Our corporate and business lawyers have experience forming and advising multiple forms of business entities:
- Sole Proprietorships
- General Partnerships
- Limited Partnerships
- Limited Liability Companies
Through our experience, we have acquired in-depth knowledge and understanding of the opportunities and risks involved with each form of legal entity. At MSB, our attorneys can help you understand tax benefits and ramifications, requirements for formation and management, transferability of ownership, potential liabilities, and more, all to help you decide which entity is right for you.
Setting Up a New Business
If you are contemplating starting a business, our experienced lawyers will meet with you in order to learn about your goals and objectives. Following that, we will explain the advantages and disadvantages of sole proprietorships, partnerships, limited liability companies, and corporations. Once you decide which business entity is right for you, we will prepare and file all the documents necessary to establish your business with the appropriate State registration agencies. Additionally, we will help you obtain any necessary tax identification numbers with the appropriate federal and agencies.
Existing Entities and Corporate Governance
Through the course of pursuing your commercial enterprise, as your trusted legal advisor we will help you ensure your day-to-day legal matters are addressed and resolved, including:
- Succession planning. We will help you establish a plan for the continuation of business operations if you or one of your key officers become unable to do so, or if you decide to sell your business in the future.
- Employment agreements. Your business’s employment contracts will be negotiated, reviewed, and prepared by us.
- Contracts. We will help you handle all other relevant business contracts including vendor and customer contracts, shareholder agreements, commercial leases, non-compete agreements, and confidentiality agreements.
The pros and cons of any business structure should be considered carefully, which is why speaking with a MSB corporate lawyer can help you make your best decision. One of our favorite forms of business entity for many clients is the LLC. We know your personal assets and the company’s assets are of utmost importance as a small business owner. By forming a Limited Liability Company (LLC), you can take steps to protect your assets and minimize your tax burden. The LLC can be a great option for business owners who wish to separate their personal and business assets, but do not intend to go public or raise outside capital.
What is an LLC?
A limited liability company (LLC) is an independent corporate entity with its own tax identification number, separate bank accounts, and the ability to conduct business under its own name. An LLC with more than one member has elements of both a corporation and a partnership. In the same way that a partnership is a pass-through entity for tax purposes, members of a multi-member LLC avoid taxation at the corporate level (unlike in a C-Corp), and are taxed only once on profits from their LLC.
Operating agreements detail the rights and responsibilities of the company’s members, outline certain operating procedures, discuss corporate governance, and address numerous other business and legal issues required for the successful operation of an LLC. In an LLC, there is a lot of flexibility in terms of structure, so the operating agreement is crucial. The operating agreement allows you to customize many aspects of your business to fit your needs, such as tax structure and member rights. An operating agreement is not technically required, but it is highly advised for every LLC to have a detailed operating agreement. Even single-member LLCs can benefit from the organization and clarity an operating agreement provides.
Advantages of an LLC
There are many advantages to operating as an LLC:
- No double taxation.
- Less corporate governance and paperwork.
- No required shareholder meetings.
- More flexibility.
Disadvantages of an LLC
There are also some some disadvantages to operating as an LLC:
- Less attractive to outside investors.
- Lack of formal corporate governance can lead to sloppy record keeping.
- Failure to follow general corporate procedures can increase risk of member liability.
If you are considering starting a business, or already have one and want to ensure you are protecting your personal assets and maximizing tax advantages, contact MSB to determine the right entity formation for you.