• Home
  • About Us
    • Teammates
    • Ratings
    • Employment
      • Attorney
      • Paralegal
      • Executive Assistant
  • Development
    • Affordable Housing
    • Tax Credit Financing
  • Capital Market Transactions
    • Private Activity Bonds
    • Securities
  • Commercial Transactions
    • Business Entity Formations
    • Buying and Selling Businesses
    • Business Transactions
    • Nonprofits
  • Real Estate
    • Commercial Real Estate
    • Construction Contracts
  • Contact Us
  • Blog
  • Media
    • Press
    • Speaking Engagements
  • Testimonials

Lotzar Law Firm P.C.

Legal talent that pays for itself.
480.905.0300 x103 8687 E. Via de Ventura, Suite 115 Scottsdale, Arizona 85258

What are the Major Types of Business Organizations and How Do I Choose The Right One?

September 9, 2014 by Charles Lotzar

Business entities can be structured in different ways and it is essential to select the right type of business organization for your company.  The best way to select the right type of business structure is to consult with an experienced corporate law professional. business

The Scottsdale Arizona corporate attorneys at Lotzar Law Firm, P.C. have an in-depth knowledge of the major types of business organizations. We can review your company’s goals and your current organizational status and help you to make an informed choice about what type of structure is right for you. Call today to schedule a consultation and learn more.

Understanding the Major Types of Business Organizations

 

While there are a variety of different ways to structure a business, the three main types of business entities include:

  • Sole Proprietorships

Sole Proprietorships are very common because they are simple to form. A Sole Proprietorship is simply one owner operating an organization that provides goods or services. The owner may have employees.

To start a Sole Proprietorship, the owner simply needs to begin operating his organization. The business owner must comply with local laws for permitting or licensing for the particular type of company. The simplicity of beginning operations is the biggest advantage of Sole Proprietorships. There are no ongoing paperwork filing requirements and the business does not have to file a separate tax return, nor is it separately taxed on profits. All income and losses pass through to the owner and are included on his personal tax return.

There are significant disadvantages to a Sole Proprietorship. Selling the business is usually difficult or impossible, and the business frequently dies with the owner. The owner is also personally liable for any judgments against the business and for all business debts.

  • Partnerships

Partnerships are also a simple form of business entity. Partnerships are very much like a Sole Proprietorship except they allow for multiple owners. There are generally few initial paperwork requirements to start a partnership, but the co-owners should create a comprehensive Partnership Agreement to avoid problems down the line.

An interest in a partnership can be difficult to sell and the business may die if any of the co-owners dies or departs the organization. Simplicity of formation is a major advantage, and profits and losses also pass through to owners of the partnership just as with a sole proprietorship. The major disadvantage of Partnerships is that owners face personal liability just as with a Sole Proprietorship. Limited Liability Partners (LLPs) can sometimes mitigate the risk but not all partners can be shielded from liability.

  • Corporations

Corporations are the most complicated business organization to form and require the most ongoing paperwork. The Corporation must file a separate tax return and is generally subject to more regulation than a Partnership or a Sole Proprietorship. Depending upon the chosen corporate form, double taxation is a possibility.

A Corporation is a separate legal entity from its owners, so ownership can be more easily transferred and the business can outlive individual owners. Owners are also shielded from liability and their potential loss is typically limited to the amount of invested in the business.

Which of the Major Types of Business Organizations is Right For You?

Deciding among the major types of business organizations can be complicated. Lotzar Law Firm, P.C. can evaluate the needs of your organization and help you to determine the best way to structure the business. Call today to speak with a Scottsdale corporate lawyer to learn more.

Free Report: What is the Difference Between Subchapter C-Corporation and S-Corporation in Arizona?

September 4, 2014 by Charles Lotzar

What is the Difference Between Subchapter C and S Corporation in Arizona

While C-Corporations and S-Corporations share common traits, there are important differences between the two different corporate forms. Both C-Corporations and S-Corporations are common ways for businesses to be organized.  Both types of corporations involve the classification of the business as a separate legal entity distinct from its owners. Corporations have many of the same rights and the same responsibilities as individual citizens, and owners of corporations enjoy liability protections not available with other types of business entities.

Click here to read the whole article or download the PDF.

Free Report: Do I Need a Covenant Not to Compete in Arizona?

September 3, 2014 by Charles Lotzar

Do I Need a Covenant Not to Compete in Arizona

An experienced attorney can provide invaluable advice and assistance in determining if a Covenant Not to Compete is necessary and in drafting a Non-Compete Agreement that meets the needs of your business enterprise and is likely to be upheld in court.

Topics covered in this whitepaper include:

  1. Is a Covenant Not to Compete Necessary for Your Business?
  2. Drafting an Enforceable Covenant Not to Compete

Click here to read the whole article or download the PDF.

What is a Design/Build Construction Contract?

September 2, 2014 by Charles Lotzar

When construction projects are undertaken, an architect or building design professional must draft blueprints that dictate how the structure will be constructed.  A builder or general contractor will work from the blueprints or a design plan in order to complete the finished project.

file0001860226169

In some cases, the design team or designer is hired and works independently of the builder. The design is created and shopped or bid out among contractors before a construction team is selected. In other situations, there is one entity called a Design/Build Team that provides both design and construction services.  If there is a single entity responsible for the project, a Design/Build Construction Contract must be created.

Working with a Design/Build Team allows for streamlined project delivery.  From the onset of the project, the designer can consider both the client’s desires as well as the practical implications for the build process. However, when there is one team responsible for all phases of the project, it is imperative that the team be skilled, professional and focused on meeting the client’s needs.

A Design/Build Contract must be carefully drafted to protect the interests of the owner/investor who has contracted for the construction project. An experienced real estate lawyer at Lotzar Law Firm, P.C. should be consulted to help with the drafting of the Design/Build Construction Contract.

Is a Design/Build Construction Contract the Right Choice?

A Design/Build Project is an alternative to a Design-Bid-Build Project.  Both residential and commercial projects including schools, office buildings, apartments, condo complexes and single family homes have been constructed using the design/build approach.

There are myriad benefits of having one team responsible for designing the finished structure and constructing the structure.  Advantages include:

  • Speed. Collaboration from the start of the project can make it possible for the construction to be completed in a more timely manner.
  • Budget. It can be more cost-effective to have the same team both design and build because the design team has an inherent understanding of the cost to incorporate desired features.  The team can also focus on innovation and efficiency from day one.
  • Responsibility. There is just one entity responsible for the success of the project and held accountable for the cost, performance and schedule of the construction.
  • Risk. The Design/Build Team assumes greater risk because it is clear that the team is responsible for the successful completion of all phases of the project. Warranty gaps are effectively closed and the owner is less likely to need to litigate in order to resolve problems.

The risk of a Design/Build Project is that there is lesser oversight.  When there is an independent architect or design team, that professional can hold the build team accountable and work to ensure the project is being completed to specifications.  With less outside oversight, a strong design/build construction contract must be created that protects the interests of the investor/owner. Contact Lotzar Law Firm, P.C. today to speak with an experienced real estate lawyer who can assist with the creation of a contract for your Design/Build Project.

What is a Cost Segregation Study in Arizona?

September 1, 2014 by Charles Lotzar

What is a Cost Segregation Study in Arizona? from Charles Lotzar

A Cost Segregation Study refers to the process of identifying personal property assets or land improvements that have been grouped together or joined with real property assets. Learn more about Cost Segregation Study in Arizona in this presentation.

Free Report: What is a Time and Materials Construction Contract in Arizona?

August 30, 2014 by Charles Lotzar

What is a Time and Materials Construction Contract in Arizona

If a Time And Materials Contract is utilized, it is essential that the parties involved in the Agreement have appropriate legal representation to advise them of the risks and protect their interests during the drafting of the contractual agreement.

Topics covered in this whitepaper include:

  1. What is a Time and Materials Contract Appropriate?
  2. Drafting a Time and Materials Contract
  3. Risks of a Time and Materials Contract

Click here to read the whole article or download the PDF.

Free Report: What Factors Should Be Considered in Choosing the Type of Business Entity for my Business?

August 28, 2014 by Charles Lotzar

 

What Factors Should be Considered in Choosing the Type of Business ntity for my Business

There are myriad organizational structures and choosing the correct one of your company is essential to achieve your business plan goals and to minimize risks.

Topics covered in this whitepaper include:

  1. Factors to Consider in Choosing the Type of Business Entity to Operate
  2. The Number of Owners and Stakeholders
  3. Whether Your Organization Will be Operating for Profit
  4. The Complexity of Initial and Annual Paperwork Requirements
  5. The Desired Tax Structure
  6. A Future Intention to Take Your Business Public
  7. Liability Protection

Click here to read the whole article or download the PDF.

What is the Role of the Architect?

August 26, 2014 by Charles Lotzar

In any construction project, an Architect has an important role to play. Whether the project is a residential or a commercial project, the design of any building or structure generally begins with an Architect understanding the needs of the buyer/owner and designing a structure that meets those needs. The Architect may then oversee the completion of the construction project to ensure that the builders and contractors follow the written plans and specifications.

architect

The role of the architect is an important one and architects can become responsible for problems with the design and implementation of building plans.  The architect’s role must be clearly defined at the onset of a construction project with all parties involved in the project understanding the extent of the architect’s responsibilities.  Lotzar Law Firm, P.C. can represent clients in all phases of construction projects to assist parties in protecting their rights and understanding their obligations. Call today to learn more.

The Role of the Architect

At a most basic level, the role of the architect is to design a structure and develop blue prints for the building of the structure.  Architects should consider:

  • The budget for the project.
  • The end users who will be occupying the structure.
  • The purposes the building should serve.
  • The efficiency of the construction.
  • The safety and structural integrity of the finished structure.
  • Emergency exit paths and other safety features.
  • The goals of the owners and their vision for the project.

After meeting with the owners of the building to determine the goals of the structure, architects should draft a preliminary design plan. It is often beneficial for contractors and builders to be involved early in the design process to provide insight into the cost and practicality of design choices.  Structural engineers and other professionals may also be a part of the initial design phase depending upon the scope and complexity of the project.

Architects may revise the design multiple times before creating finished blueprints. Revisions may be driven by code requirements; aesthetic preferences of owners; cost limitations and other factors.  In some cases, architects will create 3D models of the structure to be designed. Computer Assisted Design (CAD) is also frequently utilized by architects to create lifelike models of finished structures.

Once the design has been finalized, the construction can begin.  Architects generally play a role in overseeing construction to ensure that the builders and contractors adhere to plans. The scope of the architect’s responsibility varies depending upon the contract terms.  In some cases, architects also serve as construction administrators; however, some builders and developers use non-architect construction managers in this role as a cost-saving measure.

The job of an architect should be clearly defined at the onset of the project so that all parties understand how the architect will work with builders and buyers. Lotzar Law Firm, P.C. can assist with the negotiation and drafting of construction contracts and professional agreements to help ensure clients interests are protected. Call today to speak with a member of our legal team to learn more.

What is the Difference Between an Option to Purchase and a Right of First Refusal?

August 19, 2014 by Charles Lotzar

When selling property or assets such as real estate, a seller generally makes an offer and a buyer has the option to accept that offer to create a legally binding contract. In some cases, however, the transaction may become more complicated. A seller can make an offer that is open for a set period of time, or can make an offer that is triggered by a future event.  Buyers and sellers need to understand the different types of transactions they enter into and the rights and responsibilities that different types of arrangements confer.

For_Sale_-_Classifieds

In the real estate market, both an Option to Purchase and a Right of First Refusal can be used by buyers and sellers to provide more flexibility regarding when and if to enter into a transaction for the purchase and sale of real estate.  Buyers and sellers need to understand the similarities and differences between an Option to Purchase and a Right of First Refusal so that they may make informed choices.  The Scottsdale Arizona real estate lawyers at Lotzar Law Firm, P.C. can provide representation in negotiating sales contracts and offer terms. Call or contact us online today to speak with a member of our legal team and to learn more.

Option to Purchase vs. a Right of First Refusal

Options Contracts are common in real estate, on the stock market and in a variety of different situations. When someone is given the Option to Purchase, the potential buyer has the right but not the obligation to buy property or assets at a set price under specified conditions during a certain period of time. The potential buyer can exercise the option and complete the transaction at any time before the option expires. The seller cannot withdraw the Option to Buy until the option expires.

For example, a seller of a property could give a buyer the Option to Purchase the property for $100,000 any time over the next 30 days.  If the value of the property goes down, the buyer would have the choice not to exercise the Option to Buy. If the value of the property went up, the buyer could purchase it at the $100,000 during the option period.

Typically, the potential buyer will pay a premium in order to secure the Option to Buy the property or the asset at the set price.  In some cases, the Option to Buy is transferable or saleable and in other cases only the person who purchased the option may exercise it.

A Right of First Refusal is similar to an Option to Buy, but there are some important differences. A Right of First Refusal simply gives the potential buyer a chance to enter into a transaction before anyone else does. For example, if a buyer was given the Right of First Refusal to purchase a house and then someone else made an offer to buy that same house, the seller would need to give the initial potential buyer with the Right of First Refusal the option to complete the transaction.

The fundamental difference between an Option and a Right of First Refusal is that an Option to Buy can be exercised at any time during the option period by the buyer.  With a Right of First Refusal, the right of the potential buyer to complete the transaction is triggered only if the seller wants to complete a sale.

Lotzar Law Firm, P.C. can advise you on Options and on the Right of First Refusal and help you to ensure you are entering into transaction that make financial sense and protect your interests. Call today to speak with a member of our legal team and learn more.

Do I Always Have to Consider the 4 D’s in Business Planning?

August 5, 2014 by Charles Lotzar

When starting a business or starting a professional organization, it is essential to plan for the future. This means determining what will happen if any business owners need to leave the company at any point in time. This also means protecting your own ownership interests and ensuring that the organization can survive and be left behind as a lasting legacy.

business paperwork

To ensure that you have a plan in place to protect your interests in your organization, there are 4 D’s in business planning that should be considered whenever you start a new company.  An experienced Scottsdale Arizona business lawyer at Lotzar Law Firm, P.C. can help you to understand the 4 D’s in business planning and advise you on how to take the right steps to be prepared for any future developments that could threaten the value or operations of your organization.

The 4 D’s in Business Planning

 

The 4 D’s in Business Planning stand for:

  • Divorce
  • Disability
  • Death
  • Discharge from employment

The 4 D’s need to be considered in the creation of any business plan or when any organization first begins operations. Whether you are the sole owner of your organization or you are entering into a partnership or other shared-ownership arrangement, planning for these potential future events can ensure that your organization can continue to operate and that you can maintain the value of your business no matter what happens down the line.

Planning for the 4 D’s is essential because otherwise there could be a costly and expensive future disagreement that must be resolved in court. If you do not plan in advance, operations of your organization could be interrupted by a future dispute and your business could lose value, or an interest in your business could end up being owned by someone who you cannot effectively work with.

In a divorce or a death, for example, the spouse of a business owner could be awarded a share in the business or the business could be sold or transferred to a family member that the other business owners do not wish to work with.

An Agreement put in place before any of the 4 D’s happen will allow for business owners to avoid undesirable transfers of the organization or other shifts in ownership or operations that could adversely impact operations.

When considering the 4 D’s in business planning, a variety of tools can be utilized to protect the organization. A detailed Buy-Sell Agreement is common and an attorney can assist with drafting an effective and enforceable contract. Business owners frequently purchase life insurance to make it possible for partners to buy them out in the event of a death.  Incorporating an organization can also make it possible for the organization to survive beyond the lives of individual owners, as well as providing protecting for the owners from personal liability.

Lotzar Law Firm, P.C. has extensive experience representing clients and helping them to consider the 4 D’s in business planning.  Call or contact our experienced Scottsdale Arizona business law attorneys online today to get started protecting the future of your organization.

  • « Previous Page
  • 1
  • …
  • 6
  • 7
  • 8
  • 9
  • 10
  • Next Page »

Why We’re Not Your Typical Law Firm

logo 8687 E. Via de Ventura, Suite 115 Scottsdale, Arizona 85258 T (480) 905-0300 F (480) 905-0321 E info@lotzar.com

SITE NAVIGATION

  • SITE NAVIGATION
  • Home
  • About Us
  • Teammates
  • Press Coverage
  • What Clients Say
  • Speaking Engagements
  • Contact Us

FROM OUR BLOG

How Often Do I Have to Re-Certify a Tax Credit Tenant’s Household Income?

Property Tax Abatement vs. Property Tax Exemptions – GPLET

Can You Restructure Your Business Under the Arizona Entity Restructuring Act?

REVIEWS

View and rate us
on Google

©2025 Lotzar Law Firm, P.C. All Rights Reserved. | Privacy Policy | Disclaimer