With respect to corporations, our representative work includes the formation of both C and S corporations. The difference between the two primarily being the number of layers of taxation permitted by the internal revenue code. Beyond formation, our firm has representative experience drafting by-laws to govern the day-to-day operations of the corporation, buy-sell agreements between principals and holding organizational meetings necessary to comply with state law requirements for ensuring the proper people have the proper authority and that the governing documents are adopted properly, among other items.
The firm also has representative experience helping corporations streamline for strategic goals. We have structured what are called tax-free reorgs involving reverse triangular mergers between a new holding company, a new shell wholly-owned subsidiary, and an existing operating entity. The benefit of such a transaction has tax, accounting and administrative implications. The opposite transaction would be a spinoff of a subsidiary to the market. The firm also has experience representing clients who raised capital through a private placement transaction.
Another business association the firm has experience with is the limited liability company. The newest form of business association, having come about in 1977 in the State of Wyoming, the limited liability company is a cross between a corporation and a partnership. The entity provides limited liability to the owners so long as the owners do not act in a self-serving, detrimental manner as to justify “piercing the corporate veil” (even though it is not a corporation the shield of liability can be removed in certain extreme circumstances).
Besides the formation documents, the operative documents common with limited liability companies are operating agreements instead of by-laws and buy-sell agreements. Non-compete agreements are not uncommon between officers and the company, and have to be drafted often. By default, a limited liability company having more than one owner is taxed as a corporation under sub-chapter k of the internal revenue code. However, an election can be made to be taxed as a corporation.
Boards of directors of corporations and some managers of limited liability companies owe default fiduciary duties to shareholders and members. We offer advisory services to boards of directors and managers of limited liability companies to help boards and managers meet and fulfill their legal obligations to shareholders and members. To fail to fulfill one’s fiduciary duties has significant consequences to actions taken by corporations and limited liability companies. The depth and breadth of our experience and commitment to these issues give boards and managers valuable insight and provide them confidence in making critical business decisions.
Partnerships are another common entity of choice. The firm has representative experience forming limited partnerships, limited liability limited partnerships (the difference is subtle), and general partnerships. Important consideration is given to the proper structure for the client given the strategic goals its sponsors possess. We work to address all the relevant considerations affecting why one business association would be more advantageous than another and then put together a structure that fits our clients’ needs.
Our work also includes legal representation during the operational life of the entity. One area where our firm has been engaged is mergers and acquisitions. Our firm’s representative experience includes advising trucking companies on strategic asset purchases, reorganizing disparate limited liability companies under a newly formed holding company, making them wholly-owned subsidiaries for easier compliance, accounting and general administrative purposes on a tax-free basis.
The last life-cycle phase of an entity is dissolution. Having represented clients by forming the appropriate entity for the sponsors and handled or participated in strategic mergers or acquisition matters, the firm is capable in assisting clients in bringing to a close, through formal dissolution, the life of the business association. These matters are governed by state statutes, and it is crucial that our clients acquire legal counsel with actual experience in dissolving a business association to ensure liability does not get transferred to the members, shareholders or officers after the company is dissolved.
Companies have multiple reasons to engage in mergers and acquisitions. Besides mergers and acquisitions, companies find divestitures as compelling strategic moves as well. Whether a client wants to sell assets, buy assets, buy stock, sell stock, merge with another company or just reorganize on a tax-deferred basis, our firm can represent those interests in any of these transactions. Our firm’s clients include trucking companies, freight brokers, and professional service firms.
M&A deals often involve the need to answer complex questions regarding disparately scattered assets of various forms or types. Our attorneys have the experience to add value to deals and provide due diligence expertise on real and personal property assets, ascertaining the status of title to these assets and who owns what interests, ensuring that decisions can be made with confidence about the status of priority to claims against assets.