Corporate Law in Monroe, GA
The Legal Partner You and Your Business Need.
At Foster, Hanks, & Ballard, our practice is designed to address the legal needs of growing businesses. Whether yours is a small start-up company or a long-established corporation with plans to expand, our attorneys will provide the counsel you need in today’s fast-paced business environment. Foster, Hanks & Ballard, LLC’s breadth of legal expertise means responsive business-minded advice for clients at any point in the business cycle. Our firm encompasses a range of practice areas involving business litigation.
What falls under Corporate Law?
Corporate Law is a part of the larger law of business associations which is a branch of civil law, meaning it deals with both public and private legal issues. Corporate Law specifically relates to the rights, conduct, and relations of people who work for a defined corporation. Laws are in place to regulate how the many entities of a corporation function together, including the investors, shareholders, employees, directors, and other stakeholders, like consumers when it comes to publicly traded corporations. The State does this by requiring annual, bi-annual, quarterly, and sometimes monthly meetings with a corporation’s shareholders, board of directors, and officers to make sure the company entity is meeting practice regulations.
Additionally, corporations also face the multitude of legal matters that other business also have to deal with like, employment law, contract disputes, intellectual property management, product liability, etc. Since Corporate Law deals with both State and Federally mandated laws and restrictions, larger corporations usually have a team of Corporate Lawyers with varying specialties within the Corporate Law umbrella to manage the daily legal issues, whereas small corporations might be able to get away with having only one corporate lawyer on retainer to handle their contract, business, and employment issues.
When a business chooses to incorporate, they do not have to do so in their home state; in fact, many corporations choose to incorporate within the State of Delaware since there are so many tax benefits and low incorporation costs compared to other states.
When do I need a Corporate Attorney?
There are several situations in which corporate lawyers are prudent:
- Employees: if you are a current, former, or potential employee of a corporation that you are suing on the grounds of discrimination during the hiring or firing process, you should seek corporate legal counsel to ensure that you aren’t bowled over by the corporation’s legal team.
- Government Investigations: Local, Federal, and State government entities sometimes conduct investigations and file complaints regarding potential legal violations. It is important to retain corporate legal counsel to assuage any culpability on the part of the corporation and to allow the investigation to move forward as smoothly as possible.
- Environmental Issues: If an environment issue arises, and even if you’re business isn’t the root cause of said issue, your business could still be penalized. Having a corporate lawyer could help minimize or even avoid these penalties.
- Forming a Corporation: Even though most business owners handle forming legal business entities like LLCs or partnerships since articles of incorporation can be filed without a lawyer. From assigning shareholders to forming a board of directors, forming a corporation is far more complicated; plus, navigating the complex tax and legal requirements of a corporation usually requires a corporate attorney.
- Filing a Patent: There is a reason you see so many, “Patent Pending” messages in the marketplace: patents are costly and tedious. If you’re thinking of getting a patent for your product, it’s best to sit down with a corporate lawyer to a) make sure a patent is really the right move for your business, and b) if you do move forward with the patent, you want to make sure all the paperwork is filed properly so you don’t lengthen an already long process.
When evaluating contracts, what do lawyers look for?
One of the major topics that corporate lawyers live and breathe for are business contracts. It is recommended to have legal counsel review any contract before an employee, contractor, renter, or home buyer signs it. Lawyers look at contracts to make sure language and terms are explicit and do not infringe upon you or your company’s rights; the legalese that goes into evaluating contracts is more complicated than making sure your contract covers “everything”.
Most Corporate Lawyers look at the following before signing off on the validity of any contract:
Also known as essential terms, it is important that a contract has clearly stated clauses, for the Law to provide the language for terms not specifically spelled out, or for the Law to determine that the lack of specificity in the terms makes the contract null and void. For example, when starting a service industry job, the contract needs to clearly state the period its terms will be active, otherwise, it will be impossible to legally enforce.
A strong contract also needs to have a valid exchange of consideration, which ensures that there is a fair and valid exchange of goods for services, meaning that the language in the contract must be wage specific. If someone is providing work without proper compensation, that would constitute a lack of consideration, making the contract illegal.
No Legal Conflicts
Another issue when trying to form a legitimate contract is that they may accidentally clash with laws already in place. It’s not just making sure a contract’s terms don’t inadvertently conflict with current laws, the contract must also make sure it meets all requirements of the State. For example, if one includes outlawed or legally contradictory statements in a contract, the contract will be considered invalid, and it will be entirely useless. Corporate Attorneys have the expertise and understand the State and Federal Laws that need to be abided to fully form a valid contract.
The boilerplate clauses of a contract are separate from the main terms of the contract and are full of necessary standardized legal jargon. Most often, this is the space at the bottom of a contract where various provisions are listed out, usually pertaining to dispute resolution and how and when either party can and should take legal action against the other.
Does my Startup need a Corporate Lawyer?
So, you’ve created a startup business, and you’re currently working out of an office the size of a broom closet, so there’s no reason to have a lawyer on retainer, right? Wrong. Even if you only use a corporate lawyer for the following, it’s imperative that you consult a lawyer when dealing with:
From annual business taxes to making sure you’re abiding by the necessary business regulations, it’s essential to employ a corporate attorney to make sure you aren’t accruing unnecessary tax liability.
When it comes to third parties like the public, it is important to ensure that your business isn’t taking an unnecessary risk with your customer, supplier, and general public interactions. A good corporate attorney can make sure the proper safeguards are in place to protect you and your business.
If your startup has more than just one founding member, it is important to document the expectations of the founder’s rights to ensure everyone’s interests are protected down the road.
What is the difference between an LLC and a Corporation, and which one is right for my business?
When trying to determine what kind of business you want to form, the two biggest factors in that decision deal with how you will be paid and how you will be taxed. To understand the difference between a Limited Liability Company (LLC) and a Corporation (the two most common business entities), we will first need to understand the difference between the two different types of taxable businesses:
- Pass-Through Businesses are when the business’ profits and losses pass to the owners or shareholders of the company. This means that the business income is considered a part of the income of the shareholders and owners which is reflected in the personal taxes paid by the owner and/or shareholders. Sole Proprietorships and Partnerships are considered pass-through entities, and limited liability companies are unless you elect a different tax treatment for the LLC. Owners of an LLC may elect, for tax purposes, to be treated as a “separate entity” (a corporation) instead of a pass-through business (a partnership). An LLC can be formed by one or multiple people; these owners file Articles of Organization and form an Operating Agreement. Each owner, more commonly referred to as members, are responsible for fulfilling the annual tax requirements for the state in which the LLC was formed, as well as federal tax requirements and some local government tax requirements when opting to be treated as a pass-through entity.
- Separate Entities refers to companies that keep their profits and losses separate from the owners and shareholders, and instead, the necessary taxes that need to be paid fall under the corporation’s responsibilities, instead of the owner/shareholders. Corporations are an example of a separate entity. A Corporation is formed when the designated shareholders file corporate organization forms in the state where the corporation is being formed. Since a corporation is a separate entity, owners and shareholders aren’t paid, and instead are given dividends which are then taxed by state and governments, the because of the different tax treatment for corporations, many business owners elect to have their LLC treated as a corporation for tax purposes
There are other factors to take into consideration when trying to decide between an LLC and a Corporation. Although both LLCs and Corporations restrict the liability of owners and shareholders from potential debts and lawsuits the business might accrue, the required formality and management structure of a corporation make an LLC an inviting alternative. However, LLC’s can only take on new members if all current members agree, while owners of corporations can sell their shares (think stock market) to other individuals as they wish. It is important that business owners have sound legal assistance in navigating these choices.
How are Non-Profits different from For-Profits?
Whether or not a business makes money has nothing to do with whether that business is considered a non-profit or for-profit business. There are typically three elements that occur when a business is classified as a non-profit:
Nonprofits have mission statements that make it clear that the purpose of the business is to serve society, and whose primary goals is not to accrue profit. An example of a non-profit business mission is that of Goodwill: “Goodwill works to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.” It’s obvious that Goodwill is putting the dignity of their employees and customers before their bottom line.
There are no owners of a non-profit organization which means that there aren’t any shareholders because no one can own interest in the company. Ownership in a for-profit company is commonly known as shares from which the owner intends to derive a financial benefit.
All income that remains after paying the expenses associated with running the non-profit corporation (which would otherwise be referred to as “profit”) is recycled back into the non-profit company in order to further the cause of the organization’s mission and pursuits. The excess income may also be donated to other non-profit corporations to assist in furthering their missions. This remaining income or “profit”, is not paid out as dividends because there are no owners with shares of stock.
I want to sell my small business; how do I go about starting that process?
Selling a business is a lot like starting a business: it’s all in the planning. Before you started your small business, there were weeks, months, or maybe even years that were spent in the planning stages. A business plan took shape which informed your necessary business structure, contracts were drafted, and finances were planned years in advance, and finally, the necessary licenses and permits were obtained before you could ever put your mission statement into practice. Selling that carefully crafted business takes just as much care. Retaining a Corporate Lawyer to help you navigate through this complex affair can not only save you time and rookie mistakes, it can also save you money by making sure your company is sold for what it’s worth. A few steps to think about and discuss with your lawyer are below:
Reason to Sell
One of the first questions a prospective buyer will ask is, why are you selling, and what is making you sell now? The reason for the sale is usually personal and can span a wide range of reasons like being ready to retire, hitting a wall/getting bored, disagreements between you and your partner, or feeling a bit overworked. Even if you’re selling your business because it is no longer profitable, it is important to keep the focus on the positive attributes of your business in order to attract buyers. Next to your reason for selling, make sure you list positive qualities of your business like major multi-year contracts that have been signed, the sturdy customer base that has been built and maintained, or any consistency you’ve noticed in your business’ financial figures. Any of these attributes will help entice buyers and explain why now is the right time for you to sell and why it’s also the right time for them to buy.
To Use or Not Use a Broker
There are a couple of factors to weigh when decided what kind of intermediary the sale of your business may need. Selling the business, yourself can be extremely cost effective since you won’t have to worry about paying the commission of a broker but selling the business yourself is only recommended if you plan to make the sale to a family member or current employee. If you intend to sell your owner-operator business to a buyer whose intention is to oversee the daily business operations, hiring a business broker is an invaluable go-between for the various transactions involved in selling your business. Your corporate attorney can help walk you through these never-obvious decisions.
Roundup All Business Documents
Making sure you take the time necessary to gather all the necessary paperwork for the sale of your business is legally imperative. The State of Georgia requires you to have financial statements and tax returns dating back at least three years (if you’re an organizing maven and have more than three years of tax and federal records, it won’t hurt to include them) in order for all parties involved in the transaction to have an accurate financial representation of your business at the time of its sale. In addition to State and Federal financial information, you need to create an itemized list of any equipment that will be included in the sale, as well as a list of contacts that pertain to your company’s supplies and sales transactions, and copies of the business’ building lease. Make copies of all the important documents you can scrounge up to make it easier on both the buyer and the broker/attorney who are assisting in the sale.