The Choice to Incorporate Your Business: Choosing your Corporate Structure (LLC, Partnership, Corporation, S-Corporation)
Whether you are just starting a business (LLC) or you have been in business for years, ensuring that your company is protected is vital to both its livelihood, and yours. It’s essential to take the time to consider the importance of business formation documents and the protections they can provide.
The important documents that every business and organization should have in place are the following:
I. Articles of Incorporation.
This document is a common denominator in the failure of many businesses. Not having the proper infrastructure in place can leave the business owner(s) subject to a number of negative impacts- both legal and financial. Ensuring that ‘John Doe’ and ‘Doe Company’ are separate is a significant choice that many businesses overlook upon start up.
Although not always a requirement by law, defining how your company will govern itself, establishing roles of leadership and internal rules will save both time and money in future difficult situations.
III. Partnership Agreements.
Like the Bylaws, Partnership Agreements can help settle disputes internally, and set forth the individual obligations and contributions of the partners to the partnership. Just because you start a business with a long-time friend does not mean things will end that way. It’s important to reach an agreement in the beginning that governs the actions of the partners, and creates reliable expectations.
IV. Non-disclosure Agreements (NDA).
This document can be imperative to the businesses ability to function, especially if you are going public with your company’s information to seek investments or leadership advisement. This document, which should be readily available, safeguards you company’s ideas and any intellectual properties that it maintains.
V. Employment Agreements.
Written agreements, rather than oral arrangements can protect the company from unwanted legal actions brought about by disgruntled employees. These contracts should address the important aspects of the employment such as wages, benefits, termination procedures, confidentiality, covenants not to compete, and the duties and responsibilities of the employer and employee.
VI. Dissolution Agreements.
This document is by far one of the most overlooked and essential documents to a business. This is mostly due to its individuals not wanting to think about their business and its demise or end. Starting a conversation with the parties involved at the beginning of a business venture while intentions are good and fair, is a highly advisable action. Take time to negotiate a mutually beneficial separation, should the need arise.
Now That You’re Incorporated – Who is your Registered Agent?
Securing a Registered Agent ensures that important matters, such as notices of pending legal action, are received and timely acted upon. It is the responsibility of the Registered Agent to forward documents and notices to the business entity, and notify the company of its government filing status.
For companies that function in multiple states a Registered Agent is advisable for the tracking of legislative changes, reporting due dates and laws applicable in their respective jurisdictions.
Need to incorporate your business? Want to learn more about establishing a corporate structure that fits your business’ needs? Have questions about the difference between a limited liability company (LLC), a corporation, a partnership, and an S-Corporation? For more information regarding the business services described, call SBStewart Law at 804-572-4356, email us at email@example.com, or contact us here today!