You are operating a business, know your business well, and are enjoying growth and healthy revenue. However, have you taken the time and effort to determine whether the entity you formed for operation of your business is the most appropriate choice? Do you have in place all the necessary documentation for the governance of your business? Have you thought about what will occur to your business when you are no longer able to manage it?
Many small business owners may not have thoroughly considered these questions. Business owners typically want to get up and go for their customers. You should consider your state’s default operating conditions which will control when your corporate documents are silent. Those default operating conditions may not be beneficial to your business or you.
We have counseled clients in business planning decisions so that they may maintain control. We have witnessed that as clients complete their business planning, it eases their mind, reduces the burdensome details, and simply allows them to operate their businesses. Some essential considerations are as follows:
- Formation and maintenance requirements;
- Fiduciary duties within the entity;
- Ownership and compensation structure;
- Managerial control;
- Funding considerations;
- Taxation (salary, profits, self-employment tax, gains); and
- Succession planning.
As always, the attorneys at Winne, Banta, Basralian & Kahn are here to serve you.