Business law in California and across the United States has many intricacies and nuances that business owners have to keep track of. For example, new business owners may have difficulty determining what type of business structure would provide the best benefits when considering entity formation. Other business owners may have issues staying abreast of the constant changes in tax laws and other regulations, such as the Tax Cuts and Jobs Act (TCJA). If you are a business owner and need assistance in dealing with tax issues impacting your company, you should consult with the experienced Sacramento and Roseville business law lawyers of NewPoint Law Group.
The business tax lawyers at NewPoint Law Group have over two decades of combined legal experience dealing with various types of business law issues at the state and federal levels. We understand the pressures of successfully operating a business, and we are here to represent you. To schedule a free and confidential legal consultation to discuss your business law issues, call us at (800) 358-0305, or contact NewPoint online.
Business Entity Formation: Types of Structures
One common issue that may trouble new business owners is choosing a business type that meets all of the unique needs of their company. Individuals who own businesses as sole proprietors should consider the merits of forming a business entity to reduce legal liability and to provide for certain tax advantages.
There are various types of business entities that you can choose from, depending on what your business seeks to accomplish. Examples of common business structures include the following:
- C Corporations – One of the primary advantages of C corporations is limited liability for shareholders and owners of the corporation regarding debts. The corporate tax rate for C corporations was lowered to 21% by the Tax Cuts and Jobs Act.
- Limited Partnerships – One advantage of a limited partnership is pass-through taxation. This type of taxation allows partners to claim business profits and losses on their personal tax returns. Additionally, this type of partnership allows investors to earn profits without being exposed to personal liability.
- Limited Liability Companies – LLCs are an amalgamation of corporation and partnership features. One of the biggest advantages of LLCs is that members of the company cannot be held personally liable for debts or liabilities accrued by the company under most circumstances. LLCs are also not subject to the various regulations that come with the formation of a corporation, like needing to keep track of official business meetings and all issues discussed during those meetings.
This is not an exhaustive list of business formation types. There are other types of business entities that may work better for your company and your employees. Our business formation attorneys can help you make a strategic decision.
It is important to note that merely setting up a corporation, LLC, or partnership is not enough to avoid personal liability. For example, a business entity must be run as separate and distinct from its owner(s), and not be the mere alter ego of its owner(s). For example, if company funds and your personal funds are commingled, there is not enough separation between you and the company. Additionally, the observance of certain corporate formalities is necessary to achieve the benefits of corporate immunity for the officers, directors, and shareholders.
Business Dispute Resolution and Corporate Governance
On occasion, the governance of corporations and partnerships can result in internal conflict. These internal issues usually require legal assistance to ensure that corporate by-laws are adhered to and to promote and facilitate the smoothest possible resolution of internal conflicts. It is the responsibility of a corporate attorney to educate and be prepared to implement the policies of the leaders and decision-makers of the business.
Contract and lease review, negotiation, and enforcement are common necessities in running a business. A skilled business attorney is not to be viewed as a “deal killer” in proactive treatment of contractual issues, but rather, as a “loss preventer” when the contracts are breached. Ultimately, the cost of doing business should be lower with proactive legal support.
Finally, it is always a good idea to retain a competent business attorney when dealing with city, state, or government agencies. There are myriad issues that could arise when doing business with government agencies, such as a permit or licensing issue or a property tax issue. Having a knowledgeable business attorney is a good investment when you need to preserve and protect the assets of the business.
Sacramento and Roseville Business Attorneys Serving Corporations, LLCs, and Partnerships
Business law is a broad area of law that directly impacts corporations, limited liability companies (LLCs), partnerships, sole proprietorships, and other organizations. Many business owners elect to hire a business lawyer that may serve as in-house counsel for small businesses which regularly encounter a wide spectrum of legal issues. Having the advice of an attorney in various types of business matters can help both new and experienced business owners achieve greater financial success in California and beyond.
If your Roseville or Sacramento business needs help resolving a legal issue, contact the experienced attorneys of NewPoint Law Group. Our team can work with you to discover and effectively address business formation issues, internal conflicts, business disputes, and many other types of legal issues that your company may encounter. To schedule a free legal consultation, contact us online, or call (800) 358-0305 today.