Entity Formation, Finance, and Structuring
Selecting the right entity for your business can be a complex and confusing task. At Primuth & Driskell, LLP, our attorneys can help you determine which entity type is best for you – a corporation, general or limited partnership, limited liability company, professional corporation, joint venture, or individual proprietorship – while keeping in mind operational and tax efficiency, and considering personal liability and your long-term vision.
We work with diligence and detailed focus to complete all necessary government filings and draft foundational documents and agreements for the company. We make sure your company is built on a strong legal and operational foundation.
Entity Formation Options
- General and Limited Partnerships. Partnerships are almost as easy to form as sole proprietorships, but can be some of the most complex entities to operate. In its simplest form, a partnership is an association of two or more persons to carry on a business for profit. While there are no formal procedures to form a partnership, documenting the terms and agreement of your partnership is imperative.
- Limited Liability Partnership. A Limited Liability Partnership (“LLP”) is an entity that is generally used by professionals in the areas of law, medicine, accountancy, and architecture. An LLP must be registered with the Secretary of State and takes on a form of limited liability similar to that of a corporation or LLC. Typically, that means that partners aren’t liable for the bad behavior of other partners, though the level of liability can based on the actions of each partner.
- Limited Liability Company. The Limited Liability Company (“LLC”) is probably the most popular form of business entity today. LLCs are hybrid entities that offer the liability protection of a corporation with the option to be taxed as a partnership or a corporation. An LLC is made up of members, as opposed to shareholders. Individual members are typically protected from liability so long as corporate formalities are observed. That means that the entity must be registered with the state and pay attention to state laws (like filing annual reports with the Secretary of State). On the plus side, LLCs have far fewer corporate formalities than other corporations.
- C Corporation. A C corporation is what most people think of when thinking of “business.” In a typical C corporation, the business is owned by individual shareholders who hold stock certificates or shares. The shareholders vote on policy issues, but the decisions on company policy are left to the Board of Directors, who are typically elected by the shareholders. Day-to-day work of running the company is performed by the officers of the corporation. Individual shareholders are not usually responsible for the debts, obligations, and actions of the company.
- S Corporation. An S Corporation is not a form of corporation at all – it’s actually a tax election made by a company with the IRS. That means that another entity (a corporation, LLC, or LLP) is created with the Secretary of State and elects to be taxed by the IRS as an S corporation. Federal law places considerable restrictions on S Corporations, such as having only one class of stock and limits on the number of domestic (no foreign) shareholders.
How We Can Help
When you sit down to talk to us, our team at Primuth & Driskell LLP gains an in-depth understanding of your unique business requirements, and our understanding will continue to deepen throughout our working relationship. We will work with you to decide which form of entity is the right choice for you, now and in the future. Each company has a different story and different objectives, and we take the time to learn about both your business and your personal goals.