Business Formation The way in which your business is formed will determine the personal liability of the founders, how taxes are paid, and other important details.

Starting a business is both exciting and challenging. At Sperline Raekes, our business formation attorneys break down the barriers that get in the way of your success.

You’ve decided to start a business! Now what?

First and foremost is establishing the legal status of your business, and we’re here to help make sure you’ve considered every detail to inform your business-formation decisions.

There are many formation options to choose from including:

* Items marked with * must register with the Washington Office of the Secretary of State, Division of Corporations and Charities.

An individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate and may enjoy greater flexibility of management and fewer legal controls. However, the business owner is personally liable for all debts incurred by the business.

Sole Proprietorship

Composed of two or more persons (usually not a married couple) who agree to contribute money, labor and/or skill to a business. Each partner shares the profits, losses and management of the business and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement.

General Partnership

Composed of one or more general partner(s) and one or more limited partner(s). The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment. Limited partners are usually not involved in the day-to-day operations of the business. Note: A limited partnership may opt to become a Limited Liability Partnership* by including a statement to that effect in its certificate of limited partnership. Status as a Limited Liability Limited Partnership provides general partners with a shield from liability for obligations of the Limited Liability Limited Partnership.

Limited Partnership*

Similar to a General Partnership except that normally, a partner does not have personal liability for the negligence of another partner. This business structure is used most commonly by professionals such as accountants and lawyers.

Limited Liability Partnership (LLP)*

Formed by one or more individuals or entities through a special written agreement. The agreement details the organization of the LLC, including provisions for management, assignability of interests and distribution of profits or losses. Limited Liability Companies are permitted to engage in any lawful, for profit business or activity other than banking or insurance. Doing business as a LLC may yield tax or financial benefits.

Limited Liability Company (LLC)*

Has certain rights, privileges and liabilities beyond those of an individual. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as decreased personal control. Corporations may be formed for profit or nonprofit purpose.

Corporation*

Typically run to further some sort of ideal or goal, rather than in the interests of profit. Many nonprofits serve the public interest, but some do engage in private sector activities. If your nonprofit organization is or plans to fundraise from the public, it may also be required to register with the Charities Program of the Washington Secretary of State.

Nonprofit Corporation*

Legal Services for Starting a New Business

The experienced lawyers at Sperline Raekes can help you determine the business entity that is best for you and your situation, taking tax considerations into account. We will coordinate with your accountant so come tax time, there are no surprises.

Sperline Raekes business formation services include drafting crucial legal documents, such as:

  • Articles of incorporation
  • Bylaws
  • Operating agreements
  • Buy/sell agreements
  • Employment contracts
  • Employee handbooks

Legal Services for Established Businesses

For those businesses already established, our expert team of attorneys can help with:

  • Contract negotiations
  • Confidentiality agreements
  • Real estate purchase and sale agreements
  • Other essential documents and agreements

If you’re considering starting a new business, we can help with:

  • Establishing the legal entity

  • Determining a tax status for your business

  • Drafting legal documents

  • Coordinating with your professional advisors

    Accountant, insurance agent and banker

If you have an established business, we can help with:

  • Contract negotiations

  • Confidentiality agreements

  • Real estate purchase and sale agreements

  • Other documents and agreements

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Establishing a new business can be overwhelming.

We can help relieve the stress by asking the right questions to help you formulate your new business and guiding you through the necessary contracts and agreements.

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