Startup Issues: 2 Legal Reminders for All Entrepreneurs

Two noteworthy updates on the JD Supra network today, important reminders for any entrepreneur facing the myriad issues (legal and otherwise) that come with building a viable business. [Spoiler alert: choose your business entity wisely and make sure your operating agreements are in order…]

1. 12 Reasons for A Startup Not To Be An LLC

From law firm Davis Wright Tremaine, a look at the tricky issue of business formation and, more specifically, why the Limited Liability Company might not be the best entity designation for your new company. You already know some of these reasons, but do you know all twelve? Example: “Raising additional capital through an LLC is much more difficult than raising a next round through a corporation. LLC agreements are more difficult and complex to prepare than their corporate counterparts. In addition, you can hit upon sticky and highly complex tax issues in the LLC context that just don’t exist or arise in the corporate context…” Read entire LLC update»

2. I Don’t Think We Are Going To Remain Friends: What Happens When Owners of Closely Held Companies are Deadlocked or in Dispute with Each Other or Former Employees

Title says it all. From law firm Jaburg Wilk, a look at why you absolutely positively must get your legal ducks in a row, even when (or maybe especially when) you launch a new business with good friends or family. “In a perfect world, many of these issues could be resolved through agreements that were put in place by the owners of a company either at the time of the company’s formation or at any time before a dispute arises. Various types of agreements can create a roadmap to determine how to proceed to resolve the most common disputes – operational issues, changes in ownership, compensation, or even the ownership structure of the company…” Read entire update»