Business Formation And Succession Planning
When you start a new business, you have many concerns. Operational needs will occupy much of your day. While all of that is necessary, you should not neglect the topic of the choice of legal entity your business assumes.
The type of entity your business takes will have significant implications for management structure, regulatory reporting and taxes, so it is worthwhile to discuss these matters with an attorney very early in the life of your business. You have to make certain everything is done correctly and is accurate. It must be created properly, as rectifying mistakes later can be costly. Morris Estate Planning Attorneys is skilled at counseling new business owners on these matters.
How Do You Choose Your Businesses Legal Entity?
There are a number of choices available for most businesses. There are sole proprietorships, corporations, limited liability companies, partnerships and variations of these entities. The reason you want to speak with one of our attorneys, before you decide, is that each of these forms has different elements that may make it more or less attractive for your business.
If you operate a small business with no employees, assuming corporate status may bring with it too many reporting requirements and be cumbersome. An LLC has many advantages, including protection from personal liability for business debts, but you want your operating agreement to be appropriately designed for your business. Our attorneys can help you with this decisional process and draw up the proper documents for your choice.
Many attempt to use a template they find on the Internet and fail to realize the must adhere to the formalities of the corporate entity, lack bylaws, do not report minutes of meetings or fail create a proper operating agreement. We can ensure you have a complete entity, with all of the requisite elements in place to prevent these difficulties from later hobbling your business.
Do You Have A Business Succession Plan?
Business formation issues are important, but business succession planning is equally as important. You will not live forever, and accidents and illness can strike at anytime. While it may seem very abstract to be planning to leave or sell a business, at a time when you are just beginning, there are compelling arguments that this is the best time to create such a plan.
Having a comprehensive business succession plan in place from the beginning both sets proper expectations. It removes elements of uncertainty and the potential for surprise and upset among your partners, managers and owners. Doing it early in the life of your business also means that should an unforeseen event like a car accident occur your business would not be thrown into a state of disarray by the loss or incapacity.
If you have a family business, a succession plan can help prevent disagreements or misunderstandings from crippling your business. Family businesses are not immune from conflict and because of the presence of personal issues overlaying business matters, a detailed succession plan is essential.