Forming a business is a major milestone that often follows months of careful planning and organization. If you are considering starting your own company, it is wise to seek guidance from an experienced attorney who can help you navigate both state and federal business formation laws. A Virginia business formation lawyer can provide the support you need to choose the right structure and ensure your business is established correctly from the start.
As a new business owner, you can select from several types of entities, including:
Limited liability companies (LLCs)
Corporations
Partnerships
“S” Corporations
Each entity type comes with its own organizational structure, requirements, and tax consequences. For example, LLCs are popular because they are relatively easy to maintain and offer greater protection to members compared to partnerships. Still, the right choice depends on the nature of your business and your long-term goals.
After selecting the right entity, you must also choose a name and file the required organizational documents with the Virginia State Corporation Commission. Depending on your entity type, you may also need additional documents such as bylaws, shareholder agreements, stock certificates, organizational consents or minutes, operating agreements, or partnership agreements. Having a talented business attorney ensures these critical steps are handled properly so your business can thrive.
One of the purposes of forming a new business is providing protection from liability to yourself and any future members, managers, officers, or directors. Corporations offer a high level of protection to shareholders, officers, and directors. Partnerships provide the most fluidity because they do not need state filing and can simply be formed by something as simple as a handshake. However, partnerships do not offer any protection to partners. As a result, if any lawsuit arises that is brought against a partnership, the claim can seek damages from all partners if the partnership does not have enough assets to cover the liability.
A corporation, on the other hand, protects officers, directors, and shareholders from this type of liability, and only the corporation itself will be responsible in the event of a claim.
Limited liability companies emerged as a happy medium between corporations and partnerships. These limited liability entities provide liability protection to members and a more flexible tax structure than corporations. An experienced business law attorney will be able to advise you on which entity works best for your unique situation.
Business law is a broad term which covers a number of different transactions affecting both individuals and companies. While business law sounds quite foreign, business transactions occur on a daily basis and are simply a part of owning a company. If you need assistance in forming a new company or in negotiating a transaction with another company, you should seek the advice of an experienced business law attorney.
Business law includes the following types of transactions and documents:
Many of these are routine business documents which need to be drafted and reviewed before the company enters into any negotiations with an outside company. An experienced business law attorney will be able to ensure that your documents cover all potential disputes or breaches and protect your company from any foreseeable future legal disputes.
Business formation is an important part of any new business and an attorney should be consulted to make sure all documents are carefully reviewed and timely submitted. As a new business owner, you have many options relating to choice of entity. Each type of corporate entity has different advantages and disadvantages, and an experienced business law attorney can help you make the decision regarding which type will work best for your business.
However, business formation is only one part of the overarching role of business transactions. Businesses also require ongoing maintenance and updates to agreements and contracts. Corporations and limited liability companies often undergo ownership and management changes over the years, all of which should be documented through meeting minutes and other corporate documents.
Other business transactions take place as a business grows and needs to either acquire another company to continue its growth or is ready to sell the business itself to a buyer. Business law attorneys play an essential role in major purchase or sale agreements by ensuring timely completion of due diligence and monitoring compliance with all contract terms. Buying and selling businesses forms a significant part of business law and requires careful attention to the transaction, along with a cooperative working relationship between the parties.
Business agreements and contracts are necessary when contemplating any major transactions with another company or even another individual. Parties create these contracts to mitigate disputes or prevent them from arising. However, if one party breaches the agreement or an outside event triggers conflict, you may need a business litigation attorney to help protect your company and your interests.
Contracts serve an important role in all business transactions and provide a blueprint for the transaction and what is to occur going forward. Parties on either side of a business contract enter into a contract not with the belief that the transaction will end in a dispute, but simply to protect their company. However, unfortunately, many business transactions do end up in disagreements or disputes, which can have legal consequences depending on the contract language.
Business litigation often involves the following types of disputes:
These disputes can lead to severe consequences when related to important contracts and agreements that result in the loss of money or other business consequences. These types of business disputes can also attract the attention of federal authorities if they involve stockholder impropriety, and it is therefore important to protect your business from any actions caused by a shareholder or director.
Business litigation can involve a number of different disputes based on different entity structures. Corporations are typically a more common type of corporate structure, and this type of structure can lead to not only ordinary contract disputes, but also major fiduciary duty disputes due to shareholder and director responsibilities. If a director or shareholder oversteps their boundaries or engages in illegal action, the company or other members can bring an action against this person. An initial company agreement or bylaws provides regulations on appropriate actions that shareholders and directors can engage in, and will involve the appropriate remedy for breaching these fiduciary duties.
Two different corporate entities also bring business disputes that arise from mergers, acquisitions, or contracts with suppliers and buyers. Mergers and acquisitions require attorneys to prepare purchase agreements that outline the transaction and include “what if” language to address potential breaches. Contracts involving suppliers and buyers detail the provisions of the transaction and define what constitutes a breach of contract, such as a payment that is seven days late.
Starting a business is exciting, but it also comes with complex legal requirements that can impact your future success. A Virginia business formation lawyer at MichieHamlett can guide you through choosing the right entity, filing the necessary documents, and drafting agreements tailored to your needs. For trusted legal support in building a strong foundation for your business, contact us today to schedule a consultation.
