There is a large body of law that involves using different business forms to benefit people creating companies and conducting business.
We would be happy to work with you to see if you can benefit from using one of these legal business forms. Areas where my law office may be able to help include such things as writing a business plan, deciding upon a legal form to use for your company such as a corporation or limited liability company (LLC), creating by-laws or operating agreements, considering the use of a serial LLC, using a Delaware Business Trust, and locating an independent Director for your corporation
Corporate law, or business formation law, deals with the structure and operation of:
Many home-based and small businesses use a sole proprietorship or partnership form of business structure. While there are some legal requirements for using those forms, they are fairly simple to run and maintain.
One limitation of using a sole proprietorship or partnership is that personal assets are possibly subject to being taken by creditors in the instance of debt owed by the business.
Corporations and limited liability companies
There are a number of other reasons why using a legal form such as a corporation or limited liability company can be beneficial to a smaller business, including:
As a business becomes larger, and its operation needs to be managed by more than one person, a legal business format can be helpful in providing a structure for the organization and management of the company.
A number of the concerns addressed in setting up a business involve:
Corporate law may involve handling disputes amongst shareholders, directors, or officers. Or, it may be the planning, design, and creation of such artificial entities.
Many Delaware corporate attorneys focus on assisting corporations with the buying and selling of corporations, and the restructuring that can result from such purchases.
Not every suit involving a corporation is a case centered around corporate law.
Corporations may find themselves in litigation in much the same way individuals do. Corporations may sue or be sued, and in some circumstances corporations may be charged with crimes.
My Delaware law firm works with the planning, design and creation of new corporations, limited liability companies (LLC's), and other such structures. I can also serve as a trustee for a Delaware business trust, or other types of Delaware trusts.
We have found that a very effective way to keep client's costs down is for the law office to work hand-in-hand with an incorporation service. Some of the basic services that can be performed by the incorporation service can be provided at a lower cost than if done entirely by the law firm. The incorporation service cannot provide any type of legal advice, however, so the planning and advice aspects of creating a business entity must be handled by the law firm. This firm has a special relationship with one such incorporation service, Delaware Intercorp, Inc., as Larry Sullivan is the owner of that company.
A Delaware Incorporation Attorney at my office can assist you with the incorporation process from start to finish.
You can choose the complexity or simplicity of the process as you develop your business plan, and keep costs low by determining for yourself which areas of the process are handled by the Delaware Attorney and which part you choose to do on your own.
Drafting a Limited Liability Company's Operating Agreement
An Operating Agreement is critical to the planning, development, and operation of a Limited Liability Company. It should directly reflect the business plan and correctly frame the relationships, rights, duties, and authorities of the members and officers.
As it should reflect the business plan, there should be a business plan. So if you are going to create an LLC, start at the beginning and make a business plan.
A business plan does not need to be much more than an improved outline of what you want to do and how you plan to get there. The process of writing it down is very helpful and may highlight problem areas for you before you experience the problem.
Here are some links to sites which can assist you in preparing a business plan:
Remember, the process of developing the business plan may be as helpful as the finished project itself. Don't skip this planning process by blindly incorporating someone else's sample form, or you will have missed the point.
You may find it helpful to consult with a professional during this planning phase.
My office can assist with the development of a business plan for your venture. And once the business plan is complete, we can help you with the drafting of your Operating Agreement.
Just like the business plan, the Operating Agreement is not a "one size fits all" project. If you are sincere about your business venture, then both of these documents should reflect the particularities that give rise to your business.
Serial Limited Liability Companies
A serial limited liability company is an LLC which has broken its business down into a number of parts, and has given each part its own operating agreement and system of management.
One would create a Serial LLC in the same manner of filing as one would a regular LLC, except that the Certificate of Formation would indicate that there are several components to the limited liability company. The real difference comes with the drafting of the LLC's Operating Agreement(s) and the strategy as to how to divide the assets and liabilities.
An example of a use for a Serial LLC is to divide up ownership and liabilities for multiple pieces of real property, while keeping a unified management system. In this use, if a particular piece of property incurs a liability larger than its value, the liability does not spill over to the other properties. The liability is thus contained.
The key to the business strategy of utilizing Serial LLC's, like many other endeavors, is proper planning and professional advice during the set up.
Delaware Business Trusts
Delaware business trusts (DBT) may also provide benefits in the areas of taxes and asset protection. Also known as a Delaware Statutory Trust, the DBT is an unincorporated business association that is used to hold assets for the benefit of the trust owners.
Our page on Delaware Business Trusts explains many of the uses and benefits of using a statutory trust form to reduce gift and estate taxes, as well as to protect your assets.
Independent Director Services
We can assist with the provision or location of an independent director to work with your company to meet due diligence and other corporate governance needs.