There are two old college buddies living in Kansas City. The two have decided that their professional skills complement each other. Bill is an excellent talker and businessman, and he’s good with numbers. Phil is a master carpenter—has been for almost 15 years. So Bill and Phil want to start a carpentry business—specialized carpentry, in fact.
Bill is going to be tasked with keeping the books—keeping the business’s finances in order. He’ll be in charge of getting clients, talking to them about job progress, and managing job procedures. And, of course, Phil will be the center of the business, doing the physical labor.
Now that Bill and Phil have decided what kind of business they want to start and what role each will play in the venture, they need to legally set up their commercial enterprise. Rather than tackle the process alone, they’re going to need a lawyer to navigate them through it.
Tim Denker, the head of Denker Law Firm, is a Kansas City business law attorney. He says that how you establish a business going forward depends on whether you’re forming a business from scratch, or turning an existing business into a new formation. Denker says that you can classify a business in a variety of ways. “You can have a limited liability corporation (LLC), a limited liability partnership (LLP), or a C-Corp or S-Corp depending on the classification,” he explains. C-Corp and S-Corp refer to federal tax codes that define the business make-up.
Once the basics are covered, there are more local considerations to keep in mind, says Denker. For example, he explains, “Based on the Missouri law, or wherever you choose to incorporate your business, you’ll receive different benefits.” Benefits in Missouri include having an annual filing fee waived for an LLC. Yet in the State of Kansas, on the other side of Kansas City, an LLC will be subject to a nominal annual filing fee, says Denker.
So how Bill and Phil decide to legally define their business venture will be a decision to be made with the guideance of a Kansas City business law attorney. But where in Kansas City they decide to station their company will also affect how they pay their business taxes, since the laws are different in Kansas and Missouri—and the fact that Kansas City is in two states only makes things trickier!
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.