Business Planning Overview
Whether you are just starting a business or have spent years building a successful company, effective business planning is essential to ensure that you reduce personal liability; preserve tax deductions; facilitate your retirement; maintain family harmony; minimize income, gift, and estate taxes; and ensure your business will survive if you become disabled or die prematurely. Many business owners do not take the time to plan for these issues, primarily because they are busy running their company or just don’t know where to start.
Planning for how you will exit from your business should be an integral part of your business formation and estate and retirement planning. Proper planning now can provide you with retirement income, reduced income and estate taxes, and even let you benefit a charity if you so choose, regardless of whether you transfer your business to family members at discounted values, to employees, or to an outside buyer.
At Howes Law, we use an integrated approach to help business owners plan for these issues, including estate, retirement, insurance, asset protection, and tax planning. We also coordinate with our clients’ other professional advisors (bankers, accountants, attorneys, and investment counselors) to create an effective team working for our clients’ success. We have many tools and strategies at our disposal to help you achieve your goals, and we can help you sort through your options and plan to meet your specific needs and objectives. If you have questions or would like more information about Business Planning, we invite you to contact us for a free initial consultation.
Business Formation and Startups
If you’re interested in forming a new business entity, Howes Law can help. In our years of practice, we have helped many clients bring their startup dreams to reality. Hiring an experienced attorney can make a significant impact on your early-stage business, ensuring that you are compliant with state and federal laws, as well as properly equipped to mitigate the risks of running a company in North Carolina.
Getting the right entity in place, with the correct filings made in support of its establishment, sets the stage for both proper risk management and the ability to grow your business with peace of mind. Our services are designed to have your business step into the market on the right foot, allowing you to focus on areas like sales, marketing, and operations.
At Howes Law, we perform a variety of startup services for North Carolina entrepreneurs, including the following:
- Providing advice and counsel on business formation issues
- Preparing and filing company formation documents
- Preparing an operating agreement, shareholder agreement, or partnership agreement for the company
- Preparing organizational meeting minutes or other minutes/resolutions
- Obtaining and preparing the company’s corporate record book
For more information on our approach to Business Formation and services for startups, we invite you to contact us for a free initial consultation.
Owners of closely held businesses often enter into buy-sell agreements with a number of goals in mind. Among these goals are to ensure that the business remains in the hands of the current owners and/or that a ready market of prospective buyers exists for a departing owner’s interest in the event of certain triggering events, such as an owner’s death, disability, or retirement.
Although buy-sell agreements are quite common in businesses with more than one owner, we offer targeted counsel that will enable you to avoid common mistakes that business owners often make when engaging in buy-sell planning. Challenges often occur for business owners due to concepts like fixed valuation of the business, failure to properly fund the plan, and improper terms in the agreement.
A common challenge with buy-sell planning is accurately valuing the business at the time the buy-sell provisions are triggered. Many business owners set a buyout value using a fixed-price or formula valuation method that may make sense at the time of initial planning, but may not work after the business has evolved in growth and complexity over time. Through proper planning, Howes Law can work with you to ensure that your valuation calculation matches reality versus history.
In order for a buy-sell agreement to work, it must be properly funded. There are various methods of funding a buy-sell agreement, including life insurance, disability buy-sell insurance, and negotiated payment terms. Sometimes a combination of funding methods is appropriate. We work with our clients and their other advisors, such as insurance agents and accountants, to determine the most effective method to fund their buy-sell agreements.
There are many ways to structure buy-sell agreements, whether you’re offering rights of first refusal to surviving partners, triggering a mandatory sale of the business upon death of a partner, or handing down business interest from a partner to his or her surviving family members. While each of these scenarios can work fairly for a business and its owners (and their families), they must be applied in the correct circumstances to affect all in a balanced way. As with valuations, many business owners implement buy-sell agreements with provisions that may work at the founding of the business, but later on these same provisions can be problematic. Howes Law works with business owners to match the terms of their buy-sell agreements to the realities they currently face with their businesses and families.
For more information on buy-sell planning with Howes Law, contact us for a free initial consultation.
Business Succession Planning
Business owners must plan effectively for the fate of their company’s operations upon their own death, retirement, or other triggering event that requires new ownership and/or new management of the organization. Owners must plan early and often to mitigate a variety of issues around taxation and risk, as well as issues pertaining to their personal lives.
Proper business succession planning affords business owners the appropriate time and consideration of concepts like valuation of the business, aligning their personal needs with those of the company, and relationships with their colleagues and family members. Perhaps most importantly, consistently executed business succession planning offers owners the greatest amount of options and ultimate control over their personal destiny and that of the company they’ve worked so hard to build.
At the heart of succession planning is goal setting. Whether it’s your goal to sell the company to your partners or employees, cash out, or leave a legacy income to your family by transferring ownership to children or siblings, taking the time to plan for your own exit will enable you to reach your goals. At Howes Law, our experience in dealing with issues surrounding life, death, asset transfer, taxation, and issues related to both personal estates and businesses will empower you to make the right decisions for your family and your business.
For more information on our business succession planning services available at Howes Law, contact us for a free initial consultation.
One of the most important reasons business owners utilize corporate entities is to afford liability protection. However, in order to maintain limited liability and avoid piercing the corporate veil, it is essential to maintain the corporate formalities of the business. In order to ensure our clients properly maintain corporate formalities, we have developed our Corporate ShieldTM Service. As part of this service, we serve as registered agent, prepare annual minutes and file the annual report for the company. In addition, we provide periodic checklists and worksheets to assist our clients with annual updates, tax planning, end-of-fiscal-year planning, and other business planning matters. For more information on our Corporate ShieldTM Service and a complete list of services provided, please contact us.