?

Series Ls well, two things, several things. One is not all states have a series llc, right? So first thing is you, you can hear about it. And if you're in a state and if you have a CPA who really understands series LLC and how to do the taxes, I have zero problem with them. They, they serve a purpose, but people can get a little, I don't think there's any big, particular huge value on series LLCs there. It's something that has been shoved together. It's just a form of creating kind of a daisy chain. And most CPAs don't know how to manage the taxes in a series llc. So if you're going to, if you think, oh, that sounds cool to me and I want to try using one because my state allows it and I have several entities and I'm trying to, trying to kind of cram them all together in one silo, then what? That sounds negative. I don't mean anything negative by it, but I'm saying if, if you're choosing to do this experiment, please ensure you have somebody that really understands the taxes. We work very closely with a firm in Tampa, Florida. They understand the series LLCs. They, they just do corporate tax planning. That's 95 of their business is corporate tax planning the fulfillment as well. But they don't, they're not like a firm that just does your tax returns. They're, they're. As a matter of fact, we've been joking because on the 17th, two days from now is tax filing day, right? It's the deadline. And so we said the next day, the 18th, the next tax season starts, which is tax planning season. And that's. We're going to look ahead and make sure that you're in the best position going to the end of this year. So in 2024, you pay little to nothing. So if that sounds Interesting. You know, again, right? Aaron Young at Laughlin usa. But if you want to see your complimentary minutes, which you need to have, it's a requirement by the law, go to corbel.com I'm sorry, I forgot about questions. Scott, any other Q A?

Yeah, I got a question from somebody, said I haven't done my notes in the last five years. Do I need to start a new LLC or can you guys help me out with that?

We so our program, that's called the Corporate Veil Protection Service, and I try never to talk about multiple offers. So we've already talked about annual minutes and this and the seminar. But I'll just say this. You are just part of the masses of people that own business. Don't feel bad. It's fixable. And again, if you want to, just write to me, Aaron Young at Laughlin usa. We can. We can go back. You'll be surprised how inexpensive it is for us to go back five years, get all that stuff caught up, as well as help you from the day you enroll to out for 12 months. Matter of fact, can I say the price, Scott? Is that okay? For $997, we will go back five years, interview out of you what needed to be done so you don't need to have it all. We're going to pick your brain, and our team will do it for you. We'll pull it out of your brain. We'll ratify the decisions of each year's boards, and we'll call you every month from, you know, now, going forward for a year. And we'll interview stuff out of you, create the minutes, create the resolutions, send them to you. You sign them, put them in your corporate minute book. We even have a program where you can do that in installments. And. And we report to the business credit bureau where it starts to build your business credit. So, guys, it makes a lot of sense. The easiest way to start is either write Aaron young@laughlin USA. By the way, that doesn't go to me. Sorry to break your heart. It doesn't go to me. It goes to our team. But it's. You're hearing me. So we use my full name, Aaron Young. But folks, if you go to courtville.com, let's get what you've already done done. If you're five years behind, easy peasy. We can get you caught up. We do it for tens of thousands of companies.

Yeah. All right, Start putting things in place, guys. And as Aaron said, definitely out there. It's not if, it's when at Some point in real estate and you want to have your. This is getting your ducks in a row. So things are rocking and rolling for you and Aaron's team over there. Second to none. Absolutely. Always a pleasure to talk with the whole team over there. We have questions when we're setting things up and they're very familiar with Note investors. They're very familiar with our students and how to structure things and how to get things set up and same thing, too, if you need to get your CPA on the phone with them or your attorney on what you're trying to do. They're really, really great to do that. And they have such an amazing group of experts and professionals to help you get things in the right space in the right way. So things are going well for you.

Yeah. Thank you, Scott. Thanks for having me on this Saturday morning. I think you do terrific work. I've been a fan from the first day I met you. In the same room where Magnify youy Wealth will be in a few weeks.

Yep. Just over a month there at the Dana.

Yeah. Just over a month. Well, yeah. May 19, 2021, San Diego, California. Mission Bay. In the same room where I very first saw Scott Carson who was sponsoring another event. And I'll let him tell the stories of some of the things he did.

I lost a bet. I was wearing a tutu is what he's trying to get at. One day I was wearing a tutu and fairy wings with my get up and the next day I was wearing coconuts.

And I thought this guy is such a stud that he was. He's going up in front of about 300 people in the fairy wings, the tutu or in his, you know, grass skirt and. And coconuts and. And then I went and we. I remember distinctly. I don't know if you would remember this, Scott, but I distinctly remember standing by the back doors of that room. Bitch. Look out on that patio there at the hotel. And I started asking you questions. And within, I mean, moments, I thought, oh, not only is this guy nice and a good sport, this guy knows his stuff. And I've only. The more we've done over the years, I've only become more and more and more of a fan. So I just want to thank you for having me on. Thanks to all those that stayed here and learned something. Thank you for those that have made nice comments in the chat and I look forward to any. Any opportunity to come back to your crowd here in your audience, your. Your tribe. I look forward to it. Scott, thanks so much for sharing an hour with me this morning.

Thank you for coming on here today. And give our best to Michelle and the kids and enjoy that. That crashing waves out there, buddy.

All right, I will do it. You give Steph a hug and pet the cats, and I'll talk to you later.

We'll do, buddy. We'll see you later. Thanks, man.