What is the difference between an LLC and a Corporation?
By law, a corporation is a separate entity that has its own rights and responsibilities. In forming a corporation, potential shareholders offer money and/or property in exchange for stock. Advantages of a corporation include limited liability for stockholders, unlimited life for the business, relative ease in raising capital, simple transfer of ownership through the sale of stock and tax-free benefits to the owner/employees. Disadvantages of a corporation include complexity, limitations on activities by the corporate charter, extensive regulation and record-keeping rules, and double taxation, once on corporate profits and again on dividends. A Limited Liability Company (LLC) is created and regulated under state laws. An LLC is allowed to possess the limited liability characteristics of a corporation, but is treated as a partnership for federal tax purposes. A major advantage to an LLC is the same tax pass-through feature of an S Corporation. Furthermore, they offer the flexibility of a partnership without the restrictions of an S Corporation.
How do I know what type of company to form?
We will review the pros and cons with you while we look at your business structure and future goals.
What is a partnership? If the partnership fails, what happens?
Legally, a partnership is inseparable from its owners. As a result, each partner (with the exception of the limited partners in a limited partnership) is personally liable for the entire amount of any business-related obligations. This means that if you form a partnership, creditors can come after your personal assets (such as your house or car) to make sure any partnership debts get paid. Legally, a partnership is inseparable from its owners. As a result, each partner (with the exception of the limited partners in a limited partnership) is personally liable for the entire amount of any business-related obligations. This means that if you form a partnership, creditors can come after your personal assets (such as your house or car) to make sure any partnership debts get paid.
Why do I need a business attorney?
We can...
Ensure compliance with company or corporate formalities. A business attorney will draft resolutions, minutes, etc.
Prepare and review business documents and contracts. Although there are quite a few self-help legal guides and pre-printed forms do exist, you should not rely on these materials exclusively. The law can be complicated, and mistakes can be costly.
Prepare employment agreements and employee policies/handbooks protecting you from wrongful discharge and discrimination lawsuits.
Amend or replace basic agreements like shareholder agreements or operating agreements and purchase agreements.
Provide immediate access to legal counsel with knowledge of your business in times of crisis to evaluate situations as they arise and provide you with timely advice and guidance.
Provide a confidential sounding board to help assess company issues, strategies and plans.
Point out potential problems that you may not anticipate with your company, its employees, operations, policies and procedures.
Negotiate on your behalf for the sale of your company or the acquisition of another company or its assets.
Negotiate financial arrangements. Navigate the sometimes complex landscape of obtaining State and Federal licenses your business may need.