SELECT THE PROPER CORPORATE ORGANIZATION
One of the many legal issues that emerge when a business is organized, is what form of business corporation to elect.
BUSINESS ORGANIZATION AND CREATION
In Wisconsin, there are several forms available. The forms primarily applicable are the incorporation, the S corporation, and the limited liability corporation (“LLC”). Often times, upon consultation with others, a new business will select a business form that is inappropriate. In the case of most small businesses, an LLC is perfectly adequate; however, there may be advantages to selecting an S corporation or incorporation as well.
S CORPORATIONS V LLCS
A new business owner may focus on tax advantages that may be obtained from selecting some types of business organization, such as the S corporation. However, it is possible that in selecting the S corporation the business owner/organizer fails to understand that with the S corporation comes a significant requirement to follow certain corporate formalities. These formalities include having an annual meeting with an agenda and minutes, keeping by-laws, and appointing corporate officers. Though these tasks are relatively minor, if over the course of several years they are not observed, Wisconsin law holds that a company that fails to follow corporate formalities may lose the benefit entirely of limited liability that comes with a corporation. On the other hand, the LLC has much reduced requirements for corporations; however, it may be an exact fit for the corporation’s needs as to some other issues such as taxation.
OUR ATTORNEYS CAN HELP SET UP YOUR BUSINESS
Consultation with an attorney and a competent accountant is absolutely vital when selecting the appropriate corporation. Our firm has set up hundreds of new business, including corporations, LLC’s, and partnerships, over the years and is prepared to give you advice on setting up the appropriate corporate entity and preparing the associated legal documents in the proper form.
Please consult with Attorney David Daul at the Green Bay, Wisconsin law firm of Wanezek & Jaekels, S.C., to discuss these matters in greater depth.
Call David at 920 437-8191, or email him at [email protected].