After coming up with a brilliant plan and putting in countless hours of work, it’s time to take the next step: making your business idea a reality. Entrepreneurship can be incredibly risky – but it also has the potential to be truly rewarding. One of the most important steps that you should take to protect yourself and your business is forming a legal entity.
The way that your business is structured and organized can have a massive impact on its ultimate success. Each type of corporation, from LLCs to partnerships to S-corporations, has its own advantages and disadvantages. Selecting the right formation can be a critical way to protect yourself from legal liability, minimize taxes, and more.
A Mason business formation lawyer can help you choose the form that is best for your specific needs. With decades of experience in all aspects of business law, the legal team of Engel & Martin is well-positioned to help your business thrive.
In the early stages of planning your new venture, you may have come across options for moving forward without forming a corporate entity. While it may be easier to operate as a sole proprietorship or a DBA (doing business as) company, these entities lack the same levels of protection that other structures offer.
Perhaps the most important reason to form a corporate entity is to minimize liability and reduce your personal exposure to risk. A limited liability company (LLC), corporation, or other formal business entity is treated as a person under the law. These entities can sign contracts, own assets, and file lawsuits.
An LLC, corporation, or other entity can also be sued in court. As an experienced business litigation lawyer can explain, with few exceptions, the owners of an LLC or corporation are not personally liable for the debts of the company. As a result, creditors can only go after the business assets – not your personal assets.
Incorporation can also protect your personal assets from legal liability. For example, assume that you own a construction company in Mason, OH. One of your projects fails, causing serious injury to the homeowner and major property damage. The homeowner files a lawsuit against your company. If your business was being operated as a sole proprietorship or a DBA, then the homeowner could go after your house, car, personal bank account, and other assets. With incorporation, the homeowner will generally be limited to seeking compensation through the business and its insurance policy.
In addition to protecting your personal assets, there are a number of other advantages associated with incorporation, such as:
For these reasons, most entrepreneurs choose to incorporate their business as a way to protect themselves – and their business’s bottom line.
In Ohio, there are a number of options for incorporation that a for-profit business may choose. The specific entity selection will depend on the needs of your company.
Corporate forms include:
A skilled Mason corporation lawyer can help you select the entity that is most appropriate for your business needs, based on the size of your company, number of owners, taxation issues, and other factors. Your attorney can also assist in related matters, including articles of incorporation and bylaws, operating agreements for LLC, partnership agreements, buy-sell agreements, and contract drafting, negotiation, or review.
Ohio law requires that new business names be distinguishable from other registered business names. Registering your business name is not required, but it helps to protect your company and your brand. If you do not register your business name, then another company could register a similar name and benefit from the goodwill and recognition that you have grown with your own hard work.
Registering a business name is a relatively straightforward process that involves checking to see if your business name has been taken, and then filing a form with the Ohio Secretary of State. A Mason business formation lawyer can assist you with this, and other aspects of the incorporation process.
There are five basic steps to forming a limited liability corporation in Ohio. Before you begin the process, however, you should consult with a Mason business formation attorney to ensure that an LLC is the best corporate form for your business. If so, then you will need to:
For many people, this process can be challenging. To make sure that your LLC is formed properly, reach out to a Mason business formation attorney to schedule a consultation.
One of the main benefits of forming a business entity in Ohio is protection from liability for the owners and shareholders. However, this limited liability can be lost. A court may “pierce the corporate veil” and allow an individual or another entity to go after the personal assets of the owners in certain situations.
This often happens when the owners fail to maintain the separate identities of the company and its owners, or when they fail to follow corporate formalities. A Mason business formation lawyer can work with your company to properly set up a business entity – and to provide advice on how to maintain your limited liability status.
There are few things that are more exciting – or more daunting – than starting your own company. Whether you are an old pro at business or just getting started, having experienced counsel by your side can make the process much easier – starting with forming the proper corporate entity for your company.
At Engel & Martin, our team of highly skilled attorneys has substantial experience in all phases of business litigation and corporate law. We take a collaborative approach with our business clients, helping them to minimize costs and exposure to liability. To learn more or to schedule a consultation with a Mason business formation lawyer, call our law firm at 513-445-9600 or fill out our online contact form.