Business & Start Up Formations

Starting a business is a big step. Anyone knowledgeable in this area knows that having an experienced, highly skilled firm of attorneys to help you through the process is invaluable. At Tand & Associates P.C. we are ready to assist and guide you from your original concept to the day your business comes to fruition. Our goal, like yours, is for the process to move as smoothly as possible and for you to become a successful entrepreneur. Since our legal professionals have been through business formations many times before, we are able to instruct you in strategies we know to be effective.

Decisions To Make Before Starting a Business

Business startups require a great deal of planning. It is important that you decide how you want your business to be structured and financed, what your preferred tax treatment will be, whether you plan to issue stock, and how you plan to deal with issues of owner liability or business disputes that may arise.

The major decision that has to be made when you are starting up a business is whether you want to form some type of corporation or other business entity that will protect your personal assets from business debts you may incur. Even the most well-run business is vulnerable to unexpected, sometimes dangerous onslaughts, such as lawsuits, tax miscalculations, unforeseen repairs, or large benefit payments. In worst case scenarios, your business may fail, and though this is awful to contemplate, you must be responsible for protecting your assets and your family from such adversity.

Types of Corporations That Will Protect You

Often, our attorneys will advise you to avert potential loss of personal assets by creating a corporation. There are two primary ways to establish a corporation, both of which have been approved by The Internal Revenue Code. The IRS differentiates between the two, Subchapter C and Subchapter S Corporations, in terms of tax treatment. Depending on your personal circumstances, one or the other may be preferable. As your business attorneys, we will be able to advise you on the matter.

Subchapter C Corporations

Typically, Subchapter C corporations are large and publicly held, so they are not usually appropriate for small businesses. These corporations face double taxation since they file their own tax returns, paying taxes on profits before paying out dividends. When their shareholders file their own individual returns they will be taxed again based on their own earnings.

Subchapter S Corporations

Subchapter S corporations have the advantage of being able to avoid double taxation, thus protecting their shareholders. There are, however, some restrictions on Subchapter S Corporations, including that they must:

Be domestic, without any alien shareholders
Have fewer than 100 shareholders
Have no corporate or partnership shareholders
Have only one class of stock
Not be affiliated with any larger corporate groups

Other Types of Business Formations

For individuals starting up a new business, there are several other methods of approaching business formation. Besides Subchapter C and Subchapter S Corporations, you may be able to form one of the following:

Limited Liability Company (LLC)

State laws provide for the creation of LLCs as another means of providing personal liability protection. Though they don’t have the same restrictions as S corporations, LLCs are also business structures designed to protect members from being held personally liable for company debts. In many ways, LLCs integrate aspects of sole or partnership ownership with corporate protections.

Partnerships

In a partnership, both partners are equal in their ability to represent the organization as a whole. In some cases, a limited liability partnership (LLP) can be formed to limit each partner’s liability for another partner’s error or wrongdoing.

Stock purchases

Since businesses may also be purchased by buying a large number of stocks in the company from existing shareholders, business attorneys can also draw up documents pertaining to stock purchases. While buyers are inclined to favor asset sales and sellers tend to prefer stock sales, in either case, there are tax and liability concerns to be dealt with and it is important to have a trustworthy business attorney at your side.

Employee Handbooks

Employee handbooks, while not explicitly required by law, are almost universally used as an efficient method of communicating information concerning company policies and employee rights. Since federal and state laws do mandate employer actions regarding such things as minimum wage, overtime pay, meals and breaks, and time off for jury duty, the vast majority of employers find distributing an employee handbook a convenient method of making sure everyone is on the same page about the procedures at the place of employment and the behavior that is expected in the workplace. In most cases, employee handbooks are distributed as soon as an individual is hired.

Why Employee Handbooks Are Necessary

The advantages of having a printed employee handbook are clear. Because such manuals inform employees uniformly, in written form, of company policies, they represent indisputable evidence that employees have been informed of their employers’ expectations. This ensures that a great many disputes can be put to rest without litigation, particularly since knowledgeable business attorneys have prepared these booklets as solid legal documents, not open to interpretation.

For this reason, employees are often asked to sign an acknowledgment form indicating that they have received and understand the manual’s requirements. Though employees may refuse to sign such a booklet, the employer may, if they wish, take this as a form of insubordination and terminate them before they ever begin work.

What Employee Handbooks Cover

For employee handbooks to be useful and protective to both parties, they have to spell out as many procedures and policies are possible. Areas typically covered by employee handbooks usually cover many, if not all, of the following:

Bullying
Employee benefits: healthcare, sick days, vacation days, personal days, holidays, and pensions.
Harassment and discrimination
Health and safety (potential hazards) at the workplace
Internet, cell phone, and social media usage
Payment through automatic deposit
Probationary periods
Wages and work hours

While the minimum wage is determined by law, it varies from state-to-state and region to- region. In New York State, for example, the minimum wage was increased, as of the end of 2016. In all five boroughs of New York City, it is now $10.50 per hour for businesses with 10 or fewer employees and $11.00 per hour for businesses employing 11 or more people. In Nassau, Suffolk and Westchester Counties, the minimum wage for small and large companies is $9.70 and $10.00, respectively, while In the remainder of the state, the minimum wage is $9.70. Average work hours expected to vary between 35 and 45 hours per week with the average being 40 hours weekly.

Depending on the state laws, employers may or may not require their employees to receive payments via direct deposit. In New York State, employees have the right to refuse direct deposit and, even if they do accept such an arrangement, they cannot be forced to use a particular bank by their employer.

Unacceptable behaviors, such as insubordination, bullying, and sexual harassment should be described in detail in the employee handbook so there is no misunderstanding about what is, or is not, tolerable in the workplace.

You may have all the good intentions in the world and still not craft an effective employee handbook since the project involves:

Strong legal background in federal and state employment law
Working knowledge of the pitfalls of missteps with legal language
Understanding precisely which topics must be covered in your particular handbook
Sensitivity to political correctness regarding discrimination, both in wording and enforcement of rules

Why You Need Tand & Associates P.C.

Our talented attorneys are fully aware of all components necessary for starting a business, ready to take you directly from an intriguing concept to a carefully planned enterprise to a well-executed startup. We will assist you in every aspect of business formation, including advising you on what type of business structure is best for you, how you can go about bringing it to fruition, and how to craft an employee handbook that spells out your obligations and expectations in clear, unambiguous language. We can be reached via the contact form on our website or by calling 516-393-9151.