Business Formation - Starting a Business
The Law Offices of Gerald R. Della Torre
Embark on your entrepreneurial journey with confidence.
When forming a new business, a client must consider a variety of aspects, including but not limited to, possible tax implications, liability consequences, and potential co-owner controversies. The Firm assists business owners in reviewing these issues and provides our clients with the insight and knowledge they need to choose the appropriate type of entity to create with the State of New Jersey and complete the necessary documents to operate the business. Once the formation is completed, the Firm can assist the client in their daily legal needs encountered in running a business.
Do I need to create and file a formal business entity?
Forming a formal business entity can provide a business owner with a layer of liability protection from personal exposure to legal claims for injuries and financial claims.
Does creating a formal business entity either as a corporation or limited liability company expose me to additional tax consequences which would not effect a sole proprietorship?
Forming a business as a limited liability company, or corporation designated as an S-corporation, usually does not expose a business owner to the double taxation predicament historically encountered. Specific situations may deviate from this rule and clients are additionally encouraged to review tax issues with their accountant.
Does my business need a formal set of written rules, called By-Laws for a corporation, or an Operating Agreement for a limited liability company?
Frequently, business owners take only the initial step in creating a business entity, without drafting a formal set of rules governing the operation of the entity. This is especially troublesome in the instance where the small business entity is owned by several individuals. The owners frequently do not anticipate issues such as the transfer of interest of one of the owners, or the death/ divorce of one of the owners, which can have catastrophic consequences if a proper set of rules have not been adopted.
Business owners can encounter numerous pitfalls when undertaking a business transaction. There exists a myriad of issues that pervade almost all commercial transactions, including those related to tax, environmental, and land use issues. Moreover, there will frequently arise a need to negotiate real property aspects of a transaction. The Firm has extensive experience in addressing the issues that may arise throughout a transaction and can assist clients in navigating these potentially terminal issues for their transaction.
Do I need a formal specialized Contract when buying or selling my business rather than a form from a stationary store?
While a party may save some money by foregoing the drafting of a formal, comprehensive contract, it is important to remember that a business is often one of the most important and significant assets a person has. The possible underlying problems that may be encountered by the failure to draft a detailed contract are too numerous to list. The sale/purchase of a business will include liability issues, regulatory issues, tax issues, and in many cases, issues related to real property. In turn, the potential for devastating loss is substantial. The contract is the foundation upon which the transaction is built and is paramount to the successful completion of any purchase or sale of a business.
When I am buying a business, do I need to have lien/tax searches done?
Once again, skipping this process may save a few dollars, but can be extremely costly if not undertaken. The Firm will take care of ordering the appropriate searches to address any potential lien issues.