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The Most Important Reason to Create a Business Contract

Relational Attorneys: Attorneys who do the type of work I do – forming companies, raising capital, mergers & acquisitions, etc. – are sometimes called “transactional” lawyers. The idea is that we work on transactions that have a beginning and an ending. This is as opposed to, for example, compliance lawyers who often provide ongoing advice and services to heavily-regulated business clients. Transactions, such as a merger or acquisition, are one-time events. At least, they are [...]

The Most Important Reason to Create a Business Contract2024-02-20T12:33:53-06:00

How to Avoid Seller Liabilities When Buying a Business

When buying and selling businesses (this is generally called “mergers & acquisitions” or, just “M&A”), there are three ways to structure a deal – The buyer can purchase the assets of the seller The buyer can purchase the stock (or other equity interests) of the seller directly from the owners, orz The buyer and the seller can merger themselves together through a process called a statutory merger, which entails making a filing with the Secretary [...]

How to Avoid Seller Liabilities When Buying a Business2024-02-20T12:34:41-06:00

Incorporating in Delaware? Consider This.

I am licensed in Delaware (and Texas). Delaware is the heart of corporate law in the States. Close to 2/3 of Fortune 500 companies are incorporated in Delaware. And, more than 1 million companies call Delaware home (for purposes of incorporation, not necessarily where they are physically headquartered). So, obviously, I am going to tell clients that it makes sense to incorporate their businesses there, right? Wrong. Well, generally wrong, at least. First, Some History: [...]

Incorporating in Delaware? Consider This.2024-02-20T12:35:34-06:00

4 Things to Know When Deciding Between an LLC or Corporation

So you’ve started a new business, congratulations! Here’s to the next step: legally recognizing your dream. If you’re looking to set up a liability cushion, chances are, you’re deciding between filing as a limited liability company (LLC) or a corporation. 1. Limited liability means if you go under, you don’t have to worry about the repo man. This is a benefit you can reap from either an LLC or a corporation. You are not personally liable if you [...]

4 Things to Know When Deciding Between an LLC or Corporation2024-02-20T12:36:15-06:00

Employment “At-Will” (A Business Lawyer’s Perspective)

What Does It Mean to Be Employed “At Will”? In most developed countries, employers are required by law to give employees some notice or severance pay before terminating their employment. There are exceptions if the termination is based on some type of serious misbehavior, but the default standard is that employers owe their employees a “soft landing.” This isn’t the case in the United States. In the U.S., most business owners employ their personnel “at-will,” [...]

Employment “At-Will” (A Business Lawyer’s Perspective)2024-02-20T12:36:55-06:00

Corporate Law Gets Progressive – All About Benefit Corporations

The Present State of Corporate Law Profit! Profit! Profit! That’s the rallying cry of corporations worldwide - we must make more money! Indeed, imbedded into the psyche of business is the overarching goal of producing profit with little to no concern for whether or not those profits do more harm than good for humanity. In the bastion of corporate law that is Delaware, the case law reverberates with analysis after analysis of what is in [...]

Corporate Law Gets Progressive – All About Benefit Corporations2024-02-20T12:37:37-06:00

3 Legal Blunders All Small Businesses Make and Few Attorneys Talk About

I'm sure you know about the benefit of separating your personal assets from your business assets by creating an entity like a corporation or LLC. Not doing that would be a mistake for most business owners, however it’s not a typical mistake because the need/benefits of incorporating are well known. The same thing goes for creating strong vendor and customer contracts. I’m not interested in trotting out all those often talked about and rarely made mistakes. [...]

3 Legal Blunders All Small Businesses Make and Few Attorneys Talk About2024-02-20T12:38:23-06:00

Email Confidentiality Disclaimers: Annoying but Are They Legally Binding?

I recently received an email and the email disclaimer (in the footer of the email) at the bottom was over 1,000 words long. 1,000 words! Seriously. It’s rare I receive an email from a company of any size that doesn’t include an auto-placed standard email disclaimer at the bottom of the email. If so many companies use email disclaimers, they must have value, legally or otherwise, right? Why else would so many companies use them? [...]

Email Confidentiality Disclaimers: Annoying but Are They Legally Binding?2024-02-20T12:39:24-06:00

Ways to Structure Company Sales and Purchases (M&A Deal Structures) – Part 3

Now, let’s look at the tax implications of a stock deal from the buyer’s perspective. If the buyer pays $100 for all of the stock of the seller’s company, the buyer inherits the assets at their current book value. Recall that in our example the current book value of the seller’s assets is $50. If our buyer depreciates the assets over five years, the deduction per year is $10. Therefore, in the first year the [...]

Ways to Structure Company Sales and Purchases (M&A Deal Structures) – Part 32024-02-20T12:40:07-06:00

Ways to Structure Company Sales and Purchases (M&A Deal Structures) – Part 2

Another reason asset deals are a little more work from a documentation standpoint compared to stock deals and statutory mergers is due to the question of whether or not the buyer and seller need approval of third parties. These third parties may include parties to the selling company’s customer contracts, vendor agreements, leases, etc. The general common law rule is that contracts are assignable. If you and I have a contract that says I’ll buy [...]

Ways to Structure Company Sales and Purchases (M&A Deal Structures) – Part 22024-02-20T12:40:43-06:00