Incorporations / LLCs

It is extremely important upon the undertaking of any new business adventure to obtain the appropriate advice of counsel. With over twenty years of advising start-up corporations and LLCs, Mr. Horvath provides each and every new client with a detailed outlook that is fact specific to the client. Whether the business is being started for the purposes of acquiring real estate, manufacturing, sales, internet marketing, or for any other purpose, the choice of entity is one which must be made carefully. There are particular tax consequences inherent in each and the undertaking of this effort should not be taken lightly. For sure.

Often times people believe that registering their business with the Secretary of State is sufficient to meet their obligations under Ohio law. This may or may not be the case depending on the type of entity you have chosen. Furthermore, many people undertaking these efforts on their own do not understand the registration with the IRS and the selection of the appropriate tax status. Likewise, the assumption of liabilities for the incorporator’s partners or other shareholders is often misrepresented or misunderstood. The value of proper legal advice is immeasurable at this critical stage of any company’s development.

A Limited Liability Company is one which is formed by one or more “members”. Members are issued units in the corporation. The traditional concept of stock certificates is an anachronism here. Rather, the member’s interest may be reflected on the books of the company and no particular certificates need to be issued. The additional benefit of a Limited Liability Company is that it provides great privacy and flexibility. Furthermore there is no annual requirement of a shareholder’s meeting as with an S or C Corporation.

Corporations are nonetheless the traditional method of creating a business entity. Shares of stock are subscribed to by the original incorporators and/or shareholders. Those shares of stocks then vote on the board of directors who in turn votes on the officers of the corporation. This particular type of entity serves many strong purposes. Notwithstanding, it does create several layers of record keeping including annual meetings and the perpetual election of officers and directors.

The question arises “which one is right for me?” The answer depends on the purposes for which you are forming the company and your ultimate goal with its disposition and/or growth. Concern and competent legal advice is always the best avenue of approach when undertaking any new business venture, the merger of any two business ventures, or a proposed group investment in any activity.