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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
Considerations C Corporation S Corporation Sole Proprietor Partnership Limited Liability Co.
I. Formation:
A. Method Articles of Incorporation Articles of Incorporation None Partnership agreement; certificate filings for limited partnership Articles of Organization
B. Owner Eligibility
1. Number of Owners No limit 100 One Two or more if general partnership; one or more general and one or more limited for limited partnership One or more for formation of NC LLC; no limit after formation
2. Type of Owners No limitation Individuals and certain trusts Individual No limitation No limitation
3. Affiliate Limits No limitation No subsidiaries (except some holding) No limitation No limitation No limitation
C. Capital Structure
1. Equity No limitation (multiple classes permitted) Generally one class of stock except non-voting class allowed No stock No limitation (multiple classes permitted) No limitation (multiple classes permitted)
2. Debt No specific limits but debt/equity ratio may affect tax status Safe-harbor for debt No specific requirements No specific limits No specific limits
D. Status Determination
1. Election by Entity No election requirements Required IRS election No election requirements No election requirements but state law filing; limited, must meet safe-harbor No election requirements; must meet safe-harbor
2. Owner Consents None required Consent required None required None required None required
E. Liability Limited to shareholder’s capital contributions Limited to shareholder’s contributions Unlimited General partners jointly and severally liable; limited partners are generally limited to capital contributions Limited to member’s capital contribution
F. Continuity of Existence Perpetual Perpetual Limited to life of owner Specific agreed term; may be terminated earlier by death, disability or insolvency Specific agreed term; may be terminated earlier by death, disability or insolvency
II. Income Tax Issues:
A. Management Board of Directors, officers Board of Directors, officers Owner All general partners, managing partners may be appointed Members or Manager
B. Tax year Any year permitted (limited for personal service corporation) Generally calendar year Calendar year Generally calendar year Generally calendar year
C. Tax Income Corporate level Shareholder level Individual level Partner level Company level
D. Elections Corporate level Corporate level Individual level Partnership level Corporate level
E. Allocation of Income of Owners Not permitted (except through multiple equity structure) Not permitted (except through debt/equity structure) N/A Permitted if substantial economic effect Permitted if substantial economic effect
F. Character of Income No flow-through to shareholders Flow-through to shareholders Flow-through to individual Flow-through to partners Flow-through to members
G. Investment Interest No limits Shareholder investment interest limited to net investment income; corporation investment interest flows through Limited to new income Partner investment interest limited to net investment income; partnership investment interest flows through Member investment interest limited to net investment income; LLC investment interest flows through
H. Net Operation Losses No flow-through Flow-through to shareholders (limited to basis); no basis for debts guaranteed Flow-through to individual Flow-through to partners (limited to basis) Flow-through to members (limited to basis)
I. Net Capital Losses No flow-through, but five year carry forward Flow-through to shareholders Flow-through to individual Flow-through to partners Flow-through to members
J. Undistributed Earnings Surtax on accumulations of earnings in excess of reasonable requirements for current and future business needs; $250,000 safe-harbor No restrictions N/A No restrictions No restrictions
K. Effects of Statutory Limitations Impose at corporate level Imposed at shareholder level Imposed at individual level Imposed at partner level Imposed 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.