Issues To Consider When Structuring An Olympia Or Tacoma, Washington Business
This is the next post in my series on issues to consider when starting a business in Olympia, Tacoma or elsewhere in the state of Washington. My last article discussed the tax consequences of starting a S Corporation, or electing to be treated as a S Corporation for tax purposes. It is important to speak with a certified public accountant or other tax professional to understand the specifics of your particular situation.
In this article I will discuss the potential issues a company faces when structuring their business, as the business structure matters for a host of reasons. If you require assistance, contact my office today to speak with an attorney.
When starting a business, it is important to think of your long-term future as well as your immediate needs. Certain types of entities, such as partnerships, are easier to get off the ground, but limit potential for expansion, raising future capital, or bringing in investors. In today’s economy, startup businesses often find that they must quickly restructure soon after formation. These types of situations can lead to increased formation and operation costs, problems with tax authorities and other governmental agencies, disputes between the owners, and ambiguity as to the rights of each owner when it comes time to restructure the business. By choosing a flexible business structure from the beginning you can help ensure your ability to grow the business while also making sure your current needs are met.
When structuring your company, it is also important to have properly drafted contracts, membership agreements, shareholder agreements, and company bylaws. If the rights and obligations of each owner are not clearly defined, then they may find themselves quickly embroiled in a series of disputes and those disputes will be far more complicated and expensive than they should be. Such disputes can involve issues such as compensation, responsibility for tasks, capital contributions and capital calls, loyalty to the business, self-dealing or appropriation of business opportunities, and many others. These issues get in the way of the company being able to focus on the most important thing – its customers. Also, should these disagreements strain the critical relationships at the core of the company they may reach a point in which the members commence litigation against one another, something which could kill the company.
An experienced business law attorney can help you to avoid the types of issues described above. Counsel will discuss your current needs, your long-term goals, and help you to consider possibilities which you may otherwise have not thought of. As an Olympia business entity formation lawyer, I regularly handle such issues. Contact my office today to schedule an initial consultation.
Our firm also serves the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.