Five Legal Points to Remember in Starting a New Business 1.Delaware or Georgia - Measure Twice? As a business founder, when it comes to entity selection you will hear about Georgia and Delaware (mostly). You will hear terms like “S Corporation” or “Limited Liability Company”, or “C Corporation”. Don’t follow the crowd, instead take some quiet time to review with your lawyer the (often many) pros and cons, and practically evaluate your business goals and methods, all so that you can carefully determine which type of entity best fits YOUR ... Read More »
5 Things to Know About Entity Selection
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 »
Entity Liability Insulation – A Rugged, Eloquent Voice From 1929 – Behind the “Corporate Veil”
Many of my friends know that the late Justice William O. Douglas, a rugged outdoorsman, rail hobo, eloquent author, world traveler, environmental activist, FDR’s poker buddy, and brilliant jurist, is one of my heroes. His iconic autobiography, Go East Young Man, rests on my office shelf. So I was delighted when I discovered that he had written the words excerpted below, which remain Georgia’s black letter law on the subject, in 1929 as a Professor in a Yale Law Journal article titled “Insulation from Liability Through Subsidiary ... Read More »
One of the First Things to Know When Buying or Selling a Business
Few events in business life rival the challenge and reward of buying or selling a business. Following are some practical observations about the legal landscape that every businessperson should know before venturing, as either buyer or seller, into this exciting, but often unfamiliar, territory. Below is one of the first things that every businessperson should know: 1. First, Run the Numbers. Speaking of taxes, because the tax bites of the two different structures vary widely -- an asset sale by a C corporation with its potential “double tax” ... Read More »
A Third Thing to Know When You are Buying or Selling a Business
In earlier blogs we started our list of Things Every Businessperson Should Know Before Buying or Selling a Business. That first item was “No Pig in a Poke” and the second item was “Power of the Pen”. Here is the third one to keep in mind: 3. Separating Wheat from Chaff. Fundamentally, acquisitions take the form of either a stock sale (either directly or by merger) or an asset sale. And fundamentally, the seller receives either cash or property (i.e., stock), or some combination. Everything else is a variation -- sometimes complex -- on one ... Read More »