Business FAQs

• I can help you with various aspects of your business. If you are just getting started, I can assist with formation of the proper business entity (corporation, partnership, limited liability company), negotiate a lease for your new commercial location, prepare agreements between the investors (employment agreements, buy/sell agreements) and help with contract terms for your customers.

• If you plan to purchase an existing business, I can help prepare a letter of intent (sometimes referred to as an offer) as well as the closing documents. These can be simple or rather extensive depending on the nature of the business and transaction.

• If you are buying a franchise business, there will be extensive disclosures and contracts that should be reviewed so that you have a clear understanding of your rights and obligations with respect to that business and what the franchisor expects of its franchisees.

• As the business matures, you may need help with adding or removing investors or partners, managing disputes with vendors, customers, or investors, and selling the business or winding things down.

It is never too early to reach out to an attorney for assistance. If you plan to purchase an existing business or start your own, a few minutes on the phone can help guide you through the initial stages and set expectations. You should certainly speak with an attorney before signing a lease, a franchise agreement or entering any commitment with investors or others. I do not charge for the initial consultation and that can be a valuable meeting to help you organize your thoughts and prepare a game plan.

• There are typically four types of business structures that would be used depending on the nature of the business and the number of owners/investors. The two that my clients typically use are corporations or limited liability companies. Each of these are designed to offer some liability protection for the owners, providing that they are properly created, maintained, and required formalities are followed. And even though these are designed to protect against liability, there are circumstances where the owners may be held liable. Therefore, it is important to work with an attorney to understand these limitations.

• In addition, there are sole proprietorships and partnerships. A sole proprietorship is where there is a single owner, and the nature of the business does not justify the cost of forming a corporation or LLC. A partnership is where there are multiple owners each of whom has full authority over the affairs of the business. But the organization is not incorporated or formed as an LLC. Partnerships are not very common as each owner is ultimately fully liable for all debts and claims that may be brought against the business regardless of which partner may be responsible for the claim.

• There are also some specialized entities. Limited partnerships are used for certain businesses where those who are investing will have no active role and simply want to participate in receiving profits from the enterprise, such as a large real estate investment. Professional corporations and professional limited liability companies are used by lawyers and doctors who wish to have the benefits of limited liability of a business entity; however, those protections are more limited.