Business Law Services
Business Law Services
Azadi Law offers full support throughout the creation, purchase, or sale of your business, and beyond. Our highly qualified legal team has years of experience successfully counseling corporations, small and medium-sized businesses, and entrepreneurs (immigrants and U.S. citizens). We offer cost-effective, comprehensive business start-up packages and work hard to develop creative solutions to meet your unique needs.
Business law services offered by Azadi Law include:
Business Creation (Start-Up) Packages.
Immigration Business Plans: Our tailored and comprehensive Business Plans meet all of USCIS’ specific requirements, including financial projections and market analysis. We use specific, targeted wording to work towards your visa approval.
Contracts and Agreements: Drafting, Review, and Negotiation of Contracts and Agreements to purchase/sell a business or asset, conduct business with another organization, and carry out mergers, acquisitions or incorporation.
Business Litigation: Drafting Demand/Cease and Desist Letters, Business Debt Collections, Fair Labor Standards Act (FLSA) enforcement. Filing or Defending Business Lawsuits in Florida County, Circuit, and Federal Court.
Business Trademarks: State or Interstate, spanning various classes (if necessary).
Employment Documents: Drafting, Review, and Negotiation of FLSA-compliant Employment, Non-Compete and Non-Disclosure Agreements for companies and employees. Legal assistance for employer-employee disputes.
Need legal counseling and representation for your business? Azadi Law P.A. is here to help you with your business and corporate law needs. Contact us today for your first consultation.
Important Business Documents
When creating a new entity, or buying/investing in a business, you should have a detailed Operating Agreement which outlines your business’ rules, regulations, and provisions. It is essential to define these before making important financial and functional decisions which may cause disagreements between business partners, executives, and investors.
In addition, it is advisable for companies to officially document and register the ownership of stocks, shares, or membership via certificates to avoid possible disputes.
Once you have properly documented how the business will be run and who owns it, you should then turn your attention to creating a company handbook for employees, as well as employment agreements. These are ever more important, as we continue to see a rise in the number of Fair Labor Standards Acts claims against employers, especially for unpaid wages.
Mergers and Acquisitions
If you are considering either a Merger – the joining of two businesses into a new, single legal entity, so that both parties can mutually benefit from combined expertise, resources, and staff – or an Acquisition – the purchase of an existing company, to be fully or partially absorbed by the acquiring company or investor(s) – it is highly recommended that you hire a qualified attorney to help you. To avoid costly mistakes, matters such as the preparation, review, and negotiation of your Letter of Intent, Confidentiality Agreement, Existing Contracts, Lease, and Merger/Asset Purchase Agreement should not be handled alone. Our legal team has helped many clients invest in, buy, and sell businesses, including but not limited to franchises.
Business Creation: What Kind of Business Is Right For Me?
For foreign individuals or corporations opening a company in the United States, it is essential to choose the right type of organization for you, taking into account factors such as taxation, regulatory issues, protection from creditors and other practical concerns. The Azadi Law team can help you decide which organizational structure best suits your business needs, register your company in any State you wish to operate in, file the relevant documentation with State authorities to provide you with an EIN, and apply for any relevant licenses or permits.
When it comes to creating a company, there are five main categories:
- Unincorporated Businesses or Branches
- Partnerships, Joint Ventures or Limited Liability Partnerships (LLPs)
- Limited Partnerships or Limited Liability Limited Partnerships (LLLPs)
- Limited Liability Companies (LLCs)
- Corporations (Corp. or Inc.)
Unincorporated Businesses or Branches
This is the simplest option for doing business in the United States; the foreign individual or corporation operates their U.S. business directly, without forming a separate entity to conduct business. All business decisions are made directly by the owner, giving them total control. However, the owner thus accepts total and unlimited responsibility for the obligations of the business in terms of governance and liability.
Regarding taxation, foreign individuals/entities operating an unincorporated business or branch in the U.S. are subject to United States income taxation on all income earned from the business’ U.S. activities, as well as State and local taxes in certain jurisdictions. An additional branch profits tax on all earnings that are not reinvested in the business may also be charged.
Partnerships, Joint Ventures or Limited Liability Partnerships (LLPs)
Foreign individuals/corporations have the right to team up with a) other foreign professionals or b) U.S. persons, to conduct business and/or acquire assets in the United States through a Partnership or Joint venture. There is no minimum capitalization required to form a partnership or joint venture. Depending on the State in which the business activities are taking place, formal organizational documents filed with the State may be necessary to operate this kind of business.
While business decisions should be made jointly by all involved parties, it should be noted that, generally, each individual has the authority to enter into contracts and incur obligations on behalf of the Partnership or Joint Venture (and third parties are generally entitled to enforce such contracts and obligations), even if they were not authorized by the other partners or are contrary to agreements entered into among the partners.
In terms of liability, most States, including Florida, have statutes which permit Partnerships or Joint Ventures to elect to be treated as Limited Liability Partnerships (LLPs), meaning creditors of the LLP can only enforce their claims against the assets of the LLP and not the assets of the individual partners. This limits the legal responsibility and financial risk of the partners. To ensure this statute remains valid, all organizational formalities must be strictly followed. Contact Azadi Law today for advice on these matters; we will make sure that you and your business partners are not exposed to liability.
A Partnership or Joint Venture conducting business in the U.S. is generally required to file tax returns reporting its activities, but is generally not obligated to pay federal income taxes on its earnings; instead, each of the partners must pay federal income taxes corresponding to their share of the partnership/joint venture’s earnings (even if none of the income is actually distributed to the partners). On a quarterly basis, the Partnership or Joint Venture must also withhold the allocable income earned by one of the foreign partners and remit this sum to the government as a deposit against the actual U.S. federal tax liability of the foreign partner – if this income qualifies for a preferential long-term capital gains tax rate, this can be applied in order to calculate the correct withholding amount.
Limited Partnerships or Limited Liability Limited Partnerships (LLLPs)
Limited Partnerships consist of one of more General Partners (individuals or entities) and one or more Limited Partners (individuals or entities), and must be correctly registered with State authorities in order to conduct business. Partners will also typically enter into a separate, private agreement, setting forth the details of the business relationship. A Limited Partnership owns assets and conducts business under its own name, separately from the partners, and there is generally no minimum capitalization required to set one up.
General Partners and Limited Partners have different degrees of authority when it comes to a Limited Partnership’s business activities. General Partners can enter into contracts and act on behalf of the Limited Partnership, while Limited Partners can not bind the Limited Partnership in any way, or act on its behalf. However, pursuant to the terms of a Limited Partnership agreement, General Partners may find themselves obligated to obtain prior approval of Limited Partners before carrying out certain business activities or making certain decisions (although third parties are generally entitled to enforce obligations of the Limited Partnership which are agreed to by General Partners, even if they have not obtained said approval from Limited Partners; in such a case, Limited Partners would typically seek damages from the General Partner).
General Partners of Limited Partnerships tend to have unlimited responsibility for the obligations of the Limited Partnership, whereas Limited Partners tend not to be held personally responsible – the latter’s financial responsibility is limited to the sum of their investments in the Limited Partnership, unless they have become actively involved in the business. As a Limited Partner, it is wise to seek legal advice regarding this matter, to ensure that your business activities remain limited, in order to limit your liability.
Some States, including Florida, have statutes which permit Limited Partnerships to elect to be treated as Limited Liability Limited Partnerships (LLLPs), removing individual responsibility for General Partners (or Limited Partners who become actively involved in the business) for the obligations of the LLLP, as long as certain guidelines are followed. The involved Partners’ financial risk is thus limited to the sum of their investment in the LLLP.
Limited Liability Companies (LLCs)
Limited Liability Companies (LLCs) generally have one or more Members (individuals or entities), and must be correctly registered with State authorities in order to conduct business. Members will also typically enter into a separate, private agreement, setting forth the details of their business relationship. An LLC owns assets and conducts business under its own name, separately from the Members, and there is generally no minimum capitalization required to set up an LLC. Azadi Law has years of experience setting up LLCs, filing the relevant documentation, and advising Members; we would be happy to assist you in the creation of your company.
Members of an LLC may appoint one or more Managing Members to make essential decisions and act on behalf of the LLC; otherwise, all Members generally have the authority to act and enter into contracts on behalf of the LLC. If Managing Members make decisions without consulting other members, even if they have previously agreed to obtain prior approval before doing so, third parties are generally entitled to enforce obligations of the LLC agreed to by said Managing Members. In this case, the only remedy would be other Members seeking damages.
In terms of liability, neither Members nor Managing Members are generally responsible for the obligations of an LLC, and the financial risk is generally limited to the amount of each Member’s investment in the LLC, as long as organizational formalities and guidelines are followed and the LLC’s capitalization is sufficient for its intended business.
Federal income taxation rules depend on the number of Members in an LLC. If an LLC has only one Member, the Member is treated as if he or she owns the LLC’s assets and conducts its activities directly, and is therefore subject to United States income taxation on all income earned from the LLC’s U.S. business activities. State and local taxes may also apply, depending on the jurisdiction. If an LLC has more than one Member, it is treated as a Partnership for federal tax purposes; therefore, the tax regulations described above in the Partnerships and Joint Ventures section apply.
Corporations (Corp. or Inc.)
A Corporation typically involves one or more Shareholder(s) (individuals or entities), but owns assets and conducts business under its own name, separately from said Shareholders. Corporations must be correctly registered with State authorities in order to conduct business, and Shareholders may also choose to enter into a separate, private Shareholders’ Agreement setting forth the details of their business relationship. Corporations will additionally adopt bylaws relating to their business governance and affairs; in the case of privately-held Corporations, these bylaws and Shareholders’ Agreements are private documents that are not filed with governmental authorities. There is generally no minimum capitalization requirement for a corporation.
Corporations tend to be governed by a Board of Directors elected by the Shareholders; this Board sets overall policies and elects Officers to deal with the Corporation’s business affairs, who have the authority to enter into contracts and obligations on behalf of the Corporation. Board Directors may serve as officers simultaneously, and a Corporation can be organized with a single individual serving as the sole Director and Officer.
Shareholders, Directors and Officers are not typically responsible for the obligations of the Corporation, as Shareholders’ risk is generally limited to the sum of their investment, as long as the relevant organizational formalities and guidelines are followed. U.S. corporations are subject to U.S. tax on their worldwide income, and state income taxes may apply depending on the jurisdiction. The maximum federal corporate income rate is 38%, although this is slightly higher in the state of Florida due to an additional income tax apportioned to the State (approximately 40% overall). Foreign persons receiving dividends from U.S. Corporations are generally subject to a 30% withholding tax on these payments, unless otherwise reduced by an applicable tax treaty.
How to Form a Company in the U.S.
Choose Company Type and Name: We advise each client based on their case, and can register your company in any state.
Choose a Registered Agent: Some states (such as Florida) require you to have a registered agent available to receive important State correspondence and legal notices in person.
File Articles of Organization: This makes your company official! Once your paperwork is approved and fees are collected, you are officially the owner of a company. Articles of Organization tend to take up to 6 weeks to appear on your State’s website, or for the State to send you a Certification of Formation.
Apply for an EIN: An Employee Identification Number (EIN) registers your business with the IRS. If you have a Social Security Number or ITIN, this generally only takes one business day to obtain.
Operating Agreement/By Laws: These may be the most important documents for your Company. They establish the rules for operating your business, documents ownership, and state the purpose of your business.
Open a Business Bank Account: Make an appointment and go to your preferred bank in person. (Note: some smaller banks may allow you to do so online.) Present the Articles of Organization, your EIN letter, and your Operating Agreement/By Laws. Proof of US Residency may be required at some banks. The bank will normally take 2-4 business days to review your application. Then, if approved, they will send you your business debit card.
Keeping Your Business Active
File your Annual Report
Annual reports are due on a yearly basis. You must file and submit payment through your State’s website and pay a set fee. If filed late (after May 1st), you will be charged an extra fee.
If you do not file an annual report for your business, it will become dissolved/inactive. If you wish to make it active again, you will need to file a Reinstatement application and pay a fee.