Many Chinese immigrants are engaging in business deals throughout the Bay Area. Often, they are only familiar with the laws of China. As a result, they sometimes fail to comply with the basic U.S. practices with respect to utilizing legal entities and memorializing deals in writing thorough contracts, partnership agreements or other necessary legal documents.
Failure to comply with corporate formalities could mean that the owner(s) of a company would lose their limited liability protection in the event of a dispute. Owners of a company must properly form their legal entity by filling the necessary documents with the CA Secretary of State, opening a corporate bank account and properly funding it, adopting or following the operating agreement or bylaws, and operating the business while maintaining adequate accounting records of corporate assets. Owners that fail to follow these corporate formalities risk exposing themselves to personal liability and expensive, time-consuming litigation.
Failure to properly memorialize business deals and partnership agreements often creates costly problems in the event there is a dispute between the parties, a partner decides to leave the business, or the arrangement fails due to improper conduct by one or more of the parties. The cost of proper written documentation of business agreements pales in comparison to the expense of resolving a dispute or a broken-down partnership through available legal remedies.
Here at Chauvel & Glatt, we can offer our legal services in Mandarin Chinese and English so our clients can start their business ventures in the United States with a peace of mind. To learn how our attorneys can help you and your business, contact us today.