Wynn at Law, LLC
counsels many business owners when a legal situation arises. However,
the best opportunity for us to help a business happens at the front
end, somewhere between the inspiration to start the business and the
day the first customer arrives. We totally get the excitement and
energy every business owner exudes when the lightbulb burns bright to
start an enterprise.
Forming a general
partnership doesn't require any legal paperwork, but it wouldn’t
hurt to have a written agreement amongst partners. The fact is,
partnerships are formed every day without even intending to do so if
you and another person start working together on a business.
Other business
structures require a bit more organization. A tax adviser is going to
help with the tax advantages or disadvantages of organizing a
business as a partnership, a limited liability corporation (LLC), or
incorporate as an S-corp or a C-corp. I’ve listed these in order
from the easiest to form to the more complex.
An attorney is
your lifeline to help you form the business within the state
guidelines while protecting your best interests. As one of my clients
puts it, ‘Everything is great when it’s great… when it goes
south you’re glad to have an operating agreement.’
She has an LLC,
which needs an operating agreement among the LLC members. It governs
the business and the members' financial and managerial rights and
roles. For a corporation, they’re also known as by-laws.
Remember what the two L’s stand for: Limited
Liability. The operating agreement separates the owner’s or owners’
liability from the business’ liability. In short, you separate
your business finances and personal finances, shielding the
liabilities of each from the other. That’s a huge deal, especially
if a suit is brought against the business – or, just as crushing –
at some point you face personal bankruptcy, a frequent topic of Wynn
at Law LLC’s articles. (See our archive, below right, please)
*The content
and material in this original post is for informational purposes only
and does not
constitute legal advice.
Photo
by Andrew Lobov, used with permission.
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