Our business services practice typically falls into one of two areas:
- Business Formation includes drafting and filing the foundational documents to establish a business (such as the Articles of Organization or Incorporation) with the relevant government entities. Filing these documents allows you limit the liability of the owners/members, formally register the name of the business, and record how it is treated for tax purposes. This area also includes name changes, letters of intent, annual reports, and stock logistics.
- Operating Agreements (along with Shareholder Agreements, Partnership Agreements, and Bylaws) are organizational documents that inform and guide the operation of a business. Most importantly, these documents set forth what happens if there’s a problem with the owners/members or the business itself. While, ideally, you’d have them in place early in your business’s lifetime, these documents can be created (and revised) at any point to streamline and formalize the way your business functions – it’s never too late!
Operating Agreements: JFB Law Representation
John F. Baker represents businesses (and business owners) of all sizes and stages of life looking to give their business a foundation for success. Over the last decade, we have been honored to represent business clients in Aurora, Illinois, and surrounding communities such as Naperville, Oswego, Wheaton, and Warrenville for matters such as:
Business Formation where you are starting a new business, be it a limited liability company (LLC) or corporation. We will discuss your goals and advise you which structure makes the most sense for your business, as well as ensure you get the proper permits/meet the proper standards for doing business in the State of Illinois.
Articles of Organization are necessary to draft and file with the Illinois Secretary of State to form an LLC. Much simpler in structure than a corporation, an LLC carries the same protections as a corporation, without burdening you with stock reports and board meetings. LLCs are the most common business structures we see for sole-proprietors and partnerships, as well as businesses with straight-forward ownership structures.
Articles of Incorporation are necessary to draft and file with the Illinois Secretary of State to form a corporation. Corporations are more complex than LLCs and make sense when more people are involved, governed by a board of directors, and you want a more fluid ownership structure based on shares. Corporations also require stricter rules concerning meetings and record keeping.
Name Change when you wish to modify the name of your current business or file a d/b/a (doing business as) in order to use an assumed name. JFB Law will work with you to make sure the name(s) that you’re considering is (are) available, then complete and file the paperwork to secure your chosen name.
Operating Agreements establish the organization, ownership, responsibilities, operation, and officers of an LLC. These documents also detail the process for resolution of disputes as well as dissolving the company, which is essential to have solidified ahead of time in the event of that occurs.
Shareholder Agreements establish the organization, initial disposition of shares, their owners, as well as the responsibilities, operation, and officers of a corporation. As mentioned previously, corporations are subject to additional restrictions and regulations governing operation, board meetings, and the keeping of records. In addition to the typical provisions that we would expect to see in an Operating Agreement, these additional factors will be defined and detailed.
Partnership Agreements establish the organization, ownership, responsibilities, and operation of a partnership (a company with two owners/members). Although partnerships still exist in Illinois they are rarely used in favor of the other options. Otherwise, these documents address the nuances of ownership and operation, as well as additional considerations in light of there being two owners.
Bylaws and Declaration of Covenants while other businesses also have ‘bylaws’ that govern their operation, these are the documents that govern the members and board of a homeowners association (HOA). Too often these documents are so long and overwritten, that it’s impossible for anyone to understand what’s required of them, much less follow it. We draft and revise documents so they are easy to read (and enforce) for all involved.
Operating Agreements: What Matters to You
You deserve a lawyer with the experience to help you avoid the pitfalls and advise you about what’s best for your business. More than that, you deserve a counselor who understands the dreams and struggles of starting and growing a business. We want to see new businesses succeed. That’s why we work with organizations like the Small Business Development Center that help new business owners. When approaching your case, our goal is for you to understand all of the documents so you can make the right decision for your business’s future.
Here are the most common concerns we see:
What’s involved in forming a business? While a lot of thought, research, and hard work goes into starting a business, for ‘official purposes’ (legal and tax), we’re talking about registering your business with the State of Illinois. We will discuss your goals, advise you regarding the structure of the business, make sure whatever name you’re looking for is available, then draft and file the appropriate documents with the Illinois Secretary of State. If you choose to have a long-term relationship with our firm, when the time comes, we can also complete and submit your business’s annual filings.
What are these documents, why do I need them? In the end, the most important thing you can do as a business owner is plan ahead. There’s an old proverb that says a stitch in time saves nine. The same is true in business formation: making the right decisions today, no matter how insignificant they seem, can spare you a lot of headaches in the future. People fight sometimes in business, just like everywhere else. It’s important to prepare for it while you’re still on the same page. Further, clearly defining your roles and responsibilities now may prevent that trouble altogether. Mistakes can be costly, breakups more so. These documents are not only a plan for how your business is going to function, they’re your backup plan if something bad happens.
How much will this cost/how long will it take? This varies based on the complexity of your business. For example, an Operating Agreement for an LLC is typically much simpler than a Shareholders Agreement for a Corporation – and a third of the size – but it doesn’t have to be. The complexity of these documents greatly depends on the number of owners/shareholders that are involved, how complicated the division of ownership is, and if you have any special provisions you would like included (for example, creating an employee stock pool as an incentive). We should be able to provide an accurate estimate after a brief consultation to discuss the specifics.
I’ve done some of the paperwork myself, is it right? We’d be happy to review any documents that you’ve prepared or filed already and help you revise them as necessary. Give us a call and we can go from there.
Do I need any licenses/can you help me get them? License requirements are entirely based on the type of business you’re running. If you’re not sure, we’d be happy to research the issue for you and help you secure the licenses in the event you do. Similarly, we can research and ensure that you comply with all current and upcoming regulations for your type of business.
Can you help with taxes for my business? While John has a background in accounting and can give general advise, for specific questions (taxes in particular) we recommend you speak to an accountant. In the event that you don’t have an accountant, we can recommend one for you based on your needs and location.
Let’s Discuss Your Needs
Each business is different, but they all need planning and organization. Tell us about your individual needs and we’ll work together to guide your business to the best possible future. Call us at (630) 801-8661 and tell us about your business.
