Business Formation

Choosing the right legal structure is one of the most important decisions a startup will make. At Jones Trial Attorneys, we guide founders through the nuances of forming a limited liability company (LLC), S-Corporation, or C-Corporation. We explain the legal, tax, and operational differences between entity types and help determine which structure aligns with your goals for growth, control, and fundraising. Our team drafts and files the necessary documents with the Secretary of State, obtains your EIN through the IRS, and ensures you're set up to do business legally and efficiently from day one.

Choosing your Corporate Structure
The first, and most common, question we get from new clients is "should my company be a corporation or an LLC?" In California the distinction is fairly negligible as far as the law is concerned, making the decision largely a matter of procedural preference. The primary distinction is that ownership of a corporation is controlled by the issuance of shares (or stock) and the duties are laid out in the corporate bylaws whereas LLCs are governed by the Operating Agreement, which lays out who owns what percentage of the company and is responsible for which duties. 

For companies looking to bring on investors, a corporation usually makes the most sense since shares can be issued whenever needed to compensate investors with fractal ownership in the company. For companies looking to be "closely held" with a smaller number of continuous investors, the LLC makes more sense since the roles and responsibilities of the higher-ups can be spelled out in an Operating Agreement. The more complexity in the business's ownership and management structure, the more likely a corporation is the right fit. 

There are also some considerations regarding particular industries. For instance, law firms cannot be LLCs. They can be professional corporations or Limited Liability Partnerships (LLPs). This same exception applies to a small number of other industries. Also, using law firms as an example, officers in a professional corporation or partners in an LLP must also be attorneys. The same goes for Accountants and Architects, along with some other uncommon and highly specialized fields. 

In California, LLCs and Corporations can both be classified as S-Corps, allowing the owner to avoid paying both corporate and personal taxes. Corporations, LLCs and LLPs also all establish a "corporate veil" protecting the owners from civil liability impacting their personal holdings. 

Founder Agreements and Operating Agreements

Clarity between co-founders is critical. We prepare customized founder agreements that outline each party's equity ownership, roles, responsibilities, decision-making authority, and vesting schedules. For LLCs, we draft tailored operating agreements that reflect your unique management structure, profit allocations, and buyout provisions. These agreements prevent disputes and help build a solid foundation for trust and accountability.

Equity Structuring and Cap Tables

Proper equity structuring is key to attracting investors and retaining talent. We advise clients on stock allocation, founder vesting, employee equity pools, and investor preferences. We also create and maintain cap tables that clearly reflect ownership stakes and potential dilution across financing rounds. Whether you're issuing common stock, preferred shares, or SAFE instruments, we ensure your equity strategy supports long-term growth.

Corporate Compliance and Governance

Startups often overlook ongoing compliance obligations, which can lead to liability or loss of corporate protections. We provide general counsel services to ensure your company stays compliant with state and federal regulations, including annual filings, meeting minutes, board consents, and shareholder notices. We also assist with drafting bylaws, resolutions, and policies that promote strong governance and reduce risk.

Board Representation and Fiduciary Duties

We counsel founders, directors, and officers on their fiduciary duties, including the obligations of care, loyalty, and good faith. Whether you're managing board dynamics, navigating conflicts of interest, or responding to shareholder demands, our attorneys help you uphold your responsibilities while protecting the company's best interests. We also serve as outside board counsel and can attend meetings to offer real-time legal guidance.

Startup Funding and Term Sheet Review

When you're raising capital, every word in a term sheet matters. We review and negotiate seed and venture financing documents to protect your interests while facilitating a successful deal. Our services include SAFE and convertible note documentation, Series A/B/C financings, investor rights agreements, and due diligence support. We help you understand the implications of each term so you can make informed decisions with confidence.

Ongoing General Counsel Services

As your startup grows, legal needs evolve. We offer ongoing general counsel services tailored to early-stage companies that need regular legal support but are not ready for a full-time in-house lawyer. From employment matters and contract review to IP strategy and risk management, our firm becomes your legal partner at every stage of growth.

Partner with Jones Trial Attorneys

Jones Trial Attorneys is a litigation-forward firm with a passion for startups and innovation. Whether you're building your first company or scaling your next big venture, we provide proactive, strategic legal counsel to help you grow with confidence and stay protected along the way.

Contact Us

To schedule a consultation with our corporate counsel team, fill out the form below or call (866) JTA-WINS and we'll schedule an appointment for you immediately.