STARTING/CHANGING A BUSINESS

The firm of Anderson & Burgett has a wealth of experience among its attorneys in business law. Starting a new business involves significant planning. For example, one must consider which type of business entity would best fit your situation. Your attorney can properly advise you on what type of business entity would be best for your situation. Anderson & Burgett has the skills needed to establish businesses in the following areas: sole proprietorship, partnerships, limited partnerships, limited liability companies, and corporations, both small corporation (S-corps) and large corporation (C-corps).

The following information only scratches the surface about business entities. We hope this information is helpful to you before you come to visit with an attorney at Anderson & Burgett for your business.

Sole Proprietorship/Individual Proprietorship
This is the simplest and most common form of business. The distinguishing characteristic is that the business is owned by one person and thereby exists as an extension of the personal life of the owner. The business is terminated at the death of the individual. There is no assurance of continuity of the business after death.

General Partnership
A partnership is defined as "an association of two or more persons to carry on as co-owners a business for profit" [Uniform Partnership Act §6(1)]. The persons must voluntarily associate with each other. A partnership agreement should be drafted which governs all rights and responsibilities between the partners with respect to the business affairs of the partnership. The partnership may own assets to carry on the business. The partnership may have elements of continuation in the event of the death or buy-out of a partner.

Limited Partnership
An association of two or more persons carrying on business as co-owners for profit with one or more general partners and one or more limited partners. Each limited partnership must have at least one general partner. The limited partners have limited liability to the partnership. A limited partnership agreement should be drafted which would govern rights and responsibilities of the general partner(s) and the limited partner(s). In Minnesota, the name of a limited partnership includes the words "limited partnership" or the initials "L.P."

Limited Liability Company
A limited liability company has been created by state statutes. It is a separate legal entity apart from the owners who own a membership interest. It is entitled to exercise statutory powers, and it is separately responsible for its own debts and liabilities. Limited Liability Company can be formed only for a certain duration and is most appropriate for short-term businesses or ventures where limited liability and pass-through tax consequences are desired. In Minnesota, the name of the limited liability company includes the words "limited liability company" or the initials "L.L.C."

Business Corporation
A business corporation is an artificial person or legal entity created under the law of the state to conduct business. The corporation is considered by law to be a separate legal entity. A corporation exists alone and detached from its ownership. The corporation is liable for its own obligations, and the individual assets of its owners usually cannot be reached for satisfication of those obligations. Every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs. In Minnesota, the name of corporations usually end with the following words or abbreviations: Inc., Incorporated, Co., and Company.

Non-profit corporation (Not for profit corporation)
A non-profit corporation is an artificial person or legal entity created under the laws of the state and can only distribute income for non-profit purposes. Non-profits include many corporation which provide services for the disadvantage, churches, and special interest groups (i.e. The Human Society, Ducks Unlimited).

Certificate of Assumed Name
In Minnesota, if you are conducting business under a name different from your full legal name or corporate name, you must file a Certificate of Assumed Name with the Secretary of State. This is a document allows the State of Minnesota to have information on the person or persons who are conducting business under a different name.