Michael Ray Smith

Michael Smith advises clients with starting up new businesses, buying and selling businesses, negotiating contracts, resolving internal disputes among the owners of businesses, and protecting the rights of businesses and business owners through litigation. He is particularly experienced in creating and advising limited liability companies (or LLCs). His practice also includes tax exempt, nonprofit organizations, including 501(c)(3)'s. He also represents clients in appeals, both civil and criminal. Mike has served as an adjunct professor at the Indiana University law school in Indianapolis, and he frequently teaches continuing education courses for other lawyers, paralegals, and accountants. He has published the Indiana Business Law Blog, https://businesslaw.handponist.com/blog/, since 2009.

Mike was born and raised in Tennessee, but he has been a Hoosier for most of his life. He moved to Indiana in 1978 after receiving a B.E. in chemical engineering (summa cum laude) from Vanderbilt University to work for Eli Lilly and Company in Lafayette, Indiana. In 1989 he enrolled in law school while continuing to work full time at Lilly, obtaining a J.D. (summa cum laude) from the Indiana University Robert H. McKinney School of Law in 1993. He then moved to the Lilly Law Division, working first in the Environmental Law Group, and then in Securities and Commercial Transactions. While he was in the Law Division, he organized and led the Lilly Law Divison Pro Bono program. In 2008, he retired early to open a business law practice in Fishers, Indiana, originally known as Michael Smith Law Office, LLC and later as Smith Rayl Law Office, LLC. In 2018, he and his partner, Susan Rayl, joined with attorneys in forming Hand Ponist Smith & Rayl, LLC.

Mike's recreational interests include backpacking, fishing, kayaking, gardening and native plants, and woodworking with hand tools (especially vintage tools).

Indiana University Robert H. McKinney School of Law

J.D. (1993) | Law

1989 - 1993

Honors: summa cum laude

Activities: Note Development Editor, Indiana Law Review

Purdue University - Purdue University

M.S. (1982) | Chemical Engineering

1980 - 1982

Activities: Research in the possible application of ion exchange technology in artificial kidneys.

Vanderbilt University

B.E. (1978) | Chemical Engineering

1974 - 1978

Honors: summa cum laude

Partner

Hand Ponist Smith & Rayl, LLC

2018 - Current

Attorney

Hand Ponist Smith & Rayl, LLC

2008 - 2018

Originally Michael Smith Law Office, LLC

Adjunct Professor

Indiana University School of Law -- Indianapolis

2010 - 2012

Taught Contract Drafting to law students

Contract Attorney

Community Development Law Center

2009 - 2009

Adjunct Professor

Indiana University School of Law -- Indianapolis

2009 - 2009

Conducted the Nonprofit Externship Program for law students at the Community Development Law Center.

Attorney/Counsel

Eli Lilly and Company

1993 - 2008

For more than fourteen years, Michael Ray Smith was in-house counsel for Eli Lilly and Company. While in Lilly's law division, Mike worked in the environmental legal department, in the office of the corporate secretary, and, for the last ten years, in the commercial transactions group. While in commercial transactions, Mike supported the Company's global sourcing operations, writing and negotiating contracts for all manner of goods and services, including a $1.3 billion energy management outsourcing transaction.

Indiana Business Law Blog

Hand Ponist Smith & Rayl, LLC

Yes, Your LLC Needs an Operating Agreement

Fishers Business Insider

2011

Limiting the Discretion of the Administrator of Poor Relief in Indiana

Indiana Law Review

1993

Advising Closely Held For-Profit Businesses, Annual CLE Conference, Rochester, IN

August 22, 2019

Fulton County Bar Association

Heartland Pro Bono Award

Heartland Pro Bono Council

2004

Indiana State Bar Association

Member

Current

Indianapolis Bar Association

Member

Current

American Institute of Chemical Engineers

Member

Current

Indiana

Since 1994

D.C. Circuit

Since 1995

U.S. District Court, Northern District of Indiana

Since 1994

U.S. District Court, Southern District of Indiana

Since 1994

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Business Law

Business Contracts, Business Dissolution, Business Finance, Business Formation, Business Litigation, Franchising, Mergers & Acquisitions, Partnership & Shareholder Disputes

Estate Planning

Health Care Directives, Trusts, Wills

Appeals & Appellate

Civil Appeals

Criminal Law

Criminal Appeals

• Limited Liability Companies
• Nonprofit Organizations

Q. Im going to start an ecommerce website. I do I need an LLC out the gate to protect myself?

May 17, 2022

A: I'm not a Tennessee attorney, but the answer to your question would be more or less the same in any state. I agree with Mr. Wright. Yes, you should have an LLC out of the gate. A corporation is another alternative, but an LLC is generally the structure of choice for small businesses. To stretch the metaphor almost to its breaking point, you should set up the LLC even before you get in the gate. For example, you should set up an LLC before you register domains and then register them in the LLC's name instead of yours. I also encourage you to hire an attorney in Tennessee to help you set it up rather than trying to set it up yourself, even if you will be the only owner. Although LLCs are relatively easy to organize as compared to corporations, and DIY LLCs are common, there are potential pitfalls (which are specific to the particular state statute) that an attorney can help you side-step. There may also be beneficial aspects of the state's LLC statute that you can take advantage of that you might overlook if you do it yourself. I also recommend you also find an accountant and an insurance broker, again right out of the gate. There are some basic decisions to make when you set up the LLC, and it's best to make them with the advice of both an attorney and an accountant. Insurance, especially liability insurance, is also important, even with the liability shield afforded by the LLC or corporation. Good luck with your new business venture!

Q. LLC is looking to take on its first&only employee,the job is all online work from home, how do I do it+what should I no?

May 5, 2022

A: Note that I'm not a Michigan lawyer, and I can't tell you about specific Michigan requirements, such as whether you need to buy workers' compensation insurance or pay into the unemployment compensation program if you have just one employee. (My guess is that the answer to both is yes, but I don't know.) With respect to withholding taxes, I advise my clients to pay someone to do that for them, from the very beginning, starting with their first part-time employee. You CAN do it yourself, but unless you have experience in accounting or bookkeeping, the odds are good that you'll eventually make a mistake. Find a good payroll processing company, There are large, nation-wide payroll processors, and there are local ones. I can't say that one is necessarily better than the other. If you know other small business owners, ask them how they handle payroll. Do enough research and ask around enough to satisfy yourself that the one you choose is reputable, provides good services for a reasonable price, and does not appear to have a history of making mistakes (to the extent you can get that sort of information). A good place to start is always the Better Business Bureau, but don't stop there. Another option is to have your accountant handle your payroll, if he or she does that. (Don't have an accountant? Get one. And a lawyer.) Many accountants, especially sole practitioners, don't do payroll processing because they can't compete with the companies that make that their business, but it's still a good option, although you may pay a bit more.

Q. What forms must be submitted to IRS if my LLC brings on a new member

March 31, 2022

A: If your LLC is currently taxed as a disregarded entity (i.e., like a sole proprietorship so that you report all the tax items on your Form 1040 instead of filing a tax return for the LLC), and you add members, you will need a new EIN. The LLC will then be taxed either as a partnership (the default status) or as a corporation. If you want the LLC to be taxed as a Subchapter S corporation, you'll need to file Form 2553 to elect that status. If you want it to be taxed as a Subchapter C corporation (an available option, but probably not the best), you'll file Form 8832 to elect that status. If your LLC is already taxed as a corporation (either S or C), and you don't want to change that status, you don't need a new EIN and you don't need to file a new election. I infer from your question that your LLC is organized in Indiana. Regardless of tax status, you don't have to file anything with the Indiana Secretary of State to add new members unless you want to make their identities a matter of public record. That's not required, but it can simplify things when it comes to opening bank accounts, etc. In addition, if the LLC is member-managed and you want to change it to manager-managed, or vice versa, you need to file articles of amendment to the articles of organization. Regardless of what you do with tax status, you should have a written operating agreement. As a matter of fact, you should have one even if you don't add new members, but it becomes even more important if you do. When you go into business with other people, there are a host of questions that must be considered, many of which you never had to think about before, and the operating agreement is the way the answers are documented and enforced.