here are many complex issues that can arise in the course of launching a new business, expanding a business, selling a business, or merging with another company. Experienced business attorneys can help businesses navigate today’s complex legal environment by focusing on protecting your assets so that you can focus on the things you do best. Business and corporate lawyers can help a company in the following areas:
- Business formation including Articles of Incorporation with the state, Bylaws, Meeting Minutes, and Shareholder Certificates.
- Regulatory compliance
- Contract drafting and negotiation
- Corporate governance agreements
- Confidentiality, non-disclosure and non-compete agreements
- Independent contractor agreements
- Sales agreements
- Mergers, sales, or acquisitions
- Corporate dissolution
Business Entity Advice and Formation – What type of structure is best for you? – One of the first decisions for a new business is what type of business entity is appropriate for the business to grow and protect the interests of its owners. When you start a business, you need to consider the pros and cons of many different business structures, such as a partnership, limited liability company (LLC), sole proprietorship, corporation, or non-profit. The structure you choose should take into account liability protection, taxes and investments.
- Liabilities – Generally, a business which carries risk should be careful to limit the personal liability of its owners. Corporations and LLCs offer owners limited liability. This means in the event of a judgment against the business, it will be difficult for a creditor to receive compensation from the business owners personally. In contrast, sole proprietorships and partnerships carry more personal liability for their owners.
- Taxes – In some business structures, the business owner pays taxes on profits. Business owners of sole proprietorships, partnerships and LLCs will report and pay taxes on all net profits from their business, even if they take no money out of the business’ account during the tax year. For this reasons, sole proprietorships, partnerships and LLCs are often referred to as “pass-through” tax entities, since the taxes on the profits and losses pass through to ownership on their personal income taxes. Corporations are taxed differently. Unlike pass-through entities, a corporation’s owners do not pay taxes on the net profits; instead, they pay taxes only on the profits they take from the business. This means they are taxed on their salaries, dividends and bonuses. The corporation is a separate tax entity itself, meaning it must pay taxes on its profit each tax year.
- Investments – Corporations are entities which sell shares of ownership through stock offerings. Sole proprietorships, LLCs, partnerships, and non-profits do not sell ownership through the sale of stock. An advantage of the corporate structure is that it allows the business to raise money by attracting investors. However, for businesses which do not envision issuing stock or raising money from investors, the corporate structure is probably not necessary, since it comes with additional costs and procedures. For owners who want the limited liability a corporation offers, the LLC structure is a good alternative. A business lawyer can help new and expanding business owners determine which business structure offers the right potential for growth while protecting the assets of the business.