Business Entity Selection and Structure
People need an attorney when they start a business or join a business. Few transactions in life entail more pitfalls and opportunities for unintended consequences. James McElroy & Diehl has a deserved reputation for providing competent, thorough and timely counsel and representation to clients who are starting or joining a business.
Corporations, formal partnerships, limited liability companies, contractual joint ventures and proprietorships present different attributes, some of which are not well-known. (For example, absent conscious steps to avoid it, a party to an innocuous sounding “joint venture” in North Carolina will find himself in a general partnership with unexpected personal exposure to liability created by the other joint venturer.) There are significant tax issues presented by each possible form of entity, and there are decisions to be made, either consciously or by default, that may have life-changing tax consequences.
Many attorneys – some in large, otherwise sophisticated firms – handle business transactions by selecting and adapting forms, sometimes without considering what they believe to be “boilerplate” provisions and terminology that could easily be varied. We may start with a form as well, but nothing ends up in the final document without attention. It is important for an attorney who assists in the formation of a business or the structuring of a business relationship to understand the accounting terminology and concepts that may determine how income will be allocated, how money will be distributed and how business interests will be valued when the relationship ends. Our attorneys bring to the engagement the requisite understanding of the accounting and finance terms and the accounting principles that will be implicated in the documents that we prepare or review.
We take a holistic approach to counseling and representing clients who are negotiating any transaction, but that holistic approach probably makes the greatest difference and is perhaps most essential; when a client is creating or joining a business.