BUSINESS LAW

Whether you are going it alone or with another person, it is best to consult a lawyer to determine which form of business formation will be best for your business. We will explain the various type of business entity and recommend the one that best fit your needs and the benefits of each form.

 

Various type of business entity:

  • Sole Proprietorship;

  • General Partnership;

  • Limited Partnership;

  • Corporation;

  • "S" Corporation;

  • Limited Liability;

 

Contract drafting and Review:

In addition to business formation and organization, we can provide you with the documents you will need to get your business up and running. Our business transaction services include working with clients on partnership agreements, employment contracts, non-competition agreements, vendor agreements, nondisclosure agreements, and employee policies.

 

Should You Have a Partner?

It is best to make your decision concerning whether to have a partner by preparing a "for" and "against" list. The most common reasons for joining with another person to start the business:

  • There is safety in numbers. In other words, you have two heads instead of one to discuss and make decisions. In the words of Solomon: "Two can accomplish more than twice as much as one. If one fails, the other pulls him up; but if a man falls when he is alone, he's in trouble. And one standing alone can be attacked and defeated, but two can stand back-to-back and conquer. Three is even better, for a triple-braided cord is not easily broken."

  • You will not need to be at the business at all times. You will have someone else who will be there to share the load and permit you to take a vacation and have sick time.

  • You will also have a highly motivated co-worker, not just someone who is earning a paycheck.

  • Partners can also be advantageous when they have complementary skills.

  • It may be necessary to have a partner to contribute capital and share the risk when things do not proceed as planned.

  • A partnership should have provisions made for exit strategies and you will need experts experienced in succession planning. What happens if a partner dies or becomes disabled? Or if family members want to join or quit the firm?

 

Some of the arguments against having a partner:

  • You will have to share the rewards if the business is successful.

  • You will lose total control over the business, particularly if you and your partner have difficulty in making decisions.

  • You will have to share the recognition that will come if the business is successful.

  • A partner can be a disaster if his or her judgment is not good.

  • You run the risk of a falling out and perhaps the necessity of one partner buying the other out if dissension arises.

 

Some of the things to consider in deciding whether a particular person will make a good partner are whether you have similar work habits, similar objectives concerning how to run the business, and whether your strong points are similar or complementary. For example, different capabilities permit you to spread the workload and provide better coverage for problems.

Different capabilities may permit you to give each partner a veto over important decisions in his or her area of expertise to help maintain stability and eliminate conflicts. Finally, you may want to consider whether you should have a buy-sell agreement in the event of a disagreement, and how the purchaser will pay for the portion of the business he or she is buying (and whether you should fund the buy-sell agreement with insurance in the event of the death of a partner).

 

Laws That May Affect You:

There are many laws that are applicable to owners of small businesses. It is best to consult with professionals to determine which laws will be applicable to you, what permits you will need to commence a business, and where to go to comply with the various rules. We can help you comply with labor laws such as the employment of minors, illegal aliens and workplace safety rules.

 

We can help with the requirements for business licenses, including special licenses for particular businesses.

 

If you are just starting a business or your business has already been established and you are considering changing your business structure, adding new employees or independent contractors agreement, contact me for assistance.

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