Law Offices of Anthony S. Hamassian

Business Formation, Structuring, and Operational Procedures

 

The Law Offices of Anthony S. Hamassian provides legal services in the area of business formation, structuring, and operational procedures for business entities including: Corporations, S-Corporations, Partnerships, and Limited Liability Corporations.

Corporations (C-Corp)

A corporation, sometimes referred to as a “C-Corporation”, is an independent legal entity that is owned by shareholders and formed under the laws of the state in which it is registered. Corporations are more complex than other business structures in that they tend to have costly administrative fees, tax and legal requirements.

S-Corporations (S-Corp)

An S-Corporation is a type of corporation created through an IRS tax election. Businesses under the S-Corp classification can avoid double taxation, once to the corporation and again to the shareholders.

In order to be considered an S-Corporation, the business must be chartered in the state in which it is headquartered. The IRS states that an S-Corporation is “considered by law to be a unique entity, separate and apart from those who own it.” This provides for a limitation on the financial liability for which the owner/shareholder is responsible; however, this does not shield the owner/shareholder from all litigation, such as an employee’s tort actions as a result of a workplace incident.

Unlike a C-Corporation, the profits and losses of an S-Corporation can pass through to the owner/shareholder’s personal tax return. In turn, the business itself is not taxed, but rather the shareholders are.

Partnerships

A partnership is a single business where two or more parties share ownership of the business. Each partner contributes to all aspects of the business, including, but not limited to: finances, property and labor. Generally, there are three types of partnerships:

  1. General Partnerships generally divide profits, liability, and management equally among the partners.
  2. Limited Partnerships allow partners to have limited liability as well as limited input in regard to management decisions. These limits are contingent upon each partner’s investment percentage. Generally, limited partnerships are beneficial to investors of short-term projects.
  3. Joint Ventures work similarly to general partnerships, but for a limited time or for the duration of a single project. 

Limited Liability Corporations (LLC)

A limited liability corporation is a hybrid legal structure that provides the limited liability benefits of a corporation with the tax efficiencies and flexible operations of a partnership. The owners of an LLC are referred to as “members”, and these can consist of a single owner, two or more individuals, corporations or other LLCs. Unlike shareholders of a corporation, LLCs are not taxed as an independent business entity; rather, profits and losses are passed through the business to each member. Similar to a partnership, members are required to report profits and losses on their personal federal tax returns.

Failure to keep corporate formalities can result in severe legal consequence and personal liability; that is why the advice of legal counsel is essential in properly forming business entities and maintaining its formalities. Whether a client needs guidance in forming a business, structuring, or advice in its operational procedures, the Law Offices of Anthony S. Hamassian will guide them in the right direction to minimize the legal consequences that may arise.

16530 Ventura Blvd., Suite 555
Encino, CA 91436

(818) 465-5360 tel
(818) 465-5361 fax
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