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Business Law

Redd Law, PLC can help with all of your small business needs. Whether you’re starting a new business, operating a current business or closing your business, we can prepare all of your small business documents.

Starting a Business

The first step in starting a business is deciding the type of business entity that’s right for you. You can chose from a corporation, partnership, limited liability company, or limited liability partnership. You can also operate your business as an assumed name, but doing so puts you at risk for being liable for the business debts. Each type of business entity has requirements and limitations.

There is no limit on the number of owners that C corporations and LLCs can have. For partnerships there must be at least two partners. S corporations must not have more than 100 shareholders. S corporations are limited in the types of shareholders that they can have. They can only have the following types of owners:

  • Individuals who are US citizens or resident aliens

  • Certain retirement plans

  • Tax exempt organizations under 501

  • Grantor trusts

  • Voting trusts

  • Qualified subchapter S trusts

  • Electing small business trusts

  • Another subchapter S corporation

  • Domestic building and loan associations, mutual savings banks, and certain cooperative banks with shares organized on a nonprofit basis.

Liability protection is one of the most important benefits that a business entity can provide to the owners. The owners will want to make sure that their personal assets are protected.


Corporations: Generally, owners are not liable for the corporations obligations and debts. However, shareholders may be liable if they wrongfully receive distributions while the corporation is insolvent or if there is fraud or if certain corporate procedures are not followed.

LLCs: A limited liability company’s members are not liable for obligations unless the operating agreement provides for liability.

Partnerships: There is no liability protection for partners in a general partnership.


Business Operations

While operating a business, it’s important to make sure that important agreements are in writing. Clear and concise contracts are important for agreements with employees, vendors, and others. Such contracts can prevent unnecessary confusion and help to limit the business’ exposure to risks.


Every year, many businesses stop operating. The Michigan Business Corporation Act (MBCA) offers a number of ways in which a corporation may be dissolved. A closely held corporation can automatically dissolve upon expiration of the duration of the corporation as provided in its articles of incorporation pursuant, by action of its board of directors and shareholders, judicially, or pursuant to an agreement by shareholders.

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