BUSINESS ENTITIES & TRANSACTIONS

Should I form an LLC or a corporation?

The answer depends on ownership structure, tax considerations, management preferences, and long-term goals. We explain the differences and help clients choose a structure aligned with their objectives.

​

How long does entity formation take?

Formation timing depends on the state and the complexity of ownership. We coordinate filings and draft governing documents promptly once information is gathered.

​

What legal documents are involved in starting a new company?

​The type of required documents depend on the entity type and ownership structure.  For corporations and LLCs, typical documents include:

• Articles or incorporation or organization

• Certificate of incorporation or organization

• Bylaws or operating agreement

• Written consent in lieu of organizational meeting

• Subscription agreements for entity owners

• State business license (in some states)

• Initial state reports

 

​What are bylaws and operating agreements?

​Bylaws are written rules adopted by shareholders of a corporation that govern corporate management and relations between shareholders.  An operating agreement performs the same function for an LLC.

​

Do I need bylaws or an operating agreement if I am the sole owner of a corporation or LLC?

Perhaps.  Even single-member entities benefit from written governing documents for clarity, banking, liability protection, and future planning.

​

What legal documents are involved in buying or selling a business?

Typically, the buyer and seller will enter into a letter of intent that outlines the basic terms of the arrangement.  Then, the parties will negotiate and sign an asset purchase agreement if the buyer is purchasing the seller’s assets, or a stock purchase agreement if the buyer is purchasing the seller’s interest in its operating entity.  Depending on the terms of the deal, additional documents could include employment agreements, escrow agreement, non-competition agreement, lease or sublease, bill of sale, assignment and assumption agreement, promissory note, and security agreement.

​

Can you review a letter of intent?

Yes. Letters of intent often shape the final transaction. Early review can prevent misunderstandings later.

​

What is included in an asset purchase agreement or a stock purchase agreement?

These documents typically describe the assets or equity interest being sold, purchase price and payment terms, liabilities assumed by the buyer, representations and warranties by both parties, and closing conditions.  Accompanying disclosures may include financial information and lists of assets, liabilities and contracts.

​

What is a buy-sell agreement?

A buy-sell agreement governs what happens if an owner of a corporation or LLC leaves, retires, becomes disabled, or passes away. It helps prevent disputes and provides continuity.

​

What is involved in entity maintenance and governance?

Corporations, LLCs, and limited partnerships must register with the state of formation and renew the registration each year.  If the entity does business in a different state, it may be necessary to register as a “foreign” entity there.  Each year, corporations and LLC should have annual meetings of shareholders, directors, member and managers, as applicable, or adopt written consents in lieu of actual meetings.  By following proper maintenance and governance practices, entities help maintain liability protection for their owners and officers.

​

Do you serve as registered agent for clients?

Not directly, but our sister company, CenterPoint Corporate Services, Inc., provides registered agent services and entity maintenance services.  CenterPoint Corporate Services, Inc. is a separate entity.