Privately Held Business Organization
Business organization and structure are the first decisions made in the life of a privately held business and its importance cannot be underestimated. The organizational structure of a business can be paramount to a business’s success since it will affect important issues, such as tax consequences and liability exposure of the company’s shareholders and board of directors.
There are more options today than ever for the ways that a business can be structured and the increasing complexities of the law and economy make business structure and organization all more important. Business organization options include:
- Limited Liability Company (LLC) Allows pass-through taxation, centralized management, but still affords liability protections to members. Can be utilized effectively in business succession and estate planning.
- Partnership Allows for pass-through taxation. Partners share liability and management duties.
- Limited Liability Partnership Allows for pass-through taxation. There is one general partner that bears liability and controls management of the business, with limited liability for remaining limited partners.
- Family Limited Partnership Limited partnership formed to hold a family business. Gifts of limited partnership interests can be given to heirs and beneficiaries.
- C Corporation Separate entity for income tax and liability purposes. Two levels of taxation but limited liability exposure for shareholders.
- S Corporation Allows pass-through taxation, centralized management, but still affords liability protections to members. Can be utilized effectively in business succession and estate planning. Only available for businesses with 75 or fewer shareholders and requires special tax election. Provides liability protection to shareholders and officers from the liabilities and obligations of the S corporation under most circumstances.
Attorney Alan E. Sohn, does not use a formulaic approach to structuring and organizing your privately held business. Instead, will consider your unique circumstances and goals – such as centralized control, asset protection, income tax impact, estate tax concerns, business succession plans, and the inter-family relationships of a family business – to develop a business structure that is catered to your unique needs and objectives.
As a knowledgeable business incorporation attorney, Alan Sohn understands that a privately held business structure and organization may not necessarily be static and the business structure may need to change over time as the needs and objectives of the business and its owners change. As your business incorporation attorney, Alan Sohn will continue to work with you after the business organization documents have been prepared in order to address any change in circumstances. Chicago business attorney Alan Sohn is a trusted advocate who will work with you throughout the life of your business, to address any future issues that may arise after the formation of the business, such as real estate transactions, establishing a business succession plan, or addressing any employment issues.
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