The formation of business entities in the United States is known as the process of Incorporation, and involves the creation of a Corporation or a corporate entity. A Corporation is a legal entity that is, in effect, recognized under the law as if it were an actual person. A corporation has all the same legal rights and responsibilities as a natural person, but has distinct and unique benefits which are useful to protect the assets of natural (actual) persons. Among these benefits are limits on, and protection from, certain types of litigation, taxation, creditors, liability and other legal proceedings.
How should I structure my business?
Each type of corporate entity provides different levels of asset protection and unique tax benefits to owners based on the state of incorporation, the number of owners, the type of business, and other factors. Selection and creation of the type of corporation that is appropriate for a given set of circumstances must be done prior to the occurrence of the death of the owners or other adverse events such as bankruptcy, civil or criminal litigation or other events.
There are varying types of legal business ownership entities and structures that can be created to meet the asset protection and probate and estate goals of a business owner. Each different structure has unique advantages and potential disadvantages that must be carefully considered in view of the specific individual circumstances of the business owner.
A business asset owner can also transfer ownership of business interests to a Trust, or can specify in a Will how they want their business assets transferred or disposed of upon their death or incapacity.
Do I really need to incorporate?
A single business owner, or a group of business partners that choose not to incorporate may have lower costs to maintain their business structure, but do not secure the protection of personal assets from liabilities of the business. This is called, “flow-through liability”. This can occur in cases where creditors seek to take ownership of personal as well as business assets in order to satisfy a liability or debt.
Business Structuring Attorney
Greg Smith is an experienced estate planning, tax and corporate formation attorney who weighs the intricacies of your individual circumstances to provide your business entity with the proper structuring. Smith & Shapiro selects the legal strategies, vehicles and solutions to appropriately safeguard your assets to meet your income and inheritance goals. These strategies must be sufficiently comprehensive and legally maintained in order to take full advantage of state and federal exemptions that will impact the value and transferability of the assets placed in these various structures. As a Certified Public Accountant* and attorney, Greg Smith has the knowledge and skills to structure your business to safeguard your personal assets and those of your business.
Contact Smith & Shapiro at one of our law offices in Henderson or Las Vegas, 8:00am – 5:00pm, Monday through Friday, to schedule an appointment.