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Don’t Hire a Business Attorney in Asheville Until You Read This!

Corporate Law - Business Legal Help AshevilleBusiness law deals with a broad range of legal issues affecting businesses, partnerships, and corporations. In today’s complex business world the corporate attorney is an integral part of a successful business team. Contracts are complicated and assign risk to each person who enters into an agreement. Before you sign an agreement, make sure you know what you’re signing. Our Asheville business lawyers try numerous cases involving business disputes and our experience spans a vast area from sole proprietorships to large corporations.

As a business law firm in Asheville we bring this expertise to help our clients draft fair agreements, solid contracts, and business deals that allow local business owners to focus on their business and meet the needs of their customers and industry. We try to use our knowledge about what contracts go to court in an effort to draft contracts that keep our clients out of the courtroom. Too many businesses hastily sign or create contracts only to spend years and substantial attorney’s fees regretting their haste. Our business attorneys are familiar with and offer their expertise to clients in:

  • Forming corporations, limited liability companies, limited partnerships, and general partnerships
  • Drafting performance contracts and contracts for the sale of goods or delivery of products
  • Preparing shareholder agreements, buy-sell agreements, license agreements, employee agreements, confidentiality agreements, non-disclosure and non-solicitation agreements
  • Facilitating mergers and sales of closely held corporations
  • Assisting with the daily needs of your business

DON’T CHOOSE YOUR BUSINESS ENTITY UNTIL YOU READ THIS

“What type of company should I form?” This question is the most frequently asked question of new business start-ups or when forming a new business. There are many factors to consider when choosing the type of business entity. Some of those considerations include funding, number of shareholders, tax treatment of the entity, how investors will realize gain or income from their investment, the time horizon for the company, and many others. The Asheville business attorneys at Fisher Stark, P.A. have prepared the chart below to help our clients consider and select the right business entity for them. Please note we have only taken into consideration a few of the many issues to address when forming a new company. There are many other issues and concerns that a business should address in choosing the right type of business entity.

CHOICE OF ENTITY CONSIDERATIONS
ConsiderationsC CorporationS CorporationSole ProprietorPartnershipLimited Liability Co.
I. Formation:
A. MethodArticles of IncorporationArticles of IncorporationNonePartnership agreement; certificate filings for limited partnershipArticles of Organization
B. Owner Eligibility
1. Number of OwnersNo limit100OneTwo or more if general partnership; one or more general and one or more limited for limited partnershipOne or more for formation of NC LLC; no limit after formation
2. Type of OwnersNo limitationIndividuals and certain trustsIndividualNo limitationNo limitation
3. Affiliate LimitsNo limitationNo subsidiaries (except some holding)No limitationNo limitationNo limitation
C. Capital Structure
1. EquityNo limitation (multiple classes permitted)Generally one class of stock except non-voting class allowedNo stockNo limitation (multiple classes permitted)No limitation (multiple classes permitted)
2. DebtNo specific limits but debt/equity ratio may affect tax statusSafe-harbor for debtNo specific requirementsNo specific limitsNo specific limits
D. Status Determination
1. Election by EntityNo election requirementsRequired IRS electionNo election requirementsNo election requirements but state law filing; limited, must meet safe-harborNo election requirements; must meet safe-harbor
2. Owner ConsentsNone requiredConsent requiredNone requiredNone requiredNone required
E. LiabilityLimited to shareholder’s capital contributionsLimited to shareholder’s contributionsUnlimitedGeneral partners jointly and severally liable; limited partners are generally limited to capital contributionsLimited to member’s capital contribution
F. Continuity of ExistencePerpetualPerpetualLimited to life of ownerSpecific agreed term; may be terminated earlier by death, disability or insolvencySpecific agreed term; may be terminated earlier by death, disability or insolvency
II. Income Tax Issues:
A. ManagementBoard of Directors, officersBoard of Directors, officersOwnerAll general partners, managing partners may be appointedMembers or Manager
B. Tax yearAny year permitted (limited for personal service corporation)Generally calendar yearCalendar yearGenerally calendar yearGenerally calendar year
C. Tax IncomeCorporate levelShareholder levelIndividual levelPartner levelCompany level
D. ElectionsCorporate levelCorporate levelIndividual levelPartnership levelCorporate level
E. Allocation of Income of OwnersNot permitted (except through multiple equity structure)Not permitted (except through debt/equity structure)N/APermitted if substantial economic effectPermitted if substantial economic effect
F. Character of IncomeNo flow-through to shareholdersFlow-through to shareholdersFlow-through to individualFlow-through to partnersFlow-through to members
G. Investment InterestNo limitsShareholder investment interest limited to net investment income; corporation investment interest flows throughLimited to new incomePartner investment interest limited to net investment income; partnership investment interest flows throughMember investment interest limited to net investment income; LLC investment interest flows through
H. Net Operation LossesNo flow-throughFlow-through to shareholders (limited to basis); no basis for debts guaranteedFlow-through to individualFlow-through to partners (limited to basis)Flow-through to members (limited to basis)
I. Net Capital LossesNo flow-through, but five year carry forwardFlow-through to shareholdersFlow-through to individualFlow-through to partnersFlow-through to members
J. Undistributed EarningsSurtax on accumulations of earnings in excess of reasonable requirements for current and future business needs; $250,000 safe-harborNo restrictionsN/ANo restrictionsNo restrictions
K. Effects of Statutory LimitationsImpose at corporate levelImposed at shareholder levelImposed at individual levelImposed at partner levelImposed at member level

 

Call the Asheville business attorneys at Fisher Stark, P.A. to assist you in forming your new business. We have served thousands of businesses and entrepreneurs throughout Western North Carolina, including Buncombe County, Henderson County, Madison County, Haywood County, Polk County, McDowell County, Jackson County, Swain County, Transylvania County, and Cherokee County. 828-505-4300.