For the vast majority of family business owners we have counseled over the years, the business represents the realization of a dream, a sizable investment, years of hard work and a significant portion of the business owner’s overall estate. When you form and structure your business, you are laying a foundation and need to make sure it is solid. This foundation must address the immediate needs of your business, its future success, and offer protection against potential personal liabilities associated with owning and running a business.
We create individualized plans for business owners tailored to their needs and the needs of their business. Once the business is up and running, we can help with annual obligations and planning opportunities. At Legacy Law Firm, P.C., we use cutting-edge legal and tax planning techniques to help guide our clients in making prudent business, financial and personal decisions. We can help you at start-up, succession and every stage in between. In short, we can help you obtain the greatest possible return on your investment of money, time and “sweat.”
The Importance of Business Succession Planning
The manner and timing of your exit from your business is every bit as important as your formation plan in terms of how much you ultimately earn from your business and ensuring your “success” in succession. If you want to pass your business on to members of your family, you have to be sure that they are capable of running the business and genuinely want to do so. Or perhaps you want to sell your business to your employees or an outside party? Whatever your succession goals, we have the experience to help you accomplish them.
Contact our business planning lawyers today for a complimentary consultation. We have helped numerous entrepreneurs build successful business and profitably transition out of them. We welcome the opportunity to do the same for you.
An Introduction to Business Formation
Your business formation plan must address the possibility of rapid growth while at the same time protecting business and family assets against downturns in the economy or the failure of the business itself. Your plan must also protect your business from potential threats, such as:
- Frivolous lawsuits
- Potential conflicts with employees and even partners
- The inability of loved ones to access assets if you become incapacitated or pass away suddenly
In addition, your plan must address the manner and timing of your eventual exit from the business.
Choosing the right business entity is extremely important. We have extensive experience in helping entrepreneurs select and organize the entity that best fits their immediate needs and long-term goals. Here is a brief introduction to the most common approaches to business formation.
This is generally used by self-employed people who are not interested in formally organizing their business. Sole proprietorships do not offer liability protection for business owners.
Partnerships can be formal or informal agreements between individuals who want to work together and share both profits and losses. In a general partnership, all parties share profits, losses and liability. In a limited partnership, the partners contribute capital and share in profit or loss. However, the limited partner is not actively involved in business operations and has limited liability. Limited liability partnerships take it one step further to offer liability protection for all partners.
Corporations provide owners with many important benefits, including limited liability, the ability to issue shares of stock and greater flexibility in ownership structure.
Limited Liability Company
LLCs combine the flexibility of a partnership with the protection of limited liability provided by a Corporation. An LLC can also be easier to maintain than a corporation and provides exceptional liability protection if structured properly.
Business services provided by Legacy Law Firm, P.C. include:
- Management and Preservation of Assets
- Liability Protection Strategies
- Fiduciary Duties
- Structuring Redemption Agreements, Option Contracts, Shareholder Agreements, Buy-Sell Agreements and Rights of Refusal
- Separating Ownership and Control
- Entity Status, Subchapter S Elections, Limited Liability Companies and Family Limited Partnerships
- Business Trusts and Real Estate Trusts
- Employee Ownership Structures
- Private Split-Dollar Arrangements and other Advanced Funding Mechanisms
- Business and Tax Planning
- Asset Protection Planning
- Succession Planning for Closely-Held Business Interests
- Board Structure and Governance Issues, before, during and after Intergenerational Transfers
- When and How to Sell Your Business
- Phantom Stock Plans, Deferred Compensation and Golden Parachute Plans
- Equitable Planning for Children Involved in the Business and Children Not Involved