Most new businesses fail within the first year of operation. This unfortunate reality is only compounded by the fact that many could have survived if the owners had hired an experienced attorney to advise them on business formation, planning, and corporate governance. Business is more than your idea, your product, or your hard work. Business is more than marketing and networking. Businesses, and start-ups more than most, need to understand the ramifications of the law on their business.
Formation. Most people know that incorporating a business is the safest and smartest first step. However, most are not aware of the legal and tax consequences of choosing a type of corporate entity.
- LLC? C-Corp? S-Corp? LLC taxed as a S-Corp?
- Does your business even qualify for an S-Corp?
- Does your business want to keep retained earnings? Have employees? Own property?
These, and many other questions, are essential to forming your business. These questions are most easily answered prior to forming your business with the assistance of an experienced attorney.
Corporate Documents. Another area where most small businesses fall short is drafting corporate governance documents, such as operating agreements, Articles of Organization, Buy-Sell Agreements, and Close Corporation Agreements. Corporate documents are the “blueprint” for how a business operates and establishes the rights and responsibilities of the business’ owners. Corporate documents govern ownership interests, rights and responsibilities, payments to owners, and many other critical components. Most new businesses fail to even draft these documents. Those that do often draft inadequate documents or purchase generic forms from the Internet. The consequences can range from internal disputes to violating Ohio law.
Business Planning. There are many issues that new business owners should plan for prior to opening the business. Of course, issues such as marketing, buying or leasing space, financing product, and compliance with tax, social security, worker’s compensation, and unemployment requirements are very important. However, new business owners are wise to consider business planning as it relates to the day to day operation of the organization, as well as the possibility of negative events, such as the death or divorce of an owner, or the failure and dissolution of the business. Sound business planning requires foresight, an acknowledgement that the business venture may go badly, and the courage to confront that reality with tough questions and sound judgment. An experienced attorney can present new business owners with scenarios and options to cover most situations that will arise during the course of business operations.
Corporate Governance. Even after the business is formed, owners are faced with a continued duty to ethically and legally operate their business. Corporations, whether LLC’s or corporations, must follow certain corporate governance rules. The most complex rules are for C-Corporations. Things like shareholder meetings, annual meetings, corporate minutes, resolutions, and others, may be required for your business under Ohio law. Most importantly, failure to follow the “corporate formalities” could result in the owners losing the corporate protection and exposure of their personal assets to the organization’s creditors.
Information Governance. Related to corporate governance is information governance. ICKES HOLT is a law firm of attorneys who are also certified privacy professionals. They can seamlessly integrate sound information security policies with your corporate governance policies to protect your business’ information, assets, and intellectual property.
All of these issues are integral for new businesses as well as for established businesses. It is never to too late to start a culture of compliance and sound governance. Businesses cannot rely on their own abilities, or online legal vendors, or attorneys without acumen and experience in corporate law. The attorneys at ICKES HOLT have the knowledge and skill to advise your business from formation to dissolution and all throughout the life of you your business.
ICKES HOLT is full-service, client focused, and team-minded. Clients can expect a team of professionals to work hard at providing solutions that make sense. Clients are an integral part of the team, and clients can expect collaboration and responsiveness. ICKES HOLT strives to be a different type of law firm and to provide its client with a different type of legal experience.