Ken Koenen, LLM-Taxation, Attorney at Law

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Starting a Business?

There is a lot to consider when starting a new business.  One of the most important is the formation of the business.  There are a number of ways you can organize your business, whether you are going it alone, or with others.  Here are some ...

Business Organizations

• Sole Proprietorship - This is the easiest way.  The most you would need to do is file a fictitious name statement with the county, which will allow you to operate under a fictitious name, and open a bank account.
• Partnership - You could set up a partnership with one or more people.  This could be a general partnership or a limited partnership.  It would require that you draft some kind of partnership agreement, and to file with the State.
• Limited Liability Company (LLC) - This is a cross between a partnership and a corporation.  It allows you to be taxed like a partnership, but gives you some protection against personal liability for debts or acts of the company.  Requires filing with the state and preparing articles of organization and an operating agreement between the partners.
• Corporation - Some businesses cannot operate as an LLC, such as real estate agents or certain professional companies.  Those companies must incorporate if they are looking for some limited liability.  A corporation can be set up as a "C" or an "S" Corporation.  The manner in which they are taxed will be dependant upon this selection.  Requires articles of incorporation be filed with the state, and corporate By-Laws be drafted and adopted by a meeting of the officers and directors of the company.

  There are many factors that must be considered during the formation of a business.  You should seek some legal advice in the planning of a new business, or in determining if you should change the form of a new business.

Business Succession Planning

Small businesses are often times family run organizations.  Unfortunately, many businesses will shut down or need to be sold when the founder of the business dies!  Why is that?  Poor business succession planning.  Often, the tax liabilities upon death or family squabbles will be too much for the business to support, and the business dies along with the founder.  This can be resolved with sound business succession planning.  No one wants to talk about the inevitable, but unfortunately, we all will die sometime.  Now is the time to plan for the succession of your business.

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Law Office of Ken Koenen
Last modified: March 12, 2011