Business Entity Formation and Corporate Structuring
One of the first steps in starting a new business or expanding operations of an existing business is selecting a business entity. Whether you are launching a new venture or reorganizing an existing business, careful planning ensures your business can meet current needs and achieve future goals.
Business Entity Formation
Generally speaking, the main purpose of forming an entity (as opposed to operating as a sole proprietor) is to form a liability shield that protects the business owners, as individuals, from personal exposure to company debts and liabilities. Selecting the right business entity is a very important decision. The choice comes down to a variety of factors like tax treatment, profit & loss sharing, ownership dynamics, fundraising, strategic decision-making, and management authority.
Once the entity type is selected, the next critical step is to ensure the business is properly established and compliant. Your company should comply with applicable laws and use governing documents (like Bylaws or an Operating Agreement) as internal rules for operating the business and solving problems as the company grows. Observing corporate formalities helps maintain the integrity of the liability shield and the benefits of your chosen business structure. If you fail to comply, your liability shield can be pierced, and you can be held personally liable for the business’s legal, tax, and financial obligations.
Correctly forming a business entity and then operating it within the law is not as simple as filing paperwork online. Drexler Law assists business owners in selecting the most suitable entity for their circumstances, forming the entity correctly, drafting quality documents, advising them how to operate the selected entity type, and providing ongoing legal support when necessary.
Corporate Structuring
Once a business is formed, thoughtful structuring determines how it operates and develops over time. If your business operations would benefit from adding a subsidiary or parent organization, reorganizing ownership, improving the flow of profits and losses, positioning the company for outside investment, or succession planning, you may wish to consider adjusting the structure of your business organization. Drexler Law can help you design a business structure that supports your strategic goals.
