Corporations, LLCs and Partnerships
At Chase Law Group, we believe that it is crucial to conduct business in the State of California through a business entity, such as a Corporation or a Limited Liability Company (LLC), and not as a sole proprietor or a general partnership.
The attorneys at Chase Law Group have extensive experience advising entrepreneurs, business owners, and professionals on the best business entity for their business or practice. We regularly advise individuals and business partners in determining the best entity structure for a business and in ensuring that the business entity is properly set up and maintained.
A properly formed and maintained business entity can provide a business owner with personal liability protection from the debts and obligations of the business. A business entity, such as a corporation or LLC, provides personal liability protection because it has its own legal identity separate and apart from its officers, directors, shareholders, managers or members – even if the entity consists of only one person. If you are sued based upon an occurrence arising during your business operations, a properly formed and maintained business entity can limit exposure to a judgment solely to the assets of the business, and not your family.
A business entity is particularly beneficial for business partners. If one or more individuals come together for a business venture without forming a business entity, they are deemed to be a general partnership. Essentially, each partner has unlimited personal liability for the debts and obligation of the business, including obligations agreed to by their business partner – regardless of whether he or she had knowledge of it. The Operating Agreement in a LLC, or the Shareholders’ Agreement in a Corporation, sets forth the expectations and understandings for the partnership. Certain “buy-sell” agreements are also contained in these documents, including agreements as to what happens to the business if one or more of the partner retires, dies, divorces or otherwise leaves the partnership.
Certain professional service providers are limited as to what type of business entity they can use to render professional services. Real estate agents and brokers, dentists, chiropractors, contractors, architects, lawyers, accountants, and so on, are all governed by a regulatory agency that specifies what type of business entity the agency will issue a license to and the requirements for doing so. In the end, professional service providers are business owners, and like any business owner, should not rely on insurance as their only defense against lawsuits arising from their business. A properly formed and maintained business entity, such as a professional corporation, can provide the professional with personal liability protection as well.
To learn more about how to select the business entity that is right for you or how to bring your existing business entity up-to-date with corporate minutes or an updated partnership agreement, schedule your consultation today!