Chattanooga Attorneys Lawyers Helping you start your new business
Have you started a new business? Or maybe your business has grown and you are wondering if you should incorporate?
Tennessee Corporations
For Profit Corporation
Non Profit Corporation
501 (c) 3 Corporation
Limited Liability
Company (LLC)
Partnership
Business Trust
What are the benefits
of incorporation?One of the biggest advantages to a corporation versus a partnership or proprietorship is protection from liability. Although you can not shield yourself from your own individual liability, you can insulate yourself and limit your personal exposure to liability brought on by others, like employees or contractors.
Here is how it works, a corporation is a separate and distinctive entity, an artificial person so to speak. If an employee makes a mistake and creates liability then the corporation may be sued. Even if the corporation is held liable or responsible for payment of damages, you should be protected by the "corporate veil." The Corporate veil is the protection between you as an individual and you as the President or Chief Executive Officer of the Corporation. With a properly formed and maintained corporation (in good standing, etc.) your personal assets (house, cars, saving accounts, etc.) are not at risk, only the corporation assets, unless you personally caused the damages. You should speak to an attorney about the liability protections and exposures related to a corporation.
What is a Limited Liability Company (LLC)?
A Limited
Liability Company, as it name implies,
is a business structure which is expressly
intended to provide a limitation of liability as
to the members of the LLC. In short, a
LLC is typically a group of
persons or other entities (corporations, or the
like) who come together in a business
relationship and desire to limit their
individual exposure to liability. It is
similar to a corporation, but tends to have
greater flexibility. For
instance, a corporation's ownership is
determined by the issuance of shares of common
stock. and the shareholders reap a percentage of
the profits according to the number of shares of
stock. A Limited Liability Company
is owned by the members and the share of
profits can be determined with greater
flexibility by the operating agreement. For
example a two (2) member LLC could divide the
profits equally or opt (by written operating
agreement) to split the profits on a periodic
(monthly, quarterly, etc.) based upon each
member's contribution to that period's profits.
There are some tax advantages to an LLC as well. For instance a multiple member LLC can choose to file as a "corporate" association or a partnership, each having distinctively different tax liabilities and benefits. A single member LLC can opt to file as a sole proprietorship or as a "corporation."
To learn more about the advantages and benefits of a Limited Liability Company, contact one of our attorneys lawyers today.
There are some tax advantages to an LLC as well. For instance a multiple member LLC can choose to file as a "corporate" association or a partnership, each having distinctively different tax liabilities and benefits. A single member LLC can opt to file as a sole proprietorship or as a "corporation."
To learn more about the advantages and benefits of a Limited Liability Company, contact one of our attorneys lawyers today.
A typical application of a
Limited Liability Company is for two or
more separate business entities to share common
resources. For example, a group of small business owners
want to lease or own a common office or retail space and
have common employees like a receptionist or billing
clerk, but they want to keep their incomes separate. The
property and office equipment is purchased by the
LLC, and the LLC hires the common
employees. All of the members share the expense of
the operation of the LLC (usually equally) and keep all
of their individual revenues and individual expenses and
profits separate. Speak to a lawyer to
help you determine if a LLC would be an appropriate
business structure to meet your needs.
There are other benefits to
incorporation such as the ability to have the
corporation own certain assets like a
company car, and provide you as the President the
benefit of the use of the vehicle. There are certain
tax advantages to incorporation as well. Although no
one wants to think about a business failure, in certain
instances there is the ability to file bankruptcy as a
corporation without having to file personally.
Contact Attorney Jim Purple to arrange a
consultation appointment to discuss the advantages of a
corporation.
Want to start a new business?
Considering a different business structure
27 Years Experience
Considering a different business structure
27 Years Experience
Related Articles
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| Incorporating a non profit organization |
| What is a Sub S Corporation? |
| Estate Planning and corporations |
| Home Contact About Practice Top |
Non Profit Corporations
Churches, ministries, social
organizations, schools, or civic groups or other
service organizations are prime examples of entities
which can benefit from the formation of a
Tennessee Non Profit Corporation. As
with a for profit corporation, one of the primary
benefits of incorporation is for the purpose of
limiting liability. As an officer
of a non profit group you do not want to be held
individually responsible for the liability exposure
created by another officer, member, volunteer or
employee. To protect yourself and the other
members of your organization from individual
exposure to liability you should incorporate.
As an officer of a non profit corporation your
individual assets (car, home bank accounts, etc.)
are protected in the event of a lawsuit against the
corporation due to the negligence or misconduct of
another officer, member, volunteer employee or
agent. Attorney Jim Purple is
experienced in the formation of non profit
corporations of many types, including churches,
schools, radio stations, service organizations, and
ministry organizations.
Tax Exempt Organizations 501 C 3
To learn more about 501 C 3 exempt organizations, contact one of our attorneys today. Our lawyers and staff are experienced in in completing successful 501 c 3 applications.
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Do you have to use an attorney to incorporate?
Although, an attorney is not
absolutely required to incorporate, you should have
a lawyer do this for you. Forming a
corporation, LLC or
partnership is a serious step and involves many
legal issues and potential consequences, legal and
financial. Doing it yourself can lead to adverse legal
issues that you are not prepared to handle. If a corporation
is not properly formed or maintained some of the vital
protections, like liability insulation, could be defeated.
Always seek the legal counsel of am experienced
attorney before proceeding to handle legal issues.
At Purple Law Firm our attorneys are experienced in forming
corporations, LLCs, partnerships, and business trusts of
many types. If Purple Law Firm forms your corporation
our lawyers will properly prepare all of the necessary
documents, including Charter, Minutes, and Stock
Certificates. If our attorneys form you Limited
Liability Company (LLC) we will properly prepare the
required organizational documents, including an operating
agreement , if necessary, and issue Membership Certificates.
Call or
email today to schedule your initial free consultation.
Partnership Arrangements
There are times that a partnership arrangement
is the appropriate or preferred business structure.
This type of business entity is typically simple to
maintain, if properly formed. The
partnership files its own information tax
return to report the profits/loses of the partnership
and each partners distributive share. Each partner
then includes his/her distributions from the partnership
and share of the profits on their own individual tax
return, paying the tax at the said partner's own
individual rate. Partnerships do not enjoy the
benefits of liability protection like a corporation or
a LLC, and there are more significant
limitations on tax deductions. If you are
currently engaged in a partnership business or are
anticipating forming a partnership seek the legal
advice of an experienced attorney.
If you ultimately choose a partnership as the business
structure be sure to have a lawyer prepare
a partnership agreement and other
documents to ensure that the partnership is properly
formed and issues that may arise are properly addressed
in the agreement. Issues include the share of
profits or losses, responsibilities of each partner,
provisions for a buy out of one partner by another, what
happens in the event of the death or disability of one
of the partners, life insurance requirements, etc. Call
or
email today to schedule a consultation with one of
our attorneys.
Business Trust
Another way to manage a business and distribute the
profits is a business trust. Typically a
business trust is formed for a family business.
One of the key benefits to this business structure is
that it allows for a graduated ownership percentage
which provides the ability to gift down the value of
your estate without gift tax consequences. In
other words, over a period of time (several years) you
can increase the percentage of ownership of the business
for your children within the gift tax limits imposed by
the Internal Revenue Code. Again, you should
seek the legal counsel of an experienced attorney
to discuss the details of a business trust.
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The information contained in this web site is for general informational and marketing purposes only, and is not intended as legal advice, nor does it establish an attorney-client relationship. To receive legal advice from Purple Law Firm or its attorneys lawyers call or email for an appointment. This is a commercial web site and it contains information which is considered paid advertising, and all information contained herein has been reviewed by the attorneys lawyers of Purple Law Firm. Call today to speak to an attorney lawyer in Chattanooga, TN. Purple Law Firm is a member of Hamilton Law Center, PLLC, An association of attorneys. The term attorneys / lawyers herein refers to that association and/or is for marketing purposes only, and in no way is intended to imply anything further.
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in all areas of practice relating to or included in
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