A business formation is the foundation of how a business operates. There are many different kinds of business entities in the State of New Mexico, and each has its own associated rules and requirements. Typical business entities include the limited liability company (LLC, series LLC), profit corporations (with C or S elections), nonprofits, cooperative associations, and more. You can also operate as a sole proprietorship without incorporating, and form partnerships between individuals and entities.
Forming an entity may appear simple with the amount of form services out there; however, many of those services are non-advice scrivener services that don’t provide legal assistance, issue spotting, or strategic planning. There are other considerations like internal documentation, policies, and procedures you may want in place for your company. For nonprofits, the Articles require specific language if you intend to apply for federal nonprofit recognition. When you form your business, you need to plan for the beginning, middle, and end of the business. Preventative measures can help protect your business and ideas from a fallout, split, or sudden loss of business partners, bankruptcy, criminal acts, or past company members becoming competitors.
Corporations operate with shareholder agreements, LLCs use operating or member agreements, nonprofits have bylaws, and partnerships operate under partnership agreements. Each of these forms of operating agreements have various intricacies that should be reviewed and discussed with an attorney. Additionally, how you operate and how you handle your business operations can determine serious matters as well as subject you to certain filing requirements, compliance, and taxation for the type of entity you choose. A properly formed entity can also help shield business owners from personal liability, as well as ensure any personal contributions in starting up are reflected as equity. These operating agreements define how many aspects of the business are handled, avoid any unfavorable default gap filling laws the state provides, determine voting rights, distribution of tax liability, profits, management, and more.
Pederzani Law works with you on understanding your options and forming your business entity properly, making sure all important documents you need are drafted to help your business vision come to fruition. Pederzani Law can also assist with areas related to business formation such as contract drafting for membership agreements, independent contractor agreements, subscription services, customer intake forms, business plans with confidentiality agreements, and more.