Starting a business in Charlotte is an exciting (and sometimes daunting) prospect. However, with the right forethought and some good legal advice, you can protect yourself and put yourself in a position for the most profitable legal setup for you and your company. There are many different types of Business formations / Business Startups, such as Corporations, Limited Liability Companies or Limited Liability Partnerships. Each of them have different rules that must be followed and different pros and cons depending on the type of business that you want to start.
Forming a corporation or LLC can be an important tool in making sure that you, your family, and your investments are protected from some liability.
How? Let’s say Joe decides to start a lawn care business. Joe simply signs contracts in his own name, deposits his customers’ payments into his personal account, and writes checks from the same checkbook he uses to pay his personal expenses. Life is good – until, one day, Joe’s employee isn’t looking while mowing the lawn of a very wealthy customer, and drives the lawn mower right into the living room of this customer, destroying an $8 million collection of Faberge eggs.
Not surprisingly, the homeowner does not take this well. Because Joe has not formed a corporation or LLC, he is sued personally, and could end up losing his home and all his property. What’s worse, if Joe gets another job, his wages can be garnished for the rest of his life (or until the $8 million judgment is paid, whichever comes first.)
Now, let’s say Joe had incorporated and created Joe’s Lawn Care, LLC. When his customer’s Faberge eggs hit the floor, any assets in Joe’s LLC (which might include his tractors and anywhere he does business – depending on how it is structured) are at risk. However, Joe’s personal assets are not at risk.
How does one set up an LLC?
First, determine a name for your business and make sure with the secretary of state that it’s available. You’ll also want to speak with an attorney to make sure you aren’t violating any trademarks. You will have to include the words “limited liability corporation” or “LLC” somewhere in the company name.
Next, articles of organization must be filed. These will determine how the business is run and managed. A skilled attorney can help you draft them.
Also work with your attorney to determine any other licenses and tax consequences that may exist, and then open a bank account for your business. In addition to this you need to respect and keep the corporate form. This means that you need to follow the rules for LLCs including filing an annual report with the secretary of state.
This is a very broad overview of one type of business formation. Business Formation Attorney Jonathan Meek has worked with many kinds of businesses, and will be happy to advise you on the best entity for your needs. Call
Business Lawyers in Charlotte | Meek Law Firm | 704-848-6335