Legal structuring
The entity you registered to start the business is rarely the entity you want to raise on, sell, or bring a partner into. We rebuild it before that costs you leverage.
Almost every structuring problem we are asked to fix was cheap to prevent and expensive to unwind. An LLC formed off a template with two equal members. Equity promised in a conversation and never papered. A second entity opened for a new line of business, with no agreement governing how the two relate. None of it matters until the day it does: a partner exits, an investor runs diligence, a spouse files, or a buyer asks who actually owns the intellectual property.
This engagement takes the company apart on paper, tells you what is load-bearing and what is decoration, and rebuilds the parts that will not hold. It is scoped and priced before it starts.
What the engagement covers
Entity selection and conversion
An S-election survives only while the company has one class of stock and shareholders the Internal Revenue Code permits, so a preferred round ends it. Conversion between LLC and corporate form is a statutory filing with the North Carolina Secretary of State — the easy half. What the move costs in tax, and whether it buys anything an amendment could not, is settled before anything is filed.
Equity issuance and vesting
Restricted equity is granted subject to a vesting schedule and a repurchase right, and the document has to say what the company pays for unvested shares when someone leaves. Recipients who want the tax result they expect must file an election under section 83(b) within thirty days of the grant. The thirty-day period comes from the statute itself, not from a regulation the Service can waive.
Operating and shareholder agreements
North Carolina's LLC Act fills the silence with defaults: under G.S. 57D-3-20, absent a contrary provision in the operating agreement every member is a manager, each has equal rights to participate, and a decision approved by a majority of the managers controls. Two junior members can outvote the one who funded the business. Deadlock, transfer restrictions, drag and tag are cheapest to settle while everyone still agrees.
Buy–sell agreements and funding
Triggers are the simple part; valuation mechanism and funding are the harder half. Since Connelly v. United States in 2024, life-insurance proceeds a company holds to redeem a deceased owner's shares are not offset by the obligation to redeem, which can enlarge the estate's tax exposure. Divorce is its own problem: North Carolina values marital property as of the date of separation.
IP assignment
A work-made-for-hire clause does not reach commissioned software, which is not among the nine categories in 17 U.S.C. 101. Without a written assignment the contractor keeps it; employee code within the scope of employment belongs to the employer. G.S. 66-57.1 reaches only an invention made on the employee's own time, without the employer's equipment, supplies, facility or trade secret information, unrelated to its business or to work done for it.
Holding and intercompany structures
Two entities on paper are one entity in practice if the money moves without documents. North Carolina courts apply the instrumentality rule, and the factors they weigh are practical: thin capitalization, ignored formalities, funds siphoned between affiliates, officers who do not function. Documentation is the defense — leases, services agreements, licenses and management fees between related companies, priced and papered as if the counterparty were a stranger.
Governance for outside capital
G.S. 55-16-02 lets a qualified shareholder inspect the basic corporate records on five business days' written notice; board minutes, accounting records, the shareholder record and financial statements open only on a demand made in good faith for a proper purpose, described with reasonable particularity and directly connected to it. Investors contract for more: periodic reporting, a board seat or observer, and consent rights, best settled before a term sheet.
How the engagement runs
- 01
Structure reviewEntity documents, cap table, contracts and filings read end to end.
- 02
RecommendationOne path, with the alternatives documented and set aside.
- 03
Documentation and filingsAgreements drafted, conversions filed, consents executed.
- 04
Execution and recordSigned, organized, and handed over as a corporate record you can produce on demand.
Common questions
Do I need to convert my LLC to a corporation?
Not necessarily, and it is worth resisting the assumption that you do. It depends on who is investing, what they require, how you are taxed today, and what a conversion would cost you. Some investors will take an LLC. Some will not. The answer follows the capital plan, not the other way round.
We agreed equity verbally years ago. Is that a problem?
It is the most common repair we make. It is fixable, and it gets harder the longer it sits, because memories diverge and the company becomes more valuable. Reconstructing what was promised and papering it cleanly is routine work if it starts before someone is asking to see the cap table.
What does a structuring engagement cost?
It is scoped and quoted before it starts, so you are not watching an hourly meter. The number depends on how many entities exist, how much of the history has to be reconstructed, and whether filings are involved. A call is enough to size it.
How long does it take?
Straightforward rebuilds run a few weeks. Where equity history has to be reconstructed across several years, or where multiple entities are being collapsed, it takes longer. You get a timeline with the fee.
Owners with informal equity arrangements, more than one entity, an operating agreement written for a company they no longer run, or a partner conversation coming that they would rather have on paper first.
Scoped and fixed. You are told the number before work begins.
A scoped call on what this actually needs, before anything is drafted.
Book a consultation or call (704) 222-4752