A primer on corporate legal structure…with a few new twists
As the business world attempts to embrace the idea of social enterprise, a primer might be in order, with a look at some new structures in California:
- Is now the right time to incorporate? When we start new businesses, we often think that incorporating should be the first thing we do. Sometimes thats right, but not always.
- How will the ownership of my company be shared? Will it be a 50/50 split with partners, or is some other percentage more appropriate? Do you agree on everything with your partner, or should one of you have the deciding control?
- What form of structure will give us the appropriate protection, tax situation, and fit our companies makeup? Will you have a number of employees, or will it just be the owners? Is the a structure for holding property, or a service business? Do you anticipate going public?
- Are you going to operate a social enterprise? If so, does your state offer an alternative structure like the “Benefit” corporation? Is that a good fit? Is it necessary?
These are just a few considerations worth discussing before actually moving forward with a new business structure. It’s always best to consult your attorney and a good CPA. The cost for a few hours of consultation is a small price to pay for setting up the appropriate structure.