Are you considering establishing your own business? Before you can decide how you want to structure your business, you’ll need to know what your options are.

Do you already own your own business? If so, chances are you’re too busy running your business to think about your legal needs, until a crisis occurs.

Whether you are looking to start your own business, or already have a business up and running, Preovolos & Associates takes a proactive approach in helping our clients build and sustain success.

Our Corporate Law Department is structured to meet the legal needs of our clients and can assist you by offering an in-depth understanding of the complex issues facing businesses and business owners today, including business formation, taxation, securities, compliance and accounting. Our client base ranges from small closely held companies and proprietorships to large publicly traded corporations, in a diverse array of industries.

Sole Proprietorship or Partnership
For many new businesses, the best initial ownership structure is either a sole proprietorship or, if more than one owner is involved, a partnership.

A sole proprietorship is a one-person business that is not registered with the state like a limited liability company (LLC) or corporation. You don’t have to do anything special or file any papers to set up a sole proprietorship; you create one just by going into business for yourself.

Legally, a sole proprietorship is inseparable from its owner; the business and the owner are one and the same. This means the owner of the business reports business income and losses on his or her personal tax return and is personally liable for any business-related obligations, such as debts or court judgments.

Similarly, a partnership is simply a business owned by two or more people that haven’t filed papers to become a corporation or a limited liability company (LLC). You don’t have to file any paperwork to form a partnership; the arrangement begins as soon as you start a business with another person. As in a sole proprietorship, the partnership’s owners pay taxes on their shares of the business income on their personal tax returns and they are each personally liable for the entire amount of any business debts and claims.

Sole proprietorships and partnerships make sense in a business where personal liability isn’t a big worry; for example, a small service business in which you are unlikely to be sued and for which you won’t be borrowing much money for inventory or other costs.

Limited partnerships are usually created by one person or company (the “general partner”), who will solicit investments from others (the “limited partners”).  The general partner controls the limited partnership’s day-to-day operations and is personally liable for business debts. Limited partners have minimal control over daily business decisions or operations and, in return, they are not personally liable for business debts or claims.

Corporations and Limited Liability Companies (LLCs)
Forming and operating a corporation or an LLC is a bit more complicated and costly, but well worth the trouble for some small businesses. The main benefit of a corporation or an LLC is that these structures limit the owners’ personal liability for business debts and court judgments against the business.

What sets the corporation apart from all other types of businesses is that a corporation is an independent legal and tax entity, separate from the people who own, control and manage it. Because of this separate status, the owners of a corporation don’t use their personal tax returns to pay taxes on corporate profits; the corporation itself pays these taxes. Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses, and the like.

Like corporations, LLCs provide limited personal liability for business debts and claims. But when it comes to taxes, LLCs are more like partnerships: the owners of an LLC pay taxes on their shares of the business income on their personal tax returns.

Corporations and LLCs make sense for business owners who either 1) run a risk of being sued by customers or of piling up a lot of business debts, or 2) have substantial personal assets they want to protect from business creditors.

Nonprofit Corporations
A nonprofit corporation is a corporation formed to carry out a charitable, educational, religious, literary, or scientific purpose. A nonprofit can raise much-needed funds by soliciting public and private grant money and donations from individuals and companies. The federal and state governments do not generally tax nonprofit corporations on money they take in that is related to their nonprofit purpose, because of the benefits they contribute to society.

Whether you are considering a sole-proprietorship, partnership, corporation, LLC, or non-profit, the experts in our Corporate Law Department can assist you. Or, if you already own your own business and need help reorganizing, restructuring, implementing policies, writing or reviewing contracts or leases, dealing with employee matters, or any other facet of owning and operating your business, we can assist you. Finally, if your company is running smoothly and successfully and you’re ready to hire someone to simply help you with compliance or you’re ready to retain legal counsel to help you take your business to the next level, we can help you with that, too. Please call our office to arrange an appointment with an experienced Corporate Attorney.

Services offered:

Formation of Partnerships, Corporations, LLCs, Non-Profits, Co-Ops
Buy-Sell Agreements
Cross Purchases
Private Securities Offerings
Competitor Purchases
Bona Fide Purchasers
Corporate Recapitalizations
Exit Strategies
Adoption/Implementation of Stock Options & Stock Purchases
Mergers, Acquisitions and Divestitures

• Stock & Assets
• Spin-Offs
• Leveraged Buyouts
• Tenders & Exchanges
• Shareholders Rights/Poison Pill Plans

Bank, Venture Capital, Institutional & Private Financings
Succession Planning
Corporate Compliance
Joint Ventures
Contracts

• Domestic
• International
• Intellectual Property

Employment Matters

• Hires & Terminations
• Employee Handbooks
• Disputes & Litigation
• Bonus Agreements