Our attorneys can assist you with setting up your business, selling or purchasing a business, planning for your business succession, and everything in between. Each state has its own requirements as to how a business is legally established, as well as rules for keeping the company active with the State. Licensed in Iowa, Nebraska, and South Dakota, Jack and Lindsey are here to answer your questions and walk you through your business law needs.

Types of Companies

There are numerous types of companies. Below are some common business structures and the functions of each:

LLC’s

Limited Liability Companies (LLC’s): LLC’s are a popular and flexible way to reap similar benefits offered by corporations. Like a corporation – which limits the liability of equity owners – LLC’s reduces liability of the company members. Similarly, LLC’s offer similar tax benefits as a corporation (e.g. pass business loss to individual owners). However, unlike a corporation, an LLC has a more centralized management by its managers and/or members. LLC’s are generally created with a Certificate of Organization which is recorded with the Secretary of State; Operating Agreement; Organizational Minutes, and Unit Certificates.

Corporations

Like LLC’s, corporations are considered a separate legal entity from their owners. A significant benefit of having a corporation is the limited liability of its owners. Corporations are comprised of shareholders (stockholders), a board of directors, and corporate officers (e.g. President, Vice President, Secretary and Treasurer). A corporation may own property, enter into contracts, sell property, sue and be sued. Just as a person is responsible for their own debt, a corporation is responsible for its own acts and debt as a separate legal entity.

There are four common types of corporations:

  • Business corporations: Structured as a profitable corporation.
  • Nonprofit corporations: Not for profit, organized primarily for charitable, educational, religious, or scientific purposes.
  • Public corporations: Structured for governmental purposes.
  • Professional corporations: Structured for professionals or groups of professionals, such as attorneys or doctors.

A corporation may also be an “S” corporation or “C” corporation. By far, the most popular is the “S” corporation, where shareholders retain limited liability and tax benefits. However, an “S” corporation is limited to 75 shareholders and one type of stock.

Buy-Sell Agreements

A buy-sell agreement is a legally binding agreement between co-owners of a business which specifies the company value and what happens when a co-owner dies, becomes disabled, or voluntarily or involuntarily leaves the business. In essence, a buy-sell agreement is similar to a premarital agreement between future spouses, and is sometimes referred to as a “business will.”

Business Succession Planning

Planning and timing are key when selling or transferring a business. Proper legal planning is essential to ensure a business is successfully sold or passed on to successive business owners or family members.