What to Ask: Incorporation and Business Operations | Donovan Rodriques, Esq.
UpCounsel attorney Donovan Rodriques explains what every startup should be asking their legal team about incorporation and business operations2 min read
What legal entity to form?
The type of entity you form can play a large role in determining the future success of your business, as well as have an impact on your exit strategy.
Example, the tax consequences of buying and selling LLC and partnership interests is vastly different from buying and selling corporation stock.
Costs of Business Formation and Maintenance?
In most states, LLCs and partnerships are much easier to operate and maintain than corporations. However, they involve greater up-front, out-of-pocket organizational costs than many other legal entities.
The financing options available to a startup are dependent on several factors, including its choice of business entity.
Choosing a business name?
This should be the first step in starting a business. The first step in choosing a name for your company is to determine whether the proposed name is available and the name is not already registered as a trademark or service mark.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Place your assets into a business that is structured as a limited partnership, limited liability company or corporation, instead of a sole proprietor or general partnership.
What specifically are small business owners most confused about when you first meet with them?
Licenses and permits
How can quality legal services help a small business grow?
By providing sound business judgment and legal savvy, a small business can achieve growth through proper organization, structuring, strategy, networking, compensation, capitalization, and uncovering and assessing the hidden risks and exposures associated with new business relationships, potential acquisitions or investments.
How can quality legal services help small businesses save money?
From maximizing effectiveness to building its sales and marketing strategy, to appropriate financing, to finding and structuring the right strategic alliances and relationships, to maturity and exit.
How can small businesses maximize the value of their legal team’s services?
Leveraging the legal team's connections and expertise.
Should business partners have the same amount of equity in a company? Why or why not?
That is to be determined on a case-by-case basis.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Review the business's tax returns to determine profitability and if there is outstanding tax liability, Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Find out if there are any human resources issues or outstanding lawsuits pending against the company