RISK MANAGEMENT
Whether a business is in it's early stages of organization, or has been in operation for years, there is a diverse range of matters a business owner needs to consider.
Providing Proactive Counsel
Our law firm is proactive in looking for issues that may present future legal and financial problems for businesses, and we counsel businesses to avoid or minimize these legal and financial risks. However, as determined as we are to help small businesses avoid unnecessary risks, we also work hard to recognize the risks that businesses should take.
Whether the transaction involves a partnership agreement, a license agreement, an affiliate program agreement, or any other contract law matter, we work to facilitate profitable transactions and relationships while protecting our clients business interests. At Frame Legal, we are determined to help your business grow without the unnecessary costs and complications.
Areas of Legal Counsel Offered
Our firm provides legal counsel in the following areas:
• Business Planning
• Selection of Business Entity
• Capitalizing the Business Entity
• Tax Issues and Personal Liability at Formation
• Ownership Control Arrangements
• Incorporation and Liability Issues
• Selection of Business Name
• Liability Issues of Officers, Shareholders and Directors
• Intellectual Property, Trademarks
• Strategic Alliances, Affiliate Programs
Liability and Asset Protection
Because liability issues are often the initial motivating factor causing business owners to consider forming a separate entity, sole proprietorships and general partnerships are becoming less utilized, at least with respect to operating entities. Clients want to protect their non-business assets from the risks incurred in the business and also want to protect the continuity of the business against liability exposure that individual owners may encounter outside the business. As a result, limited liability companies and corporations often rise to the top as the entity of choice.
The Limited Liability Company is the most popular entity being formed today. The LLC is the entity of choice because: 1) it is less expensive to form and easier to operate than a corporation with respect to complying to state law, 2) a corporation can be taxed two ways under the federal income tax law, but an LLC can be taxed four different ways, 3) a corporation must comply with at least six different corporate formalities required under state law, but an LLC is not subject to the same formalities.
Sole Proprietorships, General Partnerships
As a sole proprietor, you and your business are in essence legally indistinct. In short, your business' debts are legally your debts. A lawsuit brought against your business is a lawsuit brought against you personally. This means your assets, such as, your car, home, bank accounts, investments may not be protected should your business get sued or go into debt. In a general partnership, the risk may be even greater. If one partner makes a bad business decision or creates an injury within the scope of the business, both partners may be subject for the entire amount of any damages.
Limited Liability Companies
By contrast, LLCs are separate distinct entities. This means that in the eyes of the law, they, like corporations, are freestanding legal persons, separate and distinct from their members. LLCs provide their members and managers with a statutory liability shield. With certain exceptions, this shield protects LLC members and managers from personal liability for claims against the LLC. The LLC Act also provides LLC members with statutory asset protection and related legal advantages.
Whatever your line of business, protecting you and your family against personal liability can help you avoid a potentially disastrous situation. However, while a properly formed and maintained LLC can protect against personal liability, this protection is not absolute. LLC members and managers may be liable for debts if there is a personal guarantee of a debt, there is an intermingle of personal funds with the funds of the business, the LLC was not properly capitalized or not properly insured, or your LLC fails to pay state taxes or otherwise violates state law.
