Helping Clients And Seeking Justice
We solve problems. Better yet, we help you avoid them!

529 25 1/2 Rd. #B210 Grand Junction, Co 81505


Client Care

Entity Formation

While most of our clients seek assistance after they have already established their business entity, a few come to us early enough to talk about the type of a legal entity they should form in order to operate their business. There are several types of entities that can be utilized by someone looking to establish a new business including the four most popular:

  • Sole Proprietorship (with or without a separate federal tax identification number);
  • Partnership or a limited liability versions of a partnership
  • Corporation (Profit or Nonprofit)
  • Limited Liability Company or professional versions of a limited liability company

Because of their flexibility and superior benefits in most settings, limited liability companies (LLCs) are the most popular type of entity for a new business owner to consider and with good reason.  We favor clients considering LLCs as their first option because of these kinds of benefits that are inherent in an LLC:

  • As the name suggests, the owner can be shielded from many types of liability;
  • There are flexible profit or loss distribution strategies that provide tax advantages over other types of entities;
  • There are other tax advantages that allow owners of an LLC to avoid paying tax twice on money they take out of the business;
  • The management of an LLC can be more flexible than other types of entities, especially a corporation, because of the contract nature of the operating agreement ;

That is not to say that every new owner ought to automatically select an LLC as their entity of choice for their new business, but it is a good starting point for new business owners to consider.

And while selection of the right business entity is a very important element in setting up a successful company, there are other important things for an owner to consider.  Among those other things is the answer to the unfortunate question: what happens if an owner passes away while still active in her or her business?  Even if the answer to that question is addressed in the person’s estate plan, it is unlikely that some details have been resolved.  For example, how will his or her ownership be valued?  How will the ownership be transferred or sold to someone that can help the business survive in the days and weeks that follow?  Will the family of the deceased owner be treated well while they are both mourning the loss of their family member and also worrying about the condition of the business in his or her absence?

Each of those questions can be answered ahead of time with the input of the owner and can be set up to his or her satisfaction.  Those details are rarely addressed in a person’s will or trust, even though those details are not difficult to resolve.  They simply need to be thought through, hopefully as part of the formation of the business, or not long thereafter.  With that said, though, it is never too late to ask and answer those questions; in the hands of the right professionals, those details can be managed well in advance of any need for them.  Whether the issues involve tax and accounting, insurance on the individuals involved, financial planning for the heirs of those individuals or the legal aspects of the formation and operation of a business, our team of lawyers and their network of professionals are prepared to guide our clients through the process needed to bring peace of mind.