Frequently Asked Questions

SMALL BUSINESS FAQs

What is a sole proprietorship?

A sole proprietorship is a company with one owner that is not registered with the state as a limited liability company (LLC) or corporation. In some states, a sole proprietorship is referred to as a DBA (doing business as), as in "Joe Smith, doing business as Smith Heating and Air Conditioning."

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What is a partnership?

A partnership is a business owned by two or more people which has not filed papers to become a corporation or a limited liability company (LLC). You don't have to complete any paperwork to create your partnership -- the arrangement begins as soon as you start a business with another person.

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What is the difference between a general partnership and a limited partnership?

Usually, when you hear the term "partnership," it refers to a general partnership -- that is, one where all partners participate to some extent in the day-to-day management of the business. Limited partnerships are very different from general partnerships, and are usually set up by companies that invest money in other businesses or real estate.

While limited partnerships have at least one general partner who controls the company's day-to-day operations and is personally liable for business debts, they also have passive partners called limited partners. Limited partners contribute capital to the business (investment money) but have minimal control over daily business decisions or operations.

In return for giving up management power, a limited partner's personal liability is capped at the amount of her investment. In other words, her investment can go toward paying off any partnership debts, but her personal assets cannot be touched -- this is called "limited liability." However, a limited partner who starts becoming involved with the management of the business can quickly lose her limited liability status.

Doing business as a limited partnership can be at least as costly and complicated as doing business as a corporation. For instance, complex securities laws often apply to the sale of limited partnership interests. Consult a limited partnership expert if you're interested in creating this type of business.

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What is a corporation?

A corporation is a type of business structure created and regulated by state law. What sets the corporation apart from all other types of businesses is that a corporation is an independent legal entity, separate from the people who own, control and manage it. In other words, corporation and tax laws view the corporation as a legal "person," meaning that the corporation can enter into contracts, incur debts and pay taxes apart from its owners. There are other important characteristics that result from the corporation's separate existence: a corporation does not dissolve when its owners (shareholders) change or die, and the owners of a corporation are not personally responsible for the corporation's debts; this is called limited liability.

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What is a limited liability company?

A limited liability company, commonly called an "LLC," is a business structure that fits somewhere between the corporation and the partnership or sole proprietorship. Like owners of partnerships or sole proprietorships, LLC (members) report business profits or losses on their personal income tax returns; the LLC itself is not a separate taxable entity.

Like a corporation, however, all LLC members are protected from personal liability for business debts and claims -- a feature known as "limited liability." This means that if the business owes money or faces a lawsuit for some other reason, only the assets of the business itself are at risk. Creditors cannot reach the personal assets of the LLC members, such as a house or car.

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WILLS AND ESTATE PLANNING FAQS

What happens if I die without a will?

If you don't make a will or use some other legal method to transfer your property when you die, state law will determine what happens to your property. This process is called "intestate succession." Your property will be distributed to your spouse and children or, if you have neither, to other relatives according to a statutory formula. If no relatives can be found to inherit your property, it will go into your state's coffers. Also, in the absence of a will, a court will determine who will care for your young children and their property if the other parent is unavailable or unfit.

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What is a living will?

A living will, known in many states as a Directive to Physicians or Healthcare Directive, sets out your wishes about what extended medical treatment should be withheld or provided if you become unable to communicate those wishes. The directive creates a contract with the attending doctor. Once the doctor receives a properly signed and witnessed directive, he or she is under a duty either to honor its instructions or to make sure you are transferred to the care of another doctor who will.

Many people mistakenly believe that healthcare directives are used only to instruct doctors to withhold life prolonging treatments. In fact, some people want to reinforce that they would like to receive all medical treatment that is available -- and a healthcare directive is the proper place to say so.

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How does a durable power of attorney work?

When you create and sign a power of attorney, you give another person legal authority to act on your behalf. This person is called your "attorney-in-fact" or, sometimes, your "agent." The word "attorney" here means anyone authorized to act on another's behalf; it's most definitely not restricted to lawyers.

A "durable" power of attorney stays valid even if you become unable to handle your own affairs (incapacitated). If you don't specify that you want your power of attorney to be durable, it will automatically end if you later become incapacitated.

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ADOPTION FAQS

There are several types of adoptions. In Montana an adult can be adopted, as well as a child. Step-parent adoptions have different requirements than private or agency adoptions. Our firm is experienced in all types, including international adoptions. Call us with your questions as to the costs and requirements.

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DISSOLUTION FAQS

What is the difference between a divorce and a legal separation?

A divorce is a legal proceeding to dissolve a marriage, divide property and determine custody and support of any minor children.

A legal separation is a proceeding to divide property and determine custody and support. The parties are still married once they are legally separated.

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Do I need an attorney to handle my divorce?

Each person's divorce and situation is different and so you should seek the assistance of an experienced attorney as to your rights and obligations, rather than your friends, co-workers and relatives. There are some aspects of a divorce which cannot be changed after it is final if you make a mistake in representing yourself.

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How will I pay for my divorce?

Divorces are charged on an hourly basis by our firm. It is not possible to do a divorce on a contingency fee basis.

It is possible to ask the court to order your spouse to pay for your attorney's fees and costs in your divorce action. You should discuss this possibility with your attorney.

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MISCELLANEOUS FAQS

What kind of arrangements exist for attorneys to be paid?

There are several ways for attorneys to be paid. The two most prevalent are: 1.) paying by the hour for the time attorneys work on your file, and 2.) paying under a contingency fee agreement. A contingency fee agreement means the firm does not get paid by you for the time and work it does unless your case is settled or you collect a judgment. If you receive money from a settlement or a judgment, the lawyer or firm receives a percentage of the settlement or judgment and reimbursement of expenses. The collection of fees, therefore, is contingent upon your receiving a settlement or judgment.

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If I need someone to review my potential lawsuit, how do I contact you?

The lawyers at Marra, Evenson & Levine, P.C., are available for you to contact us and discuss your potential lawsuit. Once we have had the opportunity to review your potential lawsuit and discuss it with the owners of the firm, we will contact you to advise you whether we will represent you. You can contact us at (406) 268-1000 or via email at email@marralawfirm.com.

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