BUSINESS PLANNING
At Frame Legal, we continue to grow our business law practice to serve the expanded needs of today's start-up's, small businesses and business professionals, who are building some of the most innovative and successful companies in South Carolina.
Successful businesses not only seize opportunities, they carefully plan for them with the help of our law firm's professional counsel. We work with clients from initial business entity selection, business formation and control arrangements, through the various phases of growth, to maturity and success.
Legal And Business Consulting Services
Legal and consulting needs for small businesses and start-up's are diverse, and we have developed our law practice to match those needs. Our law firm provides business law counsel and business consulting services in the following areas:
• Designing Business Plans For New Businesses
• Research and Due Diligence
• Business Entity Selection
• Small Business and Start-Up Financing
• Identity Branding and Marketing Strategies
• Website Development
• Search Engine Optimization Strategies
• Business System | Application Integration
• Intellectual Property Management and Protection
• Partnership and New Venture Agreements
Choice of business entity is one of the most important decisions our law firm helps clients make. We counsel entrepreneurs and businesses on whether a new venture should be structured as a corporation, partnership, limited partnership, limited liability company (LLC), or joint venture, including the important implications for tax liabilities, tax issues at formation, capitalizing the business, distributing funds from the business, and exposure to personal liability.
The selection of the form of the entity will have a variety of consequences during the life of the business. For example, it may affect whether the principal will be liable for the obligations of the business; it may influence what assets the principal will transfer to the business; and it will determine to a great extent whether the business will continue to operate after the principal has ceased to participate in it. It is therefore necessary to consider both the short-term and long-term goals of the business and the nature of the business itself in order to determine the form of legal entity best suited for the operation of any given business.
How LLCs Compare to Other Business Structures
The interest in limited liability companies is clearly an outgrowth of dissatisfaction with the other business forms that have been available in the United States. For instance, corporations, while offering limited liability, impose difficult management structures and, usually, double taxation of corporate earnings at both the entity and shareholder levels. S corporations offer limited liability and, generally, one level of taxation on shareholders but are subject to a great number of structural and operating restrictions. Partnerships do not offer all investors limited liability and may not permit as flexible a management structure. An LLC may be the solution to many of these problems.
LLC's have become one of the most popular choices of entity in South Carolina, and more LLCs have been formed in South Carolina during the past few years than any other type of entity that files with the Secretary of State. That said, however, there are many for-profit business options available, each with its own advantages and disadvantages. Understanding at least the basics of choice of entity is important to help guide your business to the best option.
Additional LLC Operational Considerations
If an Limited Liability Company is selected as the entity of preference, an in-depth analysis must begin regarding buy-sell provisions, management authority, and other key issues. The additional time spent in the early stages of formation will often lead to much less time than would otherwise be spent helping the client resolve issues resulting from an improper organization, or loosely drafted LLC operating agreement.
The LLC Operating Agreement
An Operating Agreement is an agreement between the members and managers and the LLC that sets forth the terms, conditions, rights and obligations agreed to during the formation of the LLC.
Every Operating Agreement should contain the following provisions: 1) the names and addresses of all members, 2) percentage of the company owned by each member, 3) each members' obligations to the LLC, 4) restrictions on transferring membership interests, 5) how new members can be admitted, 6) actions that require approval of a majority of members or all members such as borrowing money, selling or buying land or entering into significant contracts on behalf of the LLC, and 7) how members call meetings and vote on a variety of issues.
If your LLC does not have a properly drafted Operating Agreement tailored specifically for your business, then you have a potentially disastrous situation waiting to happen.
