New Jersey is an exciting and vibrant place to live and work. The entrepreneurial spirit is alive and well. People who take the leap to start businesses have a lot to consider.
New Jersey has always been a center of commerce. With close proximity to New York City and Philadelphia, businesses providing goods and services in the metropolitan area have always considered New Jersey to be a great home. If you are interested in forming a business in the state of New Jersey, you should contact an attorney to help you through the process. The team at Cohn Lifland is ready to guide you through business matters and help you reach your potential as the owner of a business. If you need our legal services, contact Cohn Lifland to discuss your unique business situation.
The First Step in Starting a Business
In order to start a business, you need to create an entity. You can choose among a variety of business structures, including an LLC, corporation and S-corp. Selecting an appropriate business entity is important when considering the factor of liability. New Jersey treats a business entity as separate from those who control it, including owners, members and shareholders. If a business goes to court for a liability case, the assets of any person who has a stake in the company are protected.
LLC, S Corporation, and C Corporation
The major difference between an LLC, S-Corp and C-Corp is the taxation structure that applies to each. Your taxation needs will dictate which structure you choose. S corporations only pay one level of taxation at the shareholder level while a C corporation pays taxes at both the corporate level and the shareholders level. An LLC is subject to taxation at the member level. An LLC is a simple business entity, and there are no requirements for bylaws or shareholder meetings because there are no shares. S corporation and C corporation structures have bylaws, shares and, accordingly, shareholder meetings. Picking the right structure for your needs is complicated and speaking with an attorney is in your best interests.
If you have created an LLC in New Jersey, you already have an operating agreement adopted through the Revised Uniform Liability Company Act. This law regulates how LLCs can operate within New Jersey. Violating the law can affect the liability shield that protects your assets. You are free to draft your own operating agreement. You can set the rules for how your business operates internally. In the case of a limited liability company with multiple members, you can establish how disputes are handled, avoiding future litigation. Corporations have an obligation to file articles of incorporation and corporate bylaws, which are similar to an LLC operating agreement. In order to draft a durable operating agreement, contact an attorney at Cohn Lifland.
Buying a New Jersey Business
Buying a business in New Jersey is an exciting prospect. To properly protect your interests when buying a business, you should consider working with an attorney. You should first consider looking at the tax history of the business. Through filings with the Internal Revenue Service, one can establish a clear picture of the business’s profits and liabilities. If the business looks appealing, you should check to see that there are no liens or lawsuits pending against the business. If everything checks out, have an experienced attorney draft a durable business purchase and sale agreement. For quality legal advice regarding buying a business, contact our firm to discuss your exciting prospect.
Protecting a Business Name or Brand
When a business notices a competitor using a similar name or web address in order to usurp customers, the business owner should take action. A business with a name or brand that needs to be protected should always register a trademark. Technically, once you start using a name in commerce, you have a trademark. If you register that name with the United State Patent and Trademark office, you can get further protection, including statutory damages. This means that if your competitor tries to confuse customers with a similar business name, logo or website, you can prevent them and pursue damages for the infringement of your trademark.
When Customers Owe Money
According to New Jersey law, businesses are limited in how they can collect a debt from a consumer. According to the Fair Debt Collection Practices Act, businesses can take steps to collect debts before resorting to litigation. The act also sets guidelines as to what constitutes prohibited conduct and required conduct to collect a debt. Prohibited conduct includes harassment, annoyance, deceit, abuse and engaging a consumer that has asked to cease communication. It is important for a business to act lawfully when collecting debts to avoid litigation.
Can I Obtain Non-Profit Status for my Business?
Under the Internal Revenue Code 501(c)(3), the federal government has established standards to establish a non-profit company. If the Internal Revenue Service grants your entity 501(c)(3) status, you become a charitable organization. Of course, this tax structure does not require you to pay taxes on any income, but it limits your function to non-profit and charitable purposes. This will not apply to most businesses that provide goods and services to the public in hopes of making a profit.
Contact Cohn Lifland
Cohn Lifland has many years of experience assisting clients through business law matters. Whether you are starting a business or buying another one, you have a lot to consider about the future. You need an experienced attorney to guide you through the complexities of picking the right business structure, protecting your business and, buying a business. Cohn Lifland is a legal resource to the businesses of New Jersey. If you need our services, contact our firm today.