Business Formation and Transactions

Choose Gould & Hahn For Proper Business Formation And Transactions

Many licensees in the State of California unintentionally conduct their businesses as an extension of their personal lives. While they may have set up separate bank accounts to track and pay their accounts payables and receivables, they have done nothing to ensure that the liabilities they may incur in their licensed practice do not endanger their personal assets. Unknowingly, every day they use their license, they may be jeopardizing their home and savings. Recognizing that even the best licensees can find themselves the subject of a lawsuit, licensees should take action to protect their personal assets by conducting their business as a corporation or limited liability company.

Gould & Hahn is experienced in forming corporations and limited liability companies and prepares the formation documents necessary to protect personal assets. For healthcare professionals, Gould & Hahn recommends the formation of a professional close corporation and can assist you in the process depending on your individual, professional goals.

Once formed, Gould & Hahn will draft the Minutes and company Resolutions to memorialize decisions and agreements made by the company. Gould & Hahn also prepares critical employment agreements, lease agreements, purchase and sale agreements, and other contracts that reflect the variety of business interactions engaged in by professional licensees.

Professional Corporation
A professional corporation has specific ownership requirements that limit ownership of the corporation to other licensed professionals. The professional corporation is registered with the State licensing board and the healthcare professional is permitted to practice as a corporation by the Board upon the issuance of a certificate of registration.

Close Corporation
A close corporation is a small corporation limited to less than thirty-five shareholders. A close corporation is managed under the terms of the shareholder’s agreement and permits the licensee to operate under conditions that may be less formal than is usually required of corporations in the State of California. When managed in compliance with the terms of the shareholder’s agreement, licensees are less vulnerable to attempts by litigants to “pierce the corporate veil”. While many companies offer discount rates to incorporate licensees online, you may be buying many problems down the road if you do not consult with legal counsel with specialized knowledge of the complex California licensing laws. It is not enough to simply file the Articles. If you don’t complete the organizational documents and maintain your corporate documents, you will not be protected. It is the time, effort, and planning that is put into the initial formation of a corporation and the maintenance of the company records that ultimately provides its shareholders with the benefit and protection they seek.

Limited Liability Company
Licensees not involved in the healthcare field are permitted under California law to form limited liability companies. Similar in nature to a close corporation, these companies also permit the members to dispense with some of the corporate formalities required of California corporations. A limited liability company is formed by the filing of Articles of Organization and the drafting of an Operating Agreement, while a corporation is formed by the filing of Articles of Incorporation and the drafting of Bylaws. The decision to incorporate or to form a LLC is generally based on tax and accounting considerations. Gould & Hahn will work with your accountant or tax preparer to determine which form best suits your tax needs.

Subchapter S Election.
Whether a LLC or close corporation, licensees may elect a Subchapter S election, which permits income to the company to flow through to its shareholders or members.

We specialize in Administrative Law & Business Counseling.