CORPORATIONS, LLC’S
AND PARTNERSHIPS
Small and medium size businesses are
one of our greatest assets in the United States. Almost everyone probably dreams of owning
their own business and many people at one point or another in their lives
actually operate their own business.
Some people originate the business themselves. Others purchase an existing business. An experienced attorney cannot insure that
your business succeeds, but he can be sure that you are organized properly so
that your business development is not hampered by organizational or
government regulations. Starting and maintaining a business requires sound
legal advice and counsel. Attorney
Mark Heimsoth works with business
owners to identify effective solutions for protecting your long term goals. He
offers a wide variety of business law related legal services – evaluating
business formation options (corporation, limited liability company, sole
proprietorship), reviewing shareholder or operating agreements, handling
ongoing legal and contract issues, and submitting annual filings with the
state. If you have questions regarding your business call or
e-mail the law firm of Mark Heimsoth today to schedule an initial
consultation. His clients include businesses within DuPage County, DeKalb
County, Will County, Kane County, and Kendall County. I.
Choosing a Business Entity: The five major business
organization forms are: a)
Sole Proprietorship b)
General Partnership c)
Limited Partnership d)
Limited Liability
Company, and e)
Corporation. There are many questions which must be asked to determine
which of these entitles is most suitable for a business. For example, how many owners will there be
and will each owner be active in running the business? Sole proprietorships are simple and inexpensive
for starting a one person business but when more people are involved, this
business type has its limitations.
Will some of the owners be investors only? If so, will they want to limit their
liability? Partnerships and
corporations offer a variety of ways to structure a business in which
investors provide cash, but do not wish to operate the business. Another important question for multiple owners is whether
or not they will be equal partners or whether one or more individuals will be
dominant. If there are going to be
owners who will own only a small fraction of the company, how will their
minority interests be protected? Will
the minority operation of the new business create risks that could jeopardize
an owners assets? Sole proprietorships
and general partnerships are less complicated business entities, but the
owners and partners are personally liable for the debts and liabilities of
the business. Corporate business forms
(including LLC’s) can shield owners from personal liability. II.
Buying an Existing Business An
experienced business law attorney can be invaluable when purchasing an
existing business. If the business is
already incorporated, the first question to review is whether to buy the
corporation’s stock or form a new corporation and buy the assets of the
corporation. Buying the stock
transfers all assets and liabilities of the existing corporation. Where the business is risky or the record
keeping in the business has not been good, it may be more advantageous to
form a new corporation and buy the assets of the other business to avoid
having to deal with the old owner’s problems. If
there is a daily changing inventory, how does one set the price and freeze
the inventory being sold? What
employee rights and obligations will be carried forward? Are receivables part of the
transaction? Are there any
environmental issues to be considered or any government licenses which will
need to be obtained or transferred?
Will the prior owner be required to consult for a period of time and
be prohibited from entering a similar business? These
and many other questions must be considered in buying a business. A comprehensive discussion with your
attorney can help make sure that when you purchase a business it will be
productive from the beginning and not be loaded with problems which have to
be resolved before the business can really begin to function. As
you organize your business and move forward, there are many other matters you
will want to discuss with your attorney including, but not limited to: a)
Purchase contracts, b)
Zoning compliances, c)
Employee hiring, d)
Employee compensation, e)
Use of independent
contractors, f)
Privacy rights, g)
Avoiding
discrimination. Some
of these matters will not impact a business immediately, but having formed a
business with a clear understanding of the issues that might arise can help
one be prepared to recognize and properly deal with such questions. |
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A business is a complicated, evolving
entity. Attorney Mark Heimsoth is ready
to partner with businesses in an ongoing consultative relationship to ensure
your business is secure. He understands
how changes in the law can affect taxes, liability, accounting and reporting
requirements. The law can directly impact business operations. Attorney Mark
Heimsoth can monitor developments and provide you with important information
that facilitates your business planning.
Contact the law office of Attorney Mark Heimsoth to schedule a free half hour initial consultation.