Experienced business counseling can save companies money, avoid problems with government regulators, and help encourage company growth over the long-run. Even business owners who do not think they need to sit down with business counseling attorneys may find that they are putting their company at risk of expensive lawsuits or government penalties.
Business counseling may involve any aspect of running a business, from business formation through planning for business succession. It may also involve drafting contracts, tax planning, partnership disputes, international business transactions, and employee benefits. Counseling can be used to avoid possible problems in the future, or address a current conflict with another company, business partner, or government agency.
Talking to an experienced San Diego business counseling attorney can help ensure your company is on the right track for success. Contact the law firm of Butterfield Schechter LLP today to discuss any questions or concerns you have.
There are a number of factors to consider before establishing a business, including selecting what corporate form is best for the business and partners. Businesses in California can be structured as a C-Corporation (C-Corp), S-Corporation (S-Corp), Limited Liability Company (LLC), Limited Liability Partnership (LLP), nonprofit, benefit or flexible purpose corporation, or sole proprietorship. There are a number of benefits to each type of business structure, as well as potential drawbacks.
Some of the primary considerations in establishing a new business involves liability, corporate requirements, and tax filing. For tax purposes, many businesses prefer an LLC or S-Corp. A traditional C corporation designation has owners taxed on profits, as well as paying corporate income tax. An S-Corp may be able to avoid corporate income tax as a “pass-through entity.” However, S-Corps may be restricted on who can be a shareholder, and the total number of shareholders the company may have.
Corporations and LLCs generally protect owners from being personally liable for business liability. A sole proprietorship may be simpler and cheaper to establish than a corporation or LLC; however, the owner may be personally liable for business debts and other liability.
Corporations generally have more restrictions on how the business can be run, requiring annual meetings, corporate minutes, and other corporate requirements. LLCs generally have a more flexible structure. However, corporations may have more options for seeking investors, especially from outside the U.S.
There are other factors that must be considered when forming a company that will depend specifically on the business type, goals, and future plans of the company. Given the number of differences between these corporate forms, you should talk to an experienced San Diego attorney about which form will provide the best protection while allowing for future growth.
Start-Up Business Counseling
Start-ups may gain the most from general business counseling. Many start-up businesses are created by individuals with different backgrounds, including engineering, sales, marketing, or manufacturing. However, for many start-ups, this may be the owner's first business. Navigating the world of business formation can be complicated, especially given the short timeline many startups have before they run out of money.
In addition, start-ups may face a number of regulatory hurdles, especially here in California, regarding corporate formalities, valuation, seeking investment, and raising capital. Experienced counseling will provide the guidance that these new companies need while allowing the owners to focus on getting their product or services up and running.
Transactional law is one of the primary areas where a business may require the assistance and counseling of an experienced attorney. This generally involves advising the business on any number of financial or business transactions, negotiating contracts, and corporate or tax planning. When transactions are handled properly, they may avoid unnecessary litigation or legal battles down the road.
Transactional counseling may depend on the type of business, the type and scope of transactions, size of the business, and whether they are engaging in novel or complex transactions. Complex transactions may include mergers and acquisitions, intellectual property licensing, succession planning, governmental compliance, and international business transactions.
Business and Corporate Tax Planning
Tax planning is one of the most important considerations for a business or corporation. Poor planning or improper accounting may cost businesses thousands or more in unnecessary California and federal income tax. However, if the government alleges wrongdoing, the company may also face expensive penalties or even criminal sanctions.
Alternatively, proper corporate tax planning can save a company and their shareholder's money and increase profits. There are a number of areas where tax counseling can make a significant impact on a company's bottom line, including accounting methods, computation of income tax, corporate structure, employee benefits, employee compensation, deduction methods, depreciation, and the use of state and federal tax credits.
A company may consider providing employee benefits as a way to motivate workers, reward dedication to the company, or to compete for the best employees. However, there are a number of considerations a company must take into account before offering employee benefits. Providing employee benefits may trigger certain federal and state requirements, such as the Employee Retirement Income Security Act (ERISA). ERISA sets the minimum standards for most voluntarily established pension and health plans, including defined contribution plans, defined benefit plans, Employee Stock Ownership Plans (ESOPs), 401(k)s, Profit Sharing Plans, Simplified Employee Pension Plans (SEPs), health insurance, and disability insurance.
If an employer's plan falls under ERISA, the company is required to provide the covered employees with a description of their benefits and rights under the plan. There are also provisions for the fiduciary duty of the plan manager, a process for when a claim is denied or disputes arise, the right to an appeal, and the employee's right to file an ERISA lawsuit if they lose their appeal.
San Diego Business Counseling Attorneys
At Butterfield Schechter LLP, we provide our clients with all forms of business counseling and business planning. From business formation to employee benefit plans, our attorneys will help your business stay up to date with the latest regulatory changes while taking advantage of tax benefits and avoiding regulatory liability. Contact our office today with any questions on how we can help you and your company succeed.
General Business & Transactional Counseling Resources
It's National Small Business Week: Virtual Conference hosted online by the SDPA on September 22-24
Succession Planning Strategies for the Retiring Small Business Owner
National Small Business Week, May 5 to May 11: A Review of Qualified Plan Choices for Small Businesses
Small Business Making a Big Impact: Protecting Your Small Business - Save Yourself the Headache and MONEY
National Small Business Week, April 30 to May 6: Successful Retirement Strategies for Small Business Owners – Your Future is NOW!
Entity Formation - Starting a Small Business in California Checklist
California Workers’ Comp Law Changes for Excluded Employees
Differences in Filing as an LLC, Partnership, S Corp, Sole Proprietorship and Independent Contractor
Benefit and Social Purpose Corporations
Are Series LLCs Finally the Next Big Thing?
Are You Planning on Starting a Business in 2017?
Mileage Reimbursement Rate Decrease
The Importance of Preparing Corporate Minutes
California (Finally) Making it Easier to Obtain Corporate Filing Records Online
Social Security Benefits Increase in 2017
New Trend to Attract and Retain New Employees
Beware of Offering Stock to Friends
Using Standard Form Contracts May Hurt Your Business
Start Your Business Off Right as a Corporation or an LLC
Have You Considered What Legacy Your Small Business Will Leave?
Is Your Business Eligible for the New Employment Credit?
Before You Start Your Startup Make a Founder Agreement