There are a number of considerations involved in starting a business. Some of these include selecting the appropriate business structure, creating the necessary legal documents and protecting the owners from liability. The best way to handle these challenges is with the advice and guidance of an experienced business law attorney. The law office of J. Trent Lehman is one of the premier law firms representing small business owners throughout the state of Tennessee. For over 15 years, we have helped new businesses get up and running. By understanding our clients objectives, we design strategies to help them achieve their goals. Nashville Business Formation AttorneyLaunching a new business requires a great deal of advanced planning. If a business fails, the wealth of the owner can be decimated if she or she remains personally liable for the business obligations and debts. Even in a successful enterprise, other actions such as lawsuits, tax penalties, wage and hour claims and benefit payments can deplete the owner’s assets.In selecting the business structure, the goal is to separate the owner’s personal assets from the business’ liabilities. This can be accomplished by utilizing specific corporate structures under the Internal Revenue Code (the Code). The main benefit of creating a corporation is that it protects the owners from personal liability.
Our highly skilled attorneys can help you make informed decisions about the following corporate entities:Subchapter C and S CorporationsUnder the code, there are two different levels of corporate tax treatment - subchapters C and S. Generally, Subchapter C corporations are usually large and publicly held. These entities face double taxation because they pay taxes on profits. Additionally, if shareholders are paid dividends, they will be subsequently taxed again on the basis of their individual returns.
On the other hand, Subchapter S corporations are allowed to protect their shareholders and avoid double taxation. However, they must meet the certain conditions. First, the entity must be domestic and cannot be affiliated with a larger corporate entity. Moreover, the corporation cannot have more than 100 shareholders, and it can only have one class of stock. In addition, corporations, partnerships and nonresident aliens cannot be shareholders. Finally, all of the shareholders must agree to subchapter S treatment before selecting this option.
Other Business Formation FactorsIf you are setting up a corporate entity, It is also necessary to prepare foundational documents including the Articles of Incorporation and Bylaws.
Articles of Incorporation state the corporate name and the purpose of the business. This is basically a generic statement that its purpose is to conduct any lawful business, according to its objectives. In addition, this document establishes the type of stock, common or preferred, and the amount that will be issued. The Articles should also include other relevant information, such as the name and address of a registered agent.
By-laws are the formal rules regarding the day-today business. This includes the rights and powers of the shareholders, officers and directors. Bylaws also establish how officers and directors are nominated and elected. In addition, this document establishes where and when meetings will be held, what constitutes a quorum, as well as voting and proxy rules. Finally, Bylaws should also include information on the issuance of shares of stock and other operational details.
Other Business StructuresWe also advise our business clients on other business formation options, including:
Limited Liability Company (LLC) - Provide liability protection without the restrictions of an S corporation. LLCs protect owners from being held personally liable for company debts by combining the features of sole proprietorships or partnerships with corporate protections.
Partnerships - In a partnership, each partner generally has equal power to represent the organization. On the other hand, limited liability partnerships limit each partner's exposure to the liabilities of other partners.
Joint Ventures - Unlike a partnership, a joint venture is entered into for a set period of time for the purpose of achieving a specific business objective. In addition, we also assist clients with obtaining required business licenses and tax identification numbers and required filings with the state. We also prepare partnership agreements, operating agreements, shareholder agreements. In addition, we prepare buy sell agreements that will protect the owners or partners in the event of a shareholder or partner’s divorce, disability, termination, or death. Ultimately, a buy-sell agreement provides for a smooth succession. Experienced Nashville Business Formation AttorneyIf you are considering starting a new business, having a capable business law attorney can help you to make strategic decisions. The law office of J. Trent Lehman has a well-deserved reputation for helping business owners achieve their objectives. Call our office today or complete the contact form on our website to set up a consultation. Tennessee Business Formation Attorney Helping Clients in Davidson County, William County, Brentwood and Nashville.
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