A Pennsylvania Winery Wins Medals At San Diego’s International Sommelier Challenge

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The first Sommelier Challenge International Wine Competition was held recently in San Diego, California. Eleven sommeliers from the nation’s finest restaurants gathered to evaluate wines from nine countries. Pennsylvania’s own Crossing Vineyards and Winery, a Bucks County winery in Washington Crossing, Pennsylvania earned the Platinum, Gold and Silver medals.

Congratulations to Pennsylvania’s own Crossing Vineyards and Winery! For more information: Crossing Vineyards Wines Earn Three Medals At International Sommelier Challenge.

What Wine Or Hospitality Business Are You Creating? Forming A Limited Liability Corporation

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Do you dream of opening your own winery, vineyard, restaurant, bed and breakfast, catering, wine-based or hospitality business? If so, it is important for you to choose the correct legal structure that’s right for your business.type of business formation

In this series on forming your business entity, we previously considered the “Sole Proprietorship” , “Partnership” and “Corporation” as business entities. Knowing and understanding how each of these legal structures work enables you to carefully decide what legal structure is right for your dream business. In today’s post, we will consider forming the “Limited Liability Corporation”.

Limited Liability Corporation

The Limited Liability Corporation or LLC is a hybrid flexible form of business entity often recommended for a new winery, wine based, or hospitality business. How LLC’s are treated for federal and state tax purposes typically depend on the entity’s classification as either partnership or corporation. The properly structured LLC offers the combined benefit of both the liability protection of a Corporation and the favorable tax treatment of a Partnership. The owners of a LLC can report business income, losses, credits and deductions on their individual income tax return. Thus, the business entity itself does not pay income tax. This can be a tax savings where the owners rates are lower than the corporate income tax rate. Because there is no entity level tax, the LLC owners avoid the double taxation on monies that are distributed to its owners that often occurs with a C-Corporation.

A LLC owner is provided limited liability for its debts and obligations. Much like the Corporation, the LLC owner is generally limited with respect to tort liability. Each member is allowed to manage and control the business without risking loss of the member’s limited liability.

Forming a LLC involves filing Articles of Incorporation with the Corporation Bureau of the Pennsylvania Department of State. A formal written Operating Agreement is recommended which sets forth the LLC’s corporate governance provisions, including but not limited to, voting rights, shares, profit distributions, management structure, ownership and buyout schemes.

As discussed in the earlier posts of this series, different business structures provide different risks, protections, and ease of administration. What wine or hospitality business are you creating?

Pennsylvania’s Wine and Grape Industry Strengthens The State’s Economy

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Pennsylvania’s wine and grape industry continues to be a major contributor to the economic strength of the State. The results of the latest update of the MKF Research Study, an independent study commissioned by the Pennsylvania Winery Association indicates increased growth in the industry during the two year period between 2005-2007. Pennsylvania’s rank in wine production moved from eighth to seventh place among wine producing states in the United States. For more information read: Wine and Grapes Enrich Pennsylvania’s Economy.

What Secrets Do You Need To Keep In Your Wine or Hospitality Business?

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Have you identified information in your winery, wine, or hospitality business that is valuable as a trade secret? Perhaps you have certain technologies, techniques, materials, innovations, inventions, customer lists or formulas that you need to protect? If so, what steps have you taken to protect the secrecy of your business’simages-confidential confidential information?

A sensible way for you to maintain your business’s trade secrets and confidential information is through the use of a Confidentiality or Non-Disclosure Agreement. A Confidentiality or Non-Disclosure Agreement can be indispensable in helping you to protect your ideas, formulas, trade secrets, new business ventures, and key business information. A Confidentiality or Non-Disclosure Agreement is a written agreement executed by you and your key employees, suppliers, distributors, buyers, sellers or independent contractors who either help create or have access to your confidential information.

A Confidentiality or Non-Disclosure Agreement can be one-way (use is restricted by one-party) or it can be mutual (use is restricted by both parties). The parties contractually agree to protect the confidentiality of your business information against improper disclosure of information that is not generally known or in the public domain. The parties are legally bound to keep the information secret.  If a disclosure of your confidential information is made, you may sue for damages or pursue a court order against the violator for future unauthorized disclosures.

Key elements of a Confidentiality or Non-Disclosure agreement include:

  • defining the confidential information
  • determining time frames to maintain confidentiality of the information
  • determining the particular purpose for which the parties will disclose the confidential information
  • agreement that the parties not disclose the information to third parties
  • binding the heirs and assignees of the agreement.

It is important to limit access to such information to those persons in your business who need to know certain information in order to perform their duties. Thus you should take reasonable steps to store and secure your paper and electronic information.

What confidential information  do you need to keep secret?   Perhaps now is a good time to consider a Confidentiality or Non-Disclosure Agreement for your winery, wine or hospitality business.

What Wine Or Hospitality Business Are You Creating? Forming A Corporation

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Are you considering starting a winery, restaurant, bed and breakfast, catering, wine-based or hospitality business? If so, when forming a business it is important to choose the legal structure that’s right for your type of business formationbusiness circumstances.

In the earlier posts of this series, we considered the “Sole Proprietorship” and the “Partnership” business entities. Knowing and understanding how each of these legal structures work will enable you to decide what legal structure is right for you. In today’s post, we will consider forming the “Corporation”.

Corporations

Incorporating your business can be complex and expensive. Forming a corporation is a way for you to limit your personal liability (with some exceptions) for the debts of your business that you do not personally guarantee. A corporation is a separate entity from the person(s) who own or operate it.  There are two types of corporations that are distinguishable based on federal taxation laws.   A “C-Corporation” is a business entity that is separate from its owners and must pay federal corporate income tax. Conversely, a “S-Corporation” is a business entity that does not pay federal income tax. Taxes for the “S-Corporation are paid by the corporation’s owners.  To form a corporation in Pennsylvania, Articles of Incorporation must be filed with the Corporation Bureau with the Pennsylvania Department of State.

S-Corporation

Electing to establish your business as a S-Corporation allows you to limit your liability as a corporate owner but requires you to pay income taxes the same way one would if they were a Sole Proprietor or Partnership.   For purposes of income tax, the income is considered earned by the corporation but is passed through the corporation to the corporate owners or shareholder’s personal income tax return.   To elect to operate as an S-Corporation, the corporate owner must sign and file IRS Form 2553.  Unlike the C-Corporation, which has a two tier double taxation structure, an S-Corporation tax bill is likely to be less and may therefore be a more suitable option for a start up business entity.   Additional restrictions apply regarding citizenship and shareholder size that may also need to be considered.

C -Corporation

A C-Corporation is a regular for profit entity that is separate from its owners and taxed under IRS corporate income tax rules.   The corporation files its own tax returns and pays corporate taxes on the profits accumulated in the business.   If the profits of the corporation are distributed to its owner(s), then the owners must pay individual taxes on the salary, bonuses, or dividends they receive.   This is known as the C-Corporation’s double taxation structure. When forming a corporation, you must follow certain corporate formalities. You will need to hold annual directors and shareholder meetings.  You will need to keep minutes of your corporate meetings and maintain good record-keeping systems.

As discussed in the earlier posts of this series, different business structures provide different risks, protections, and ease of administration.  In the next post of this series, we’ll consider the Limited Liability Corporation.   What wine or hospitality business are you creating?

Should Pennsylvania Re-Evaluate Its Need For Private Liquor Stores?

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A recent study by the Commonwealth Foundation indicates that Pennsylvania’s rates of underage drinking hasn’t largely declined as a result of  public versus privately controlled liquor system. Has the time come that selling off state liquor stores is now a good idea? Read also the: Lehigh Valley ‘s The Express-Times: Study Shows Pennsylvania Liquor Control System Doesn’t Significantly Underage Drinking, Drinking Driving Fatalities.

Wine, Corn Dogs, and Nachos. Is This A New Way To Reach Wine Drinking Millennials?

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Value wine is apparently finding a place on the shelves of 7-Eleven stores.  Driven by today’s down economy, 7-Eleven stores is moving into the business of selling bargain wines to go with its new line of food staples.  As a competitor to the “Two Buck Chuck” wine, has 7-Eleven stores found a new way to reach today’s wine drinking millennial’s?  After all, this age-cohort can regularly be seen at 7-Eleven stores with corn dogs and nachos.  For More Details Read: 7-Eleven Plans To Sell Its Own Brand of Chardonnay, Cabernet Sauvignon