Business Planning
Corporations (Nevada Revised Statutes, Chapter 78)
A properly established corporation can protect its shareholders from the corporation’s liabilities. A corporation must have adequate assets and insurance or it could be disregarded for liability protection. If a corporation’s employee (including an officer) does something that is considered intentional or gross negligence to another, that employee can be sued individually, and the corporation offers no protection to that employee. However, it does offer protection to the shareholders, officers, and other employees who were not responsible for the actions of the employee in question. Also, shareholders are generally insulated personally from the business liabilities.
Only the officers of a corporation are registered with the Nevada Secretary of State on an annual basis. This means that owners who are not officers may be difficult to trace to a corporation. The officers can be individuals or another entity, however officers cannot be trusts.
Limited Liability Company (Nevada Revised Statutes, Chapter 86)
A limited liability company can be managed by a manager or a member. Since the identity of a limited liability company’s members is not private in Nevada, we prefer a manager managed limited liability company. Our office can provide a number of ways to provide continuity of the management of a limited liability company in the event of your death or incapacity.
Partnerships (Nevada Revised Statutes, Chapter 87)
A partnership can be a valid structure to hold business assets. There must be a general partner (similar to an officer of a corporation or a manager of a limited liability company), except the general partner must also be an owner. The general partner may have personal liability.
Limited partners are owners who are not responsible for running the partnership. In most situations, limited partners do not have personal liability for partnership issues. Of course, this protection can be removed by a personal guarantee or indemnity clause in a contract.
The most common structure is to have a 1% general partner and 99% limited partners.
Contract Review and Drafting/Buy-Sell Agreements for Sale of Businesses
Our office is familiar with the drafting and review of contracts pertaining to corporations, limited liability companies and partnerships. We also provide our clients with advice and drafting of buy-sell agreements for the sale of all types of businesses.
Family Succession Planning
Many clients desire to ensure the future of their business, our office can assist in providing a succession plan as part of the estate plan.
As an attorney with an LL.M. in taxation, which is a specialized degree in taxation law, Shannon can help owners of companies develop a plan for a smooth transition. Our recommendation is to consult with employees, coworkers, owners and family members to discuss the goals for the future of the company and then our office can create a custom plan. Typically a succession plan utilizes either retention of the ownership or by creation of a buy-sell agreement.
- Continuation of the ownership allows a family member to retain control of the asset.
- Buy-Sell Agreements can be part of a limited liability company’s operating agreement or corporation’s minutes. offer the other owners or employees a larger stake in the company. Sometimes the other members/shareholders will be granted a first right of refusal to purchase a selling/deceased owner’s share, before the ownership may be offered for sale to other individuals. The agreement can outline how the purchase price would be calculated (such as with certified appraisals or by a CPA), which can be tailored to your specific requests.
Properly drafted family succession planning documents provide protocol for the remaining owners of a company in case the unexpected happens. During the creation of a family succession plan, you will name a successor to assist during this process.