Practice Areas

Business Formation and Business Succession Planning

Business Formation:

There are many types of business formation entities:

1. Sole Proprietorship
2. C Corporation
3. S Corporation
4. General Partnership
5. Limited Parthership
6. Registered Limited Liability Partnership
7. Limited Liability Company
8. Business Trust

When considering business entity is best, the owner and his or her advisor should first examine the anticipated operations of the proposed type of business entity, such as its duration, nature and amount of risk, financial requirements, potential income, ownership, size, and geographic scope.

A careful analysis of the probable operations involved in the undertaking helps in deciding whether to select an entity at all. However, the easing of certain tax rules, potential liability and availability of new forms of business entities have dramatically increased the use of business entities for most conceivable business or investment undertakings.

The following are issues the business owner and advisor should consider:

1. The type of management structure best suited to the business
2. Liability Protection
3. Taxation
4. Ease of Transfer of Ownership
5. Estate Planning
6. Financing Convenience

Business Succession Planning:

Business owners inevitably begin to think about leaving their business. This may be due to the owner's retirement, disability or death.

Step One: Exit Objectives

Have you, the business owner, determined your primary planning objectives in leaving the business, such as

1. Your desired departure date?
2. The income you need to achieve financial security (the sale proceeds of your business may play a major role in your retirement income)?
3. The person to whom you want to leave the business?

Step Two: Valuation and Cash Flow

Do you know how much your business is worth? Do you know what the business's future cash flow is likely to be after you leave the business?

Step Three: Making Your Business More Valuable

Do you know how to increase the value of your ownership interest in your business?

Step Four: Sale to Third Party

Do you know how to sell your business to a third party in a way that will maximize your cash and minimize your tax liability?

Step Five: Transfer to Co-Owners or Family

Do you know how to transfer your business to family members, co-owners or employees while paying the least possible taxes and enjoying maximum financial security?

Step Six: Business Continuity upon Death or Disability

Have you implemented all necessary steps to ensure that the business continues if you do not?

Step Seven: Wealth Preservation Plan

Have you provided for your family's security and continuity should you die or become incapacitated?