Forming a Business? Paul Spitz Can Help
As an aspiring entrepreneur, you are understandably excited to take your idea and transform it into a profitable business, but you are also faced with a myriad of choices about where to spend your capital, your time, how to allocate your risk, and overall aspects of forming your business. You are also simultaneously focused on innovation while ensuring you are using best practices to run the business. Forming a business is a very important first step, one that should adhere to proven modes of success.
You will need to strategically assess your business plan to determine the best entity for you, thinking through personal and business tax issues, asset protection, and planning if you want to motivate your employees with ownership in the company. Forming a business is not just filing a form with the Secretary of State; you will want an experienced business lawyer to walk you through the legal steps of business formation to ensure you have the proper foundation and flexibility in the future.
We have extensive experience guiding entrepreneurs through the entity formation process so that they make the right decision. This isn’t just “paperwork” – mistakes made at the formation stage can have costly ripple effects as the company tries to grow. We have set up many single-member and multi-member limited liability companies created corporations for our tech startup and professional clients, and provide guidance on the optimal corporate structure for your startup. We can also help you determine where the most strategic geographic location to incorporate your business is, based on your unique needs.
When we get started, we will discuss your options and help determine which business entity best fits your needs, such as a partnership, LLC, or a corporation. We will guide you through every step of the formation process, providing skilled legal assistance that highlights how choices you make today will affect your choices in the future. With our assistance, you can avoid costly mistakes that could harm your business financially and impact your personal finances.
Here are some of the most common business entities we help with:
Limited Liability Company (LLC)
We form LLCs the most frequently, since they are the preferred choice for most businesses, providing flexible management with pass-through taxation for members. An LLC is similar to a sole proprietorship or partnership, but with liability protection for its owners’ (called members) assets. As most states do not restrict ownership of an LLC, these members may include individuals, other LLCs, corporations, or even foreign persons or entities, with no maximum or minimum number of members. An LLC is a “pass-through” entity, which means that the LLC does not itself pay taxes on its profits. Instead, the profits (and losses) are “passed through” to the members, who pay taxes on their share of any profits. This can help eliminate double taxation on the same stream of revenue. We can work with you to determine if this is the best path to take for your business.
We generally form corporations for tech startups and other organizations that will be raising outside investment. We also work with professionals, such as doctors, lawyers, or accountants in states that require professional corporations for such practices. As with the LLC, corporations provide liability shields for the personal assets of the shareholders. However, unlike an LLC, the corporation itself will generally pay income tax. Shareholders will also incur tax obligations for dividends they receive from the corporation.
We can also help determine whether your company is eligible to be an S-Corporation, which isn’t an entity you can necessarily choose, but rather a tax election you make with the IRS. We will discuss if this S-Corp tax election will benefit your organization and the best next steps to take. Both corporations and LLCs can make S-corp tax elections.
Partnerships are formed when 2 or more people join together to operate a business. In many cases, we’ve seen partnerships formed accidentally (because you generally don’t have to file any documents with the state to form a partnership), which creates serious risks to the business and to the partners. This is particularly important because unlike an LLC, if one partner incurs liability for the partnership, all partners may be personally liable. This is why you need an experienced business formation lawyer to help guide you through this process. We can draft legal agreements that specify how the partnership will be managed, how profits and losses will be allocated, and cover other contingencies.
Additional Spitz Business Law Services
Here at Kinetic Law, we don’t just form the business for you. We can advise you and provide a range of legal services to assist you in launching your business venture. Through our personal experience as entrepreneurs, we combine professional acumen with the legal skills to provide you with an invaluable resource to overcome your legal challenges with business formation.
If you need licenses and permits to begin and operate your business in your state, then we will show you how to obtain and maintain them year after year. We will also spend the time to make sure you fully understand the structure of your business, the corporate governance obligations that apply to you, and how to maintain the liability shield that protects your personal assets from company obligations and liabilities. We offer a corporate governance subscription service, as well, to help you comply with these essential obligations and give you the confidence that you are doing things the right way.
Whether you have an existing company or are forming a new company, we can also serve as your company’s registered agent. A registered agent is a person or company that is designated to receive lawsuit complaints and other official legal notices. We offer registered agent service in all 50 states.
To sign up for our registered agent service, click on the link below:
To sign up for our registered agent service, click on the link below:
Many states, such as Delaware, require that your business file annual reports. Our annual report service will help you stay on top of this requirement.
Our annual report service is only $99. To sign up, click on the link below:
Getting Started with Forming Your Business
In summary, here’s what we can do to help you with forming a business:
- Help determine the right kind of entity for your business – whether it should be a partnership, a limited liability company, or a corporation.
- Determine which state to form your company in – this will usually be the state in which you live and plan to run the business, but for certain kinds of companies, such as tech startups, states like Delaware may make more sense.
- Help you determine whether making an S-corp election is right for you, and whether your company will be eligible.
- Handle all aspects of the formation, so that you can have the peace of mind that it is being done right. This includes preparing and filing documents like articles of organization or a certificate of incorporation, drafting bylaws, operating agreements, shareholder agreements, and board resolutions.
- Advise you on all aspects of the business formation, including corporate governance once the company is formed.
We understand the challenges of running and forming a business, and with our help, we can form your business and corporate structure in a way that serves you today and in the future. Contact us today to get started.