Establishing a Company

Selecting the appropriate business structure is a fundamental decision that can significantly influence the success and growth of your enterprise. Below is a detailed overview of the four primary legal entities: Sole Proprietorship, Partnership, Limited Liability Company (LLC), and Corporation, along with their advantages and disadvantages.

Sole proprietorship

A sole proprietorship is the simplest and most common form of business structure, where a single individual owns and operates the business.

Advantages:

- Ease of Formation: Minimal paperwork and low start-up costs make it easy to establish.
- Complete Control: The owner has total control over all decisions and profits.
- Tax Simplicity: Business income is reported on the owner's personal tax return, avoid double taxation.

Disadvantages:

- Unlimited Liability: The owner is personally liable for all business debts and obligations, putting personal assets at risk.
- Funding Challenges: Raising capital can be difficult, as sole proprietors cannot sell shares and may face challenges securing loans.

Partnership

A partnership involves two or more individuals who share ownership and responsibility for the business. There are two main types: General Partnerships and Limited Partnerships.

Advantages:

- Shared Responsibility: Partners can share the workload and bring diverse skills to the business.
- Tax Benefits: Profits are passed through to personal tax returns, avoiding corporate tax rates.

Disadvantages:

- Joint Liability: In a general partnership, all partners share unlimited liability, risking personal assets.
- Potential Conflicts: Disagreements among partners can lead to disputes that may affect business operations.

Limited Liability Company (LLC)

LLCs are a popular choice for enterprises of all sizes due to their flexibility and tax advantages. Our lawyers can assist you with every aspect of forming and operating an LLC, including:

- Drafting operating agreements

- Handling member changes

- Ensuring compliance with state laws

- Protecting your personal assets

An LLC combines the benefits of a corporation and a partnership, providing flexibility and protection.

Advantages:

- Limited Liability: Owners (members) are generally not personally liable for business debts, protecting personal assets.
- Tax Flexibility: LLC's can choose how they want to be taxed (as a sole proprietorship, partnership, or corporation), often avoiding double taxation.

Disadvantages:

- Self-Employment Taxes: Members are considered self-employed and must pay self-employment taxes.
- State Regulations: Formation and operational requirements can vary by state, and some states impose additional fees.

Corporations

A corporation is a legal entity separate from its owners, providing the strongest protection against personal liability.

Advantages:

- Limited Liability: Owners are not personally liable for business debts, protecting personal assets.
- Capital Raising: Corporations can raise funds by selling shares, making it easier to attract investors.

Disadvantages:

- Complex Structure: Corporations require more formalities, including a board of directors and regular meetings.
- Double Taxation: Corporate profits may be taxed at the corporate level and again as dividends to shareholders

Mergers and Acquisitions

Combining and acquiring can be complex and challenging, but they also present exciting opportunities for expansion. Our attorneys have extensive experience in M&A transactions, including:

- Due diligence

- Contract negotiations

- Regulatory compliance

- Post-merger integration

We work closely with you to understand your goals and develop a customized strategy to ensure a smooth and successful transaction.