Starting a business can be one of your largest investments. That is why from formation to sale, your business law needs require experienced guidance to protect your operations and assets. John Kenney & Associates, PLLC in Poulsbo offers that assistance to manage your legal needs while you keep your enterprise running smoothly.
Attorneys at John Keenney & Associates will ensure that the correct forms are filed and all needed formalities met. During this process, we will also guide you toward keeping personal and business assets separate for liability purposes. Getting this accomplished in the beginning means less risk and heartache later.
Limited Liability Companies (LLC)
The limited liability company (LLC) protects owner assets like a corporation. An LLC has the most flexible tax statuses available to it. It may be taxed as a C corporation, an S corporation, a partnership or a sole proprietorship. It can offer many benefits without the extensive formalities required for corporations. Due to the flexibility for tax status and the lack of corporate formalities required, the LLC is the small business entity that is most often recommended.
Whether for joint ventures or the family business, partnerships define management duties and compensation while also making expectations clear for all involved. A less formal and complex business formation option, this takes several forms and one may be advantageous for you.
Corporations offer tax benefits and asset protection for enterprises that are more high-risk or involve more people managing it. It can also invite outside investors by selling stock, giving the corporation many co-owners. As it is defined as an independent entity outside of you, it offers the highest amount of protection. There are two types of corporations.
An entity for smaller organizations, it can only possess one class of stock and no more than 100 shareholders. Income passes directly to shareholders and is reported on their individual tax returns, meaning it is not subject to double taxation.
With no limit on the number of shareholders, there is potential for endless growth. However, this entity must file its own tax return and involves more formalities. But the legal protection it offers plus the ease this entity has in raising capital, may make it an appropriate choice for your growing business.
Agreements & Contracts
A business cannot be formed and then just let go; the day-to-day operations often require contracts and agreements. At John Kenney & Associates, PLLC, we can help you by drafting air-tight agreements that provide clear expectations and keep everyone in a position of mutual understanding.
Office leases not only have rent terms, but also designate whether you can change the property. A good lease prevents misunderstanding and helps you make the most of your commercial premises.
Whether you employ W-2 employees or independent contractors, make your expectations clear with the right policies and contracts regarding hours, pay, benefits, technology and Internet usage.
Payment terms, buy/sell options, management duties or records available for review are just a few stipulations provided in a shareholder agreement. While these are not needed for all corporations, they may be relevant if your shareholders provide services beyond just buying your stock.
Used for the LLC, the operating agreement defines the managerial and financial rights of the members. A very flexible document, it can be customized to your LLC’s goals and needs.
When it is time to sell your LLC membership or partnership interest, a good buy/sell agreement will make this process seamless. It is a little like a premarital agreement in that it is drafted at formation and will discuss who can buy a departing party’s membership or partnership interest, events that trigger a buyout, and the price of the interest.
Looking to start a business? Need to incorporate or perhaps you leaving your entity? Contact John Kenney & Associates, PLLC at (360) 850-1049 to schedule a consultation regarding these and any other business law matters.