The information provided today is offered as a community service to the public. While the information presented is about legal issues, it is general in nature and it is NOT legal advice. Moreover, the providing of information about legal issues is specifically not intended to create an attorney client relationship between the presenter and any receiver. Further, the information is provided as it applies in the State of Wisconsin. Other states laws may vary. Laws are updated from time to time and there is no guarantee that this presentation reflects the current state of the law. Always consult with a qualified lawyer before acting on any of the information contained herein.
Information contained herein will deal with some of the legal issues associated with new business start-ups. The topic is broad and the provided information is not and should not be considered to be a comprehensive review of all necessary considerations. In fact, what I hope to do is provide some very basic concepts and perhaps focus on some areas of interest of the group. Nothing presented here today should be considered a substitute for specific legal advice and all are advised to seek competent legal advice before acting on any information presented here.
Biographic Summary of Attorney Larry R. Cot é, Jr.
Practicing Attorney for over 13 years
Admitted to practice in Wisconsin Courts, Federal District Court for the Eastern District of Wisconsin, Federal 7 th Circuit Court of Appeals, U.S. Court of Federal Claims, & United States Supreme Court.
Member of Wisconsin Bar Association, Milwaukee County Bar Association, Washington County Bar Association, & U.S. Court of Federal Claims Bar Association.
Practice Areas include: Asbestos Injury (mesothelioma) www.the-asbestos-attorneys.com , Business Law, Employment Law, Vaccine Injury Claims, Personal Injury, Family Law, & Civil Litigation.
The partnership must have at least one general partner with unlimited liability for debts and obligations of the partnership.
Typical way to deal with the liability problem is to make the General Partner a corporation.
This strategy creates other difficulties (1) expense and complexity of the operation; and (2) brings into play IRS guidelines which require the General Partner to satisfy certain net worth and capital requirements, further increasing the complexity and expense of the arrangement.
Similar to Limited Liability Companies. Typically used by professionals such as lawyers and accountants. Sometimes well suited for certain real estate ventures.
Protects LLP Partners from joint and several personal liability for obligations of the partnership arising from the omissions, negligence, wrongful acts, misconduct or malpractice of OTHER partners. The assets of the LLP remain available to satisfy all tort and contract claims against LLP. Also protects partners from joint and several liability in tort claims and liability from contract claims.
Each partner does remain liable for his or her own actions or the actions of individuals acting under the partner’s supervision. Personal assets of “innocent partners” are not reachable.
Use for multistate business is questionable due to statutory variance from state to state. Wisconsin LLP statutes are in the minority of states in that it provides liability protection for all claims including contract; many states only provide liability protections from tort claims.
Taxed like all other partnerships (individual rates)
C-Corporation : A legal fiction deemed to have the same rights as a person. Composed of shareholders (owners). All corporations are presumed to be C-Corps and are governed by Subchapter C of the Internal Revenue Code, unless the Subchapter S elections are made by a qualifying corporation.
Liability of shareholders is typically limited to their investment, even if they participate in management of the corporation. Corporate directors and officers may have personal liability for their actions depending on articles of incorporation.