Alexander W. Tighe
Attorney At Law
12 Old Boston Post Road
Old Saybrook, Connecticut
06475
(860) 388-0049
Fax: (860) 388-9605
Attorney Tighe will provide his clients with
assistance in the formation of business entities. We can help guide you
in the creation and filing of proper documentation for the legal
establishment of your Corporation, Limited Liability Company
(LLC), Partnership, or Sole Proprietorship.
In addition, our office can assist in the creation
of and maintenance of Corporate Books, including such necessary
documents as the minutes of annual and special Shareholders and
Director's meetings, and appropriate resolutions.
The following is a brief description of the business entities we can help create or maintain for you:
CORPORATION - A Corporation is
an artificial legal entity which, while made up of a number of people
or other legal entities, has a separate legal identity from them. As a
legal entity the corporation receives legal rights and duties. Five
rights always exist for a corporation: the ability to sue and be sued
(this gives the corporation access to the courts); the right to a
common treasury (this gives the right to hold assets separate from the
assets of its members); the right to hire agents (this gives the
corporation the right to hire employees); the right to a common seal
(this gives the corporation the right to sign contracts); and the right
to make by-laws (this gives the corporation the right to govern its
internal affairs). Generally, corporations are owned by Shareholders
and are managed by Directors and Officers. The Officers usually are
charged with the duty of running the day to day business of the
corporation.
"C" CORPORATION - This entity
is subject to "double taxation" on company earnings. Most major
companies and many small ones are treated as "C" Corporations for
Federal Income Tax purposes.
"S" CORPORATION - Unlike a regular "C" Corporation, an "S" corporation generally pays no corporate income taxes on
its profits. Instead, the shareholders in the "S" corporation
pay income taxes on their
proportionate shares, called distributive shares, of the "S" corporation's
profits. Shareholders must report the income (and pay a related tax, if any)
regardless of whether the shareholders receive distributions from the S
corporation. This requires a valid election and filing with the I.R.S.
OTHER CORPORATIONS -
Among other types of corporations, there are "Professional
Corporations," "Not-For-Profit Corporations" and "Municipal
Corporations."
LIMITED LIABILITY COMPANIES - These are similar to a corporation and are often a more flexible form of
ownership, especially suitable for
smaller companies with a limited number of owners. Unlike a regular corporation,
however, a limited liability company with one member may be treated as a
disregarded entity, so the member is often singled-out as a person performing
the actions of the LLC. A limited liability company with multiple members is
typically treated as a partnership for tax purposes, thereby avoiding "double taxation."
An LLC can elect to be either "member managed" or "manager
managed." LLCs are organized with a document called the "articles
of organization", additionally, it is common to have an "operating
agreement" privately created by the members. The "operating agreement"
is similar in many respects to a partnership agreement.
PARTNERSHIP -A Partnership is a type of business entity in which partners share with
each other the profits or losses of the business undertaking in which all have
invested.
In Connecticut, a partnership is an agreement between individuals who, in a spirit of
cooperation, agree to carry on an enterprise, contribute to it, by combining
property, knowledge or activities and to share its profit. Partners may have a written agreement which may or may not be registered and available for public
inspection. Generally, a partnership offers less liability protection than the Corporation or the Limited Liability Company.
Partnerships are often favored over corporations for taxation purposes, as a
partnership structure eliminates the dividend tax levied upon profits realized by the
owners of a corporation.
The most basic form of partnership is a general partnership in which all partners
manage the business and are personally liable for its debts. Two other forms
which have developed in most countries are the limited partnership (LP), in which certain
"limited partners" relinquish their ability to manage the business in exchange
for limited liability for the partnership's debts, and the limited liability partnership(LLP), in which all partners have some degree of limited liability.