859.312.9264167 W. Main Street #1012
Lexington, KY 40507
The free market is not a forgiving place, nor particularly kind to
businesses that make critical planning mistakes during their incubation
and development process. For these reasons, seeking the advice and
counsel of an experienced business formation lawyer before making a
costly mistake with your business start-up is not only a good decision —
it's the right decision.
At Frazier Law, we offer a variety of Business Solutions, so call us today at (859) 312-9264.
A corporation is a separate and distinct legal entity. A corporation can open a bank account, own property and do business, under its own name. The primary advantage of a corporation is that its owners, known as stockholders or shareholders, are not usually personally liable for the debts and liabilities of the corporation. If the assets of the corporation are not enough to cover the debts, in most cases the creditors cannot go after the stockholders, directors or officers of the corporation to recover any shortfall.
A board of directors oversees the management of a corporation and are responsible for making major business decisions
and overseeing the general affairs of the corporation. Directors are
elected by the stockholders of the corporation and the officers of the
corporation (i.e. President, Treasurer, etc.), who run the day-to-day
operations of the corporation, are appointed by the directors. To
remain compliant with the law, corporate officers and directors must
hold regular company meetings and document and
maintain the minutes of these meetings.
One major disadvantage of a traditional corporation is double taxation. However, there are solutions to this problem. If you are considering forming a business, talk to Frazier Law today for legal advice on the best business types and ways to avoid double taxation.
Limited Liability Companies (LLCs):
Like a corporation, a Limited Liability Company (LLC) is a separate legal entity from the owners of the LLC. The owners of an LLC are referred to as "members" rather than stockholders or shareholders and the LLC may be member managed or manager managed.
An LLC is a very popular business formation option because it combines the personal liability protection of a corporation with added tax benefits where certain income, deductions, and losses can be passed through the company to the individual tax return of each member. In other words, the members of a LLC are not usually personally liable for the company's debts and liabilities, and they have the benefit of being taxed only one time on their profits.
Other Business Entities:
Partnerships: General partnerships afford the least protection and the most exposure to you personally. If you are considering forming a partnership or need legal advice about the various types of business formations, please contact Frazier Law at (859) 312-9264.
Joint Ventures: A joint venture is usually formed by two or more entities for a particular purpose, recognizing that the entities have other business interests that may or may not compete with the particular purpose of the joint venture. When a joint venture is formed it theoretically creates a new entity. The parties may choose a corporation, LLC, partnership or other entity for the venture's purpose.
DISCLAIMER: This site and any information contained herein are
intended for informational purposes only and should not be construed
as legal advice. Seek competent legal counsel for advice on any legal