Business Formation

The Foundation For A Successful Business Is Built On Preparation And Planning

Launching or reorganizing a business is a huge undertaking. It’s exciting, but it carries risks, which can be mitigated by spending a little time in the formation / reorganization process and doing it right.  The Calhoun Law Firm, PLC, provides legal knowledge and advice facilitating discussion of all important considerations ensuring formation of a consensus on how things ought to proceed.

Business formation laws govern company formation, mergers, acquisitions, owner rights, and property issues. The Calhoun Law Firm, PLC, assists clients identify the legal and regulatory requirements associated with these events.  We develop approaches to address these issues and identify associated potential risks and negative side effects.

We work with clients to establish a Business Structure that accounts for:

  • Cost and ease of formation.
  • The tax treatment of company revenue.
  • The degree of control afforded founders / owners.
  • Founders / owners personal liability for management decisions.
  • Founders / owners personal liability for business liabilities.
  • Ease of transferal of ownership.
  • Access to alternative financing options.

We work with clients to address Business Formation issues involving:

  • Establishing the existence of the business with the government.
  • Establishing the management structure, and dispute resolution processes.
  • Establishing processes for handling partner or member departures.
  • Business Succession Planning.
  • Employee/Independent Contractor Designations.
  • Intellectual Property Management.

Business Formation Services Provided

Our firm has 15 years of experience handling business formation matters for businesses throughout Arizona.  We assist clients with:

  • Business structure selection. We facilitate client selection and formation of the right corporate structure when forming, re-structuring, or merging businesses; ensuring ease of day-to-day management and control and preservation of limited liability.
  • Business purchase or sale. We work with our clients to determine the purchase price and post-sale advisory services provided by the seller.  Together we establish non-competitive policies, employee poaching policies, and confidentiality policies ensuring buyer protection from seller post-sale interference. We review and determine whether or not existing employment and commercial transaction contracts are transferable from seller to buyer.
  • Franchise purchase or sale. We create and review franchise disclosure documents and franchise agreements. We ensure clients understand the terms being agreed to. We identify aspects of the contract that are ambiguous and provide clarification language.
  • Succession planning. Many business owners want their companies to continue operating beyond their lifetimes. Lacking a succession plan at the time of their retirement or death, their company may become involved in a succession dispute resulting in dissolution. Together with our clients we develop succession plans addressing management changes, debt restructuring, ownership transfers, and tax liability allocations necessitated by succession.
  • Business dissolution. If the company’s governing documents define the dissolution process, they should be followed.  Otherwise, guidance provided in state laws should be adhered to.  Creditors need to be notified, outstanding claims settled, and remaining assets distributed equitably.

Business Formation Contracts / Agreements

Contracts support all your business relationships with your partners, employees, contractors, and clients. These must be carefully drafted to serve your unique needs and protect your interests. Our firm has drafted and reviewed numerous types of business formation contracts / agreements including:

  • Asset Purchase-Sale Agreements transferring the business’s assets without transferring the business’s outstanding liabilities.
  • Assignment of Interest Agreements transferring membership interest in an LLC, or corporate shares.
  • Bill of Sale Agreements listing the purchase price and details of what is being purchased.
  • Buy and sell agreements are widely used by sole proprietorships, partnerships, and closed corporations to expedite the transfer of ownership when a partner retires, dies, or leaves the business.
  • Corporate Bylaws defining the positions, authority and responsibility of the directors and officers of the organization.
  • Shareholders Agreements detailing share ownership, dividend rights, voting rights, and shareholder assets and efforts being contributed.
  • Distribution Agreements hiring companies to market and sell a manufacturer’s products in certain geographic areas, in certain markets, in a certain manner.
  • Equipment Leases used to lease equipment for use or lease out business equipment.
  • Franchise Disclosure Documents detailing the franchise, who operates it, the location of present franchisees, fees, and required investment.
  • Franchise Agreements in which franchisees acquire a franchise and agree to be bound by the marketing and operational rules of the franchiser.
  • Letters of Intent declaring the parties’ intent to investigate and consummate a transaction on certain terms provided that their due diligence confirms the facts.
  • Membership Interest Purchase Agreements transferring ownership in a limited liability company.
  • LLC Operating Agreements detailing ownership interests, what owners gave or must do for that interest, and the nature and extent of each owners’ management authority.
  • Real Estate Leases ensuring the leased space fits the needs of the business, the term is sufficient, and landlord’s obligations are explicitly detailed.
  • Termination Agreements detailing the procedure for a party to sell their interests in the business to the other.

A further discussion of each of these business formation contracts is provided in the Contracts Section of the Blog.

Business Formation Regulatory Compliance

Regulatory Compliance is achieved by establishing policies and procedures ensuring compliance and keeping records demonstrating compliance. Non-compliance can cause fines, censures, and damage to your reputation. Our firm assists businesses adhere to the complex rules, policies and processes mandated by federal, state, and local business formation regulations including:

  • Business licenses required by local governmental offices for businesses based within their jurisdiction or conducting business within their city limits.
  • Professional certifications and licenses required by federal, state, and local governmental offices that demonstrate a level of skill or knowledge needed to perform a specific type of job.

A further discussion of each of these business formation regulations is provided in the Regulatory Compliance Section of the Blog.

Business Formation Dispute Resolution

Disputes arise when parties involved in the formation become dissatisfied with what they are receiving for the contribution they are making.  When a company experiences internal strife we work with all parties to identify the issues leading to and the options for resolving the dispute.  Our firm represents clients in negotiations, mediation, arbitration and litigation proceedings resolving business formation disputes involving:

  • Quiet Title disputes arise when more than one person or entity claims to be the owner of the same piece of property.
  • Easement disputes arise when a property owner challenges a person or business that claims a right to use an easement to access the owner’s land.
  • Partnership disputes arise from disagreements over the roles and responsibilities, misappropriation of assets, disputes over how profits are distributed, and a partner wanting to sell their share of the business.
  • Successor Liability disputes arise from disagreements over who’s responsible for paying the debts or other financial liabilities for a business when a new owner or leadership team takes control of the company.
  • Shareholder disputes arising from disagreements between shareholders, partners or other parties responsible for operating a business.
  • Real property disputes involving failure to disclose defects, leases and assignments, mortgage foreclosure, option agreements, security interests, and title issues.
  • Real Covenant disputes arise when someone attempts to use a piece of property in direct violation of a restrictive deed covenant stating what the property cannot be used for.

A further discussion of each of these business formation disputes is provided in the Dispute Resolution Section of the Blog.

Contacting The Calhoun Law Firm, PLC

If our capabilities match your needs, we invite you to contact us today by one of these means:

  • Call us at 877-455-6344 to evaluate our capabilities to address your situation.
  • Submit an inquiry via our Contact Us Form to brief your situation and needs.
  • Schedule a low-cost 45-minute legal Consultation via our client portal to review your situation and potential approaches by which your objectives can be met.