Contract and Business Law
Here at the firm we can help you every step of the way from business formation, obtaining proper licenses, lease agreements, business contracts, employee contracts, lawsuits, and much, much more. Read below for some basic information and call the firm for more details.
Starting a business is a complicated, exciting and challenging endeavor. A business needs to be good at what they do whether it is providing a service or product or owning and operating a bar or restaurant. A new business needs to hit the ground running. Even if a person has the best idea in the world and is amazing at what their service, if they are opening a business for the first time there are things that must be carefully decided and determined:
-Business formation-type of business entity (determines liability and tax structure)
-Limited Liability Company (LLC)
-Type of licenses needed
-food and beverage licenses
-rules and regulations
-employees or independenat contractors
-salary of people involved
-Buying or leasing property
-liability of business
-business insurance (ex. mal practice or E and O insurance)
Each new business has a set of its own specific issues. In order to find out what best fits your business you need to contact an attorney and find out what each option means and then determine the best plan of attack. Here at the firm, we are experienced with helping new entrepenaeurs begin their business and place them on the track to success.
If you are a group of individuals consisting of 2 or more people then you have the option of starting a Partnership, an LLC or a Corporation.
-General partnership in which all partners in the business are personally liable for the entire business.
-Limited Partnership in which Personal liability is joint and individual for the general partner(s) who are responsible for the obligations of the partnership; limited partner(s) are liable to the extent of their capital contributions to the partnership.
These options allow the partner to be taxed on their personal incomes but leave all general partners completely and fully personally liable for all debts of the business.
The pros and cons to this type of business are cheap and easy creation and not being taxed as a seperate entity, however the general partners retain full personal liability for all contracts and expenses as well as any and all lawsuits.
Limited Liability Company (LLC):
-Seperate Entity which requires Formation
-Articles of Organization
-Operating Agreement (agreement that governs your Company)
-EIN number (tax number- if you want bank accounts or employees)
-Limited liability of only the assets placed in the Company (provided no comingling of funds)
-Pass through Taxation (means each member is taxed on personal income tax unless opt differently)
This option is available to a single person or a group of 2 or more people. A 1 person owner is known as a single member LLC and it is a very common structure for ownership of real estate, businesses and other entities whose desire is to limit the liability to only the business' assets. Each person in an LLC with 2 or more are known as members. Depending on the agreement determining the payout structure, each member reports the expenses and income on his/her own personal income taxes. This option is more expensive in the beginning stage due to the publication fee however this is the entity type in which is most appropriate for people looking to limit their personal liability to their new business.
-File Certificate of Corporation
-Appoint Board of Directors
-Have first Meeting
-Following the rules of corporate structure are essential to retaining the limited liability
-Must have annual meetings
-Never comingal assets
-Personal Liability is limited to stock investment
-Must file a seperate tax return for the business
This option is available to 1 or more people. After creating the corporation, especially as the sole owner, it is important to make sure one does not commingle any money or assets otherwise they run the risk of piercing the corporate veil and becoming personally liable. A corporation must file its own separate taxes which in some cases causing the problem of double taxation to the owner of the corporation.
There are many pros and cons for each type of business entity depending on the type of business in which the owner will be involved. Contact an attorney before you begin your business so that you can conduct your business free of other worries not concerning the day to day activity of the business.