Business Formation

Business LawThe law of business organizations is a complex interrelationship of statute, case law, procedural rules, and common law concepts. The law is further complicated by the fact that business organizations are essentially codified human relationships.

There are five types of business organizations currently allowed under the laws of most U.S. states: the sole proprietorship, the general partnership, the limited partnership, the regular (or C) corporation, the S corporation (or Subchapter S Corporation) and the limited liability company or LLC. Most states also allow limited liability partnerships or LLPs.

There is no one perfect way to organize your business; each type involves certain trade-offs and only you can weigh the pros and cons to determine which  is right for you. You may be concerned about liability because of the nature of the product or service you are selling or you may be worried about taxation. If you are planning on raising financing, you may want to focus on issues of control and ease of issuing equity or debt to potential investors and lenders. In that case, forming a corporation may work better than registering an LLC. Although, easier to setup, LLCs may not be the best vehicles for raising financing from outside investors.

LLCs have become the most popular alternative for small business formations since the IRS approved it in 1988. Virtually all states allow LLCs in some form. LLCs are S Corporations without all of the icky little rules that make S corporations unattractive for small business owners. LLCs are taxed like partnerships, so there is no “double taxation” of an LLC’s income. LLCs are also cheaper to operate on a day-to-day basis. LLCs can also declare to be treated as Subchapter S Corporations. However, where an LLC has foreign shareholders, the LLC cannot take advantage of the Subshapter S declaration.

In short, whether it is an LLC, corporation or partnership, each form of business organization has advantages and disadvantages that make it a prudent means of conducting business in some circumstances but not in others.

I can guide you through the process of setting up your business entity (LLC, corporation and partnership) and taking it through the first six-to-twelve months of growth. I can advise on LLC or corporate formation, founder stock issuance, employment and officer and directors compensation. I can also develop equity compensation structures for employees. Every business needs terms and conditions for dealing with customers and vendors. I can customize these terms using industry best practices.

I offer a U.S. business organization package that includes everything a founder or business owner needs to get started on the right foot.

I also work with individuals and companies who are doing business overseas and need legal advice on international joint ventures and other business relationships such as agencies, distributorships, sales representatives or branch offices.

Have a question about a business legal matter?

Schedule a free consultation with Umar Farooq.

Free Consultation

Business Financing

I assist start-up founders, business owners and angel and professional investors with all aspects of business financing. If you are contemplating getting financing from the financial institution, I can also advise you on your rights and obligations under the traditional loan arrangements and may be able to negotiate the key terms of the loan with the financial institution depending on the size of the deal.

Business Purchase and Sale

I can also also assist you in your business purchase or sale or cross-border or interstate acquisitions or mergers. My services include assisting with all aspects of the purchase or sale process, including transaction structuring, offer letters, legal due diligence and drafting and negotiating of the stock or asset purchase or sale agreements.

If you are a foreign individual or company contemplating purchase of a business or investment in the United States, I can also assist with preparation and filing of your immigration petition.

Commercial Contracts

I can guide you through the entire contract life cycle; from pre-contract negotiations, to preparing and finalizing the actual commercial agreements.

Whether it is buying or selling a business or another asset such as aircraft, boats or high-valued art collection, I can assist in various aspects of the sale and purchase, including due diligence, preparation of the sale and purchase documents and registration issues.

I can also assist with confidentiality agreements, customer agreements or terms and conditions, supplier agreements, employee or consultant agreement, website terms of use and privacy policies and other standard clauses for use in various agreements in your business.

I also offer a customized commercial documents package that includes all the commercial agreements your business needs to operate smoothly.

Disputes

Sometimes, business or commercial relationships don’t work out as expected.

Count on me to find the best resolution to your business disputes. I can assist with all types of commercial and financial disputes, including shareholder disputes, manufacturer/distributor disputes, sales and use tax disputes and claims under sale and purchase agreements.

In certain cases, where I believe that you have been wronged unjustly, I may consider taking the case on contingency.