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Advice You - Beware of the Top 20 Costly Mistakes, Even One Could Cost You Your Business
A must read before you form your corporation.
We've talked to literally hundreds of business owners over the years. If there's one thing we've learned beyond the shadow of a doubt from those who have been sued, needlessly poured money down
We've talked to literally hundreds of business owners over the years. If there's one thing we've learned beyond the shadow of a doubt from those who have been sued, needlessly poured money down
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
bottomless tax or expense holes, or whose businesses have failed, it's this: NOT ONE was excited over the few bucks they saved by using a low cost incorporator -- or worse, flying solo -- to incorporate or establish an LLC for their business
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
.
Years and untold dollars later, they sorely regret the hard work, stress, and many, many lost hours of time with family and friends -- consumed instead by lawyers, bankers, accountants and creditors, while picking up the pieces of the wre
Years and untold dollars later, they sorely regret the hard work, stress, and many, many lost hours of time with family and friends -- consumed instead by lawyers, bankers, accountants and creditors, while picking up the pieces of the wre
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ckage from a devastating lawsuit or bankruptcy.
All those losses could have been prevented by proper planning with the right company to support them. All those losses were the indirect, and sometimes direct result of “penny-wise, pound fool
All those losses could have been prevented by proper planning with the right company to support them. All those losses were the indirect, and sometimes direct result of “penny-wise, pound fool
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
sh” thinking. They've learned (the hard way) the value of having a company like NCP to be at their side, constantly guarding against missteps and roadblocks.
We hear the same basic horror stories told over and over again. And while we'd nev
We hear the same basic horror stories told over and over again. And while we'd nev
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
er say “we told you so,” we've learned from them as well. Let us share with you the 20 most common mistakes they've made, both before and after their entity formation:
10 Costly Mistakes Before Entity Formation:
1. Forming an LLC and NOT k
10 Costly Mistakes Before Entity Formation:
1. Forming an LLC and NOT k
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
nowing how it's taxed (Are you a single or multi-member LLC? Will you be disregarded for tax purposes, taxed as a partnership, a C-, or an S-corporation?)
2. Forming an LLC for real estate and NOT knowing which is best. Is the property inve
2. Forming an LLC for real estate and NOT knowing which is best. Is the property inve
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
stor vs. dealer? (Make the wrong choice, and be doomed to a life of unnecessary taxes.) 3. Forming an LLC and having it managed by Members instead of Managers (A sure way to lose flexibility and control)
4. Forming an S corporation and NOT
4. Forming an S corporation and NOT
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
nowing the shareholder rules (Imagine discovering years later that you've violated an S corporation shareholder rule -- and that you now owe years of expensive C corporation back taxes.)
5. Forming an S corporation when your company anticip
5. Forming an S corporation when your company anticip
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ates future value (There must be a better approach… and indeed, there is!)
6. Forming a C corporation to take advantage of fringe benefits when your business doesn't fit the C corporation model. (Can you spell nightmare?)
7. Forming an ent
6. Forming a C corporation to take advantage of fringe benefits when your business doesn't fit the C corporation model. (Can you spell nightmare?)
7. Forming an ent
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ity in Nevada and NOT knowing when to foreign register, and for what reasons. (“Can't you just get a mailbox?”)
8. Forming an entity and hiring independent contactors and employees WITHOUT knowing the rules. (It makes a difference as to whi
8. Forming an entity and hiring independent contactors and employees WITHOUT knowing the rules. (It makes a difference as to whi
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ch states you'll need to foreign register.)
9. Forming an LLC taxed as a partnership WITHOUT having an “official” partner . (Maybe the IRS won't notice…)
10. Selecting an inexperienced or disreputable company to help you form your entity.
9. Forming an LLC taxed as a partnership WITHOUT having an “official” partner . (Maybe the IRS won't notice…)
10. Selecting an inexperienced or disreputable company to help you form your entity.
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
There's no excuse for not checking references with the BBB, local professional organizations and testimonials.)
10 Costly Mistakes After Entity Formation:
1. NOT completing corporate AND LLC formalities (Yes, LLCs should have them too!) 2.
10 Costly Mistakes After Entity Formation:
1. NOT completing corporate AND LLC formalities (Yes, LLCs should have them too!) 2.
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
NOT completing the LLC operating agreement (Unless you've got a lemonade stand, it's essential)
3. NOT properly capitalizing the entity, and especially not being crystal clear with partners about your capitalization (A disaster waiting to
3. NOT properly capitalizing the entity, and especially not being crystal clear with partners about your capitalization (A disaster waiting to
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
happen!)
4. Putting LLC Members on payroll vs guaranteed payments (Do you know the advantages?)
5. Forming an LLC taxed as an S corporation and having the incorrect operating agreement (A subtle, but effective nuance that must be handled p
4. Putting LLC Members on payroll vs guaranteed payments (Do you know the advantages?)
5. Forming an LLC taxed as an S corporation and having the incorrect operating agreement (A subtle, but effective nuance that must be handled p
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
roperly.)
6. NOT completing a buy sell agreement for the partners (Again, being crystal clear will save your sanity.)
7. Falling behind on employee payroll taxes to the IRS and your state (This will cost your business dearly -- at best .)
6. NOT completing a buy sell agreement for the partners (Again, being crystal clear will save your sanity.)
7. Falling behind on employee payroll taxes to the IRS and your state (This will cost your business dearly -- at best .)
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
8. NOT meeting with your CPA to set up a chart of accounts (Running your business off a checking account balance is a fast track to bankruptcy.)
9. Registering your domain name to your operating entity (This may account for 70% or more of y
9. Registering your domain name to your operating entity (This may account for 70% or more of y
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
our lead generation-a huge asset at risk.)
10. NOT obtaining the proper business licenses (Being out of compliance can punch gaping holes in your bottom line.)
We at NCP pride ourselves on conscientious, well-informed expertise to help you
10. NOT obtaining the proper business licenses (Being out of compliance can punch gaping holes in your bottom line.)
We at NCP pride ourselves on conscientious, well-informed expertise to help you
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
avoid these costly mistakes. We take the time with you to ensure that we understand every relevant aspect of your company, and diligently do our homework so that you're fully prepared for whatever the business world throws at you. Remember,
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
you get what you pay for!
Don't wait until January to get started! Incorporate before the end of the year and get a head start on tracking your Schedule C for 2007. Waiting until the last minute is a sure way to show up on the IRS 's radar
Don't wait until January to get started! Incorporate before the end of the year and get a head start on tracking your Schedule C for 2007. Waiting until the last minute is a sure way to show up on the IRS 's radar
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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