Providing trusted legal counsel for credit unions, banks, businesses and individuals in the Tri-state area since 1989.

The right business corporation can help avoid commercial disputes

On Behalf of | Oct 1, 2021 | Commercial Disputes |

For business owners, if one is successful, commercial disputes and litigation are just a fact of life. At some point, a commercial dispute will happen, and depending on how it is handled, it could lead to litigation. Though, what some business owners may not realize is that those disputes could come from inside the organization, not just the out. And, one way to help mitigate litigation exposure and liability is by choosing the right business corporation.

Choosing the right entity

New York recognizes several types of business entities. This includes a Sole Proprietorship, Corporation (including, a Not-for-Profit Corporation), General Partnership, Limited Partnership and Limited Liability Company. Choosing the right one dictates tax and litigation liability, along with the rights and responsibilities of the business participants and owners.

What is the most common?

Many owners choose corporation because it is a separate entity from the owners, but the corporation itself has many of the same rights as a natural person. There are a lot of advantages as a result. It can last forever, limits the liabilities of the corporate participants and, what can be most important, ownership interests can be easily transferred. Limits on transferability can be a huge source of commercial disputes.

Source of disputes

However, corporations, just like the other entity types, have requirements. For a corporation, there must be complete books and records of meetings, including the meeting minutes, a board of directors and executive committee, etc. If one fails to do this, some or all of the benefits of the corporation could be lost.


For Terrytown, New York, business owners, commercial disputes generally are unavoidable, but steps can be taken to help avoid them. Or, in the alternative, utilizing an appropriate business entity, help avoid liability.