contract for goods and services

A sale of goods contract is one of the most important agreements a business owner can enter into. You may be writing a contract so you can offer your goods and services to customers. Or maybe you’re reviewing a new contract as you make a major purchase. In either situation, understanding what language to include (or keep out) can save you a bundle.  “Most businesses are selling a good or service. A well-constructed sales contract template is an important asset and business tool.”  Business Attorney Trevor Brewer Our team at BrewerLong business law attorneys has put together a roadmap to crafting a great contract for the sale of goods. When drafting or reviewing sales contracts, we can help you craft a favorable deal for your business.  Defining a Sales Contract A contract for the sale of goods sets out the terms of a transaction between a buyer and a seller. This document goes by many different names. Perhaps you’ve heard it called a purchase contract, a sales agreement, or a sale of goods contract. Whatever name you call them, these contracts set out the terms of sale of items or services between two parties.  Under most circumstances, a sale of goods contract contains at least the following terms: A clearly identified buyer, A clearly identified seller, A definition or description of the goods or services to be sold, and Any other terms that can help define or specify the terms of the contract. The goal is to make a contract as definite as possible so the buyer knows what they’re buying and the seller knows what they’re selling. Using a Sales Contract You can use sales contracts for any size of transaction. Contracts govern deals ranging in value from ten dollars to ten million dollars. The most important purpose of a contract is to protect both parties’ interests during a transaction.  In the United States, most states have adopted something called the Uniform Commercial Code (UCC). The UCC requires certain contracts to be in writing. For instance, contracts for the sale of goods over $500 require a written contract. While this is not a federal law, most states have adopted the UCC, Florida included.  It’s also important to note that written contracts, like sales contracts, are generally easier to enforce than “handshake deals.” Oral contracts are enforceable only in unique circumstances. Having a written contract for the sale of goods with the parties identified and schedules for payment and delivery is best for your business. It makes a court’s job in enforcing the deal much easier in the event something goes wrong. Drafting a Sales Contract: Six Points to Success Good, careful, and thorough drafting of a sales contract is your insurance policy against expense and heartache down the road. Talking with an experienced business lawyer can help. Our team at BrewerLong business law attorneys has extensive experience helping business owners with sales contracts. Whether you’re drafting or reviewing a contract for the sale of goods, we can help. One: Identify the Parties Make sure the contract for goods and services clearly identifies the buyer and seller. Confirm that all the identifying information is correct. If necessary, ensure that it in some way identifies any parent, affiliate, or partner of a buyer or seller that may later need to be liable for a party’s debts.  Two: Identify the Services or Goods the Contract Covers Identifying what the contract covers is possibly the most important part of the contract for sale of goods. This is where you’ll need to get as picky as possible with your language. An experienced business lawyer can help you with drafting. Goods might be defined by any of the following: Lot or SKU number; Make; Model; Size and weight; Type; Color; and Other identifying details like defects, blemishes, or markings. When selling services, the process is slightly different. Something called a Statement of Work (SOW) usually describes the services to be performed. SOWs are usually appended to the contract. SOWs usually contain a fair amount of detail about the services that the parties agree to perform. Three: Confirm Details of Payment Getting paid is the other most important part of a contract for the sale of goods. You’ll want to negotiate this term to your satisfaction, whether you are the buyer or the seller. A sales contract typically includes the agreed-upon price in the written contract. It also includes the terms of payment (like whether the contract will be paid in installments or all at once). Sales contracts typically also include terms that specify what happens in the event of a default (i.e., the buyer fails to pay).  Four: Confirm Details of Delivery of Services or Goods Including delivery details in a sales contract is an essential part of the written instrument. Whether you’re delivering a sailboat or accounting services under your contract, it’s very important to know when and how to deliver.  In certain contracts, usually for ones for bespoke products like specialty goods or software code, the sale of goods contract may include an inspection period. This period typically allows the buyer to confirm the product is fit for use before paying in full. If your contract has a provision like this, make sure you speak with an experienced business lawyer before finalizing the agreement. Five: Negotiate the Appropriate Representations and Warranties Contract warranties are representations by the seller that whatever’s being sold will meet certain standards. Contracts will usually contain certain express warranties about the reliability of the goods being sold. However, look out for potential waivers of warranties. Be sure to negotiate the appropriate protection for yourself and for whatever product you’re buying. And be skeptical of any seller who wants to sell you something as-is!  Six: Negotiate Situation-Specific Contract Provisions Most contracts have just a few situation-specific provisions like “choice of law” and “confidentiality” that need to be addressed before signing. A contract for the sale of goods is no different than any other. A few things for you to consider…

converting s corp to llc

Not so long ago, the go-to model for businesses was the corporation, and more specifically the C corporation. Savvy business owners may have elected the S corporation to add the pass-through tax benefits of a partnership to the limited liability of corporations. These days the go-to business model is the limited liability company (LLC). It unites a partnership-like tax treatment and governance structure with the limited liability of a corporation. Further, unlike the S corporation, LLCs have no restrictions on ownership or ownership structure.  “Sometimes the business entity that owners begin start out with is not the best entity for the business or the owners.” Business Attorney Trevor Brewer You may have started your business when corporations were the only real option. Now you want to move to an LLC to get more nimble in business and benefit from better tax treatment. Fortunately, Florida provides a straightforward process in its statutes on how to convert a corporation to an LLC in Florida. Below are 8 Steps, broken into 3 Parts, to convert your C or S corporation into an LLC.   Florida Law The Florida Business Corporations Act provides a specific mechanism for converting your domestic (Florida) corporation into a domestic (Florida) LLC. The procedure, known as “statutory conversion,” creates a new domestic LLC through the existing corporation in a single set of filing documents. It dispenses with the independent dissolution of the corporation and the separate creation of the LLC, and the related wind down and wind up of two independent businesses. However, statutory conversion requires specific corporate actions taken in a certain order to properly implement the conversion. Detailed attention to governance and timing are critical to convert a corporation into an LLC under Florida law. Part A: Corporate Matters Conversion of a business’s entity structure from a corporation to an LLC requires approval from the highest levels of the business leadership and its ownership. Therefore, a proposed conversion initially rests with the board of directors (the Board), but approval must ultimately come from the shareholders.  Step 1: Resolution of the Board of Directors The Board, by vote at a properly called meeting or by  written resolution, recommends to the shareholders that the corporation convert to an LLC. The Board resolution needs to contain a proposed Plan of Conversion (the Plan) and Articles of Formation (the Articles) for the new LLC. The Plan should contain the following information: The name of the corporation, The name of the LLC,  The organizing state of the LLC (in this case Florida), and The terms and conditions of the conversion.   Among other significant issues, the terms and conditions should address the conversion of corporate shares into LLC membership interests and the restructuring of management (e.g., corporate president becomes LLC manager etc.). While the Florida Secretary of State provides some of the conversion forms, others need to be drafted.   Step 2: Resolution of the Shareholders The shareholders, also through a vote at a properly called meeting or by written resolution, approve the conversion and adopt the Plan and Articles. Again, it is important to ensure the validity of the shareholder meeting and the actions taken. The shareholders must approve the Plan and Articles prior to submission to the Florida Secretary of State. Step 3: Filing the Certificate of Conversion A properly authorized officer or director of the corporation then files a Certificate of Conversion (the Certificate) with the Florida Secretary of State. The Certificate must contain: The name of the corporation, The type of business the corporation is converting to (in this case an LLC), The name of the LLC, The organizing state of the LLC (in this case Florida), The principal office of the LLC (even if it is the same as the corporation), A statement that the Plan was approved pursuant to Florida law, The effective date of the conversion, A statement that the LLC will pay to shareholders with appraisal rights the amount that they are due (see Florida statute 607.1113), and The signature of a duly authorized officer or director. Given that the Certificate of Conversion is subject to approval by the Secretary of State, it is good practice to seek professional advice in preparing it. Step 4: Acceptance of Conversion Before any other external acts related to the conversion occur, confirm that the Secretary of State accepted the Certificate of Conversion. Once accepted, the new LLC is now the active business entity. The LLC will be treated as if it had always existed in the place of the old corporation, which is itself dissolved through no additional action. Part B: LLC Matters The LLC, as successor to the old corporation, must now sync the statutory conversion to the ongoing business. This includes matters related to commercial, government, insurance, and financial relationships.  Step 5: Adopt an Operating Agreement Like corporations, LLCs have their own formal governance structure, and these formalities should be respected. As such, the LLC should adopt an operating agreement to replace the discarded bylaws of the old corporation. The operating agreement will outline the governance of the LLC, including the powers and duties of its managers (formerly the corporate officers). Step 6: Notify Commercial Partners Even though the business operations were not interrupted by the conversion, the change of the core business entity can affect several relationships. The most basic change starts with the business name. While it may not be significant, the name needs updating with all commercial partners. This update will affect contracts, accounts, invoices, billing systems, login information, online services, and other basic operational relationships. It could also require amendments to, or assignments of, contracts, leases, real property deeds, and vehicle and equipment titles. Step 7: Notify Government Agencies Similar to notifying commercial partners, the business may hold licenses and permits from various state or federal agencies. All business licenses and permits need to be amended for, or assigned to, the new entity to remain active and valid. Step 8: Notify Insurance and Financial Institutions  The named insured on any insurance policies should be…

limited liability partnership florida

Starting your own business is an exciting venture. However, before you really dive in, one of the first things you need to do is decide on what type of business entity you want to form.  “Choosing the right form of business entity is one of the first important decisions business owners must make.” Business Attorney Kristi Benson Common entity types that Florida businesses often elect to form include:  Sole proprietorships, Corporations, and Limited liability companies (LLCs).  Additionally, many new business owners choose to form a partnership. In fact, according to the U.S. Small Business Administration (SBA), partnerships are the simplest structures to form for two or more people who desire to own a business together.  Importantly, however, there are various types of partnerships to choose from in Florida. So what sets these types of partnerships apart from the others? And how do you know which one is the best fit for your future business?  Use our guide below to learn more about the various Florida limited partnership options and how to select the best one for you. If you have questions or are ready to move forward with forming your Florida business, contact the small business lawyers at BrewerLong today.  Limited Partnership in Florida: An Overview As a general matter, a general partnership is formed when two or more people agree to go into business together. However, general partnerships have two major problems: (1) any partner can create liability for the partnership, and (2) each partner is separately liable for all of the partnership’s liabilities. A better alternative to the general partnership is a limited partnership. Under the Florida Revised Uniform Limited Partnership Act of 2005, there are three common types of limited partnerships:  Limited Partnership (LP),  Limited Liability Partnership (LLP), and  Limited Liability Limited Partnership (LLLP). A distinguishing feature of the Florida limited partnership entity is the concept of limited liability for individual members of the business.  The concept of limited liability in the context of business law means that you are not personally responsible for the debts and liabilities of the partnership or your other business partners. However, whether you benefit from this limited liability will depend on the type of Florida limited partnership you form.  Florida Limited Partnership (Florida LP) In a Florida LP, there must be at least one “limited partner” and at least one “general partner.” A limited partner is one who has limited personal liability for the debts and actions of the business and its other partners beyond their own personal investment in the LP.  A general partner, on the other hand, will have unlimited personal liability and may be pursued directly. However, the benefit of being a general partner is that general partners typically control the management and decisions of the partnership, whereas limited partners do not. Florida Limited Liability Partnership (Florida LLP) In a limited liability partnership in Florida, there are no general partners. Rather, all members of the business will be limited partners and will benefit from limited personal liability.  Additionally, all members are able to share generally in the control over and decisions for the business entity.  Florida Limited Liability Limited Partnership (Florida LLLP) The third type of Florida limited partnership is the LLLP. LLLPs are a relatively new entity type. As such, not all states authorize the existence of LLLPs. However, Florida law does.  As with an LP, an LLLP in Florida will have at least one general partner and at least one limited partner. Further, a Florida LLLP will function very similarly to an LP.  The primary difference between the two entity types, however, is that general partners in a Florida LLLP will also benefit from limited liability. Thus, not only are they able to participate in the management of the business, but they also will be protected from liabilities and debts of the partnership.  Which Type of Florida Limited Partnership Is Right for My Business?  So, now that you have a better understanding of the types of Florida limited partnership entities, you may be asking, How do I know which type will best suit my business?  Unfortunately, there is no easy answer to this question. Each business is different and will have varying needs and goals. Thus, the best thing you can do is consult with an experienced business law attorney who can work with you to discuss your business goals and determine what entity type might be a good fit.  Do I Need to Hire a Florida Business Lawyer?  Of course, there is no legal requirement stating that you must hire a lawyer to help you start your Florida entity. Nevertheless, having one in your corner can be a great benefit to your new or growing business. A qualified Florida business lawyer can help you with:  Selecting an appropriate entity type for your business;  The business formation process, generally;  Tax planning;  Contract drafting, review, and negotiations;  Acquiring intellectual property rights;  Registration and licensing;  Legal audits and risk assessments;  Transactions, mergers, and acquisitions;  Business disputes and litigation; and  General business advice and counseling.  At the end of the day, starting a business in Florida is a legal process. Thus, it’s important that you do so legally and in compliance with state and federal laws. At the same time, you should also do so in a manner that is in the best interests of your business and its future.  The best way to accomplish all of these goals is to have an experienced legal professional in your corner who can advise you appropriately at every step along the way.  BrewerLong Is Ready to Assist Looking for a qualified business law firm in Florida that can help you with all of your business’s legal needs? If so, look no further than BrewerLong.  At BrewerLong, we pride ourselves on providing the highest quality services to businesses at all stages of the business lifecycle.  Many larger firms focus solely on securing business from large and well-established companies. However, our focus is on ensuring that even small businesses and startups get the…

is it legal to dock pay for mistakes

It can be very frustrating when your employee makes a costly mistake. You may be wondering, is it legal to dock pay for mistakes? This is an important question to ask before taking any action. Each state is different and there are several things to take into consideration in Florida.  Is It Legal to Dock Pay for Mistakes in Florida? The State of Florida does not have specific laws pertaining to deductions to employee pay to compensate for mistakes made on the job. Some states require that the employee provide written consent to the deduction. Without a law prohibiting docking pay for mistakes, a Florida employer can withhold or reduce wages for mistakes or loss of equipment. Some common examples include: Damage or loss of the employer’s property; Cash shortages; Returned checks; and Uniforms or tools. Under the Fair Labor Standards Act (FLSA), as long as the employee’s wage does not drop below the minimum wage, these deductions may be permissible, depending on the type of employee.  Exempt vs Non-Exempt Employees Non-exempt employees are hourly employees, which means they are entitled to overtime pay when work exceeds 40 hours per week. Exempt employees do not receive overtime and are generally salaried employees.  Non-Exempt Employee Wage Reduction for Mistakes The FLSA does not prohibit the reduction of the hourly wage for non-exempt workers as a disciplinary measure. However, this reduction cannot drop the employee’s wage below minimum wage. If the employee has an employment agreement or union contract that asserts contrary terms regarding wage deduction protocol, that should be followed, providing it is not illegal.  Exempt Employee Wage Reduction for Mistakes Salary deduction for exempt employee mistakes is permissible by the FLSA under certain circumstances including:  The violation of safety rules of major significance; and Disciplinary suspensions of one or more full days imposed for infractions of workplace rules of conduct. Deductions for damage to property, equipment reimbursement, accounting errors and the like are not permissible. They would defeat exemption status because it would reduce the guaranteed salary.  Other non-disciplinary reasons for exempt employee wage deductions may include: When an employee takes personal leave for more than a day; To offset compensation the employee received from jury duty, witness fee, or military pay when not working; Family and Medical Leave Act unpaid leave; and During the first or last week of employment when the employee doesn’t work the full week.  As an employer, it is important to understand when you can dock pay for mistakes and for employees who are not working for certain reasons.  Employee Misappropriation of Funds There are some exceptions to the minimum wage rule. One situation is if the employee misappropriates the employer’s funds, uses them, and does not return them. This may be considered theft, but in some circumstances, it may also be accidental or negligent. Regardless of the situation, the employee was essentially paid these funds regardless if they were used.  If the employee did commit theft, depending on the sum of the funds or property, the employer may want to consider pursuing legal action.  Employer Penalties for Improperly Docking Pay Penalties differ depending on if the employee is exempt or non-exempt. If an employer reduces the paycheck of an exempt employee, the employee is being treated as if he or she is a non-exempt employee. Because of the deduction, the law may interpret the exempt employee as non-exempt, which means they are entitled to overtime pay.  A court would take into consideration the number of improper deductions and how far apart they were. The location and number of managers overseeing the employee will be considered along with the clarity of company policy on deductions.  Talk to Florida Employment Law Attorney to Reduce Legal Risk As an employer, you already have plenty of work to do without worrying about the legal ramifications of disciplining your employees. Employment law can quickly become confusing and it is important to have an experienced business law attorney who can answer your questions and help you determine what is best for your business.  The experienced attorneys, paralegals, and administrative professionals at Brewer Long understand your frustration and strive to provide a client-focused experience where you are able to receive all the answers you need to remain compliant and in line with industry standards. Our legal team does much more than litigate. We are here to support your legal business needs through consultations and guidance as we navigate the legal system on your behalf. Contact Brewer Long to schedule a consultation with one of our attorneys. This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.

how to file a lien against a business

When businesses fail to live up to their financial obligations, those who do business with them can get hurt. Whether you are a vendor supplying the business with materials on credit, or a commercial real estate owner leasing the building within which said business operates, Florida law provides you recourse to get your money back—or at least get some of it back. The following discussion explains how to file a lien against a business. What Is a Lien Against a Business? When efforts to collect a bill from a business that owes you money have been unsuccessful, you can place a lien on the assets of the business. A lien on a business is a legal right of a creditor (someone the business owes money to) to obtain title and possession of a business’s assets. Said assets are then used as collateral to satisfy the debt. Types of business assets subject to a lien may include real estate owned by the business, bank accounts, inventory, and equipment. As a lienholder, once you gain title and possession of the debtor company’s property, you have the authority to sell said property. You would then use the proceeds of the sale to offset or satisfy the amount of the debt owed to you. However, before obtaining a lien on a business, you must seek a judgment against the business in court. Gather Documents to Prove the Debt As a threshold matter, you will need information about the debtor including its name and address of doing business. To obtain a court order, you must first prove that the business owes you money and that the business has failed to pay you. For example, if you are a food caterer and performed services as a contractor at the business’s office Christmas party, you would want to evidence the bill for the costs and labor, as well as the receipts for any materials or ingredients used. Similarly, if you have performed professional services for the business, your hourly billing statement should suffice as evidence of the unpaid debt.  File Your Claim in Court  Before you can place a lien on business property, you must first have a court order—a judgment directing the debtor to pay you what is owed. To obtain a judgment you first need to file a complaint and pay any necessary filing fees. Include all documentation described above to prove the amount and validity of the debt.   After filing a claim with the court and submitting proof of the amounts owed to you, the business will typically file an answer with the court and serve you a copy. At this stage, the business will have an opportunity to argue the invalidity of the debt or prove that said debt has in fact been paid. Documentation may include credit card statements or canceled checks. If the debtor business fails to demonstrate to the court that the debt is invalid or previously paid, the court will award you a judgment against the business to the full extent of the debt.   Enforcing the Judgment  Once the court awards you a judgment against a business, you must next file the written order with the county clerk’s office so that the public is put on notice that you hold a lien against the business and its property. If the business has other creditors, your priority is generally determined by who filed first. This process is sometimes referred to as attachment. Here, you will identify the business’s assets that will serve to satisfy the lien. Assets typically include real property, equipment, accounts receivable, and inventory. Once the business’s assets have been “attached” to your court order, the business debtor will be prohibited from selling or transferring said items of property.  Note that in some instances, the notice requirement varies by type of asset. For example, if the debtor business owns any real property, you will want to file a notice in the clerk’s office of the Florida county in which said business is located. For automobiles, you will want to file with the department of motor vehicles in whatever state the debtor business’s vehicles are registered. If you seek accounts receivable, you will want to send a copy of the written order to the debtor business’s financial institutions.   Selling the Assets Once the lien is in place, and the debtor business’s assets are attached, you can then exercise your legal right to seize and sell said assets. Because public policy seeks to discourage self-help, it is often the case that seizure and sale are done through the sheriff’s office via a public auction. Here, the proceeds are applied to the outstanding debt. if the debt is not fully satisfied, your lien against the business can be placed against other assets. Contact an Experienced Florida Creditors’ Rights Attorney Business clients frequently ask us how to file a lien against a business that owes them money. Because the answer varies with the facts of your case, it is advisable to speak to an attorney in your jurisdiction. For more than a decade, BrewerLong has advised creditors on a wide range of issues pertaining to business asset liens. We provide custom solutions based on your specific circumstances. Contact us today to schedule a consultation. This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages….

multiple businesses under one llc

Business clients frequently ask if they can structure multiple businesses under one LLC. Generally, yes. However, how you should structure multiple businesses depends on the circumstances and goals you have for your business.  Are you a young entrepreneur looking to launch your next venture as a different brand? Are you in the real estate rental business looking to minimize your liability exposure? Perhaps you own a law firm and are looking to open a café down the street? In general, business owners looking to operate multiple businesses at once in Florida have three options for structuring their affairs. Let’s walk through the pros and cons for each.  According to Business Attorney Trevor Brewer, “The decision whether to combine business lines under a single company or maintain separate companies for each of them largely comes down to two factors: (1) the similarity of the business lines, in terms of opportunity and risk, and (2) the increased costs and risks associated with managing multiple companies.” Set Up Several DBAs Under a Single LLC It is common for a business to advertise and operate under different names from its legal one. DBA stands for “doing business as.” In Florida, a DBA is also referred to as a fictitious name. A DBA allows you to operate multiple businesses under a different name than your own name (in the case of a sole proprietorship) or the registered name of your business. For example, if you operate a retail business called “Brick-and-Mortar Retail Clothing, LLC” and subsequently decide to expand the business online, A DBA will allow you to use a more marketable name such as “RetailClothing.com.”   How Many DBAs Can an LLC Have? Business clients frequently ask whether they can have multiple DBAs under one LLC. In Florida, owners of an LLC can apply for an unlimited number of DBAs. A business can use a DBA to advertise and transact business. Florida law requires you to register your DBA names so that the public is aware of who is operating the business. LLC owners must pay to register each separate DBA they wish to use. Note that a DBA can be registered at any time. You can apply for a DBA when you first register your new business. Or you can apply for a DBA later if you decide to make changes to your business later down the road.  Can I Use the DBA to Sign Contracts? This is generally not a good idea. It is important to use your registered LLC name, and not a DBA when signing contracts or other legal documents. Customers should know that they are dealing with a limited liability company. This would include service contracts, contractors, suppliers, and vendors. However, this doesn’t mean you must include “LLC” in every communication. For example, you might not want to include “LLC” on logos or website marketing materials (However, you might disclose in the website’s terms and conditions). What Are the Benefits of Running a Business with DBAs? This arrangement is great for those looking to expand their business into a second brand but stays under one entity. After registering your DBA, you don’t receive any additional legal rights protections per see. However, proper registration with the Florida Secretary of State serves to give notice to anyone else seeking to do business under the same DBA. An additional advantage of using DBAs is that it keeps administrative costs down. You don’t have to keep separate bank accounts, accounting, or operating agreements for each business.  What Are the Drawbacks of Running a Business with DBAs? A DBA by itself does not create a separate business or legal entity. It is all part of the one LLC. This means that if you operate multiple lines of businesses under a single LLC, they all share liability. In other words, if one brand gets sued, it’s the LLC getting sued, not just that one DBA. A DBA is not going to separate and shield the LLC from the debts and obligations of the other lines of business.   Set Up a Holding Company  Another way to structure multiple businesses under one LLC is to set up a holding company. Under this option, you would create separate LLCs for each new business venture and “hold” them under your primary LLC. This arrangement is also referred to as an umbrella company or parent company. Typically, the role of the primary LLC is to simply own the new businesses, while management takes place at the subsidiary level.   What Are the Benefits of Organizing My Multiple Businesses Under a Holding Company? A holding company has two primary benefits. These are liability protection and tax benefits. With respect to the former, one example may be the owning and renting of real estate to college students. Generally, if the owner owned more than one rental property, they would form separate LLCs for each of the rental properties. This protects the parent company and each rental property from the liabilities of the other. For example, if the college kids had a party and someone got hurt and successfully sued the owner, the parent business and all the other subsidiary properties would be protected from collections. As long as you abide by your state’s LLC laws, your liability is limited to what’s in that LLC.   A nice thing about an LLC is that you don’t have to file a separate tax return for each subsidiary LLC. This is because the income earned from each subsidiary flows to the parent company.    What Are the Drawbacks for Organizing My Multiple Businesses Under a Holding Company? A holding company can be expensive to manage. It can also cost you a lot of money to keep up multiple LLCs. Note, that for Florida LCCs, the initial filing fee is approximately $100 with annual report filings at $138.75 per year. In addition, owners typically hire registered agents for each separate LLC. A registered agent is one who receives service of process on behalf of your LLC. In Florida, a registered…

work separation agreement

As a business owner and employer, you’ve undoubtedly had situations where you’ve had to terminate someone’s employment. Ending a relationship with an employee is never easy. Ensuring that the end of a job is as friendly as the start is important for business owners and employees alike. The best way to do that is to use separation and release agreements. These agreements help protect you during an employee’s departure from your company, whatever the reasons.  “Employers are sometimes surprised when their former employees sue them, even if they never made a complaint during the employment. A practice of using well-drafted employment separation agreements, supported by consideration, can limit those post-termination lawsuits.” Florida Employer’s Attorney, Kristi Benson What Is an Employment Separation Agreement? Whether an employee is leaving your company voluntarily or you are terminating their employment, documenting the terms on which they are leaving benefits you both. In a job termination situation, you want to be especially diligent about documenting everything. An employment separation agreement represents the complete, written understanding of terms between you and your soon-to-be-ex employee.  Unlike tax forms or other items an employer needs to provide to an employee, an employment termination agreement is not a legally required document. Most states have few rules about the process of terminating an individual employee. This is why it is very important for your business to be proactive about knowing how to handle employee separations. Having experienced employment law counsel can be essential to handling employee separations smoothly. Our team at BrewerLong has extensive experience in all aspects of helping Florida business owners with employment law issues. We’d love to get to know you and help you too. At-Will Employment Most employment in the U.S. is “at-will.” This means that an employer can terminate someone’s employment at any time, for almost any reason. An employer typically does not have to provide notice to an employee of the termination. Employers do not have to tell employees why they are being terminated. However, an employer cannot fire someone for a discriminatory reason or as an act of retaliation for the employee exercising their legal rights (See Florida Laws on Firing Employees). Discriminatory actions may create serious liabilities for your business. That said, once you terminate someone’s employment, you will want to confirm in writing that the employee understands their employment is over.  Waiver of Claims One of the most important reasons to get an employment separation agreement is to obtain a waiver of claims. A well-drafted waiver usually prevents a terminated employee from suing your business for claims related to their employment. However, a waiver is part of a contract between you and your former employee—that means consideration is required. Typically consideration comes in the form of a payment, a severance package, or some other type of benefit.  What Should an Employment Termination Agreement Include? Any employment termination agreement you enter into with a former employee should include terms that are relevant to your business. The agreement should also incorporate terms relevant to the employment situation. An experienced employment lawyer can help you navigate employee terminations. They can also provide important drafting expertise when crafting employee separation agreements. The team at BrewerLong business law attorneys has more than a decade of experience in crafting employment separation agreements for employers.  Termination of Employment Details When drafting an employment separation agreement, identify the former employee’s job title and date the employment ended. Depending on what you agree between your business and the employee, you may want to state a reason for departure. Sometimes, in a separation agreement, the parties decide to mutually agree that the employee should leave. An experienced employment lawyer can help you understand how best to identify your terminated employee’s departure details. Severance Package Because one of the key reasons to seek a separation agreement is to get a waiver of claims, severance packages are important considerations for any employer considering a job termination. Employees who are fired, laid off, or otherwise terminated are usually the only ones who get severance. Sometimes, money is offered as an incentive to sign a waiver of claims. Often, senior executives may be entitled to severance under an employment agreement. Make sure to check all employee documents and agreements before drafting employee separation documents. A business-savvy employment lawyer will be your best ally in protecting your business from employment law liability. Benefit Plans Often, employees are offered access to employer benefit plans as a post-termination benefit. Sometimes they are entitled to this as part of the plan’s terms or part of an employment agreement. In any event, make sure to use a separation agreement to document what post-employment benefits a terminated employee will receive.  Non-Financial Clauses Not all parts of employee separation agreements relate to money. One important aspect of entering into an agreement with a soon-to-be-former employee is confidentiality. Reputational damage done to your business by a former employee who disparages your products or your services can cost you more money than a separation agreement ever would. Some clauses to consider include: A waiver of the employee’s right to sue the company for discrimination; A confidentiality clause ensuring that any information about the company that the employee may have gained during their tenure is kept private; A non-solicitation clause preventing the former employee from hiring other employees or taking away your clients; A non-compete clause preventing the former employee from competing with your business for a certain period of time within a certain geography; A non-disparagement clause confirming what each party can say about the other; A non-disclosure clause ensuring that the former employee will not disclose the existence of the agreement; and Other non-financial clauses that may be applicable to the particular employment situation. Remember that separation agreements are meant to protect you in more ways than one. Identify your biggest risks when considering which clauses to add. Be specific and thoughtful in your drafting. Special Requirements When Terminating Older Employees When terminating an employee that aged 40 or older, some additional steps…

breach of contract affirmative defenses

If your business has been sued for breach of contract, it is important to know how to defend yourself. You want to be prepared to raise as many legal defenses as possible. Often, it’s not enough to deny the claims against you. You will also have to raise “affirmative defenses.” These defenses justify steps taken in making and/or breaking a contract. Raise all defenses to a breach of contract claim as early as possible. Doing this in a lawsuit is an extremely important part of defending yourself. Raising all defenses early also ensures you won’t be prevented from doing so later.  At BrewerLong, our business law attorneys can help you understand how to defend your business against a breach of contract claim. We’ve prepared this guide to help you understand breach of contract defenses, including affirmative defenses that can help keep your business safe. “Both parties to a contract have obligations and duties. One party’s breach of contract may be entirely justified by the other party’s failure to perform its obligations. If you haven’t performed, you may not be able to enforce the contract.” Business Attorney, Michael Long What is a Breach of Contract Case? When someone brings a claim against you, they must be able to show all the basic elements of a breach of contract claim under Florida law. In Florida, those elements are:  A valid contract between the parties; A material breach of that contract; and Damages. Our team at BrewerLong can help assess whether these elements have been met. An experienced business lawyer can help you understand whether a claim against your business has any chance of success.  Is the Contract Valid? When preparing to defend yourself, confirm whether you have a valid contract with the other party. The other side will be required to prove the contract was valid, so be sure you understand what you signed. Florida requires the following elements for a valid contract: One party made an offer; One party accepted; Both parties gave consideration; The terms of the contract were reasonably certain (and in writing if required); Both parties had the capacity to enter into the contract; and The contract was legal. If your lawyer determines that there was no valid contract in place, this will be helpful as you defend your business. However, most cases require a detailed assessment of the facts and circumstances that went into the formation of the contract. This is why it is important to look at each element of a breach of contract case to know what all your defenses might be. Has There Been a Material Breach? Assuming you have a valid contract, a claimant must show that a contract was materially breached. The Florida courts interpret material breach to mean that one party to the contract has violated the terms of the contract very severely. In that case, the other party no longer has to uphold their end of the bargain.   It is the responsibility of the claimant to show that you didn’t fulfil your end of the contract. If someone claims you’ve breached a contract, they’ll have to show that you didn’t perform a service or deliver goods. They might have to show that you failed to pay them when they performed a service for your company. It’s a very strong defense if a claimant can’t show that the contract was materially breached. Has the Claimant Suffered Damages? Someone filing a breach of contract claim against your business must also show they suffered damages. This means that they must show they were harmed when the contract wasn’t performed. It’s the responsibility of the claimant to show that they suffered losses. For example, they might have to show the court that they had to seek a higher-priced vendor to fulfill the broken contract and therefore lost the benefit of the bargain they would have received if you had fulfilled your contract obligations. If the claimant cannot show that they suffered damages, this will also help your defense. The team at BrewerLong can help you understand the intricacies of contract claims against your business. We have successfully served the Florida business community for over a decade. Elements of Successful Affirmative Defenses If someone is able to make out a claim against your business for breach of contract, it is extremely important to raise all defenses as quickly as possible, including affirmative defenses. Defining Affirmative Defense to Breach of Contract An affirmative defense presents an alternative set of facts to a claimant’s claim against your business. If these facts are credible, they negate your potential liability. Most defenses to breach of contract claims are affirmative defenses.  What are Some Affirmative Breach of Contract Defenses? Defenses to a breach of contract claim can include any of the following: Repudiation, meaning the claimant indicated by words or actions that they were not going to perform their end of the bargain; Revocation, meaning the other person revoked the contract before it could be performed; Duress, meaning someone threatened you into making the contract; Illegality, meaning the contract is illegal in the place where it’s made, or it violates the laws of another state or country; Lack of consideration, meaning your contract fails to impose a duty on both parties to the contract; Lack of capacity, meaning the person from your business who made or signed the contract lacked the capacity to make/sign the contract; and Unconscionability, meaning that enforcing the contract is grossly unfair because the bargaining power between the parties was severely unbalanced. This is a non-exhaustive list. There are many more potential affirmative defenses that BrewerLong business law attorneys can help you explore. Our experienced team has deep knowledge of contract law defense. Trevor Brewer, Mike Long, and their team have dedicated their careers to helping business owners like you keep their businesses safe. Other Breach of Contract Defense Considerations While traditionally considered an affirmative defense to breach of contract, it’s important to note that you have the right to “argue in the alternative.” This means…

corporate maintenance

You have formed your Florida corporation and you are starting to get business growth underway. The administrative work does not end when all of the initial paperwork has been submitted and bylaws drafted.  “The officers, directors, and shareholders of a corporation are not required to know everything about corporations law, but they are expected to take steps necessary to maintain the corporation’s legal existence and good standing.” Business Attorney, Trevor Brewer What Is Corporate Maintenance? Corporate maintenance is the act of ensuring that a corporation hosts all necessary meetings, submits the proper notices, annual reports, and more to stay compliant with state regulations. There are consequences for not keeping up with the responsibilities of a Florida corporation.  Why Is Corporate Maintenance Important? Having to submit additional paperwork and hold ongoing meetings may seem trivial to your business, but it is important. Officers, directors, and shareholders may face a greater Shareholders incur a significant risk of liability when corporate maintenance is not upheld.  Though corporate maintenance is mandatory, that is not the only reason to hold shareholder meetings and record all pertinent information. For instance, Sshareholder meetings are an ideal time to discuss the business and make changes. Any changes to shareholders, dividends, finances, or anything else that a shareholder may want to revisit should be documented.  There are multiple issues that could arise if you fail to remain compliant with corporate responsibilities.  Issues with the Internal Revenue Service (IRS) As an example, corporate maintenance is important for confirming to the IRS that the corporation is a legitimate business entity, separate from its shareholders.  When the IRS performs an audit, they are looking for indications that the corporation is a real company. Indicators include corporate records, minutes of meetings, and compliance with state regulations. Without these documents, the IRS can legally find that the company does not count as a corporation. If so, there can be significant tax ramifications. One of the biggest tax changes can be that shareholders can now be held personally liable for taxes owed by the company. Instead of capital gains tax, shareholders may have to pay much higher personal income tax rates. The IRS also has the power to garnish accounts, seize assets, and place tax liens on items like homes and cars.  Dissolution of the Corporation There are a lot of benefits to incorporation. The state of Florida determines how a corporation formed in the state will act. There are a number of requirements to becoming a corporation and maintaining status as a corporation. The state has the right to administratively dissolve a corporation that fails to file its Annual Reportrevoke a corporate charter for lack of compliance. If the corporation is administratively dissolved state revokes your charter, it will lack good standing to continue the operation of its business it will be as if the corporation never existed and all shareholders become individually liable for business debts. Buyer and Merger Concerns Any serious buyer or potential merger will want to see all of your corporate records to understand the details of the business and make sure everything adds up.  If you are unable to produce records of annual reports, meeting minutes, shareholder correspondence, and other documents, it does not look good for your business. Anyone who considers purchasing your debts and assets will want to have a clear understanding of your business and what they are getting into. Lack of corporate maintenance may give the buyer bargaining power to offer a lower price or decline purchasing your business altogether.  Piercing the Corporate Veil Much like what can happen with the IRS, failure to meet all corporate requirements could cause a court to decide that you are not an actual corporation. If a judge comes to the conclusion that you may be trying to hide assets from creditors using the corporation, they can allow piercing of the corporate veil. This means that shareholders no longer have the legal protections that kept them from being sued individually for actions of the corporation.  How to Stay in Good Standing A corporation that complies with all government requirements for corporate maintenance is in “good standing.” A certificate of good standing can be obtained from the state. This document serves as legal proof that your corporation is properly registered in Florida and authorized to conduct business. To remain in good standing, a corporation must continue to provide ongoing documentation according to Florida law. Some of the things required to stay in good standing include: Annual reports;  Regular shareholder meetings;  Minutes of all meetings;  Notices of change to shareholders, registered agent, name, or official address; Financial statements; and Any amendments to the bylaws.  The most difficult aspect of corporate maintenance is often remembering everything that needs to be done. Many corporations opt to hire an attorney to be responsible for corporate maintenance and compliance. Benefits of Hiring an Attorney for Corporate Maintenance Services Your focus is on running your business. So it is very easy to lose track of the administrative work required to remain in good standing. An experienced Florida corporate attorney will understand the responsibilities of your corporation and establish a regular cadence of compliance and corporate maintenance services.  Shareholder Meetings Corporate shareholder meetings should be held at least once a year. Arranging the meeting using the proper protocol can be daunting. According to Florida Statute 607.0705(1) on corporate business meetings, notice about the meeting must be sent no more than 60 days in advance of the date, and no fewer than 10 days. The same applies to special meetings.  Recording Minutes and Storing Documents Holding a shareholder meeting is only part of the battle. To be fully compliant, the minutes of the meeting must be recorded. Minutes do not have to be submitted, but must be available upon request by shareholders or the state. Having an attorney present to record minutes and ensure that they are properly filed can prevent future complications.  Annual Reports A corporate attorney can help ensure the timely filing of mandatory documents. An…

florida wage and hour law

Florida wage and hour law refers to standards and requirements that employers must adhere to when it comes to minimum wage, overtime, and other issues related to how employees are compensated. It is important to understand Florida’s wage and hour laws to provide the best situation for your employees and remain compliant as an employer. “It is critical for employers to implement payroll policies and procedures that are compliant with federal and state wage and hour laws.” Business Attorney, Kristi Benson How Are Florida Wage and Hour Laws Regulated? The Federal Fair Labor Standards Act (FLSA) and Florida State Law provide protections for workers and guidelines for employers. The governing body depends on the law. There are three types of employees in Florida: Exempt employees,  Non-exempt employees, and  Independent contractors.  Classifications determine what kind of wage protection an employee is entitled to. Independent contractors are not considered “employees,” and therefore, they do not receive wage protections such as overtime, unless otherwise agreed in their contract with the employer. Exempt and non-exempt employees are classified by their jobs.  Generally, those who earn an hourly wage are non-exempt employees in Florida. Additionally, those who earn under $23,660 annually or $455 weekly are non-exempt. Jobs that may fall under this classification include: Inside sales workers: Non-management employees; “Blue-collar” workers; Vocational workers; and Emergency personnel such as police officers, firefighters, paramedics, and other first responders.  All non-exempt employees are entitled to minimum wage and overtime pay. Florida Overtime Laws Florida does not have its own overtime laws.  However, employers must comply with federal overtime laws found in the FLSA. Overtime is available to non-exempt employees anytime the employee works more than 40 hours in one workweek.  Overtime rate of pay is equal to or greater than one and one-half (time and a half) the employee’s regular pay rate  Minimum Wage Laws Florida’s current minimum wage is ​​$8.65 per hour. Starting in September 2021, the minimum wage will increase to $10 per hour. After this initial increase, the yearly increase will be one dollar a year through 2026. As an employer, you cannot pay employees less than minimum wage except in certain circumstances where part of an employee’s income is based on tips. When this is the case, the minimum wage requirement is $5.54 per hour and the employee must earn at least $3.02 an hour in tips.  Prevailing Wage Prevailing wage refers to the rate of pay that must be offered by contractors and vendors to their employees when conducting business with a government agency. Florida does not have a state law that governs these types of contracts. This is rarely an issue in states like Florida where the state minimum wage is higher than the national minimum wage, though the prevailing wage is not always the same as the minimum wage.  Meals and Breaks According to the Department of Labor, federal law does not require breaks, but the FLSA asserts that if breaks are less than 20 minutes long, they are considered part of the workday. Meal breaks of 30 minutes or more can be unpaid.  Some states have detailed rules regarding employee breaks and compensation, including how often breaks are required per hours worked. Some industries, such as transportation, require breaks on a certain schedule for safety reasons.  Paid Vacation Time Employers do not have to provide the benefit of vacation time to employees. Vacation time is a “perk,” not a requirement. Many private-sector employers offer paid vacation time for full-time employees. Vacation pay incentivizes employees to stay with the business and boosts morale.  Stipulations for vacation pay, such as how long you have to work for the company before receiving vacation pay, the number of days an employee can take, and how to submit a request for vacation should be understood by both the employer and employee. Employers do have the legal right to enforce a “use it or lose it” policy so that an employee cannot accrue an excess amount of vacation time. This type of policy mandates that the employee use the days by a certain date or they disappear.  Sick Leave Much like paid vacation time, sick leave is an optional perk provided by an employer. It is often in the employer’s best interest to have some sort of sick leave option for full-time employees to avoid the pressure of trying to work through an illness or having employees infect other staff members when contagious. That being said, if you are an employer who does not offer sick leave, you are still compliant with state and federal labor laws. But keep in mind that in some circumstances, an employee is federally entitled to take leave without pay to deal with a personal or family illness.   ​​Florida Holiday Pay Private-sector employers are not required to grant any holidays off with or without pay. The State of Florida officially recognizes 19 holidays, many of which are days off for those working in the public sector. Some of these holidays include: New Year’s Day, Martin Luther King Day, Presidents’ Day,  Pascua Florida Day, Independence Day,  Labor Day,  Columbus Day,  Veteran’s Day.  Thanksgiving Day, and  Christmas Day,  If you are a private-sector employer, you may not even notice that Columbus Day has come and gone, but Thanksgiving is probably more meaningful for your employees. You do not have to offer any holiday pay for these holidays, but keep staff morale in mind when making decisions about holidays.  Maternity and Paternity Leave Employers are not required to compensate employees for maternity or paternity leave. New parents who are Florida public sector employees are legally entitled to a maximum of six weeks’ leave to care for a newborn or newly adopted child. This also extends to caring for a spouse with disabilities leading up to and following childbirth. This time is unpaid unless otherwise stated in an employment agreement or employee policies. The Federal Family Medical Leave Act allows both private or public sector employees 12 weeks of unpaid leave for new parent duties….