5 Things to Know About Entity Selection So you’re starting a business? Here are some threshold things to consider when choosing the entity: Often the choice is between an S corporation and a limited liability company, which is a type of partnership with liability protection. Both are considered “pass-through entities” for tax purposes. Both entities provide the same protection against the company’s trade creditors, assuming the business is properly operated. Generally, neither entity protects its principals from personal ... Read More »
BUYING OR SELLING A BUSINESS
FIVE THINGS TO KNOW BEFORE BUYING OR SELLING A BUSINESS By: Laurance D. Pless Following are some practical observations about buying or selling a business that every business owner should know before venturing into this often unfamiliar territory. Step One: Run the Numbers. Tax liabilities vary widely. For example, one deal structure can risk a double tax. And tying payments to certain circumstances could increase the tax rate on them significantly. “It’s Not Signed Until It’s Signed”. The first document to be agreed upon between ... Read More »
START-UP PACKAGES
START-UPS/FORMING A NEW BUSINESS Overview. So you have a great business idea for a START-UP. You may turn to the Internet for legal help and come across a website or service that contains a form for incorporating a corporation or organizing an LLC. There is so much more to organizing a corporation or LLC, however, than just filing Articles of Incorporation or Organization. If your business has more than one equity holder, a Shareholders’ and Buy-Sell Agreement (in the case of a corporation) or LLC Operating Agreement (in the case of an LLC) ... Read More »
Corporate Abuse, Power Struggles, Stalemate – And Dissolution
Find yourself in major disagreements with your corporate business “partner” or fellow shareholder? At an impasse? Worried that your business “partner” may be abusing or even betraying the corporation? Can’t find a way to talk about the disagreements or concerns, much less resolve them? Court-ordered dissolution of your corporation may be where you are headed. In an earlier blog I described how statutory, court-ordered appointment of an impartial provisional director has for decades been unavailable to deadlocked boards of “garden variety” ... Read More »
Step Into What Crossfire?
Business split-ups are often among the hardest experiences that an entrepreneur can go through. Board deadlocks often precede split-ups. A number of states’ laws have provided for what are known as “provisional directors” in case of Board deadlock. Woe to the corporation with an even number of Board members! A provisional director is an independent, neutral third party – a “voice of reason” -- who is willing to become the swing vote on an otherwise deadlocked Board. Like an arbitrator and mediator combined into one. The idea was and is that ... Read More »