At first impression, business formation may seem simple. An entrepreneur picks the entity best suited to his or her needs, files basic documentation with the Secretary of State, and presto… the company is off and running. Many people choose to use an online service rather than hiring a business formation attorney.
A business formation attorney can put your business on the track to success
But when you look a little closer, there are a number of potential pitfalls. Determining the best entity or structure is often not as simple as it seems, and is made more complex by the choice of jurisdictions in which one can incorporate or form an LLC.
More importantly, there is the matter of bylaws, board appointments, initial capital transfers, initial board approvals, vesting of founder’s stock and other matters. Then there is ongoing governance and maintenance… from the mundane (franchise taxes and annual filings) to more complex matters, such as stockholder and board meetings, board duties, and officer appointments and oversight.
With specific advice and a little training on how to handle these issues, they can be managed in a very cost-effective way. But small oversights and errors in the early days can be problematic and costly later on in the company’s life-cycle, for example when seeking investment financing or in an M&A transaction.
We understand that capital is in short supply for start-ups, which is why we limit the up-front legal expenses and work with entrepreneurs to train them to manage many routine tasks themselves. Our goal is to help start-ups grow and stay on track to achieve milestones such as financing, revenues or profits. Working in partnership, we can ensure your company gets the best opportunity to succeed without prohibitive expenses.
Types of entities
A number of considerations go into the choice of entity, including the number of owners and investors, the business plan, the potential for liability or need to protect personal assets, tax planning, and many other matters. The following links are to brief overviews we have put together on the main entity types an entrepreneur might consider.
- Corporations (including “C” and “S” corporations, professional corporations, non-profit corporations and California’s new “flexible purpose” and “benefit” corporations)
- Limited Liability Company
- Sole Proprietorships
We provide a number of services which are customized based on your particular needs:
- Formation planning
- Preparation and filing of entity documents
- Licensing, tax and other registrations
- Initial governance matters: board appointments, bylaws, officer appointments, capital authorization, etc.
- Initial capitalization: contributions to capital, founders stock, founders agreements, initial investments, investor agreements, etc.
- On-going governance planning and training
- Other services as determined on a case-by-case basis
Blog posts on business formation: