Entity Formation, Maintenance & Counseling

Estate planning for your childrenEntity Formation, Maintenance & Counseling

Entities

It is often important that a client establish an entity through which to own and operate a business or investments. This might be done for personal liability protection and to separate investments so that if one investment is negatively impacted (e.g., because of a lawsuit), it does not affect other investments.

Establishing an entity is only part of the process for the client’s business and investments. The factors discussed below play an important part in making sure the entity is properly operated and the benefits of the entity are maintained and not lost.

Our Firm helps you determine and establish the entity which would be most appropriate for you. Among the entities we can assist you in establishing are:

  1. Limited Liability Companies (LLC)
  2. General Partnerships
  3. Limited Partnership
  4. Corporations

We then prepare the necessary paperwork for filing with the various governmental agencies (such as the California Secretary of State) to establish the entity. In addition, we will prepare the document which will govern the entity whether it is an operating agreement for an LLC, a partnership agreement, or bylaws for a corporation.

We will assist you in changing the entity’s operating agreement and governmental filings when the owners of the business change, which occurs through a sale of an ownership interest or through the purchase of an interest. This is required to reflect the change in owners and their percentage ownership interests.
Entities

Maintenance

Each type of entity has formalities that must be followed in order to ensure the entity is being properly operated. Failure to carry out these formalities can result in the loss of any benefits the entity was intended to provide, such as asset protection.

As an example, corporations are required to have annual minutes prepared, i.e., written documents by the board of directors and by the shareholders approving the corporation’s actions during the year. While annual meetings are not required, the preparation and signing of annual minutes must be done. Failure to prepare these minutes on an annual basis could result in the shareholders being personally liable for actions taken by the corporation, which is likely the main reason the corporation was established in the first place.

We can prepare the annual minutes for our corporate clients to make sure that this aspect of the corporation is properly carried out. Our involvement in this process assures that the minutes will be prepared timely and properly.

Regardless of which entity is established, it is important that you meet with us periodically to make sure the entity is being properly operated.

Counseling

In addition to the above services, we provide you with counseling as to the operation of your businesses and investments. For instance, you may want to start a new line of business within the company (whether it is operating as a corporation or some other entity). We may advise you to start the new business in a separate entity to provide more liability protection. In addition, we might have some of the ownership of the new business be owned by your children or a trust for your children in order to have some of the future growth in value of the business avoid estate taxes when you die.

This website is intended to provide legal information only; legal information is not legal advice and you should consult with qualified legal counsel prior to implementing any estate planning. The transmission or receipt of information to or from this Website is not intended to create, and does not create or constitute, an attorney-client relationship. No portion of this site may be reproduced or used in any manner other than for the private information of the site reader without the express written consent of Tisser & Standing LLP. The testimonials throughout this site were provided by actual clients. To maintain their privacy their names may have been abbreviated. Please note that testimonials do not warrant, guarantee or predict your particular results.