Entity Formation

Overview

We've been assisting business owners for almost 30 years. We've formed hundreds of business entities, ranging from closely held corporations and limited liability companies, to operating subsidiaries for new divisions of existing corporations, to emerging growth companies destined for an IPO.

Overview of Limited Liability Companies

A limited liability company, or LLC, is a business entity created under law that combines characteristics of both a corporation and a partnership. Although an S corporation shares many of the same tax characteristics as a LLC, a LLC has more flexibility and fewer restrictions than an S corporation. An S corporation cannot have more than 100 stockholders, cannot issue more than one class of shares, and is subject to more formalities than a LLC. However, owners of a LLC are required to pay Social Security and Medicare taxes on profits. Corporate stockholders are not required to pay these taxes on profits over and above the stockholders' salaries.

Reasons to Operate Your Business As an LLC

Limited liability companies, are popular, and it's easy to see why. They combine the personal liability protection of a corporation with the tax benefits and simplicity of a partnership. In other words, the owners (or members) of a LLC are not, absent special circumstances, personally liable for the LLC's debts and liabilities, but also have the benefit of more flexible tax treatment. Moreover, LLCs are more flexible and require less ongoing paperwork than an S corporation.

LLC ownership can be expressed in two ways: (1) by percentage; and (2) by membership units, which are similar to shares of stock in a corporation. In either case, ownership confers the right to vote and the right to share in profits.

Unlike a corporation, a LLC can distribute its ownership interests as it pleases, without regard to how much money or property a member contributes to the company. For example, if John contributes $10,000 to the company and is a silent partner, and Mark contributes no money, but runs the company on a daily basis, they could still decide to split the membership interests 50%/50%.

Choosing the Best Structure for Your Business There is no best business entity for all situations, and there is no such thing as perfect protection. The best idea is to meet with an attorney and discuss your business situation. You can then weigh the initial expenses, long term costs and risks against your needs and make the best decision for you.

As a final note, remember that you can lose your protection under certain circumstance. The right business entity, a good lawyer and good accountant can help you avoid problems before they occur.


How We Can Help

  • Form an Arizona LLC
  • Draft Custom and Tailored Operating Agreements
  • Draft Confidential Trust to Own an LLC
  • Review Existing LLC Agreements and Structure
  • Amend Articles of Organization
  • Register Your Non-Arizona LLC to do Business in Arizona
  • Prepare a Tax Audit Agreement for the LLC Taxed as a Partnership
  • Prepare Documents to Buy or Sell an Arizona LLC
  • Serve as Statutory Agent
  • LLC or Corporation Address Service
  • Terminate an LLC
  • Negotiate Member Disputes
  • Arbitrate Regarding LLC Disputes
  • LLC Litigation
  • LLC Business Planning
  • Advise Regarding LLC Employee Matters
  • Draft and Negotiate with Outside Companies
  • Trade Secret Protection, Employee Defection, and Unfair Competition

What Sets Us Apart

Rest assured that we share a common goal: creating certainty for your business and business relationships. Based on our experience with all sizes of organizations – ranging from start- ups to multinational corporations – and structures such as sole proprietorships and joint ventures, you find in us the right partner to help you plan for the unexpected.

As a client you can further benefit from our association with other lawyers and law firms, should the need for legal advice on a global scale arise.

We’re Different

Being a small, full service law firm located in the Phoenix metropolitan area allows us to offer accessible, efficient and responsive legal counsel. Leveraging a uniquely Southwest approach, we strive to make the complex simple and to communicate clearly. We speak your language.


IF YOU OPERATE AN EXISTING LLC

Members and managers of existing LLCs should take this opportunity to review existing operating agreements, particularly provisions on fiduciary duties, in light of Arizona's new LLC law, and make appropriate changes.

Being a small, full service law firm located in the Phoenix metropolitan area allows us to offer accessible, efficient and responsive legal counsel. Leveraging a uniquely Southwest approach, we strive to make the complex simple and to communicate clearly. We speak your language.


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    As long as the world shall last there will be wrongs, and if no man objected and if no man rebelled, those wrongs would last forever.

    — Clarence Darrow (1857-1938)