Business Entities

Small- and medium-sized enterprises often rely on banks for operating capital and business growth, and business owners assume responsibility for loan repayment through personal guarantees. Given the significant business and personal risks involved in business loans, understanding the Five Cs and the factors that banks consider when evaluating a business loan application is highly beneficial to borrowers. Business owners can also leverage this knowledge to enhance their chance

Although not required by law, operating agreements are essential because they define the partnership relationship between the members, clarify the rights and responsibilities of members and managers, set up internal governance procedures, and establish the management structure for the LLC.

Subsidiary limited liability companies (LLCs) can be a very effective strategy for minimizing a parent company’s exposure to potential liability by transferring the liability risk to the subsidiary LLC. If the LLC becomes liable for some claim or debt, the liability is limited to the subsidiary LLC, which, in most cases, protects the parent company’s business assets from being used to pay the LLC's liability.

The Arizona Corporation Commission (the “ACC”) recently voted to adopt new policies intended to deter fraudulent business filings and to...