As business entities, sole proprietorships and partnerships involve the significant risk of personal liability for the proprietors and partners. The most typical way to reduce that risk is to incorporate the business. But possible incorporation immediately requires business founders to consider another significant issue: taxation, especially federal income taxation.
Lanier Ford’s business attorneys assist clients in carefully evaluating their choices for creating a business: sole proprietorships, partnerships, limited partnerships, C corporations (which involve double taxation of income), S corporations (which involve single taxation of income, similar to that of a partnership), limited liability companies (LLCs), professional corporations, and so forth. This evaluation involves consideration of the following, among other issues:
- Risk of personal liability of the business owner for lawsuits.
- Taxation and related issues, such as deductibility of operating losses, deductibility of charitable contributions, effects of passive losses and credits, treatment of tax-exempt income, taxation of benefit plans, and estate planning for the owners.
- Ease of management and management expectations of the founders.
- Issues related to securities laws.
- Flexibility desired in transferring ownership interests.
If a client decides that a corporation is the best approach to take, our attorneys prepare and file the articles of incorporation. (Part of this process is to make sure that your chosen name has not already been selected by another business.) Our attorneys also assist with the following:
- Drafting the bylaws.
- Issuing stock certificates and other issues of corporate record keeping.
- Drafting any shareholder agreements.
- Holding the first shareholder meeting.
- Obtaining tax identification numbers, permits, licenses, and so forth.
After incorporation, our attorneys advise corporate clients on various aspects of the day-to-day issues that may arise in operating a business as a corporation. Some of these include—
- Raising capital and issuing securities.
- Shareholder meetings, election of officers, and meeting minutes.
- Shareholder disputes.
- Hostile takeovers.
- Fiduciary duties of officers and directors of the corporation.
- Transfers of stock certificates and related record keeping.
- Maintaining the corporate veil to prevent individual liability of officers and directors of the corporation.
- Compliance with the myriad of federal, state, and local laws that govern the ordinary operations of any business from the Uniform Commercial Code to the Fair Labor Standards Act.