If you feel like you’ve finally come up with the perfect idea, and you’re ready to take the next step toward owning and operating a business, congratulations! This is an exciting time in your life, and you should enjoy it. However, you also need to consider the legal implications of running a company.
At this stage, legal guidance is critical to making sure your organization has a strong foundation. A seasoned business attorney can make sure your company complies with state and local laws before you open your doors to the public. If you need help choosing what type of legal entity to form or deciding what to include in an operating agreement, you should speak with an Alpharetta business formation lawyer right away.
Every business owner must structure their organization as a specific legal entity. Some common structures include sole proprietorships, general partnerships, limited liability companies (LLCs), and corporations. However, there are several other types of legal entities, such as:
Regardless of what type of legal entity you choose, there are certain steps you need to take before you can become fully operational. You must select a business name, obtain the appropriate licenses and permits, and request an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
If you fail to do these things, you could run into serious legal trouble down the road. For that reason, you should seek help from an experienced attorney before officially starting your company.
General partnerships are formed between two or more people who decide to work together in a for-profit business. This may seem simple, but the fact that there’s more than one person involved means you must clearly establish each person’s position and role within the company.
If someone is unclear about their rights and responsibilities, it could cause disagreements and negatively impact your profits. You can avoid many potential disputes by executing a partnership agreement with a local attorney early on in the business formation process.
Limited Liability Companies the most popular structure for business in Alpharetta, as they offer you legal protection if your company is sued. This differs from sole proprietorships and partnerships where the business owners’ personal assets can be involved in a lawsuit.
Additionally, the owners of an LLC receive a percentage of the company, depending on their initial contribution. According to Georgia Code Section 14-11-401, the initial contribution can be money, property, or the performance of services.
An operating agreement prepared by a skilled attorney is a crucial document for new business owners. This contract outlines many essential aspects of your LLC, including ownership, profit distribution, membership, acquisition of new members, tax structure, and dissolution.
The state requires Limited Liability Companies to select a registered agent to receive official correspondence. Once you’ve chosen that person, you’ll need to file Articles of Organization with Georgia’s Secretary of State. It is also important to note that you will still need to continue filing annual registrations once you form the LLC.
You should choose to form a corporation if your business is planning on going public. “Going public” means your company’s stock will be traded on one of several stock exchanges. Private corporations find this structure beneficial because they can also sell stock to raise capital. Corporations owned by the shareholders are more structured than LLCs because they have a Board of Directors who oversee the company’s head officers.
Once the founding group of shareholders picks a name for the company, it must be vetted through a business search on the Georgia Corporations Division website to ensure no other corporation is using that name. You must also file Articles of Incorporation with the Georgia Secretary of State, pick a registered agent, adopt corporate bylaws, and issue stock.
After these initial steps, you must remember to file an annual report with the Georgia Secretary of State. A corporate law attorney in Alpharetta can make sure your company meets all these requirements.
When starting a company, you have so many different responsibilities, and it’s easy to overlook some of the legal requirements for running a business. Don’t try to handle this all on your own. Call Sparks Law today to set up a consultation with an Alpharetta business formation lawyer.