Business_Formations

      A Business Relationship is like a marriage, and like all relationships they usually begin well . . . and yet we all know that some are bound to fall apart. When entering into a business relationship with partners (one lawyer I know, once said partners are for dancing but that's too cynical), you need to consider all the factors surrounding the relationship. Such factors are, how do I buy out a partner, if I have to, what happens if a partner dies, what happens if I die? Can we bring in additional partners? Oh just a side note . . . I had one of those reprehensible, pusillanimous, prevaricator, sidwinder type of law partner, only once and never, never again, once again experience creeps into the message!

     The do it yourself, maybe get yourself possibly in trouble later kits don't provide those answers. Just a thought . . . the cost of competent legal counsel can far outweigh the cost of litigation

     Are you currently in business? If so, are you conducting meetings as required by statutes for corporations, do you have an operating agreement, if you are a limited liability company? There are several types of business formations you should consider, that are listed below.

     Before you decide, the advice of a skilled attorney who also engages in entrepreneurial pursuits would be advisable. Our office can offer you advice in what type of business organization best suits the type of business you wish to engage in; if you are already in business, our advice is available regarding how to conduct your affairs, which includes vendor agreements or contracts for services to be provided. Also we provide the ability to write business plans if you are seeking a business loan. We also offer services regarding obtaining funding, we can provide you with referrals as well.

Corporations: While this type of business organization has been somewhat relegated to second string, this attorney believes it affords the best form of protection for assets. While it is somewhat structured (formal annual meetings, resolutions, having officers and directors), and it more expensive to initially register, its formal structure is based upon several hundred years of case law to support its existence.

Limited Liability Companies: This a cross between a partnership and a corporation, conferring certain protection from personal liability, while affording for tax purposes your losses and gains into your personal tax return. A favorite of many because it dispenses with formalities associated with corporations. Don't be fooled into thinking because you did a do it yourself filing that you are completely protected. Only an attorney can advise you properly.

Limited Partnerships: I personally favor this type of business organization.   Why? If you have an idea and need to raise investors this is way to raise capital and depending on the terms, the limited partners once paid, no longer are part of the business. Limited partners are by agreement make a certain amount on their investment, they receive their profits according to the structure of the limited partnership agreement and get their principal back by a certain date. Limited Partners exposure to personal liability is limited, and they have no participation in management affairs of the company.

Joint Venture Agreements: Two separate businesses which to engage in one or more common enterprises or pursuits but then disassociate themselves upon completion of the venture. A perfect business tool to accomplish that end.

Business Plans: This is usually the last thing anyone going into business wants to spend money for. Poor business mentality to begin with, not a good start! A business plan helps to focus your energies, develop marketing strategies while determining your market and availability to your business. It projects break even analysis and most importantly how much money you need not only to start the business, but to sustain your liquidity during the formative years. Cost ... incalculable to your business, out of pocket, reasonable. Lenders do rely upon business plans, for one because it shows, direction, dedication and strategy toward success.

Employment Contracts: Sometimes in order to protect your business relationship with key employee's a contract of employment outlining and defining the parameters of the relationship is a wise business decision.

Confidentiality Agreements: Some business wish to protect their business by having employees who have access to confidential and proprietary information sign a confidentiality agreement; sometimes included in those agreement in a covenant not to compete within a certain geographical area or period of time.

Contractor s Mechanics Lien Rights: Contractor's . . . before you begin work, develop your contract so as to protect your mechanic's lien rights. Connecticut General Statutes are somewhat narrow in scope and you must be ready to defend your rights to a mechanic's lien. Contact us for a review of your proposed contract in order to protect your legal interest, in the event of default by the contracting party.