The primary focus of a Business Development Attorney is to assist the owners/managers in making the proper choice regarding the form of business entity for the proposed business and, thereafter, structuring the various relationships between the owners/managers in a manner which conforms to the legal requirements of the organizational form and the personal and commercial intent of the founders. In order to accomplish either of these objectives, it is essential to reach a clear understanding of all of the material elements of two major considerations;)1) the plans and objectives of the owners/managers in operating the business, and the statutory and contractual rules and regulations that will typically govern the actions of the parties in any given form of business organization.

Basic Considerations:

The business entity selection process, at a minimum, requires a comparison of the business organizational types in relation to a variety of distinguishing factors. Among the basic factors which may be useful for consideration are the following:

1. The formalities, process and procedures involved in forming and organizing the business entity.
   
   
2. The manner in which the business entity helps or hinders the fulfillment of the financing and debt/credit requirements of the underlying business.
   
   
3. The rights of the owners/managers to participate in managing and controlling the activities of the business, as well as the ability of designated individuals to enter into contracts and other arrangements with outside parties.
   
   
4. The allocation of profits and losses from the activities of the business among the stakeholders.
   
   
5. The extent to which the owners/managers will be personally liable for the debts and obligations of the business.
   
   
6. The ability of the business owners to transfer their ownership interests in the business without causing a disruption or termination.
   
   
7. The effect of the death, withdrawal or retirement of any of the business owners on the continued existence of the business.
   
   
8. The income tax consequences associated with forming, operating, making distributions from and terminating the business entity, as well as the income consequences of transferring an ownership interest in the business.

The selection of the proper form of business entity requires a careful balancing of tax and non-tax considerations. The most common choices include:

1. Sole proprietorships
2. 2. General partnerships
3. Limited Partnerships
4. General business corporations
5. S corporations
6. Statutory close corporation
7. Limited liability companies ("LLCs").
8. Joint ventures
9. Professional corporations
10. Nonprofit corporations.

While each form of business entity has its own unique legal framework and requirements as to formation and operation of the enterprise, it is important to remember that the choice of the business form does not itself guarantee the success of the enterprise, although the improper form may contribute to its ultimate failure. The proper form should provide a means for the owner/managers to achieve the desired results and should not unduly constrain the freedom of the business to establish relationships that suit their business considerations. Accordingly, each business form should be viewed as a means of resolving a given issue, problem or opportunity which arises within the context of the specific business plans and objectives of the participants.

AGREEMENTS, DOCUMENTS & FORMS:

Selection of Business Form Worksheet