Business / Corporate Law

Your New Jersey Business Lawyers

At Burns, LeBrocq, Wolfe and Associates, our business law practice involves all matters relating to the formation and financing of business enterprises. Whether you are starting a new business or you want to protect an existing business, our attorneys can help contribute to your company's success. Our lawyers advise New Jersey business clients from the initial stages of their business, including entity selection, by reviewing each client's goals to recommend the best entity, selecting from:

• Sole Proprietorship
• Partnership
• Corporation
• Limited Liability Corporation
• Limited Partnership
• Limited Liability Partnership

In addition, we work extensively with established businesses in areas such as:

• Corporate Records and Filings
• Protection of Intellectual Property
• Asset Purchase Agreements
• Non-Competition Issues
• Separation Agreements
• Contract Issues
• Business Litigation

At Burns, LeBrocq, Wolfe and Associates, we represent business clients in all areas of business and commercial law and litigation, including employment-related matters, general business issues, and shareholder disputes. We handle business litigation including contract disputes, employment law and general corporate issues, as well as litigation prevention and settlement. Our clients know they can count on our firm's decades of experience to give them an advantage in any lawsuit.

If you are considering starting your own company or if your company is involved in a business dispute, contact us and take control of your future.

SOLE PROPRIETORSHIPS

The sole proprietorship is the simplest and most common form of business entity. A sole proprietorship is a business that is conducted by a single individual owner (the "sole proprietor"). Sole proprietors can conduct business under their own name by simply doing business, for example, as "John G. Public." A sole proprietor can also do business under a trade name (sometimes called a "fictitious name") as "Dot Doughnuts" or "Dire Skates." If a sole proprietor operates under a trade name or fictitious names, the sole proprietor is required to file a form (a "trade name certificate") in the city, county, or state where the business is located. A sole proprietorship may have employees and is permitted to carry on most businesses.

PARTNERSHIPS

A partnership is a business enterprise entered into by two or more persons who do not form a corporation or any other type of business entity to operate the business. If two or more individuals start a business together with the understanding that each will share in the profits of the enterprise, they are considered a general partnership even if they didn't specifically intend to start a general partnership. A business venture is usually considered a general partnership if it doesn't form some other kind of business entity such as a corporation. Both very large and very small businesses can operate as general partnerships.

Like the sole proprietor, partnerships are not required to file any certificates or other organizational documents with local, county, or state authorities; but they usually must file a "trade name certificate". The rights and duties of the partners and partnership may be governed by a partnership agreement if the partners choose to have one prepared; which is highly recommended.

CORPORATIONS

A corporation is legal entity wholly separate and apart from its owners (the shareholders or "stockholders"). Corporations are formed by filing "Articles of Incorporation" with the Secretary of State. Once articles are filed, the information is part of the public record and can be obtained by anyone for a small research fee.

Bylaws are a separate set of rules governing how a corporation is run. Bylaws are adopted by the shareholders who formed the corporation. They can later be changed by a vote of the shareholders or the directors.

Corporations are governed at three levels:

1. Shareholders elect directors. Shareholders do not, other than through the election of directors, typically exercise any control over the overall plans, goals, or day-to-day operations of the corporation.
2. Directors are responsible for the management and exercise the rights and power of the corporation.
3. Directors elect officers such as president, vice-president, treasurer and secretary to carry out the policies of the board and to run the corporation on a day-to-day basis.

Corporations enjoy many advantages operating as a business form. Perhaps the most important advantage is that a corporation's stockholders, directors, and officers are not liable for the debts or other obligations of the corporation. Usually they are liable only for any debts or other obligations, which they have personally guaranteed or result from their own negligence or misconduct.

Because it is a separate entity, a corporation is not terminated or dissolved upon the death or departure of any shareholder. Shares can be purchased on a national stock exchange such as the New York Exchange, NASDAQ National Market System, or the American Stock Exchange.

Professional corporations are corporations formed by doctors, lawyers, accountants, engineers, architects, and other professionals to do business in their respective professions. Under New Jersey laws, only licensed professionals can be shareholders and directors of professional corporations. The same rule usually applies to partnerships, limited liability companies, and other entities formed by professionals to practice their professions. In most states, a professional will not be liable for the negligence or misconduct of other professionals working for the corporations, except those directly supervised by such professional. Of course, professionals will be liable for their own negligence or misconduct.

LIMITED LIABILITY COMPANIES

A Limited Liability Company, or "LLC", is an unincorporated business entity that is similar to both corporations and partnerships. Like a corporation, the formation of an LLC shields its members from personal liability for the debts and obligations of the company. Like a partnership, an LLC is typically formed by the filing of a "certificate of formation" or similar certificate with the Secretary of State. Also like a partnership, the members of LLC.s typically enter into an operating agreement that establishes how the LLC is governed.

A Limited Liability Company may have an unlimited number of owners and there are no restrictions on the type of persons who may be owners. New Jersey requires that an LLC have at least two owners. Additionally, an LLC may have more than one class of equity interest, as well as wholly owned subsidiaries that assets, liabilities, and operating results will be treated independently from those of its LLC parent.

One advantage of an LLC over a corporation is that there is more flexibility in management. For example, an LLC may be managed in the following ways:

• Solely by its members
• By its members and a management committee serving in a function similar to the board of directors of a corporation.
• By its members, a management committee, and officers.

Further, an LLC, unlike an "S" corporation, may provide for allocations of profits, losses, and distributions disproportionate to the percentage of equity interest held in the LLC. Because an LLC combines the insulation from personal liability of a corporation with the tax advantages and managerial flexibility of a partnership, it will, in most cases, be the entity of choice for new businesses.

LIMITED PARTNERSHIPS

A limited partnership is a partnership in which the duties and obligations of the partners are divided between "general partners" and "limited partners".

• A "general partner" is a partner who is responsible for managing the partnership and its operations
• A "limited partner" is one who is prohibited from taking part in the partnership's management and day-to-day operations. Unlike the "general partner", the limited partner is usually not personally liable for the partnership's debts and other obligations.

A limited partner participating in management of the limited partnership may become personally liable, however, for partnership debts and obligations. The advantage of limited partnerships is that limited partners are not personally responsible for the partnership's debts and other obligations. As a result, it is far easier to market limited liability partnership interests as an investment, particularly with respect to discrete projects such as real estate development.

LIMITED LIABIILITY PARTNERSHIPS

Limited liability partnerships are partnerships in which the liability of all the partners is limited. Generally the partners in limited liability partnerships are not responsible for the debts, obligations, or liabilities of the partnership resulting from negligence, malpractice or wrongful acts, or misconduct by another partners, employee, or agent of the partnership. However, a partner of a limited liability partnership is liable for other partnership debts and obligations as well as for their own negligence, malpractice or wrongful acts, or misconduct and that of any person under their direct supervision and control.

Limited liability partnerships are governed like general partnerships and have a similar degree of management flexibility.