In this video, our Champaign County business attorneys emphasis how it is important that you work closely with a business attorney when incorporating your business for several reasons:
(1) Your business attorney will educate you and assist you in selecting the most advantageous and proper corporate entity: There are many different types of corporate entities that you can select from when incorporating, including LLCs, S-Corps, LPs, and LLPs, your business attorney will take the time to educate you on the pros and cons of each type of entity for your particular situation. Your attorney will help you find the most cost-effective solution that best fits your needs. Series LLCs can be a great cost-saving solution for business owners with multiple businesses or multiple locations. Professionals and other particular types of businesses may be required to file as a P.C. or PLLC. Selecting the wrong corporate entity can be an expensive mistake for your business.
(2) Your business attorney will help you maintain required corporate formalities: In order to receive the benefits of incorporation, such as liability protection and self-employment tax savings, it is important that you follow the required steps to maintain corporate formalities, both at the time of initial corporate set-up and annually. Failure to do so will result in creditors being able to "pierce the corporate veil" in order to attribute business debts to the shareholders personally, and may result in paying back self-employment tax savings if you are audited. Your attorney will help you prepare bylaws or an operating agreement, prepare initial and annual meeting minutes for shareholders and directors, comply with notice requirements for annual meetings, issue stock, and maintain your corporate book. Even if you are a single-shareholder corporation or LLC, failure to take these steps may result in your corporation being worthless from a liability and tax saving standpoint.
(3) Your Business Attorney will register your corporation with the required government agencies: As part of our corporate-set up service, our Elmhurst attorneys will assist you in obtaining state and federal tax ID numbers, registering with the Illinois Department of Employment Security, and completing any other registrations that are required for you to legally operate your business.
(4) Your business attorney will advise you on tax issues associated with your corporation and file the necessary paperwork on your behalf: As a corporation, you have the opportunity to make an S-Corp election with the IRS that may significantly reduce your personal and business tax liability. A good corporate attorney will work with your accountant to ensure that you are receiving the benefit of every tax advantage available to your corporation.
(5) Build a long-term relationship for your future business needs: Meeting with a business attorney at the incorporation stage of your business will allow you to build a relationship of trust and identify future legal needs such ascontracts, leases, employee issues, exit strategies, or disputes. When a legal issue arises, it is important both to identify the situation as one in which you should consult your attorney, and to have a pre-established relationship with an adviser and advocate that you trust.
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