Business Formation

Steve has a lot of experience in business formation and continuity. If you have started your own business - or are thinking about doing so - you may be uncertain as to whether to operate a business just in your name (as a "d/b/a"), under a trademark or fictitious name, as a partnership, as a corporation, or as a limited liability company.

Corporations and partnerships used to be the two-standard means for operating a business, and they are still viable options. In fact, if you are forming a non-profit in Oklahoma, you must form as a corporation. But many businesses these days choose to form limited liability companies for the ease of formation, the ease of maintenance and continuity of the company's records, and the pass through-tax benefits that may be established to avoid double taxation. Significantly, a limited liability company (LLC) is like a corporation in that its members (or shareholders) are not responsible or liable for the company’s debt. Like a corporation's President, a LLC commonly has a chief executive officer known as a manager. The manager may or may not be a member (i.e., owner) of the LLC but is elected (and hired) by the members of the LLC to serve.

Regardless of what path you choose, always consider obtaining insurance coverage for your potential liabilities. While a corporation or LLC will provide a liability shield to protect the interests of corporate shareholders or LLC members, that liability shield can be "pierced" if the legal entity is considered by a court of law to be a sham. This is not common but is a particular risk to a one-owner or two-owner corporation or LLC. To reduce this risk, once the business is formed as either a corporation or a LLC, it must be run as a corporation or LLC and not as a "d/b/a". Of course, if you are a licensed professional, you may have to be bonded, too, regardless of whether you do business as "d/b/a" or as a legal entity.

There is one other important decision to make when forming a company and that is to not just establish a relationship with a good attorney but also with a good certified public accountant (CPA). It will be of unending help to you in communicating with your CPA about taxation issues to understand the simple ins and outs of your business' profit and loss statements and balance sheets. That goes for communicating with your banker, too.

If you have questions about your business, give Steve a call at (918) 287-8762! Steve would love to help you get your business started on the right path.