Starting a business seems simple enough; however, choosing the appropriate form of business entity in which to operate can be quite complex. The issue of entity choice generally arises when considering starting a new business or, when planning to acquire an existing business. The most common business entities are formed as corporations, limited partnerships, or limited liability companies. Other available entity choices may be appropriate as well. Decisions must also be made concerning taxation of the entity and its owners. If there is to be more than one owner of a business, even if the owners are members of the same family, the owners should have a separate business agreement that is entity specific and that provides a legal framework to establish the rights, duties and obligations of each owner to the other. This should generally be accomplished concurrently with the formation of the entity. Following formation, the needs of each business and its owners will change and evolve over time and usually add more complexity to the advice that the owners will require. The needs of each business and its owners will vary and may include matters such as the need to maintain appropriate business structure and formalities, creation of appropriate employment agreements or independent contractor agreements and development of fringe benefits to attract and retain quality employees. We guide our clients through the maze of legal, tax, operating formalities and personal liability protection considerations in choosing an appropriate business entity to start a new business or when acquiring an existing business. We also work closely with our clients’ other professionals as appropriate in providing advice. We are able to address the needs of our clients in this area by providing advice and legal services that include:
- Selection and formation of a business entity through which a business will operate
- Ownership structure of the business
- Preparation of employment and independent contractor agreements
- Preparation of agreements between and among business owners such as shareholder agreements, partnerships agreements and operating agreements
- Structuring the buy-sell provisions of owner business agreements to avoid the many pitfalls that may result when an owner of a business dies
- Advice concerning the effective use of life insurance in funding the buy-sell provisions of the business owners agreement