Corporations & Associations
So, You Want To Start A Business?
If you want to start a business, the first question is how do you begin? You can begin your business just by operating as a sole proprietor either in your name or in a chosen business name. However, without filing any legal documents, you are taking on complete personal liability for your actions in the business as well as anyone who may be conducting business for you or acting as your agent. In order to avoid total personal liability, there are a variety of business organizations to choose from.
Before you incorporate, you will want to know:
- Who will own the business?
- Who will manage the business?
- Who will receive profits from the business?
- Who will be responsible for the risk of any loss?
By answering these four questions, you will help decide what type of business you want to organize. A few additional things are important to understand and consider when organizing your business.
Taxation and Finance
Will, you be the sole owner of your business or do you plan to work with a partner or partners? A general partnership will hold you personally liable for not only your actions but also the actions of your general partner(s). Creating a partnership agreement is extremely important for establishing the intent of the partners and the rules of your association. Just like writing a prenuptial agreement, you want to consider all future possibilities such as the rules of association, how to add new partners, who receives what types of profits, how are debts managed, who will manage the daily business, what would be the requirements to sell the business, how could a partner dissociate, and how would the partnership be dissolved. A well-thought-out partnership agreement should have established guidelines, but also be flexible enough to handle the unexpected. The partnership agreement cannot be used to avoid all tort liability, but liability can be limited based on the type of partnership you choose.
In order to limit the liability of some partners, a partnership may establish at least one general partner and additional limited partners. The limited partner cannot take part in the control of the business but may invest in the business and receive profits. The general partner acts in the interest of the limited partners and owes a fiduciary duty of undivided loyalty and fairness in managing the affairs of the business.
Principals and Agents
Type of Business
Limited Liability Company (LLC)
Limited Liability Limited Partership (LLLP)
These are only a few things to keep in mind when starting your business. In order to best defend yourself against lawsuits and avoid liability, you should consult an attorney on your specific needs and interests. There are many resources available to give you a general overview of how to file your business. But in order to properly protect yourself, consulting an attorney is the best way to assure you incorporate in the best way to suit your needs.
We have been helping businesses incorporate for over 20 years. Trust us, it is better to start your business well-informed of the options and ramifications than to try and correct it after a disagreement. We also help negotiate business disputes, whether between partners, agents, contractors, creditors, or debtors.
Our goal is always to get you full and fair compensation for any loss or injury you have sustained. If you are being sued we work hard to minimize, reduce, or avoid your liability for an alleged wrongdoing. We know from experience that litigation is costly. We employ all alternative means for dispute resolution including negotiated settlements, mediation or arbitration, to help you get the outcome you want ant the lowest possible cost.
When two or more individuals agree to start a business a partnership has been formed. There are no filing requirements to establish a partnership, but without any documentation the partners accept personal liability for their business as well as the acts of their partners. Liability may be limited by creating a Partnership Agreement, filing Articles of Organization, or Articles of Incorporation.
Don’t Hesitate To Ask
Feel free to get in touch with any inquiries and one of our friendly staff members will get back to you as soon as possible, we are here to help!