Creating a Business Entity

///Creating a Business Entity
Creating a Business Entity 2017-09-18T01:04:52+00:00

Creating the Business Entity

Discussion Points

The following is a check-list of issues that should be covered when creating a business entity. This is by no means an exhaustive list, but it covers the basics. This list is intended to be a guide for your discussion with the attorney who will be assisting in the creation of the new business entity.

BASIC START-UP ISSUES.

  • Name of Entity. Name protection.
  • Organization. LLC, type of partnership, corporation.
  • Costs and Fees. Filing fees, attorney fees, title company expenses, miscellaneous.
  • Term. Indefinite or limited.
  • Principal Business Office.
  • Registered Agent. Duties
  • Purpose of the business entity. Limited or broad.
  • Initial Members or Owners. Who? How many?
  • Restrictions on who can be an owner/member?

INITIAL CONTRIBUTIONS.

  • Beginning Capital. Who and how much?
  • Property Contributions. Tax issues. Changing title. Costs. Title insurance addendum.
  • Capital Accounts. Necessity. CPA.

MANAGEMENT.

  • Member Managed. (LLCs)
  • Manager Managed . (LLCs)
  • Powers.
  • Limitations. Extraordinary transactions
  • Identity
  • Elected or Appointed.
  • Removal or Resignation
  • Indemnification

OPERATIONS.

  • Meetings.
  • Necessary Books and Records. Follow up letter.
  • Bank Accounts. EIN.
  • Annual Tax Accounting Period.
  • Reports. Annual report to the state; reporting to members; accounting.
  • Tax Matters
  • Notices.
  • Changes to Agreement.
  • Disputes. Alternate dispute resolution procedures to stay out of court.

LATER CONTRIBUTIONS.

  • Loans.
  • Later Capital Contributions.
  • Special Allocations. Tax issues.

LEAVING OR ENDING THE BUSINESS.

  • Exit Strategies.
  • Liquidation and Dissolution.
  • Limitation of Liability.
  • Restoration of capital accounts. Tax issues.
  • Transfers of Interests. To family, third parties, voluntary v. involuntary transfers.
  • Events of Dissolution. Planned or unplanned.
  • Winding Up.

This information is general in nature and should not be relied upon for your specific circumstances. For information, questions, or comments, please contact Douglas J. Engel or Kathryn S. Kumar.