Business Attorney in Summerville
Helping Clients Build Their Businesses in Berkeley, Charleston, and Dorchester Counties
Many people have a great idea for a business but are not sure how to get started. Others have built burgeoning enterprises but struggle to grow or legally protect them, especially as they begin to conduct business with other entities. Attempting to navigate, start, or grow a business without the help of a qualified lawyer can lead to mistakes with devastating results.
You do not need to go it alone. At PMC Law Firm, our Summerville business attorney can help you determine what business type best suits your goals or help make sure your existing business is protected in every transaction.
Choosing a Business Entity Type
There are several types of business entities when forming your business, each with its own advantages and disadvantages. As a business owner, it is wise to consider the following factors:
- Tax efficiency
- Limited liability
- Ease of management
In addition, you will want to think about filing costs, whether the entity requires an Employer Identification Number (EIN), and any necessary business certificates or licenses. As your business grows and metastasizes, you may want or need to change your entity type. Our lawyer can help you evaluate the specifics of your business and help you decide what entity makes the most sense for you. Below, we cover some of the major entity categories.
Sole Proprietorships and General Partnerships
These are arguably the simplest types of business and are not really entities at all. They lack many of the advantages of more formalized institutions, including limited liability. A sole proprietorship is defined as an individual running a business without any formal organization, meaning the business’s profits and losses are reflected in their personal tax returns. This gives them tremendous flexibility and discretion in how they run their business, but they are also exposed to any of its liabilities.
General partnerships are similar in that they have no formal organization. They encapsulate scenarios where two or more individuals work together on a for-profit business. What can be tricky here is there does not need to be a formal agreement specifying the participants in the business are partners; in fact, even a written agreement specifying individuals are not partners in a business does not legally absolve them of running a general partnership. This means that someone who associates with a partnership can unintentionally become liable for actions against the partnership.
The partnership’s terms, including guidelines on profit sharing, handling of partnership property, and decision-making, can be governed by a written agreement. Otherwise, these terms can be controlled by statute.
Limited Liability Partnerships
A limited liability partnership (LLP) is fundamentally similar in structure to a general partnership. However, it must be formed by filing company articles with the Secretary of State. An LLP will be required to carry a specified amount of liability insurance, and, in exchange, its partners will gain a certain level of protection from offenses the LLP might commit.
A limited partnership (LP) also requires company articles be filed with the Secretary of State and carries more structure than an LLP. While a general partner assumes unlimited liability through direct management of the company’s affairs, limited partners take on a more passive role and are generally only liable for their contributions to the LP. This can be challenged, however, if a limited partner begins to act more like a general partner. A limited partnership interest is frequently considered a security.
Corporations are among the most complex business entities, with numerous possible subcategories, but they also carry many organizational benefits. To create a corporation, you must file articles of incorporation, hold an organizational meeting, and establish bylaws for the company.
Though there are many subtypes of corporations, they all generally include these three categories of participants:
- Officers who handle the company’s day-to-day affairs
- Board of directors who oversee company management
- Shareholders who serve as passive equity investors
Being a shareholder, or owning a “share,” typically gives you voting power and other rights, including access to company financial documentation. You will also not be personally liable for corporate actions in most circumstances.
An S corporation is often called a “flow-through” entity because its income, losses, deductions, and credit pass through to shareholders. Conversely, a C corporation experiences two layers of taxation, as the entity itself is taxed separately from its owners. In the state of South Carolina, you can also form nonprofit corporations, statutory close corporations, and professional corporations. Selecting the right category of corporation can be critical in forming a business. Our business lawyer in Summerville can walk you through the pros and cons of each type and give recommendations based on your company’s needs.
Limited Liability Companies
A limited liability company (LLCs) is part partnership, part corporation. They are formed by filing articles with the Secretary of State, much like a partnership, but they enjoy the expanded protections offered by a corporation. They also boast an immense level of flexibility, as LLCs can choose how they wish to be taxed and can create custom governing structures decided by its members.
LLCs can either be member-managed or manager-managed. As their names would imply, a member-managed LLC is run by its members, while a manager-managed LLC appoints a manager, with members taking on a more passive role. In both instances, members and managers of an LLC are not personally liable for the LLC’s obligations so long as they do not personally commit any wrongdoing.
Any growing company will almost certainly need legally sound contracts in the course of conducting its business. A properly drafted contract creates a legally binding agreement that can help prevent and resolve internal and external disputes involving your company. The price for not using robust, sound contracts can be high, potentially exposing your business to harmful and costly legal action.
Some of the contracts our Summerville business attorney can assist your business with include:
- Business governing documents defining the organization, mechanisms, and practices of your company beyond statutory defaults
- Employment contracts defining the relationship and obligations of the employer to the employee and vice versa, including any rules involving alternative dispute resolution, non-compete agreements, and confidentiality requirements
- Securities compliance documentation covering the registration or exemption of securities issuance
- Real estate agreements for company property
- Third-party contracts for freelancers and other companies with which you do business
Business Sale or Purchase Services
Selling or buying a partial or complete stake in a business may seem like an open and shut endeavor, but it involves a tremendous amount of documentation and following regulatory procedures to legally and financially protect all parties. It is not advisable to attempt to carry out a purchase or sale without the guidance of a legal professional.
Our business lawyer from PMC Law Firm can help you with all elements of a business sale or purchase transaction, including:
- Drafting or review of an asset or stock purchase agreement defining the terms of the sale
- Providing guidance on the most advantageous means of carrying out a sale to limit tax liabilities
- Obtaining necessary government and regulatory approvals
- Negotiating any outstanding employment issues
- Assigning third-party contracts as necessary
- Finalizing financing and other fiduciary elements of the transaction
- Assisting in dissolving a business intended only for a finite series of transactions
Give Your Business the Legal Advocate It Deserves
No matter what kind of business you presently manage or are planning to start, you will need the help of an experienced legal professional. Our team at PMC Law Firm has a proud history delivering exceptional legal services to our clients throughout the state of South Carolina. If you are looking to start a business, our attorney can assist you in choosing a business entity and guide you through the filing or incorporation process. We can also help existing business owners with the drafting and review of contracts as well as the sale or purchase of company assets.