My Firm champions small business and I want to help you organize, form, maintain and wind down your small business. The following are some general questions for formation. My firm also handles on-going business matters such as: preparation of resolutions, consents and proxy materials; employment agreements and handbooks; and negotiating and drafting contracts.
Q: What type of business organization is right for me?
A: The answer to this question depends on the specifics of the business. Some available forms of business include: sole proprietorship, partnership, general partnership, limited liability company, S corporation, and C corporation. We will consult you in the merits and shortcomings of each of the forms. The C corporation, named for an IRS designation, is what we traditionally think of when we say a corporation. It is publicly traded, its shareholders can be people or other entities, corporate income is taxed twice (once at the corporate rate and then at the individual rate as dividends or distributions, and there is limited liability for the owners, called shareholders. A limited liability company, or LLC, has become popular since its inception in 1991 to provide limited liability of a corporation with flow-through taxation of a partnership.
Q: What documents do I need to start the business?
A: Some of the basic documents our firm will provide are the articles of incorporation, bylaws or operating agreement, and shareholder or member agreements.
Q: What is an Operating Agreement or Bylaws?
A: An operating agreement is the governing document for a limited liability company. This is the document that spells out exactly how the business should function in its day-to-day. Bylaws are a similar governing document that applies for corporations. The main difference between the two is flexibility; the operating agreement is far more flexible.
Q: What is a Shareholders' Agreement?
A: A shareholder or member's agreement addresses particular issues that are not covered in the bylaws or operating agreement between ownership of the company. These documents may address issues such as the death, disability, or retirement of a shareholder or member. They may also address potential sales of ownership interest and the company's response, or the persons who are required to purchase insurance and the amount of insurance that must be purchased. They can also address situations of deadlock between the shareholders or members, and are a preventative measure to ensure smooth operation of the business.