Determining The Appropriate Form of Business Entity
Every veteran business owner should give serious consideration to forming a business entity to limit his/her individual liability for the debts and other obligations of his/her business. Having a separate business entity allows you to separate your personal assets from those of the business—and thus protect your personal assets from claims against your business.
To achieve this liability protection, you must organize and register your business entity with a State or the District of Columbia. You will have a range of entity types to choose from.
Separately, you should consider how you are going to organize the management of your business.
Ownership and Control of Your Business
An important factor to consider in organizing a veteran owned business are the special government contracting opportunities and benefits for veteran owned businesses. In order, however, to be eligible for such special treatment a business must be “owned and controlled” by one or more veterans. The Federal Government has adopted a very narrow and inflexible definition of veteran “ownership and control” and managed” and without qualified legal counsel to assist with the organization and structuring of a business entity veteran businesses oftentimes fail to qualify for these benefits.
What’s in a Name: How the Public Knows Your Business
The name of your business can be critically important in drawing customers. But thinking of a great name is only the first step in a surprisingly complex process for registering the name that the public will know your business as.
The first step is the name of your business entity itself.
If you want trademark rights to attach to your business’s name, then you must take additional steps.
Registering in Other States
You must register your business entity in every State in which it “does business.”
Choosing a Registered Agent
A business entity must appoint an official agent in every State or District in which it is registered and/or doing business. The official title of these agents varies by State (most often they are called a “Registered Agent” or “Resident Agent”), and the different States’ laws give different duties and responsibility to the agents.
In all States, if a business entity is sued the legal papers for lawsuit may be served on its registered agent. In many States, including Virginia, the agent is also the recipient of all of the official correspondence to the business entity, such as annual renewal paperwork from the State.
Writing Your Business Plan
Before you begin making decisions about your business, you should organize and formulate your thoughts and objectives by creating a business plan. It does not need to be a formal document, especially in its early stages. A business plan is a living document—you will modify it frequently as you go along.
If you would like to arrange a no obligation consultation with us to discuss your business goals and choice and structure of an entity for your veteran owned business feel free to call Norman L. Eule, Esq., Chair of General Counsel PC’s Corporate and Tax Group at 703-556-0411, or e-mail him at firstname.lastname@example.org.