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LAW OFFICES |
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This website is provided as an educational service not as legal advice (see important legal notice). Except as otherwise indicated, all contents copyright ©2000 and thereafter by Alexander L. Ullenberg. All rights reserved worldwide. |
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ULLENBERG |
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Law Office |
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101 Camelot Dr., Ste. 2b Fond du Lac, WI 54935
Phone: (920) 924-9878 (877) 924-9878 Fax: (920) 924-9895 E-Mail: info@UllenbergLaw.com |
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General Information
Business Services:
Buying a Business Selling a Business Custom Contracts Annual Records / Reporting
Litigation (i.e. Lawsuits):
Being Sued / Suing
Other Issues of Interest:
Wills, Trusts, P.O.A.s
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ULLENBERG |
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Choosing the Right Form of Business Entity.
There are advantages and disadvantages to all business forms. Some forms are uniquely advantageous for certain businesses; other forms are potentially dangerous if used for that same business. Therefore this decision should be made only after carefully considering the operations of the business, the perceived risk of the business, and other issues unique to the business’ owners. With the involvement of the right advisors, this decision can be made relatively quickly.
In determining the proper business form to use, consider the following: · How many owners will there be? · Can each owner manage the business, or should only one or two owners have sole authority to manage and control the business? · How important is it that new owners can be added, or that existing owners can sell or transfer their interest in the business? · Will some of the business owners be other businesses or trusts? · What voting rights do minority owners desire? · How risky are the business’ intended operations? Do owners need or want limited personal liability for the business’ debts? · Must all owners have limited liability? · Will the business offer fringe benefits, profit sharing or ownership interests to its employees? · Does the operational system of the business need to be simple? · What is the business’ principal business, i.e. real estate, retail, service-based, etc.? · Where will the physical operations of the business be located – i.e. within or outside Wisconsin, international? · Is there a need to protect intellectual property rights? · Will the business be engaging in Internet commerce? · How will the business’ initial and continuing operations be funded, i.e. through bank loans, owner contributions, venture capital, etc.? · How much money is available for payment of the organizational expenses of drafting organizational documents, operating agreement, buy-sell agreements, etc.? · Will the business’ operations be able to justify payment of the annual legal and accounting expenses to comply with record keeping requirements of certain business entity forms? · What are the current and anticipated tax rates of the owners? · Is minimizing taxes on operating income vs. on liquidation more important? · Will flow-through of losses and profits benefit or hurt the owners? · Does the business plan to “go public” in the future? |