BUSINESS FORMATION

The business law and commercial attorneys at Brown, Paindiris & Scott are well trained in the area of business formation and can advise Connecticut businesses on the pros and cons of the various business entities available in Connecticut. Our commercial attorneys have represented literally thousands of Connecticut corporations, Connecticut limited liability companies, Connecticut partnerships and Connecticut sole proprietorships. Forming some type of entity is essential when opening a business as it can bring tax advantages as well as limitations on liability. The business law and commercial attorneys at Brown, Paindiris & Scott can help you decide what entity would make the most sense for your business.

            CORPORATIONS

            Corporations are separate legal entities that have their own rights and liabilities that are separate and distinct from that of its members. The characteristics of a corporation include: a distinct legal personality; limited liability; transferable shares; a managing board of directors; and shared ownership by investors.  The types of corporations that can be formed by the commercial attorneys at Brown Paindiris & Scott include:

§  Connecticut Stock Corporation

§  Connecticut Non-Stock Corporation

§  Connecticut Not For Profit Corporation

LIMITED LIABILITY COMPANIES

            Limited liability companies, or LLCs, are entities that combine features of corporations and partnerships. Connecticut LLCs, like corporations, also offer its members limited liability, though it is possible for the members to be held liable for the debts and or liabilities of the LLC in certain situations. The major difference between a Connecticut LLC and a Connecticut corporation is the way the entities are taxed. An LLC utilizes pass-through taxation which means the members will be taxed at the personal level instead of first at the entity level and then again at the personal level, as would occur in a corporation. LLCs can choose to be taxed as a corporation as well.

            PARTNERSHIPS

            A partnership exists where two or more partners share in the profits and losses of the business. Profits of a partnership, like LLCs, are taxed at the personal level. In Connecticut there are two main types of partnerships, general partnerships and limited partnerships. In a Connecticut general partnership, all the partners will have management control. In a Connecticut limited partnership, only one of the partners will be required to have management control. Whether you are a general partner or limited partner will impact how much liability you are exposed to.