Starting a business is a strategic task involving branding, financial planning, asset protection, and the ability to have ownership and raise capital without cumbersome legal maneuvering. We establish this by developing a detailed overview of your business objectives and then outline the appropriate business entity that is matches your goals. Our experience will simplify the task in deciding which type of business form to achieves your personal objectives.
- Limited Liability Companies
- Sole Proprietorships
- Venture Capital Issues and Agreements
- Trademark Issues
- Internet Agreements
- Indemnification Agreements
Questions to Consider:
Can I use any name to start my business and where do I register the business entity?
At a later date, if I need extra capital, how can I privately raise additional capital without tax consequences?
What business form allows me to add a financial partner at a later date?
What limitations are there on adding new partners?
Can I add new partners? Who and how many people should be general partners?
How is the business managed on a daily basis and what happens if the business is not properly managed?
How many officers should the business have?
Going into business involves risk, but certain risks can be minimized or avoided by selecting the proper business entity to match your particular situation. One key element that is frequently overlooked is personal protection. Other elements are ease of raising capital, adding members, ownership issues, and managing the business.
Corporations. A corporation is a legal entity created by following State laws. Corporations can exist indefinitely in duration. A critical aspect of forming a corporation is that it provides personal liability protection for all of its officers and shareholders, assuming regulations and filings are properly adhered to. The corporate structure is flexible with the Officers operating the business according to the business by-laws, while ownership of the corporation resides with the shareholders. The quantity of shareholders is not restricted and the number of shareholders may change over time. The corporate entity is responsible for corporate obligations. Hence, the shareholders are not responsible for corporate debts. In most instances, the shareholders are financially protected, unless there is illegal or wrongful conduct by the corporation.
Limited Liability Company (LLC). Limited Liability Companies also provides financial protection to the owners. A formal filing with New York State is required for formation.
General Partnerships. A general partnership is a less formal business entity than a corporation. New York State does not require a formal filing to create a general partnership. General partnerships do not furnish the partners with liability protection. In most instances, the general partner manages the entity.
Limited Liability Partnership. This option requires at least one general partner and at least one limited partner. A limited liability partnership requires the proper filing with the Divisions of Corporations and a written agreement detailing how the partnership is operated and how the proceeds are distributed. The partnership must have a general partner who is responsible for the debts of the limited partnership. In addition, there must be one or greater limited partners who have limited liability. The general partner manages the partnership and ownership generally resides in both the general and limited partners.
Sole proprietorships are generally used for small or start-up businesses. They are relatively easy to establish and do not require a filing with New York State to create. They do not protect the owner’s assets from liability and be operated under the individuals name or another name by filing a “dba” with the County Clerk. Generally, the name must be cleared by the County Clerk and should not cause customer confusion with the name of another entity.