Incorporation / LLC Lawyer for New Business Formation
Helping clients in Burlington, Lexington, Cambridge, Arlington, and the Greater Boston area get their businesses off to the right start
Massachusetts offers a variety of new business forms from which to choose, including corporations, limited liability companies, general and limited partnerships, and sole proprietorship. The best entity choice for your new business will depend upon tax, ownership structure, financing, and other legal considerations.
Some of the more important considerations when selecting the choice of entity are the following:
- Ownership structure. If your company may be seeking equity financing in the future, a corporation may be the best choice.
- Subchapter “S” elections – the IRS allows what is referred to “pass-through” taxation to corporations, limited liability companies, limited partnerships, and (by default) to sole proprietors. With pass-through taxation, business income and losses are “passed through” to the individual owners based upon their equity ownership. Owners then are taxed on income (or allowed to take a tax deduction for their share of losses). The income for the business itself is not taxed at the “corporate” level; taxation is instead done at the ownership level. Subchapter “S” corporations are legally the same as other corporations (often referred to as “C” corporations), except that Subchapter “S” corporations have elected pass-through taxation to the owners. Subchapter “S” elections may not be allowed if the business has certain types of owners (such as other corporations or individuals who are not US citizens or resident aliens), or if the corporation wants to have more than one class of stock.
In addition to these considerations, there are a number of other business considerations that may affect what choice of entity may be the best for your situation, which are too numerous to discuss here. When we meet and we learn about the nature of your business and its ownership structure and other matters, we can explain the advantages and disadvantages of various entity choices based upon these considerations.
Preparing and Filing the Necessary Documentation to Start Your Business
Once an entity choice has been determined, we prepare and file (as necessary) the startup documentation, which may include the following;
- Articles of incorporation or certification of organization
- Bylaws or operating agreement
- Shareholder or buy-sell agreements
- Resolutions for matters such as appointing officers and directors, selling shares or equity interests, Subchapter S elections, contributing money or property to the company
- Filing for a federal tax identification number
- Various other matters, depending upon the nature of the business
We look forward to the opportunity to meet with you and to learn about your business. Please call our office to schedule an appointment at your convenience so that we may get started.