The legal structure you choose for your business is the foundation upon which your business is built, and, accordingly, is essential to the future success of any business.
The De Cárdenas Law Group can advise on the best entity structure for your business goals and assist with all phases of business entity formation.
Here is a brief description of different types of business entities:
A Corporation is a fictitious entity that is formed as a separate “entity” than its owners and employees. Corporations are able to purchase assets and incur debts just like a normal person. Corporations are used to separate personal liability of its owners from liabilities incurred by the corporation. Corporations will last until they are dissolved. The Internal Revenue Code allows for two types of corporations, S and C corporations. Profits from a C Corporation experience double taxation in the sense that net income of the business is taxed as corporate income. Once the profits of the corporation are distributed to the owners they are again taxed as income to the owners. By contrast, an S corporation, also known as a pass through entity, is not itself subject to income tax. Shareholders of an S corporation are subject to taxes based on net income according to their share ownership in the company.
Just like a corporation, a Limited Liability Company (LLC) allows for the separation of a business’ owners from the liabilities incurred by the business. This key component allows individuals to invest in a company by only risking the amount invested, i.e. without further liability. Another important feature of a LLC is that it is not subject to double taxation, as C corporations are. LLC’s have generally less recording requirements than corporations, making them ideal vehicles for certain businesses. However, if your strategic plan involves private equity as capital, you will likely want to utilize an S or C Corporation since an LLC does not allow for the creation of distinct classes of preferred versus common stock.
A Partnership is an agreement between two or more parties wherein they agree to share the profits and losses of a business venture. There are two types of partnerships; general and limited partnerships. General partners are normally liable for the debts and judgments against the partnership. Limited partners on the other hand enjoy personal protection from the debts incurred by the partnership and judgments against it. In some partnerships, a particular partner may be fully liable for the obligations of the partnership as a whole. For this reason, it is critical to have an experienced business lawyer review any proposed partnership agreements for potential liability issues.
Some of the specific entity formation services provided by the De Cárdenas Law Group include:
✓ Corporate, LLC and Partnership Formation
✓ LLC Operating Agreement
✓ Corporate By-Law
✓ Partnership Agreements
✓ S Corporation Establishment
✓ C Corporation Establishment
✓ Corporate and LLC Minutes
✓ Corporate Shareholder Buy/Sell Agreements
✓ LLC Member Buy/Sell Agreements
✓ Asset and Stock Purchase Agreements
✓ Merger and reorganization transactions
✓ Governance issues; officer and director responsibilities; shareholder rights; corporate housekeeping