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Among the most important decisions a business owner or entrepreneur can make is determining what business entity best suits their needs. This decision can affect how much you pay in taxes, the amount of paperwork that you will need to do, your own personal liability, and your ability to raise capital by issuing stock. Additionally, some business formations require certain formalities in order to be in compliance with state and federal law.

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Of course, every business is different, and what may be an appropriate business entity for one venture may be completely inappropriate for another. Business ventures that anticipate rapid growth or are formed with the intention of being acquired by another company may choose an entity type that may be unnecessarily onerous at startup but allow growth and compliance with federal securities laws, preempting the need for a potentially costly reorganization down the road. For these and other reasons, it is best for anyone considering forming a business entity to discuss their goals and options with an experienced Silicon Valley business lawyer before filing any paperwork with the state.

In the meantime, here is some basic information regarding the some of the most commonly used business formations:

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Do you have a great idea but aren’t sure how to start a business? Creating a startup can seem daunting at first. There are many questions to consider when defining what type of business you want to start and figuring out what it will look like once your plan comes to fruition. There are also a few legal activities you need to complete before you can open up shop. Here are 4 steps to starting a business and some tips to help you get started.

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1. Determine Your Market and Specialty

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Deciding to start a small business can be both exciting and stressful, and seeing your business succeed can be highly rewarding.

The reality of starting a small business is, however, that forming and running a business is generally far from a simple task. Business owners must have a viable idea, the necessary supplies to bring that idea to fruition, and a client base to keep the business afloat. Furthermore, small business owners in California must always ensure that they are in full compliance with numerous federal and state laws and regulations. This can be particularly daunting as many entrepreneurs may be largely unacquainted with all of the applicable laws, and may not have the time or expertise to familiarize themselves with such regulations.

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If you are a small business owner, a California business attorney can advise you on all the essential steps you must take in order to comply with all necessary laws.

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As much as you may want to avoid litigation when it comes to your business, conflicts arise and are sometimes unavoidable as a cost of running a successful business. While you and your business partners may have other philosophies on handling workplace issues, sometimes litigation is the best course of action to deal with messy company separations, distribution of assets, protecting your property, and sometimes even handling suppliers and consumers.

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As a business owner involved in litigation, you don’t need to resort to spending years in litigation or paying unreasonable settlement sums; you need to build strategies with a business lawyer so you can resolve conflicts efficiently and effectively, and maximize your ability to avoid future disputes. When litigation is initiated, it is important that it is done right to avoid unnecessary mistakes that waste all parties’ time and money.

Here are 5 common legal mistakes business owners can make when stepping into legal territory, and how to avoid them.

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5 Items to Include in a Real Estate Purchase Contract

When you make an offer on real estate you want to buy, there can be a lot of paperwork involved. Many additions to real estate purchase contracts are obvious, such as the address of the property, purchase price and owners. Here is a list of 5 things to consider and include when drafting a real estate purchase agreement.

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1. Legal Description of Property

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Sole Proprietorships: Advantages and Disadvantages

Many small businesses in the United States operate as sole proprietorships. In fact, this is the most common type of business and is business in its simplest form. In this article we will discuss some advantages and disadvantages of sole proprietorships and more specifically, owning and operating a sole proprietorship in California.

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Advantages of Sole Proprietorships

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Pros and Cons of a C Corporation vs. an S Corporation

Selecting a business entity is one of the most important decisions an entrepreneur faces. There are numerous options including sole proprietorships, partnerships, limited liability companies and corporations. To make things even more complicated, there are two primary types of corporations, each with its own benefits. In order to ensure you choose the best business entity for your purposes, you should always conduct careful research and consult with an experienced California business attorney to discuss your options.

Once you have decided you want to incorporate, your options are to form a regular C Corporation or an S Corporation. Though these two types of corporations are quite similar, there are a few key differences that can determine which one is right for your business.

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An employment contract can be a useful tool to protect your business while providing clarity and structure for your employees. An effective agreement should clearly spell out the terms of both employment and termination. In this post we’ll take a look at the basics of creating an employment contract.

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Understanding Employment Contracts

A well-designed contract outlines an employee’s roles and responsibilities. What tasks is the employee expected to perform? What does the job pay? What benefits will the employee receive? Clearly stating this information upfront will protect your business from future lawsuits, provided you abide by the contract.

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In a previous blog post we briefly talked about operating agreements. This topic is important enough to merit further examination. We’ll specifically look at what you need to include in an operating agreement for an LLC.

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The Purpose of an Operating Agreement

Think of an operating agreement as the founding document that spells out the essentials of your business. Everything should be outlined including the management structure, membership interest, capital contributions and the financial allocations and distributions. More isn’t always better, but in this case being as detailed as possible will help you in the long run.

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There are a number of ways to fund a startup. We’ve all heard about loans, grants and crowdfunding but new rules from the SEC will make it easier for entrepreneurs to raise capital. In this post we’re going to look at changes to “Regulation D” and what that means for startups.

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Understanding Regulation D

Regulation D is part of the Securities Act of 1933. Section 506 specifically deals with the solicitation of private offerings. In the past, the SEC essentially banned all forms of advertisement for private investment. The revised Regulation D does away with most of the restrictions. It’s now possible for a company to publicly solicit funds for a private venture.

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