Carson City Lawyers for Business
Business Formation Considerations
We believe the goal of any business entity is to provide value for you and your customers/clients. Value can come in many forms, whether it be personal or asset protection or a mechanism in which to procure investments. For most, the real value is protecting you and your company while getting your products and services to your target customers.
It is important to realize that protection can benefit both you personally and your business. From the business side, the proper business entity can protect personal assets from liabilities incurred by the business. From a personal side, the proper entity can protect the business from your personal actions or creditors.
The operations of a business must also be considered when choosing what business entity to be organized under.We will discuss the numerous considerations, as well as the pros and cons of the potential entities to ensure your goals are met.
Types of Business Entities
It’s important to understand the benefits, advantage and disadvantages of specific business entity structures. Below is a brief overview.
Sole Proprietorships: The simplest, and one of the most inexpensive business entity types. Sole proprietorships provide very little protection from personal assets due to liabilities or actions of the company. With sole proprietorships, the significant disadvantages and risks outweigh the few benefits.
General Partnerships: General partnerships are for two or more active partners who are looking for a simple and economical way to operate a business. However, there are numerous drawbacks, especially regarding personal protection. Due to the limited protections, general partnerships are also disfavored. A simple and economical way to operate a business, there are numerous drawbacks, especially regarding personal protection. Due to the limited protections, general partnerships are also disfavored.
Limited Partnerships: Generally consist of a General Partner and the Limited Partner or Partners. When properly structured and formed, a limited partnership is a viable solution to provide protection for both the entity’s assets as well as the partners’ assets. The General Partner manages the business, and is liable for the full debts and liabilities of the Company.
The Limited Partner(s) cannot participate in the management of the company at all. It is essential to properly form and manage a limited partnership in order to provide the maximum protection for the limited partner and the General Partner.
Limited Liability Companies: Limited Liability Companies(also known as LLC’s) offer protection of a corporation as well as many other benefits, such as limited liability, and the availability of pass-through income taxation. It is often more flexible than a corporation, and it is well-suited for companies with a single owner or close group of individuals.
Corporations: Corporations provide the protection of its officers and shareholders, so long as the statutory requirements are meticulously followed. The statutory requirements, such as organizational meetings, annual meetings for directors, and annual meetings of shareholders, to name a few, must be completed with otherwise the “corporate veil” may be at risk, allowing a creditor of either a shareholder or of the corporation to access the other to satisfy the judgment. A shareholder’s stock may also be used to satisfy a judgment or other debt if it is properly attached, possibly disrupting not only the individual’s personal finances, but also potentially disrupting the company’s operation.
Nevada Business Advisement
With all of our corporate and business clients, we are always available to advise on any matter. Business can be complicated, from purchasing assets or equipment, to negotiating contracts with vendors and clients. Contact us today so that your rights are protected.
Contract Formation and Review
Contracts are integrated into our everyday lives, often times without even realizing their impact, from everyday transactions to employment, to business agreements and leases. Unfortunately with the proliferation of the Internet, anyone can find a contract. However, the laws of contracts is very complicated and complex. We have drafted and reviewed hundreds of contracts and agreements for individuals and businesses. Let us put this experience to work for you.
Multi State Businesses
Businesses that currently operate, or plan to operate, in more than one state must look at the big picture while maintaining and following the local governmental requirements. As we often advise, think globally, but act locally.
Business entities that are formed for charitable, educational or other types of not-for-profit reasons have a wide variety of opportunities in Nevada.
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