Limited Liability Partnerships

New Jersey’s partnership law has recognized limited liability partnerships (“LLPs”) for quite some time. However, as of December 2000, the partnership law was revised and the revision made LLPs an even more attractive alternative to the general partnership (“GP”) form of business. The following addresses frequently asked questions regarding GPs and LLPs.   What is a GP? A general partnership (a.k.a. “partnership”) is an association of two or more persons who co-own and carry on a business for profit.   Is a filing of any kind necessary to create a GP? No. The mere association of two or more persons…Continue Reading

Limited Liability Company Operating Agreements

THE LIMITED LIABILITY COMPANY ("LLC") has become a popular choice for small businesses because LLCs combine key features of both partnerships and corporations. All states have enacted LLC statutes (i.e., laws). In absence of an agreement among the owners (i.e. members), these laws establish a set of "default rules" that will govern the business relationship of the members and the internal affairs of the LLC. An agreement among the members as to these relationships and affairs is referred to as an "Operating Agreement." In most cases, they are not required by law, but are important because the default rules may…Continue Reading

BUYING A BUSINESS Legal Aspects and Considerations

PURCHASING AN ON-GOING BUSINESS is an excellent opportunity for an entrepreneur seeking the financial and personal rewards of owning and operating a business. Buying vs. Starting a Business A chief advantage of purchasing a business (as opposed to starting one “from scratch”) is the opportunity to acquire goodwill. In essence, goodwill consists of a business’ reputation, patronage and other intangible assets. Typically, a successful business develops these attributes over a period of time. Thus, the buyer can benefit by acquiring a company with some level of “ready-made” business. However, disadvantages of buying an on-going business include: (a) the price “premium”…Continue Reading

An LLC is Not a Corporation! Corporations and LLCs… A Brief Comparison

A LIMITED LIABILITY COMPANY (“LLC”) is not a “limited liability corporation.” They are two separate, legal structures that may be utilized to engage in a variety of business ventures and enterprises. A business corporation (“corporation”) is a business entity that exists separate from its owner(s) (i.e. shareholder(s) a.k.a. stockholder(s)) and is centrally managed by a board of directors. An LLC is also an entity that exists separate from its owners (i.e., members), but, in its simplest form, is managed by its owners, not by a managing board. The following identifies other key differences between LLCs and corporations. Historic Availability Corporations…Continue Reading