Starting a company……
A unique feature of working with entrepreneurs is that they tend to already know the answers to the questions they are asking. (They always do their homework.) More often than not, they are coming to you to double check their own understanding or “reconcile” conflicting advice they had received or read online.
For instance, I may commonly hear, “Well, I’m pretty sure I want an LLC, but my cousin mentioned that you can use a trust to shield assets from potential liability. How does that work?” These are the sort of “open-ended” questions that, to me, signal an opportunity to teach the client about how the law operates. Because their cousin isn’t wrong. It may be easy to dismiss what their cousin said and say “just trust me,” but it’s worth your time and your client’s time to acknowledge the complexities and nuances, explain how they impact the client, and give the client time and space to comprehend. They must choose. They must be informed. You can simplify things for your client, but you can’t “avoid complicated”.
So, what are the different entities you can form in Washington State?
Types: Limited Liability Company, C Corporation, S Corporation, Limited Partnership, General Partnership, Limited Liability Partnership
Features: Limited Liability, Federal Tax Status, Washington Tax Status, Formation Fees, Ownership, Management, Duration, Annual Meetings, Series Stock
Do you need bylaws or a partnership agreement? Will a different entity let me get out of Washington’s B&O tax? How much administrative overhead is involved? Which pays higher taxes on dividends? Which is easiest to manage? How do you form a partnership?
Here are a couple of public sources of info.
Let us know if you get stuck.
Have a question about getting your startup going?