Whether an S-Corp or an LLC is used for the business structure, a Buy-Sell Agreement is a must. Careful planning at the formation stage can create solid exit strategies down the road, instead of messy business break-ups. The ramifications if the agreement is never finalized can be devastating, as we see far too often in clients with business disputes that may be headed for litigation. This agreement may be contained within other operational documents or it may be stand-alone. A very important item that is often placed on the “backburner” when parties are entering business together is a form of Buy-Sell Agreement. Other variables play into the decision as well.Ī business owner should also be concerned with questions regarding proper formation of the entity liability protection for owners, managers, board members, and officers fiduciary obligations for those various roles considerations for operation of the company and what items should be addressed in an Operating Agreement or a Shareholder Agreement and common mistakes to avoid during business formation. Sometimes the answer will lie in how much income the business will generate and other times the relationships between the owners is an important consideration for choosing how the entity will be taxed.
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From a tax perspective, your personal accounting professional should answer the question of which entity is more appropriate for your tax situation. One of the first considerations should be differences in the way the entities will be taxed.
Is an S-Corp or a LLC the Best Choice for My Colorado Business?Ĭlients considering forming a new business in Colorado should be concerned with the distinctions between an S-Corporation or a Limited Liability Company (“LLC”) for several reasons. We also advise as needed on all aspects of small business law. This maintenance is on a flat fee, annually, and our business clients are grateful for one less thing to remember in their busy lives. Our firm offers ongoing entity maintenance to keep your new business entity compliant and up to date with documentation.
Some examples of business entities that we assist to form are: Let our experienced team of business formation attorneys advise you on the best structure for your business situation. Choice in the form of the entity is also a critical decision for many reasons including tax liability, business liability, estate planning, key member protection, asset protection and division of the entity in the event of various events.
There are many common mistakes made int he conducting of business before the entity is formed, or in the development, formation, and operation of the entity.
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