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incorporating a family business

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1 incorporating a family business on Sun May 06, 2012 3:17 pm


Arresto Menor
It’s indeed a privilege having been given this opportunity to enjoy your expertise for free.
My concern is about a friend’s exclusive family business, which I presume is a partnership among their mother and themselves the siblings, engaged in rubber latex (dagta ng puno)which is harvested at regular intervals and which are sold (in solid lumps) to a rubber processing plant. They plan to be a corporation. I am not sure if they are planning to go into other areas like a rubber processing plant. Here are my questions, if, you may:

1. Since their business is purely and simply agricultural (with a product so in-demand), so simple to harvest and still so simple to sell to a ready buyer, is incorporation advisable? Under what circumstances may it be advisable to incorporate?

2. Just in case they incorporate, would the advantages outweigh the disadvantages in all aspects (decision-making-wise, tax-wise and complexity-wise due to legal requirements, etc.)?

3. Just in case they incorporate, what precautions should be borne in mind (family relation, employee-employer relationship, taxes and other legal requirements)?

4. If a family simple business incorporates, like my friend’s, what type of corporation would that be (they do not plan to share ownership with outsiders). Is it always a stock, or non-stock?

Thank you and more power, Sirs.

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2 Re: incorporating a family business on Tue May 08, 2012 1:13 am


Reclusion Perpetua
It would be advisable if they are planning to get more capital or to protect their personal property from creditors.

The advantages are stated above, the disadvantage would be more paper works.

If they wanted to keep it within the family, they have to ensure that the stocks are inscribed with such limitation. And again more paper works.

If its purpose is for profit, it should be a stock corporation, and if they want it to stay with the family, it would have to be a closed corporation.

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3 Re: incorporating a family business on Sun May 13, 2012 7:17 am


Reclusion Perpetua

refer your case to a real lawyer and perhaps in personal. wag ka mag rely dito s forum na ito. opinion lang ito dito. sabi nga ni atty LLL, you are not my client and i am not your lawyer.

ang advantages at disadvantages, perhaps better ma address iyan ng CPA LAYWER . or lawyer na expertise niya is business law. consult the said lawyer in personal.

BUT for a start, consult or buy a partnership book by DE LEON. txt book iyan. doon nakadetail lahat advantages at disadvantages. correlate mo doon s actual facts ng friend mo.

tama din si ibonidarna. refer mo s lawyer at maexplain niya yan s personal kung ano ginamean ni ibonidarna. or kahit s CPA lang. kaya na iyan nila i explain.

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