Outside general counsel is an innovative approach to legal services for growing a mature business. Mr. Rupprecht is a senior business lawyer with substantial in house experience who can provide corporate counsel services as needed at a fraction of the cost of either hiring a full-time, executive level general counsel or relying exclusively on law firm counsel.
Archive for Small Business
Real estate attorneys need deep knowledge about the business of buying, building and operating real estate assets. That practical knowledge is acquired only through experience and exposure to clients and deals, especially deals that go bad. It takes years to learn industry practices, many of which vary among different asset sectors.
You’ve probably heard a business owner say, “Partnerships don’t work.” That statement is usually followed by a story of what a former partner did or didn’t do. I have found that no matter what the story, there are two primary things that lead to the death of partnerships. Though rarely noticed early on, these two things start small and over time cause stress to grow into tensions and tensions expand into disputes and disputes evolve into outright conflict. So what are these partnership killers? Unstated expectations and verbal agreements.
You have decided to purchase a business. It takes a lot of courage to arrive at such a major life decision. More than likely your business lawyer, assuming you have made the wise decision to hire one to help guide you through the process, has possibly advised you to make an asset purchase as opposed to a stock purchase. Hopefully, the attorney has also explained to you the potential benefits of such a choice.
Founders often face a conundrum when seeking investment for their start-up:
Should a start-up require prospective investors to sign a non-disclosure agreement (NDA) before receiving the pitch?
Many investors refuse to sign an NDA before hearing a pitch or looking at an investment opportunity. Why? An investor who signs NDAs with one start-up puts himself in harm’s way for a lawsuit if he invests in another similar start-up. Of course, the best method for protecting confidential information is not to disclose it; there’s simply no need to show up and spew your secret sauce during a pitch. Instead, founders should be able to state the “what” of the business without giving away the “how.” This being said, it doesn’t mean that start-ups should forgo NDAs. Rather, outside of prospective investor pitches, and outside of the discussion of the start-up idea, all disclosures of confidential information should only be done when necessary and only pursuant to a non-disclosure agreement drafted for the specific purpose of the disclosure.
Have there been any significant changes in the lives of your appointed decision makers that would affect their ability to serve on your behalf? Are there people you would like to have as decision makers who are not listed on your original estate plan documents?
The statute of frauds is a collective term describing the various statutory provisions which render unenforceable certain types of contracts unless they are evidenced by a writing. The statute of frauds does not mean that oral agreements within the scope of the statute of frauds cannot be made and performed, or that they are illegal. It merely means that enforcement may be unavailable if one of the parties refuses to fulfill their obligations.
Most businesses benefit from having some form of standard agreement drafted for them. Although each business should have an agreement customized to their own situation, the standard agreement should be flexible enough to cover most of their common customer transactions.
In contrast to the standard agreement a business may use with their customers, there are times when a business owner should have a specific agreement drafted for a specific transaction. This would typically involve a unique or large transaction. For example, if a business owner wants to acquire another company as a way of expanding the business, an acquisition agreement may need to be drawn up. It is important that any transaction that requires significant negotiation is reduced to writing to help ensure that the deal is reached between the parties and is understood by all of them.
Having your preferences and documents in order will protect you and your estate from outside intervention. If you don’t plan, the consequences could be one of the following:
- If you become incapacitated without having appointed someone to handle your affairs, the court will appoint a conservator to act on your behalf. There are two types of conservators and the same person can fill both roles. There is the conservator of the person and the conservator of the estate. Even if the court-appointed conservator is someone you trust to carry out your wishes, that person will still have to publically report to the court periodically and will likely incur the added expense of outside accountants and attorneys. In some cases, the court could appoint a stranger to handle your affairs.
- Probate is a process used to value your estate, settle debts, pay taxes and transfer assets to your heirs. Trusts are not subject to probate but a will must be probated with certain exceptions.
Because a will is a public document, anyone can review its contents. If someone feels that they have been treated unfairly, they can contest it. Such challenges can tie up your assets for months or even years, and could cost your estate thousands of dollars in legal fees. If you do not establish a trust and title your assets correctly, your estate could potentially undergo a costly, lengthy and public probate process.
Lawyers charge a “statutory fee” which is an amount that is a percentage of the value of the gross assets that go through probate. The current rate starts at 4% of the first $100,000 of gross value of the probate estate and that percentage decreases as the gross value of the estate goes up. For example, if you have a gross estate value of $750,000, the attorney’s fees will be $18,000. If there are extra services that need to be performed, for example, selling a house, additional fees can be ordered by the court. Please note that this is the amount for just one fee. If both the executor and the attorney take the statutory fees, this amount would be doubled. Avoiding this process is one of the benefits of a living trust.