ALBUQUERQUE, N.M., June 12, 2023 /PRNewswire/ — “Most people don’t understand or appreciate the critical importance of strong formation documents for their LLC or Corporation,” says Larry Donahue, Member Attorney for Slingshot, LLC, the parent company of Law 4 Small Business (L4SB) and Business Law Southwest (BLSW).
There are four primary reasons to form a company (whether LLC or Corporation): to limit personal liability, create survivability, minimize tax obligations, and maximize flexibility. Forming a company, however, doesn’t just mean registering it with the State where you are conducting business. It also means adopting the right “formation documents”. Not doing so could undermine all the reasons you form and operate under a company in the first place – and could also violate your state’s Corporations or LLC laws, which often require these documents be put in place.
Mr. Donahue says these documents help companies to minimize expensive lawsuits, survive IRS audits, prevent an aggressive plaintiff’s attorney from going after the owners’ personal assets, reduce the risk of need for personal bankruptcy when the business goes under, avoid expensive legal fights among partners, and much, much more. “I cannot tell you how many expensive legal matters we handle in given a month, that would simply not exist if the LLC had adopted a decent Operating Agreement, or had the corporation adopted a Shareholder Agreement and set of Bylaws.”
Free templates on the internet, or the one-size-fits-all template you get from an internet company, just won’t cut it. Do your formation documents (i.e., the Operating Agreement for a LLC, or Shareholder Agreement and Bylaws for a Corporation):
- Address your and your business’s specific needs?
- Support your company’s intended tax status (e.g., Disregarded Entity, Partnership, S-Corp, or C-Corp)?
- Comply with the latest tax laws?
- Properly handle dissociating events (i.e., death, incapacity, voluntary withdrawal, etc.)?
- Specify specific buyout terms and valuation for dissociating events?
- Address important issues impacting management and related decisions, including dispute resolution, tiebreaker, quorum, confidentiality, non-compete, and devotion?
- Ensure that licensure requirements of the owners (e.g., for Doctors, Lawyers, Accountants, etc.) are enforceable?
- Adequately handle Intellectual Property (IP) contributed by the owners?
- Provide the unique voting structure you want for your company?
- Consider the latest federal and state laws?
If you answered “no” to any of the above – or you are an Accountant, CPA, or Attorney who is asked to produce or provide formation documents for your clients – you need:
The Couture Operating Agreement™ for LLC’s: (https://www.l4sb.com/services/couture-operating-agreement/), or
The Couture Shareholder Agreement™ and Bylaws for Corporations (https://www.l4sb.com/services/couture-shareholder-agreement-bylaws/).
Our Couture™ formation documents are driven by an expert system written and designed in-house by L4SB’s own attorneys and software developers. With several hundred customizations built in, these systems provide highly customized, high-quality documents in both PDF and Word formats. Though the documents they create are suitable for the vast majority of use cases, the Word format documents enable you (or your attorney) to make further adjustments and refinements.
Don’t risk expensive legal problems down the road later. If you have a company, make sure that it — and you personally – are better protected with our Couture™ formation documents.
About Law 4 Small Business (L4SB). L4SB is a leading law firm that sells legal services on the Internet. L4SB provides very high-quality services in comparison to other Internet companies, as well as a broad range of services focused on the needs of the small business community. It is home to the flat-rate contract review, the Anonymous LLC, the Couture Operating Agreement and Couture Shareholder Agreement and Bylaws.
SOURCE Law 4 Small Business (L4SB)