A federal judge in Texas has officially blocked the U.S. Federal Trade Commission (FTC) from enforcing a nationwide ban on non-compete agreements in the United States. This means that the provisions of the FTC’s ban – which were scheduled to take effect nationwide on September 4, 2024 - will no longer take effect for the time being.

Maintaining adequate corporate books and records protect the limited liability of a legal entity. Proper records help prevent "piercing the corporate veil," which could hold shareholders personally liable. In states like Florida and Delaware, shareholders have rights to inspect these records under certain conditions.

The FTC has banned non-compete agreements in the U.S., marking a major shift in employment law. This move enhances job mobility, wage potential, and entrepreneurship, though NDAs and trade secret protections remain in force. Non-competes previously restricted employees from working for competitors or starting similar businesses post-employment. The ban supersedes state laws, requiring employers to pivot to stronger NDAs, trade secret protections, and improved employee retention strategies.

Electing S Corporation status can offer significant tax benefits for small businesses by enabling pass-through taxation, avoiding double taxation on corporate income. S Corps provide tax savings on self-employment income and allow deductible business expenses. However, they come with strict eligibility requirements, administrative complexities, and scrutiny over reasonable compensation.

Limited Liability Companies (LLCs), C-Corporations, S-Corporations, and Partnerships each have unique characteristics and selecting the right business entity in your situation is a critical decision that can significantly impact your liability protection, taxation, management, and potential for outside investment(s). Understanding the similarities and differences among these entities, is essential for making informed choices aligned with your business objectives and preferences.