Limited liabilty company
Law Firm Formation: Choosing a Legal Entity
Many choices for lawyers who want to form their own law firm. The major options are professional limited liability companies, professional corporations, and limited liability partnerships. Each legal form may pose different tax consequences, have different governance requirements and may have different levels of protection for the individual owners. This article highlights the various forms of law firms. Each structure has its own benefits and drawbacks, but the key is to choose the one that best suits your needs and protects your assets. Whether you’re going solo, forming a partnership, or creating a more formal entity, the structure you choose will shape your practice for years to come.
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Corporate Transparency Act: Every Small Business Owner Needs to Read This
The Corporate Transparency Act (CTA) went into effect on January 1, 2024. Over 30 million small businesses will be required to file beneficial ownership information with the U.S. government’s Financial Crimes Enforcement Network (FinCEN). This article highlights which companies are the reporting companies required to disclose beneficial ownership information; what information needs to be disclosed; and who qualifies as a beneficial owner. The article describes the stringent penalties that may be imposed on small business owners who fail to comply with the CTA.
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Multi-Member LLCs: New Partnership Audit Rules
You will remember that difficult discussion with your small business attorney about how you wanted your limited liability company to be treated for purposes of taxation. If you do nothing, then your multi-member LLC is taxed as a partnership. And in this article, when we refer to a "partner" or a "partnership," we are generally referring to a member in a LLC that is taxed as a partnership. If you want to be taxed as a corporation, you need to file an election. This article highlights the new audit rules and whether you may want to consider making changes to your multi-member LLC.
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Foreign Investment in the U.S.
If you own a foreign company and are thinking of opening up for business in the United States then you should read this article. Despite the challenges, foreign businesses continue to flock to the United States. This article gives an overview of the major decisions that foreign businesses must make as they explore entering the U.S. market. They usually set up a subsidiary not a branch, and confront issues of where to form the new entity. They consider issues dealing with tax, immigration, CFIUS reviews, corporate structure and other issues as they enter the U.S. market.
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Fiduciary Duties 101
You may have heard about fiduciary duties, something about loyalty and care, but truth be known, you have no idea what that all means. Let’s set the scene. Your startup company is up and running. You have consulted with your startup lawyer about forming the company as a limited liability company. What duties do you owe to those who have invested in the company. They are after all part owners and have invested their hard-earned money into your company. You talk with your startup lawyer and he or she explains that you owe the owners a fiduciary duty—fiduciary what, you ask? If you violate these fiduciary duties, you may be personally liable. Well, that should get your attention. This article discusses what a fiduciary duty is and who it is applied to.
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Manager-Managed and Member-Managed LLCs: What’s the Difference?
There are several essential questions that you must discuss with your small business attorney before forming a limited liability company. You must determine the name of the company. You have to decide in which jurisdiction the startup company will be formed. You need to decide how the company will be treated for tax purposes. The focus of this article is the management structure of the LLC, whether the business be managed by its members or by one or more managers.
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Choice of Entity Considerations in the Aftermath of Tax Reform
Entity-choice-after-tax-reform. When you are ready to form your new small business, you probably have reviewed with your small business attorney various entity choices. The small business attorney likely discussed possible legal entities such as corporations, partnerships and limited liability companies (LLCs). Which entity is the best form for your business depends on many variables such as structure, liability, management as well as tax considerations. You have likely heard that there was a big change to the United States tax code starting in 2018 under the Tax Cuts and Jobs Act. Many of the tax reform provisions affect businesses. In this article, we will discuss how these changes may affect the calculus in deciding which legal form your want to choose for your startup business.
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Dissolving a Small Business
Some businesses simply don’t make it. We have discussed reasons why small business owners may decide to dissolve a business. The procedures that a small business must follow differ depending on where you may have organized your company. In this post, we will summarize the procedures for dissolving your limited liability company (LLC) in various popular states for small businesses. We focus on business dissolution of LLCs in DC, Virginia, Maryland, Delaware and California.
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Business Divorce and Small Businesses
At one time or another there will be an end to your business. When you started your business, you should have developed an exit strategy, but sometimes things don’t go as planned. The business may end happily in a merger or acquisition and sometimes less happily by dissolution or bankruptcy. Without clear guidelines at the outside, you will find that extricating yourself from your partners may be costly. A business divorce may have similar acrimony to a family divorce. In a family divorce, there is the combustible combination of kids and money. In a business divorce, the business partners undoubtedly will also argue about money—and will contend for control over their business, which for founders, can be like an extension of their families. The disputes among partners are not easy disputes. And business divorces…
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Selling LLC Interests: Finding Exemptions from Securities Laws
You have now consulted with your small business attorney and to your surprise the attorney has advised you as a small business owner that a selling LLC interests may be subject to securities laws. Selling a piece of your limited liability company, even if it is a small business, may put you on the radar of the Securities and Exchange Commission (SEC). It doesn’t mean that you have to go public. “Going public” for those not in the know basically means that you have to register the securities with the SEC. Think big bucks for your securities lawyers and investment bankers. If you have a security, then you either have to register with the SEC or you must meet an exemption. If you fall within an exemption to the securities laws, you do not need to register the securities. Just to hammer home the point, the SEC…
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