Experienced troubleshooting to set you on the path to success
If you’re going to launch a successful business in today’s competitive economy, you need the best legal advice available. Stubbins, Watson, Bryan & Witucky Co., L.P.A. has decades of experience and the knowledge necessary to provide reliable counsel for entrepreneurs across a wide variety of industries. We go beyond filing the proper forms to get your company started; our engaged attorneys work with you to troubleshoot possible pitfalls and impediments to your success. Before you commit any resources,Stubbins, Watson, Bryan & Witucky Co., L.P.A. can pore over your business plan and alert you to potential obstacles. Together, we can choose a course of action that enhances your prospects of success.
Forming the right business in Zanesville, Ohio
One of the most important decisions you must make for your enterprise concerns the appropriate structure for the business. We advise startup ventures on the potential benefits and shortcomings of all available options, including:
Before settling on a form, we invite you to tell us your goals and long-term plans for the business, your life and your family so we can suggest the type of entity best suited to that scenario. But before we draft the necessary legal filings, our business lawyers also want to advise you regarding tax planning, operating capital, lines of credit, permitting, zoning and land use, employment law, and contracts. If one of these topics raises a red flag, we want to forge a solution before you invest any of your resources.
Understanding the advantages and pitfalls of sole proprietorship
As an example of the need for complete planning, we can point to the challenges of the most popular type of startup business, the sole proprietorship:
- Liability — With a sole proprietorship, the business and the owner are one. There is no separation between business and personal assets, and thus no protection from creditors and other claimants.
- Control — The owner has complete control and can allocate resources without having to consult partners or shareholders. Sole proprietors are not required to file formation paperwork, prepare financial statements, file annual reports or hold meetings. However, sole control is a double-edged sword; the owner may suffer burnout and find it difficult to manage growth.
- Capital — Sole proprietors cannot issue stock to raise capital and often have trouble getting business loans.
- Survival — Because sole proprietorships rely so heavily on a single person, they may falter when the owner becomes ill. A sole proprietor can plan for business succession, but these businesses often must struggle to survive after an owner’s death because of a new owner’s limited knowledge of the business and customer identification with the original owner.
- Taxation — Sole proprietorships do not incur business taxes; all reported income flows through to the owner’s personal income tax filing. However, the owner must pay self-employment tax, which can be quite burdensome.
Whichever entity you choose to employ will come with pros and cons. Stubbins, Watson & Bryan is here to help you make a fully informed choice that leads to your best outcome.
Costs to form an LLC
An LLC has a corporate shield, and can elect partnership, subchapter S, or corporate tax treatment. Our rates to form LLCs are very competitive with what is advertised on the Internet and Television. Our base charge for a single member LLC is $550.00, plus filing fees. For a multiple member LLC, our base charge is $675.00, plus filing fees. Our operating agreement contains a buy/sell provision. We charge for additional services at an hourly rate, for example, negotiating different terms for a custom buy/sell agreement, transferring real estate to the LLC, and tax planning with your CPA. Our fee includes appointing the statutory agent and obtaining a tax identification number, which are separate charges on certain Internet advertisers. And, unlike certain Internet advertisers, we have no monthly recurring fees. Once formed, your future costs are only incurred when you need further representation. Fees are subject to change from time to time, and other costs can apply depending on what we are asked to do.
Generally, forming an LLC includes an office conference, where we explain the corporate shield and the tax distinctions. The tax considerations relate to being able to have arms-length transactions, such as leases between real estate holding LLCs and operating LLCs. Under the IRS rules, one cannot lease to himself or herself, but there can be a lease between two LLC’s owned by the same individuals depending on the tax choices. There can be transfer on death certificates for membership interests, which avoid the costs and inconvenience of probate. Owning real estate in an LLC also protects against the risks and costs of partition suits, where real estate can be sold to a stranger on the courthouse steps. There are different classes of ownership in LLCs, such that there can be economic interests, as well as membership interests. There are other choices and opportunities, as well.
For further information, feel free to email, call, or schedule an appointment.
Contact our Zanesville business lawyers for business formation services
If you’re thinking of starting your own business in the Zanesville area, let Stubbins, Watson, Bryan & Witucky Co., L.P.A. troubleshoot your formation. Our experienced attorneys provide personalized attention so you can choose the right operating structure for your enterprise. To learn more, call us at (740) 452-8484 or contact our Zanesville office online.