Starting a business is a challenging yet exciting process. Business formation carries many inherent risks, but the rewards can be life-changing. Whether you are starting a construction company, a restaurant, or a law firm, you must navigate complex problems to succeed.
Successful entrepreneurs are resourceful and hardworking people. They also know when to outsource tasks to experts. The Brentwood business lawyers at Batson & Nolan PLC know how to handle all your business’s legal needs. Our attorneys have years of experience representing businesses of all sizes. From business formation through day-to-day operations to the potential sale of your business, Batson & Nolan can help with all your legal needs.
Once you have created your business plan and are ready to begin operations, you must form your business with the state.
The Brentwood corporate lawyers at Batson & Nolan can help you decide what type of business structure to use and get all your documents filed with the state.
Limited Liability Company
A limited liability company (LLC) provides the business owner the liability protections of a corporation.LLCs also provide the flexibility and tax benefits of a sole proprietorship. Forming an LLC can be easier than starting a corporation. Further, LLCs are not required to have a board of directors. An LLC may be the best option if you want maximum flexibility for your business.
General partnerships provide business owners with a flexible structure in which the allocation of profits and losses can be decided ahead of time. The main advantages of general partnerships are that they are simple to form and allow for an easy transfer of profits between the business and the owners. However, general partnerships provide no liability shield for the owners. For this reason, general partnerships are mostly disfavored.
In a limited partnership, there are general partners and limited partners. The limited partners are liable for the amount of their investment, while the general partners face unlimited liability. The general partners are in charge of the day-to-day operations of the company. The limited partners are usually passive investors. Limited partnerships can be used to raise funds for the general partners.
Limited Liability Partnership
Limited liability partnerships (LLPs) are among the most popular business forms. LLPs provide liability protections to their owners while providing the flexibility of other partnership forms. There are also tax benefits to forming an LLP because income will not be double taxed as it is with a corporation.
Corporation (C-Corp and S-Corp)
The two primary types of corporations are C-corps and S-corps. C-corps have no restrictions on the number of shareholders but are taxed at both the corporate and shareholder levels. S-corps are limited to only 100 shareholders but are taxed only at the shareholder level. There are also different corporate law considerations for these two forms of business entity. To form a corporation, you should consult with Brentwood business lawyers.
Not-for-profit corporations get unique tax benefits unavailable to other business entities. Section 501(c)(3) of the Internal Revenue Code dictates the requirements for not-for-profit corporations. Not-for-profit corporations are tax-exempt, but all business profits must be used for social causes. Not-for-profit corporations also face heightened regulatory compliance rules. These business entities are appropriate only for specific purposes.
Contractual agreements are essential to keep most businesses up and running. Standard contractual agreements that companies must engage with include:
- Partnership agreements,
- Employment contracts,
- General contractor and sub-contractor agreements,
- Indemnity agreements,
- Lease agreements,
- Non-disclosure agreements,
- Non-compete agreements,
- Franchise contracts,
- Purchase and sale agreements, and
- Merger and acquisition contracts.
Getting contracts right is essential to the effective operation of a business. The best contracts accurately reflect the intentions of both parties. They also clearly define the parameters of the specific business purpose the agreement intends to enforce. The business law attorneys at Batson & Nolan have experience writing contracts and know what pitfalls to avoid.
Potential Business Litigation Matters
Ideally, your business will never be involved in litigation. However, when litigation is necessary, the stakes can be high. Common litigation matters that emerge through the course of doing business include:
- Employment disputes,
- Regulatory compliance issues,
- Breach of contract cases,
- Personal injury litigation,
- Workers’ compensation lawsuits,
- Real estate issues,
- Malpractice cases,
- Harassment and discrimination claims,
- Wage disputes, and
- Wrongful termination claims.
No matter how careful you are in running your business, litigation can sometimes be unavoidable. The commercial litigation attorneys at Batson & Nolan know how to help your business navigate these issues.
How Do I Form a Business in Tennessee?
In Tennessee, how you form your business will depend on what type of business entity you choose. For example, to form a corporation, you must file a charter with the state and pay the filing fee. Your corporation must also have bylaws that set the rights and responsibilities of shareholders and are signed by the board of directors. Other business entities carry different requirements.
Can I Form My Business in a Different State?
Yes. If you form your business entity in another state, you must still qualify your company to do business in Tennessee. This involves filing extra paperwork with the state and paying additional fees.
Should I Form My Business in a Different State?
There are many advantages and disadvantages to forming a company in a state other than Tennessee. Some business owners choose Delaware as their company’s home because it is perceived as a relatively friendly business litigation environment. Drawbacks of forming your company in another state include complicated tax requirements and other costs. If you are considering forming your business in another state, Brentwood corporate attorneys can help you obtain a detailed understanding of the pros and cons.
Do I Need a Lawyer?
In Tennessee, you can form your business without a lawyer. However, an attorney can help you avoid common pitfalls that undermine many new companies.
The Brentwood business attorneys at Batson & Nolan have experience helping individuals form new businesses. We will help you identify the best business entity to suit your needs and guide you through the process. Once your business is up and running, we can help with all the legal issues that arise in the day-to-day operations of your new company. Contact Batson & Nolan today, and we can help you make your business thrive.