Business Agreements & Entities
Are you a business owner or partner in a professional practice? Do you have an up-to-date operating agreement that specifically spells out the duties and obligations of the company and all of its partners? What about contingencies in case a partner dies or becomes disabled? If a partner gets sued or divorced, can his or her shares in the company be attached by their creditors or ex-spouse?
All of these issues (and more) should be addressed in a number of formal agreements to avoid the dissolution or collapse of the business when faced with these unexpected events. First of all, most businesses with two or more partners or shareholders should have a written operating agreement which spells out the duties and responsibilities of each member of the company. In addition, a separate buy-sell agreement should be created to address contingencies such as death, disability, retirement, voluntary withdrawal of a partner and involuntary termination.
Entities & Corporate Formations
We are skilled in the area of incorporation and entity formation. If you need a new corporation, LLC or partnership, we can create the certificate of formation, file the appropriate paperwork and provide you with the complete kit including company seal and stock certificates. Our fees start at $500 for the simplest of entities.
Do you own investment real estate or commercial office buildings? There are many different types of entities that you can use to protect your self from liabilities of your business or real estate. And they vary from state to state. In addition, there are both tax and legal reasons that would cause you to choose one over the other depending upon your circumstance.
Limited Liability Companies (This information applies to New Jersey law only)
A Limited Liability Company (“LLC”) is a hybrid organization that combines the best features of a corporation and a partnership. Like a corporation, the LLC is a separate legal entity and you are shielded from personal legal liabilities arising out of your company’s actions. Like a partnership, it enables you to avoid double taxation – all earnings “pass through” to the individual level before being taxed. It is easy to see why LLCs are becoming so popular these days.
Here is the complete list of benefits that you can enjoy by setting up or converting your current business to an LLC.
- Tax Benefits – No double taxation
- Protection from Personal Legal Liabilities
- Ease of Operation: Unlike a corporation, no annual report, director meetings, nor shareholder requirements are required.
- Flexibility in Internal Management: Many aspects of the operation can be freely molded as you wish through the Operating Agreement. LLC Operating Agreements are not as heavily regulated as corporate by-laws, and in fact, are allowed the broadest possible discretion under the law. You can structure the LLC as either manager or member managed. Unlimited number of members are allowed in the company. Yet, since the law governing the Operating Agreements varies from state to state, it is a necessity to have the advice of an attorney to determine how the LLC law in your state best applies to your situation.
Executive Benefits & Compensation
If you are a business owner, you may have certain employees who are key to the running and survival of your company. It is often a good idea to not only reward these persons for their service and continued loyalty, but to give them more reasons to stay with the company then to leave.
A so called “golden handcuff” or deferred compensation plan can be designed as supplements or replacements for existing retirement or 401k benefits. These plans can be completely discriminatory in that you, as the business owner, can pick and choose what types of benefits are offered and to whom they are offered. Depending on the design of the plan, the company may obtain additional tax benefits as well.
Our firm is skilled in the design, drafting, implementation and funding of these types of arrangements. We also provide annual administration for plan participants to non-public, closely-held companies.
Our attorneys have more than 30 years of combined experience working with business owners and corporate executives in helping protect their companies and make sure all the legal formalities are properly followed and documented. For a free consultation or review of your company, please contact us.