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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?

INITIAL CONTRIBUTIONS.

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

MANAGEMENT.

  • Member Managed.
  • Manager Managed.
  • 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 Member. Elections
  • 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.