Oftentimes people wonder whether they need a corporate attorney to help them with a case. If you have a corporation, limited liability company (“LLC”), partnership, or other entity, you may need corporate counsel. CorporationA corporation is a legal entity apart from its owners (shareholders). Corporations can establish credit, acquire assets, and enter into contractual engagements. Potential liabilities are incurred by the corporation, not by the owners themselves. This means that the personal assets of officers and shareholders are usually safe from the corporation’s creditors. However, if shareholders fail to follow corporate formalities, a court may “pierce the corporate veil”, allowing creditors access to personal property. Owners of corporations don’t pay tax on the corporation’s earnings unless they actually receive the money as dividends or as compensation for services (e.g. salaries and bonuses). The corporation itself pays taxes on all profits left in the business. Benefits of a Corporation
Detriments of a Corporation
Nonprofit CorporationNonprofit organizations are formed in the state where they intend to do business. Unlike a standard corporation, nonprofits do not conduct activities for the financial gain of shareholders. Preventing the distribution of profits to members/shareholders is what distinguishes the nonprofit from a commercial enterprise; yet nonprofits still provide asset protection and limited liability. A nonprofit corporation is not forbidden from making a profit — but if it does, that profit can only be used to further the overarching goal or mission of the organization. Nonprofits can also trade at a profit and accept, hold and disburse money; but all profit and things of value are to be used to further the nonprofit’s quest. Nonprofits are organized in many different ways: charities, service organizations, trusts, hospitals, universities, foundations, endowments and cooperatives can all operate as nonprofits. Nonprofits can have “members”, although many do not. They may have employees, and can compensate their directors reasonably, but only if compensation is documented ever-so-carefully. Benefits of a Nonprofit
Detriments of a Nonprofit
Free Consultation with a Utah Corporate AttorneyIf you are here, you probably have a business law issue you need help with, call Ascent Law for your free business law consultation (801) 676-5506. We want to help you.
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