The Most Efficient Business Structure - Essay Example

Internal Memorandum Internal Memorandum Kevin Legal Structure of The Most Efficient Business and Limiting Liability of TREVCO’s Debts Purpose Following your plans to expand TREVCO and to find an efficient business structure, I compiled for you the relevant information that concern set up of such a business structure. Thus, this memo serves the purpose of informing you about the legal structure of a limited liability company, which is the available choice that will fit your new plans. In addition, this memo seeks to explain to you how you will limit TREVCO’s debts. The Most Efficient Business Structure Limited Liability Company (LLC) is the most efficient business structure that you need to consider as you plan to expand TREVCO. Thus, it necessary to understand all the legal procedures that pertain its formation (Ku, 2012, p. 736). The first step of setting this particular kind of business structure involves finding a name, which is dissimilar from any other company. However, since your business already has a name, this step will not be necessary. Next step that you will need to consider is filing of your paperwork, also called Articles of Organization (Zhang, 2011, p. 864). You will subsequently need to meet all payment associated with filing of such articles. The next step will involve the creation of an operating agreement, which will lay the framework of how to run the LLC (Oh, 2010, p. 122). It is essential at this point to point that, the operating agreement will define the duties and rights of every member of the LLC. It will also be necessary to make some publications. The next crucial step will involve acquiring permits and licenses that are necessary for the business to operate (Sjögrén et al., 2011, p. 360). Other steps that you may also consider include hiring of employees and announcing the business. Your LLC’s Name Though, you already have TREVCO as the business name, should you consider changing this name as you set on a new business structure, then you need to factor some details. The first requirement for finding an appropriate name for this LLC is total compliance with all governing state rules regarding the names of LLCs (Lauesen, 2011, p. 572). I suggest that you assign one member of the customer relation (CR) to find all the details that pertain to this matter. You may also contact the office within the state government, whose duty involves regulation of corporations and LLCs. A number of rules exist that guide on how to choose a name for any LLC (Gelderblom et al., 2013, p. 1058). First, the chosen name must be original. This implies that the chosen name must not be same as any other LLC, which is already in the file that is in custody of the state government office. The chosen name of the business must indicate that it is a Limited Liability Company (Bahena, 2010, p. 812). Thus, at the end of the name, there is placing of the letters LLC or some other abbreviations. Such abbreviations serve to inform the public about the kind of your business organization. For instance, if you choose to retain TREVCO, then its full name can be TREVCO LLC or TREVCO Ltd. Liability Co. The abbreviation is never a serious issue, provided that at the end of such a name one call tell the type of your business organization (Chan et al., 2012, p. 244). Thus, you can choose any abbreviation of your choice. I prefer that you consider TREVCO LLC, since it appears a bit flexible. Once again, if you decide to find another name for TREVCO, then it will be in order to consider a name, which does include words that the state government restricts. Such words include bank, insurance or corporation. This is especially imperative as it may lead to the closure of the business or make it impossible to register the business (Stoica and Cristea, 2010, p. 623). However, if you decide to maintain TREVCO as the legal name for this new business structure, then this will never be an issue. However, I deem it necessary that you have such information. While choosing a name, it is profoundly important to be careful to avoid the instance of infringing on other companies’ trademarks (Miller, 2014, p. 319). Since TREVCO is already in operation as a sole proprietorship, it has its trademark. However, since you will be setting up a new structure for this business that will see it change to LLC, it is significant to consider developing a trademark that will align with its new structure (Dawson, 2010, p. 521). In addition, getting a brief sense of laws regarding trademark is essential, and we will only need to consider how our customer will respond upon hearing the name of the business (Olander and Norrman, 2012, p. 688). Owing to my experience while working in the CR department, I can confirm to you that TREVCO has a strong brand. The customer easily identifies with its name. For this reason, I will again suggest that you retain this name as the business sets up to new legal structure. Filing of the Articles of the Organization The Articles of the Organization relate to document, which legitimizes a limited liability company and entails information including the name of the business, names of the members and the address (Sertial, 2012, p. 271). For the case of your business, you will have TREVCO LLC, as the business name if you decide to retain it. It is vital to note that the articles will establish the existence of your company. The filing of these Articles is done as a single document with the state agency, who is responsible for the registration of such businesses (Bird and Orozco, 2014, p. 85). These particular articles illustrate the elemental operating and identifying features of the LLC. Once the authorized agency dealing with the registration of the business certify and approve the filed articles, the LLC will start its operation as a legitimate business entity within the state. It is necessary to have the information of what the article of the organization should encompass. As aforementioned the articles will include the name as well as the address of the newly formed LLC (Manesh, 2013, p. 49). Another important component of this article is the nature of the LLC business. This usually appears in a statement form. For instance, it can state that TREVCO LLC will be engaging in activities, which are lawful. The articles of the organization also cover the address and name of the business’s registered agent (Lauesen, 2011, p. 565). The registered agent has the authority of accepting any physical delivery of documents, which may consist of lawsuit, on LLC’s behalf. Since TREVCO already has some of its members, it will be necessary to include them at the time of filing such documents. After the compilation and signing of the articles of the organization, they are thus, ready for filing (Kleinberger, 2010, p. 891). The process of filing such documents requires payment of certain amount of the fee. Operating Agreement Operating agreement is usually not a major requirement, but it is necessary that you consider it. The operating agreement establishes a set of regulations and rules for the running and ownership of the business. It is noteworthy that such an agreement is necessary for the long-term operation of the business (Miller, 2014, p. 297). The operating agreement entails your interest and that of the members of the LLC. The responsibilities and rights of the members are also in such an agreement. Additionally, other components of the operating agreement include regulations that control sharing of the business’s profit, terms that relate to the power of the members to vote and regulations and rules that set out the management of the LLLC. In addition, you will need to consider rules that concern scheduling of meetings and voting time. Finally, there have to be provisions in the operating agreement, which govern scenarios where a member wishes to get out of the LLC (Ku, 2012, p. 733). The member may be out of the LLC either by death, selling of his or her interest or disability. Thus, the operating agreement needs to define such situations explicitly. Publication This may also mean that you officially announce your business publicly. Thus, the members will need to notify the public by publishing a notice in the local newspaper, which spells out when the LLC starts its operation (Lauesen, 2011, p. 566). In addition, the publication indicates the way the members will approve other requirements prior to the official launching of the business. Permits and Licenses The formation of the LLC will be considered complete upon accomplishing all the above steps. The state government will then register it. You will need to acquire a number of permits and licenses prior to going into the business (Zhang, 2011, p. 854). These may consist of zoning permits, business license as well as seller’s permits. Liability Since your new business structure will be LLC, it is essential that you understand how your business will limit the liability of its debts (Bahena, 2010, p. 811). You as the owner and the members will never be liable personally for the TREVCO LLC’s debts. Settling of the LLC’s debts will be through its assets. Bibliography Bahena, A.J., 2010. Series LLCs: The Asset Protection Dream Machines? J. Corp. Law 35, 799–825. Bird, R.C., Orozco, D., 2014. Finding the Right Corporate Legal Strategy. MIT Sloan Manag. Rev. 56, 81–89. Chan, K.C., Jacob, R.A., Lee, P., Seow, G.S., 2012. The effects of Section 404 of Sarbanes-Oxley Act of 2002 on the audit fees of foreign firms listed on US exchanges. Rev. Account. Finance 11, 236–256. doi:http://dx.doi.org/10.1108/14757701211252573 Dawson, S.L., 2010. Series Llc and Bankruptcy: When the Series Finds Itself in Trouble, Will It Need Its Parent to Bail It Out? Del. J. Corp. Law 35, 515–537. Gelderblom, O., de Jong, A., Jonker, J., 2013. The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623. J. Econ. Hist. 73, 1050–1076. doi:http://dx.doi.org/10.1017/S0022050713000879 Kleinberger, D.S., 2010. A Myth Deconstructed: The “Emperor’s New Clothes” on the Low-Profit Limited Liability Company. Del. J. Corp. Law 35, 879–910. Ku, J.G., 2012. The Limits of Corporate Rights Under International Law. Chic. J. Int. Law 12, 729–754. Lauesen, L.M., 2011. CSR in publicly owned enterprises: opportunities and barriers. Soc. Responsib. J. 7, 558–577. doi:http://dx.doi.org/10.1108/17471111111175137 Manesh, M., 2013. Damning Dictum: The Default Duty Debate in Delaware. J. Corp. Law 39, 35–70. Miller, S.K., 2014. The Best of Both Worlds: Default Fiduciary Duties and Contractual Freedom in Alternative Business Entities*. J. Corp. Law 39, 295–345. Oh, P.B., 2010. Veil-Piercing. Tex. Law Rev. 89, 81–145. Olander, M., Norrman, A., 2012. Legal analysis of a contract for advanced logistics services. Int. J. Phys. Distrib. Logist. Manag. 42, 673–696. doi:http://dx.doi.org/10.1108/09600031211258147 Sertial, H., 2012. Hybrid Entities: Distributing Profits with a Purpose. Fordham J. Corp. Financ. Law 17, 261–297. Sjögrén, H., Puumalainen, K., Syrjä, P., 2011. What does the owner-manager want and get out of the business? Int. J. Law Manag. 53, 355–374. doi:http://dx.doi.org/10.1108/17542431111166340 STOICA, C.F., CRISTEA, S., 2010. The Capacity of the Administrator. Obligations. Liability. Common Provisions for Both Unitary and Dual Systems. Account. Manag. Inf. Syst. 9, 619–628. Zhang, L.Z., 2011. The Legal Environment for Foreign Private Equity Firms in China. Fordham J. Corp. Financ. Law 16, 839–889. Read More