Colorado Business Start-Up Lawyers
Need Legal Representation? Call (720) 809-8310
Our Longmont business start-up attorneys at Jorgensen, Brownell & Pepin, P.C. will assist you in choosing the correct formation of your business entity to effectively protect your personal assets, create tax planning, and manage your business. We bring 30 years of experience to each case we handle.
We can assist you with:
- Limited liability corporations
- Limited partnerships
- Reading business reports
A Close Look at Sole-Proprietorship & Limited Partnerships
Sole-proprietorship is a one-owner business. A sole-proprietorship is advantageous because it may be established by anyone, with no requirements for filing organizational documents or annual reports with the states. Additionally, sole proprietorships are administratively easy. However, sole proprietorships may not be the right option for you because the owner is also personally responsible for all business losses.
Limited partnerships are partnerships with general and limited partners. General partners run the business and are fully liable for the partnership debts. Limited partners give up their right to participate in the management of the partnership, but retain tax benefits and receive protection from liability for partnership obligations.
Limited Liability Corporations (LLCs) are in between a corporation and a partnership. Like a partnership, the members of the LLC provide capital and manage the business. All the members are assumed to have a right to participate in the management of the LLC. An LLC is advantageous because it is typically taxed like a partnership.
What Is a Corporation?
A corporation is a business entity that is separate from its owners, and is controlled by a board of directors for the benefit of its shareholders. Typically, a corporation insulates shareholders against personal liability for the debts or actions of a corporation. However, when a shareholder treats the corporation as his alter ego to perpetuate a fraud or defeat a rightful claim, a court may pierce the corporate veil and hold the shareholder personally liable in order to obtain an equitable result.
A corporation is also advantageous because shares and interests in a corporation are easily transferable. There are several formalities that must be met in order to properly form a corporation. Our attorneys can make sure you understand the laws to correctly run your corporation.
A corporation may qualify as an S Corporation if it is a domestic corporation, has only allowable shareholders (such as individuals, certain trusts, or estates, not partnerships, corporations, or non-resident aliens), has no more than 100 shareholders, has only one class of stock, and is not an ineligible corporation (such as certain financial institutions, insurance companies, and domestic international sales corporations).
An S Corp does not pay tax on its net income at the corporate level. Rather, an S Corp uses a cash method of determining profits for income taxation, and is taxed like partnerships with direct pass-through to shareholders. On the other hand, a C Corp pays a corporate tax on its net profits, and then recipients of any dividends pay a personal income tax upon those dividends.
Understanding Non-Profit Organizations
A non-profit corporation is a corporation in which no part of the earnings or profits are distributable to its members, directors, or officers. Profits and earnings must be applied to further the corporation's purposes or to expand its facilities. Many nonprofit corporations may be tax-exempt. Additionally, the activities of nonprofit corporations are potentially more flexible than those of for-profit corporations.
Our firm can assist you with weighing the advantages and disadvantages of each type of business entity. Our attorneys will assist you in choosing the correct formation of your business entity to effectively protect your personal assets, intellectual property, create tax planning, and manage your business.
Please give us a call at (720) 809-8310 to learn more about our business services.