CONSIDERATIONS, WHEN DECIDING BETWEEN CORPORATE VERSUS LLC ENTITY STRUCTURING ELECTIONS.

 

 

John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M

 

212 922 0005

Kiritsis Law Group

 

Some items worth considering prior to starting a Corporation and/or a Limited Liability Company (LLC), may include:

What is the Corporation's/LLC’s proposed name selection?

Will the Corporation/LLC elect to operate for profit or non for profit?

Will the bylaws indicate if Corporation is for profit or non profit Corporation/LLC?

Can shareholder action be taken without a proper meeting?

Where would the names, addresses and phone numbers of the Board of Directors members?

Will the directors' terms be staggered and how it may shorten and/or prolong said director's tenure with the Corporation/LLC?

If the director terms are staggered, what will be their length in terms of raw years in office (if any)?

Will the directors be shielded from personal liability exposure from a Corporation's/LLC’s claim against such directors?

What are some basic information with regards to the President?

What are some basic information with regards to the Vice President?

What are some basic information with regards to the Secretary?

What are some basic information with regards to the Treasurer?

Are transactions between the Corporation/LLC and its directors/officers permitted?

Who can sign and effectively legally bind the Corporation/LLC, as far as, real estate contract documents are concerned?

What day to day activities will individual directors/officers be allowed/authorized to do on behalf of the Corporation/LLC?

Will the directors of the Corporation be authorized to lease office space on behalf of the LLC/Corporation?

Who is the contact person of the corporate commercial tenant, with regards to  correspondence with the underlying commercial landlord?

Will officers/directors be authorized to enter into employment agreements with the corporation and/or limited liability company?

Which corporate officers will be authorized to legally bind corporations/llcs with regards to employment agreements?

What are the contact information of the individual officers?

Who are the Corporation's/LLC’s key employees from the perspective of taxation and corporate governance, respectively?

Will the Corporation/LLC have non-Board member key employees?

Who are the Corporation's/LLC’s initial shareholders?

What will be the contributions of each of the initial shareholders?

What shareholder voting requirements are needed for approving corporate action at properly conducted shareholder meetings?

What shareholder vote requirements are needed to approve corporate/llc action via written consent (absent a shareholder agreement)?

What are the shareholder voting requirements needed for changing the corporate bylaws?

When and where will the initial Corporation/LLC shareholder meeting will be held?

What are the logistics of scheduled corporate shareholder meetings?

Will the Corporation/LLC issue stock certificates?

Will fringe type of benefits be offered by the Corporation/LLC?

What benefits (if any) will be offered by the Corporation/LLC to its shareholders, officers and/or directors?

Who will be the Corporation's/LLC’s registered agent?

Who will be the Corporation's/LLC’s accountant?

Who will be the Corporation's/LLC’s lawyer/general counsel?

Who will be the Corporation's/LLC’s insurance professional?

Who will be the Corporation's/LLC’s banker/financier?

Has a founder's type of agreement been entered PRIOR to the date of incorporation/formation?

Is the underlying business of the Corporation/LLC an already existing business or is it an entirely new start up? 

Will the Corporation/LLC be treated as a C Corp for tax related purposes?

Will the Corporation/LLC elect S Corp tax treatment?

Will the Corporation/LLC have, own and/or operate LLCs/Subsidiaries?

 

 

 

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