Highly Experienced Business, Non-Profit and Religious Organization Lawyer
There are several different types of business entities that are potentially available to you.
The choice, including whether your entity is created in New York, Delaware or another jurisdiction, will depend upon the type of business, your business plans, employees that you will ultimately hire, independent contractors with whom you expect to do business and numerous other factors, Irrespective of the entity ultimately selected, It is important to have proper documentation that support your business plans..
This firm will work with you to prepare necessary "forward looking" documentation such as:
Shareholder Agreements (for corps) or Operating Agreements (for LLC’s) and protective documentation including:
Without these protections, disagreements may grow into nasty disputes which could result in acrimonious, costly, time-consuming litigation. It is always easier to develop these documents at the outset before any issues have arisen.
It is imperative that the "what if's" are legally addressed at the outset of one’s business formation in order to avoid costly problems down the road. The parties going into a business arrangement, irrespective of the structure, need to work out up front, among other things:
● how decisions affecting the business operations are to be made
● how decisions affecting capital contributions and distributions are to be made
● exit strategies such as:
-- how the exiting party’s interest will be valued
-- how and by whom the exiting party can get paid for his interest
-- whether the exiting party can compete with the business
Some decisions are not simple to make. For example, a non-compete restriction will generally apply to all equal level parties in the business so that your protection against another party competing against the business could also affect you. As another example, you may want to provide that the business will purchase the interest of an exiting party in order to avoid having a new “partner” not of your choosing joining the business.
Some people who intend to operate their businesses without partners or investors want, at least initially, to operate as a Sole Proprietorship.
Benefits of Operating as a Sole Proprietorship include:
● avoidance of the “red tape” and expenses of state filings;
● avoidance of the expenses of creating legal documentation necessitated by various entities.
Risks of Operating as a Sole Proprietorship include:
● unlimited personal liability (i.e., all personal, as well as business, assets at risk)
● being bound by the State’s statutory default provisions rather than setting the terms under
which you choose to operate
● lack of credibility given by banks and others to sole proprietorships;
● difficulty in selling the business or taking on a partner or investor
Note that sole proprietors (as well as entities) must file an Assumed Name Certificate in the Office Of the County Clerk if the business operates under a name other than that of the sole proprietor (or entity). A certified copy of such Certificate must be prominently displayed in the place of business.
Many agreements, such as loan agreements and relationship agreements (between parties who will have a non-ownership business involvement) will have provisions such as:
The various types of agreements vary with the needs and desires of the owners. They are customized to reflect the needs of the business, and therefore, it is not feasible to list all such agreements. This firm, working with you, will prepare the appropriate agreement(s) for your needs.