Los Angeles Business Lawyer

Our clients include emerging and established companies, entrepreneurs, buyers, sellers, investors, and creative talent. Our services include but are not limited to:

• Business Formation
• Business Contracts
• Business Dissolution
• Partnership Disputes

Our attorneys have extensive experience, skills, and legal knowledge. They are uniquely positioned to meet entertainment sector clients’ evolving business needs.

The first step towards creating a legally recognized business is determining which type of business entity you wish to establish. Your decision at this phase will have legal and tax implications for years to come. Our Los Angeles business lawyers frequently work on entertainment industry clients’ behalf to establish companies including:

• Partnerships
• Corporations
• Limited Liability Companies
• Joint Ventures

In a partnership, two or more individuals enter into a relationship to create a business, financial operation, trade, or venture as partners. Each partner is responsible for contributing money, labor, property, knowledge, or skills to the business based on the agreement among the partners.

Additionally, the partners share in the business’s profits and losses depending on how the business performs. Therefore, one of the most important benefits a seasoned corporate attorney can provide is drafting a partnership agreement in accordance with business law. Some of the elements an effective partnership agreement should spell out include:

• Capital, time, and resources for which each partner will be responsible
• Roles, responsibilities, and authority level of each partner
• How and whether new partners may be incorporated into the existing partnership
• How and when will the partnership allocates profit and losses
• Provisions for partnership dissolution
• The jurisdiction’s law that will govern the agreement
• Non-compete, non-disclosure, and non-solicitation clauses
• And other elements

Corporations offer protection for the individuals who create them by forming a new legal entity under state law. It shields investors from any liability that would extend beyond their financial contributions. However, if shareholders commingle business and personal funds, they may lose this protection from liability. This process is known as piercing the corporate veil.

Los Angeles business lawyers may recommend that an entertainment industry client incorporate rather than form a partnership for several reasons, including personal protection against the business entity’s liabilities and debts. Additionally, a corporation can continue to exist even when key personnel die or leave for other reasons. Some other benefits of choosing a corporation as a business entity include easy transfer of assets, the ability to issue shares of ownership through stocks, and certain tax advantages.

A limited liability company, or LLC, is a business entity that can be formed under state law by filing a copy of its articles of organization. An LLC has similarities to corporations and partnerships in their most basic form. The benefit of forming an LLC is that none of its members would be personally liable for any of the debts that the LLC entity incurs, similar to the members of a corporation.

You only need one person to form an LLC under state law across the United States. But like a partnership, the LLC retains flexibility about operations, and any profits the LLC generates are passed through to the LLC’s members, who are responsible for paying taxes on them.

An experienced corporate attorney can assist with drawing up the documentation that the members file with the state. Moreover, it is essential to seek a competent lawyer’s advice if you would like to offer a stake in the LLC to a foreign investor, if you plan to go public and issue publicly traded stock eventually, or if you need funding from a venture capitalist.

Joint ventures are contractual agreements involving two or more businesses that wish to engage in a common business enterprise. They will share the venture’s expenses, profits, personnel, intellectual property, facilities, and management.

Especially in the entertainment industry, these contracts can have many moving parts. A business attorney in Los Angeles can advise clients on how to protect their interests within the required memorandum of understanding and letter of intent, which all parties to the joint venture must sign.

Once a business entity is up and running, an experienced lawyer can assist with drafting and negotiating the company’s contracts to continue its operations. Below are some of the most common business agreements we draft and negotiate for entertainment industry clients. Two of the main types of business agreements:

• Term sheets and investment agreements
• Operating agreements, bylaws, and shareholder agreements
• Employment, officer, and independent contractor agreements

A term sheet is nonbinding and outlines the terms and conditions that will apply to a potential business agreement, especially in the context of an agreement for venture capital financing for a new company.

In most cases, the term sheet is the initial communication that summarizes the company’s valuation, who will retain what percentage of control, when the founders’ rights will vest, voting rights, and preferences for company liquidation. Once agreed upon, these terms are finalized in a binding investment agreement.

An operating agreement is a binding contract that governs an LLC’s  internal operations, including how the company will make financial and functional decisions. Operating agreements are required by law in several states, and it is recommended to create one even where not explicitly necessary.

Its board of directors usually establishes a corporation’s bylaws after the articles of incorporation are filed. Similar to an operating agreement, the bylaws determine how a corporation will operate and includes board duties and responsibilities, procedures for modifying existing bylaws, decision-making procedures, and more.

In contrast, corporations are governed by shareholder’s agreements. A shareholder’s agreement ensures that shareholders’ rights are protected regarding decision-making and share pricing, among other essential terms. A business entity may additionally create similar terms for agreements relating to a company’s founders, members, and owners.

Employment, officer, and independent contractor agreements are designed to specify the terms relating to an individual’s title and duties, how they will be compensated, how the company will handle expenses, the benefits to which the individual is entitled, and contingencies for termination of the arrangement between the individual and the company.

In addition to the business needs relating to entity formation listed above, our experienced legal team also regularly assists entertainment industry clients concerning advising on fundraising and corporate structure, negotiating purchase and sale agreements, and negotiating and reviewing leases. Contact an attorney for a free case consultation if you need legal assistance and live in the Los Angeles area.