You can choose between starting an S corporation or a Limited Liability Corporation. Each has its own merits and choosing the right structure is crucial to the sort of taxes you’ll have to pay.
Any business starts with an idea. Something that you hope will guarantee your financial stability if not make you a millionaire overnight. Once you decide to put that idea into practice you’ll be faced with a myriad of practical problems, like finding a suitable location and understanding what sort of business organization you should choose. If you’re planning to open a business in Michigan, you should look up the best business law attorneys in Traverse City or Detroit and let them sort out the legal aspects.
Say you talk to a couple of friends about your idea and you decide to pool your resources together and set up a company. You’re all probably very enthusiastic at the moment and all you can think of is how successful you’ll be. That’s the right attitude, but you risk overlooking important legal aspects and this is something you may come to regret later on. When you sit down with an experienced Michigan business lawyer, they’ll explain the need to make contingency plans for whatever may happen in the future. What if one of you gets a divorce and moves out of state next year? What if one of you becomes incapacitated or simply loses faith in this business and want out? All these contingency plans need to be included in a buy/sell agreement. Drawing up such a plan doesn’t mean that you don’t trust your partners. It’s just the smart thing to do and everybody will feel much safer knowing that they’re covered no matter what.
For instance, if one of the partners wants to quit or is forced to do so, a buy/sell agreement will set out the terms. You don’t want to lose control of your business so you can include provisions for the other partners to buy out their shares. You can decide on such issues as a down payment or the number of installments you’ll need to buy the departing partner’s shares. If you don’t put everything on paper from the very beginning, things might get ugly.
At the same time, business lawyers in Detroit, Grand Rapids or Traverse City can help you get all the permits you need to comply with local laws as they have many years of practice in the field and know what regulations apply to every type of business. They can also advise you on the legal structure that best fits your business.
You can choose between starting an S corporation or a Limited Liability Corporation. Each has its own merits and choosing the right structure is crucial to the sort of taxes you’ll have to pay.
You can also set up a non-profit organization or a charity and different laws apply to that type of legal structure.
Your lawyers will also help you define the way profits are shared among the various members of your partnership. When you’re just starting out and there’s nothing to share it’s easy for all of you to be in complete agreement, but things might change dramatically once you’re making actual profit. Seeking legal advice and putting everything on paper is the only way to avoid many unpleasant situations in the future.
Join the conversation!