Starting a New Business
Launching a new business requires more than just a great idea — it requires a solid legal foundation. We help entrepreneurs select the right business structure, prepare formation documents, secure licenses, and draft partnership or operating agreements to protect their investment from day one.
Why Have a Corporation or LLC if You Don’t Use It?
Why would you spend the time and money to set up a legal entity—a corporation or LLC (Limited Liability Company)—if you did not plan to use it? We regularly learn that people have a legal entity they paid for—but they never took the steps necessary to transfer their business or its assets into the entity correctly.
Setting up a Washington corporation or LLC is easy. You can just go online and do it for “free” using the Secretary of State’s online form and paying the state’s fee. Leaving for another day, the quality of legal advice the state provides, often “free,” means you have to spend a lot more money later to fix problems. This is particularly true when you have been operating a business as a sole proprietor or in a partnership for a period before deciding to set up an entity. It can also become an issue when you take personal assets and contribute them to the entity in exchange for ownership rights.
If you do not transfer the assets the new company is going to use to the entity, you have just gained a short stack of paper that will gather dust in the corner of your office or shop. You may float along for weeks or years before discovering that you have a potentially expensive and troubling problem.
If the business gets sued, the opposing party will soon discover that you co-mingled the entity with your personal affairs—by using your personal assets in and for the benefit of the business, and meanwhile taking advantage of business tax and other benefits through the entity. Suddenly, that protection from personal liability for business liabilities you thought you had is not available.
Another place we see problems from not properly transferring assets is when “partners” get into a dispute. Suddenly, you discover that the computer on which you kept all of the business records is not an asset of the entity—and never was. Meanwhile, she takes the position that you did transfer your existing book of business and customer list to the business. In effect you set up an entity (corporation or LLC) that sat on the shelf with no assets and conducted business using assets it may not have owned. It can be expensive and business-destroying to even attempt to unravel the mess through a lawsuit.
The solution is really quite simple. Make it clear in advance, in writing. A good rule is that if it is not in writing, it did not happen. An experienced small business attorney can guide you through the documents and actions necessary to clearly define which assets are transferred to the business entity and which remain personal, and to document the actual transfer.
Washington Business Formation Lawyer
At Bundy & Fichter, many of our small-business clients are franchisors or franchisees, but not all of them. We assist clients in setting up closely held businesses. We work closely with business owners and their teams to thoroughly understand the business and its goals, and identify the form of legal entity that will best support the business's success.
A Comprehensive Business Law Practice
Starting a nonprofit or forming a limited liability company (LLC) or another business organization requires knowledge of taxation and other liabilities that may affect your business in the future. At Bundy & Fichter, we help you make informed decisions that will protect your business and allow it to thrive. We handle all types of business startups, including:
- Corporations
- S-corporations
- Limited liability companies
- General partnerships
- Limited liability partnerships
- Sole proprietorships
- Franchises
- Nonprofit organizations
In addition to setting up the entity, we will help you protect your business throughout its operation. We are able to prepare contracts, including confidentiality agreements, nondisclosure agreements, license agreements, employment agreements, purchase agreements, sale agreements, and many more. We try to help you avoid conflicts with your business associates, customers, suppliers and others so that you never need to come back to us to resolve a dispute. However, if a dispute happens, we are here to help you resolve it as cost-effectively as possible.
Flexible Fee Structures
As experienced franchise and business lawyers, we work closely with our clients to arrive at a mutually satisfactory fee arrangement that is appropriate to the matter at hand. Our firm is not limited to hourly fees, but as applicable, we will agree to fixed fees and other arrangements. We would like to discuss the options available to you.
Protect Your Business From The Start
If you are considering buying a franchise, franchising your business or starting a business anywhere in the country, contact an experienced business formation attorney at Bundy & Fichter.
To arrange a free initial consultation, please call our Washington office at (425) 822-7888 or complete our online contact form. We are here for you.