Tag: business owner | Jones Law Firm, Billings MT

July 23, 2021July 23, 2021

What Type of Entity Should I Create For My New Business?

One of the first and most important decisions any business owner makes is how to structure his or her business. This will depend largely on the type of business, how many owners are involved, and tax considerations. It is important to involve a tax professional early on to assist with this decision.

In Montana, there are four main types of entities: a sole proprietorship, a partnership, a limited liability company (LLC), and a corporation. Some of these entities are further broken into sub-categories. For example, in Montana, if you intend to form a partnership, you can form a: general partnership, a limited partnership, a limited liability partnership or a limited liability limited partnership. The differences between these entities are outlined on the Secretary of State’s website here. If you intend to form a corporation, there are five different options in Montana: S corporation, Statutory Close corporation, Public Benefit corporation, Professional corporation, or a Nonprofit corporation.

If you intend to run your business on your own and the nature of your business is such that you are unlikely to need any employees and your liability exposure is relatively low, a sole proprietorship may be a good option. Notably, if you operate a business without registering, it will automatically be classified as a sole proprietorship by operation of law. However, this structure will not separate your business assets and liabilities from personal assets and liabilities, so a single-member LLC as opposed to a sole proprietorship, is often advisable to reduce risk exposure.

If your business will have more than one owner, forming an LLC, LP, or LLP are all options. An LLC will protect the personal assets of all owners (called members). An LLC also provides the option to be taxed as an S corporation or a partnership. An LP provides for one general partner who has unlimited liability while the other partners have limited liability and limited control over the company. An LLP is similar to an LP but with limited liability for all partners. Profits pass through to personal tax returns in these structures.

Corporations, on the other hand, are legal entities that are entirely separate from their owners. Corporations can make a profit, be taxed, and can be held legally liable. Corporations usually offer the strongest protection to their owners and shareholders, however with that increased protection comes increased costs in the form of additional taxes.

The entity you choose to form is an important consideration that should involve a team made up of a legal professional and a tax professional to ensure the greatest legal protections and mitigation of tax consequences. If you are thinking of starting a business or restructuring your existing business, Jones Law Firm would be happy to be part of your team.

May 12, 2021

Do I Need an Employee Handbook?

Many start-up businesses are so busy with the logistics of starting and opening their business that they may not think about implementing employment policies or procedures, or those steps seem like a lower priority than getting customers in the door. However, as businesses grow and employees are added, a need for consistent policies and procedures often arises. Hopefully this need is not highlighted only when a problem occurs, but all too often that is the case. An employee handbook can prevent problems before they happen.

An employee handbook serves to set forth policies and procedures usually not covered in the employment agreement. For example, an employee handbook can specify things as simple as expected hours of work, dress code, vacation and leave policies, and behavioral expectations, to the more complex aspects of your business such as specific operational guidelines, communications, and bonus opportunities.

For example, if you have reached a point where you will begin providing benefits for your employees such as health insurance, life insurance, and 401(k) plans, an employee handbook is a good place to provide this information to your employees. Details such as: where the plan information can be found and at what point in time the benefits become available to employees can be contained in a central employee handbook.

Another important component of an Employee Handbook is a company policy on harassment and the procedures in place for dealing with complaints or allegations of harassment. In an increasingly litigious society, it is extremely important for companies to have a clear process by which these issues can be dealt with.

Another common pitfall we see is a lack of clarity with respect to employees’ use of the company’s social media pages or things employees post on their personal social media that can reflect on their employer. Having clear policies and procedures governing the use of social media – both at work and outside of work – can prevent an unsavory post from going viral and harming your business reputation.

In fact, employee handbooks can prevent a myriad of business pitfalls, set clear expectations for your employees, ensure all employees are subject to the same standards, and help your business run smoothly. Jones Law Firm recommends that all businesses with employees have an employee handbook in place. This will ensure equal treatment among employees and clear policies in place for handling any problems that may arise. If you need an employee handbook, we would be happy to prepare one tailored to your specific business needs!

January 20, 2021

Jones Law Firm Blog: Business Owners’ Series

The Jones Law Firm Blog seeks to provide short, easy to digest information on timely legal topics. For 2021, Jones Law Firm’s blog articles will primarily focus on the needs of business owners. Check back here regularly for informative articles in Jones Law Firm’s “Business Owners’ Series.” We are excited to provide our clients and potential clients with this additional service!