Business Required to Pay Severence in Florida

Under Florida law, a business is generally not required to pay severance to a terminated employee. The U.S. Department of Labor generally does not require employers to offer severance pay. However, the existence of an agreement outlining severance terms creates a legal obligation to satisfy those terms. What Is Severance Pay? Severance pay is compensation an employer provides to an employee after termination of their employment. Monetary payment is not the only form of severance. Severance may include include extended benefits such as health insurance, retirement accounts, stock options, and assistance in searching for new work. Severance pay in Florida also includes payout of unused accrued “paid time off” or PTO, vacation pay, or sick leave. The months of service or the term of employment typically provides the basis for monetary severance calculations. In Florida, severance pay usually applies when an employee is laid off or retires early—not terminated or fired. Severance pay protects the newly unemployed and is typically viewed as a gesture of goodwill. Severance pay provides a previous employee with support until they secure a new job. However, when the employer has had a dispute with a departing employee, severance pay may be bargained to deter future legal action. Elements of a Valid Severance Agreement A strong severance agreement may protect against any future legal action by the employee. Because employees are only required to be paid severance according to an agreement between employer and employee, it’s important for that agreement to also include the benefits the employer gets in exchange for paying severance to the employee. Employers’ Attorney Kristi Benson Depending on the facts of the termination, an employer may want to include the following terms in a severance agreement. Release of Legal Claims If the potential for future litigation exists, the inclusion of a release of future claims is necessary. A release of general claims requests that the employee also agrees to release the employer from any potential claims they may have against the company. Confidentiality and Non-Compete Restrictions Confidentiality or non-compete restrictions may be a vital element of a severance agreement in Florida. Specificity of confidentiality clauses vary and request that the employee not divulge any proprietary information about the company or the employee’s employment. Non-compete clauses limit the employee’s future employment in a similar business over some time and in a certain geographic area. Non-compete clauses in Florida are enforceable as long as they are reasonable and protect a legitimate business interest. Mutual Non-Disparagement A mutual non-disparagement clause provides both the employer and the employee agree not to speak negatively about the other.  Mutual General Release A mutual general release releases both the employer and the employee from any future legal action. Neutral Reference or Reference Letter Severance agreements may include a neutral reference or reference letter. A neutral reference provides that employers may provide only dates of employment and position to requesting future employers. A reference letter goes further and provides dates of employment, position, and a positive statement. Contact Us If you are contemplating the termination of an employee or need assistance drafting strong severance agreements, contact the experienced Florida business law attorneys at BrewerLong. We are the premier employer’s law firm in Orlando and work tirelessly to protect you and your business from future litigation. Contact us today!

How to Form an S-Corp in Florida

Electing to be treated as an S-corp offers many benefits to both the business and the owner in Florida. An S-corp election may save money for your business especially when business profits are greater than your reasonable salary. Determine whether an S-Corp election is right for you and contact the qualified business attorneys at BrewerLong today! Making an S corporation election is often in the best interest of Florida corporations and LLCs, especially when the owners of the company are also working in company. Business Attorney Trevor Brewer What Is an S-Corp? A Florida S-corporation is a for-profit corporation or limited liability company (LLC) that has requested to be taxed under Subchapter S of the United States Tax Code. A Florida S-corporation reduces its tax burden by passing losses, deductions, income, and credit to its shareholders. S-corps avoid the double taxation of traditional corporations. Eliminating double taxation may potentially save your company hundreds of thousands of dollars. Florida taxes S-corporation income in the same manner as sole proprietorships and partnerships. The income of corporations is passed to shareholders for reporting. Shareholders use their income tax returns to report losses and income. A S-corp in Florida is essentially an election for special tax status. However, the same laws and rules apply to S-corporations as other Florida corporations or LLCs. Why File as an S-Corp? An S-corp offers many advantages to businesses in Florida. These advantages may outweigh any disadvantages or limitations. Pass-Through Taxation Filing as an S-corp provides the formal structure and limited liability of a corporation and pass-through taxation of business profits. There is no income tax imposed at the corporate level. Income is taxed only on shareholder returns. Following federal rules, Florida treats S-corp income as pass-through income. Business losses offset other income on shareholders’ tax returns reducing any income tax paid. This feature is particularly advantageous to start-up businesses with limited initial income. Business Growth An S-corp election in Florida may permit your business to raise capital more efficiently. S-corporation election allows for the issuance and sale of stock as evidence of interest in the corporation. Some financial lenders may require personal guarantees of business owners limiting the financial liability protection of S-corporation shareholders. S-corporations only permit one class of stock. The transfer of stock or change in business ownership is simplified. Simplifying class of stock limits interruptions to business operations and avoids unfavorable tax consequences. Eliminating complex accounting analysis saves on unnecessary business expenses. Limited Liability Each shareholder may lose only as much as they initially invested in the corporation. S-corporations in Florida are treated as a separate entity. Shareholders are not personally liable for any legal judgments, debts, or obligations of the corporation. For example, if a corporation goes bankrupt, creditors may not pursue the personal assets of shareholders to pay business debts. However, shareholders are liable for any crimes committed or corporate regulations violated. In a sole proprietorship or partnership, owners and the business are considered the same, leaving personal assets vulnerable. Benefits to Business Owners S-corporations still enjoy some benefits of a corporation such as insurance benefits, retirement plans, bonuses, and stock option plans. Additionally, there can be a separation of organization and management of a company. The management of the company is not required to hold ownership of the business, in contrast with the structure of partnerships, and sole proprietorships. Credibility Due to the formal commitment to their corporate structure, s-corporations may be viewed as more professional than sole proprietorships or partnerships. Customers and future investors may view your business more favorably, aiding in its success. Disadvantages of an S-Corp The disadvantages to filing as an S-corp in Florida may not align with the goals for your business. Tax Qualification Obligations Mistakes regarding the election of S-corp status, notification, consent of shareholders, stock ownership, and filing requirements may disqualify S-corporation status. Mistakes may be remedied easily, however, consultation with a qualified business attorney ensures these mistakes do not occur. Calendar Year Missing the registration requirement deadline for S-corporation status in Florida results in the failure to receive favorable tax treatment for that calendar year. Saving on tax expenses for your business requires satisfaction of these important deadlines. Stock Ownership Restrictions An S-corporation in Florida may have only one class of stock. Therefore, no varying classes of investors entitled to different dividends or distribution rights exist. Flexibility in Allocation of Income and Loss A traditional corporation easily allocates income and losses to particular shareholders; however, since S-corporations issue only one class of stock, this is more difficult. Allocation of losses and income is governed by stock ownership. Limitations on S-Corp Structure There are limitations on what types of companies may register as an S-corp in Florida. It is not the right choice for every kind of business. S-corps in Florida must be based in the United States. Some businesses, such as financial institutions, insurance companies, or domestic international sales corporations, are not eligible to register as S-corps. Additionally, the business may not have more than 100 shareholders. Only U.S. residents and citizens are permitted to operate as shareholders in Florida. Shareholders may not be other corporations, limited liability companies, partnerships, or certain trusts. Additionally, Florida S-corporations issue only one class of stock. Can An S-Corp Be Reversed? In the event a Florida S-corp is no longer an advantageous option for your business, reversal of your S-corp status is possible. Limitations exist, however. Reversal of the S-corp election may be done only after one year. You must wait for the following tax year before refiling with the IRS to revert to a traditional corporation. Need Help with Your Business? BrewerLong attorneys possess years of dedicated experience in business law matters and can ensure that your company’s formation is correct from the start. Our dedicated attorneys provide clients with knowledgeable legal counsel and answers to your complex legal questions. We understand the complexity of the small business culture and the quality representation smaller businesses require. BrewerLong attorneys are here to provide you with focused consultation and…

Business Interruption Insurance Claims

Business interruption refers to an unexpected disruption to the operation of a business. There are many reasons why businesses may suffer interruptions to their operations. Interruptions are usually the result of a catastrophic event, such as a natural disaster or possibly a pandemic such as COVID-19. When a business is not able to operate, the ability to generate revenue ceases or is drastically limited. Despite operational limitations, business obligations continue. Business interruption insurance, or loss of revenue insurance, provides a solution for businesses in these unexpected situations. What Is Business Interruption Insurance? Business Interruption Insurance is a form of insurance set up to support businesses in the event of a temporary ceasing of operations. This type of insurance is especially crucial for businesses relying on a physical location to generate income. Coverage plans operate to include replacement of lost revenue and payment of expenses when unexpected events require a business to shut down temporarily. The purpose of business interruption insurance is to place the business in the position it would be in had the interruption not occurred. While property damage is the most common reason for business interruption insurance, various scenarios exist that may result in an interruption to business operations. What Is Covered by Business Interruption Insurance? Business interruption insurance provides coverage for various losses that a business may suffer including: Actual losses: The loss sustained by the insured business resulting from the interruption to business operations is an actual loss. Business income: Business income is income the business would have received had the interruption not occurred. Period of restoration: Period of restoration is the time when business operations cease in order to repair, restore, or replace damaged or destroyed property. Period of restoration is applicable in situations where a natural disaster has damaged the business premises and business is interrupted until repairs are complete. Coverage plans offered under business interruption insurance assist in the following scenarios: Lost revenue. An example includes the loss of revenue suffered after substantial property damage closes a business while the owner completes repairs.  Rent or mortgage payments. If a business closes, rent or mortgage payments must continue even if the business is not operating. Relocation costs. Relocation costs refer to situations when a business must relocate to a new location due to an unforeseen event. Payroll. Despite the closure of a business, payroll obligations continue. Taxes. Payment of quarterly or annual tax obligations must continue, despite the business’s ability to generate revenue. Loan payments. Payments for loan obligations of the business. Property damage. Damage to the business premises. Other expenses. The insurance plan may outline specific definitions of “other expenses.” Policies may also include “extensions of coverage.” Extensions of coverage may include the following: Service interruptions. Service interruptions refer to damage to the sewer, electrical, water, telephone, or other utilities resulting in a disruption to business operations. Contingent business interruptions. Contingent business interruptions cover interruptions caused by losses of third-parties, such as suppliers. Leader property. This extension of coverage is applicable in situations where there is a loss, damage, or destruction to property not owned by the insured but that may affect the insured’s business. An example of a leader property is a large department store that attracts business to smaller stores in the same mall. Interruption by civil or military authority. This refers to situations where the government disrupts continuing business operations. This may be particularly applicable as many businesses are forced to cease operations due to COVID-19. When looking for business interruption insurance, you should choose a policy that  sufficiently covers your company expenses for more than just a few days. Prices of plans depend on the type of business seeking coverage. Higher risk businesses will likely have higher policy rates than businesses with a lower risk of business interruption. What Is a Business Interruption Claim? A business interruption claim is filed with the insured’s insurance company and details the specific request for coverage. A business must present the most recent income and expense reports, business history, and employee information. Most insurance companies require you to file specific documents to complete a claim. An essential element of any business interruption claim is the ability of the business to quantify the losses suffered by the business accurately. Accurate and up-to-date records of business operations are an essential element of any successful claim. These documents provide insurance companies with the detailed information needed to prove that a business did, in fact, suffer extensive losses as a result of the business interruption. How Are Business Interruption Claims Calculated? Business interruption claims intend to place the business back into the position it would have been in had the interruption not occurred. Business interruption insurance most commonly addresses losses in the following areas: Loss of profits due to the ceasing of operations; Additional expenses and the business’s inability to pay the costs due to loss of revenue; and Claim preparation costs to an attorney and accountant. A simple formula used to calculate business interruption claims is net expenses + continuing expenses + additional expenses = business interruption losses. Once calculated, it’s crucial to determine the extent of the business interruption insurance plan’s coverage. Any difference exceeding the plan limits will not be covered and is deemed a loss by the business. What Damages Are Recoverable from Business Interruption Insurance? Damages will vary from business to business, so careful calculation of the losses sought in addition to detailed records ensures a more successful claim. It is particularly vital for businesses to continuously maintain detailed income and expense reports, not just for the year in question, but from previous years. This useful information generates an accurate picture of the losses suffered from the business interruption by comparing the performance of the business to that of prior years.  In addition to income and expense reports, your claim should include property damage estimates and invoices, careful records of the dates of business interruption and commencement, and any other records related to your claim. How Can BrewerLong Help with Your Business…

What Employers Should Know About Working From Home Laws

The COVID-19 global pandemic has turned many business structures upside down. Nationwide, employers have notified their employees to work from home to slow the spread of the virus. Despite this change in structure, maintaining the productivity of your employees ensures the survival of your business. Employers must consider legal implications, procedural issues, and technological factors associated with this new telework environment. From payroll to tax considerations, if employers are advising employees to work from home, there are many issues to adapt to in the new workplace landscape.  Even when employees are working from home, employers must comply with the same federal and state laws intended to protect employees. Employment Attorney Kristi Benson What Are the Factors to Consider for Working At Home? There are several factors for employers to consider when determining whether the implementation of a work-at-home policy is feasible for their specific business. Making the Decision to Switch to a Telework Environment Employers should review their existing company policies and agreements with their employees and with third parties, such as customers, to determine if remote work is feasible for all or some employees. Does a telework or implementation procedure exist? If not, employers should prepare for clear communication with employees regarding expectations, reimbursement of any related expenses, and management of employee productivity. Employers should also internally review existing insurance plans and policy coverage data to determine if workers’ compensation and employee benefits, among others, remain in place despite the work environment change. Technological Factors Employees should be technologically equipped to work from home with internet connectivity, a computer, a printer, and other business-specific needs. Employers must consider whether privacy and data controls are sufficient to protect the business and any other private information. These may include the following: The implementation of added security measures to protect data and its transmission; The maintenance and storage of company data on company servers and not personal servers; and The requirement of all company communications conducted exclusively through company emails and accounts. It is important to consider the specific needs of your business in determining the level of privacy and controls you need. Communication with Employees Employers should provide defined expectations of employees working from home. It’s also a good idea to ensure clear communication channels to encourage employee communication with upper management. Employers should also confirm with employees how existing company policies, such as workplace harassment and employee benefits, extend into the working-from-home environment. Employee Agreement Where possible, employers should obtain a written agreement from their employees of the new telework policy. The agreement should covers the following points: Which employees are permitted to work from home; Employee expectations when working from home; Employee hours of availability; Employee understanding of the company procedures related to the protection of private information and general security; Monitoring of employee productivity; and  That the work from home policy is temporary and in response to the COVID-19 global pandemic. An employee agreement can help cement employee expectations and encourage continued productivity. Payment of Employees Rules regarding how you need to pay your employees vary depending on whether the employees are considered “exempt” or “non-exempt” under the Fair Labor Standards Act (FLSA). Exempt Employees As defined, FLSA exempt employees performing work outside of the office will earn their salary. These employees are exempt from overtime but will be paid for a full workweek if they performed any work during the week. If exempt employees did not work during a workweek, they need not be paid. However, if the exempt employees are directed not to work by the employer, then they must be paid their full salary. Employers must track the “type” of work exempt employees are carrying out. Monitoring procedures to measure productivity of exempt employees is essential, especially when employees are working away from upper management. Exempt employees must perform their primary duties to maintain their exempt status. Non-Exempt Employees Non-exempt employees are those that are paid on an hourly basis and are eligible for overtime pay. Employers must pay non-exempt employees the hours that they have worked. If a non-exempt employee does not work, the employer is under no obligation to pay. If non-exempt employees are called upon to work extended hours as a result of the COVID-19 emergency, employers may be required to provide extra overtime pay.   Even more so than with exempt employees, monitoring the hours of work completed by non-exempt employees is important because it can affect overtime pay and other benefits. Disability Considerations Employers must ensure that the same accommodations afforded to any employees with existing disabilities still exist when working from home. For example, if an employee has a disability that requires extended breaks, those considerations must be implemented even though the employee is no longer working in the office. As more businesses adapt their platforms online, accommodations should be made for employees with vision or hearing disabilities. The federal Equal Employment Opportunity Commission (EEOC) requires an employer to make “reasonable accommodations” for a disabled employee, including: Modifying work schedules and policies, Providing qualified readers or sign language interpreters, and Providing devices or modifying equipment. The EEOC ensures that employees with disabilities are able to work just like their co-workers. Business Expenses and Tax Considerations Employees may be able to claim their home office as a tax deduction as a result of mandated work-from-home policies. An employee may request a home office deduction if required by your employer and the employer pays no rent to the employee. If challenged by the IRS, the employee is required to show documentation that the employer required the employee to work from home. The home office of the employee must be exclusively used for work with no personal use at any time during the tax year. If an employer requires an employee to work remotely due to COVID-19, they may wish to consider reimbursing the employee for any new phone, internet, or other expenses incurred, if the additions permit the employee to telecommute successfully. However, they are not required to do so. By contrast,…

Breach of Fiduciary Duty

A fiduciary duty is a duty to act in the interest of another individual with respect to certain transactions, even above one’s own interest. A fiduciary is obligated to act in good faith and to act with care and loyalty toward those to whom they owe fiduciary duties. If you believe someone involved in your business has violated their fiduciary duties, you may have a cause of action to recover for any resulting damages. A knowledgeable business attorney can help you determine the best way to protect your business from a breach of fiduciary duty. Business partners, employers and shareholders must constantly trust that their partners, employees, or corporate officers will act for their best interest. Sometimes, these trusted fiduciaries put their own interests first, which can give rise to a legal claim for damages. Business Disputes Attorney Michael Long What Are the Breach of Fiduciary Duty Elements in Florida? To establish a breach of fiduciary duty in Florida, a plaintiff must establish the following elements: Existence of a fiduciary relationship, Breach of a fiduciary duty, and Damages caused by the breach. Once these elements are established, a plaintiff may recover compensations for losses sustained as a result of the breach of fiduciary duty. Fiduciary Relationship To prove a breach of fiduciary duty in Florida, a plaintiff must first establish that a fiduciary relationship existed. Common fiduciary relationships arising in the business context include: Business partners, Corporate officer/shareholder, and Agent/principal. Each of these relationships involves specific fiduciary duties of good faith, care, and loyalty. Breach of Fiduciary Duty The business relationships mentioned above give rise to specific fiduciary duties in Florida. These duties may vary depending on the type of relationship involved. But the crux of all these duties is that the fiduciary is legally required to act for the benefit of the individual to whom they owe a duty. Partners Business partners owe one another fiduciary duties under Florida law. These duties are specifically outlined by the Florida Statutes. They include duties to: Account to the partnership for any profits received from conducting partnership business or using partnership property; Not act on behalf of parties with interests adverse to the partnership; Not compete with the partnership; Not conduct business recklessly or with gross negligence; and Not intentionally engage in misconduct or knowingly violate the law in conducting business. Partners aren’t forbidden from all activities that further their own interests, but they can be held to have violated a fiduciary duty if they do not comply with their statutory partnership duties. Corporate officers Corporate officers have a fiduciary duty to the company’s shareholders. A corporate officer’s fiduciary duty in Florida requires them to: Exercise their powers in the interests of the corporation; Work for the benefit of all shareholders; Become informed of all material information that is reasonably available prior to making a decision; Not take illegal actions on behalf of the company; Disclose any conflicts of interest; and Obtain approval from neutral directors or shareholders for any transaction of the corporation in which the corporate officer has an interest. The Florida Statutes also generally require corporate officers to act in good faith and in a manner they reasonably believe is in the best interests of the corporation. Employees Employees also have a fiduciary duty to their employer. An employee may violate their duty by doing things like: Taking a business opportunity from the company; Stealing trade secrets from the employer; Engaging in a competing business; or Defrauding the employer. Employers can pursue legal action against employees who breach their fiduciary duties to the employer. Damages Various remedies may be available when a breach of fiduciary duty damages the individual to whom the duty is owed. A victim may seek both compensatory and punitive damages. A victim may also seek equitable relief, such as an injunction, an accounting, or disgorgement of profits. An experienced business attorney can help you calculate your potential damages and determine what types of remedies may be appropriate in your case. How Can BrewerLong Protect Your Business After a Breach of Fiduciary Duty in Florida? If you believe you have a cause of action for breach of fiduciary duty, contact the legal team at BrewerLong today. Our attorneys have extensive experience representing businesses of all sizes in complex legal disputes. Call us or contact us online to set up a consultation. We can answer your questions about the breach of fiduciary duty elements in Florida and help you determine a legal strategy to address your claim.

DBA in Florida

One of the first things to decide when you start a new business is what to name it. It is common for a business to advertise and operate under a different name from its legal one. However, Florida law requires you to register any alternate names so that the public is aware of who is actually operating the business. An experienced business attorney can help you with every aspect of starting your new business, including helping you comply with all rules for properly registering your business’s DBA in Florida. What Is a DBA? DBA stands for “doing business as.” In Florida, a DBA is also known as a fictitious name. A DBA allows you to operate your business under a different name than your own name (in the case of a sole proprietorship) or the registered name of your business. You can apply for a DBA when you first register your new business, or you can apply for a DBA later on if you decide to make changes to your business. A business can use a DBA to advertise, transact business, and open bank accounts. Why Use a DBA in Florida? There are various reasons a business might want to use a DBA. Sole Proprietorships Sole proprietorships often use DBAs because sole proprietorships are not a registered entity. If you want to operate your sole proprietorship under any name other than your own, you will need to register a DBA. For example, let’s say Chad has a sole proprietorship in which he builds and sells chairs. He would like to put up a sign in front of his shop and start taking out ads using the business name Chad’s Chairs. Chad would have to register Chad’s Chairs as a fictitious name. Registered Business Entities Other business entities, such as LLCs and corporations, would use a DBA if they wanted to start operating under a different name or if they wanted to operate multiple businesses without creating a separate entity for each business. For example, let’s say Chad sets up an LLC registered as Chad’s Chairs LLC and registers Chad’s Chairs as its fictitious name. After a few years, Chad’s Chairs has expanded its business and wants to be known for more than chairs. Rather than register a completely new business entity, Chad’s Chairs could apply for an additional DBA to start operating under the name Chad’s Fine Furniture. Or perhaps Chad’s Chairs just wants to expand its business by selling to customers online. To emphasize its web presence, Chad’s Chairs wants to do some of its advertising under the name Chad’s Chairs would then register as an additional DBA. Is Filing a DBA in Florida Necessary? If you intend to operate your Florida business under any name other than your own name or the registered name of your business, you must file a fictitious name registration. Because a company’s official legal name must include a business type designation—like LLC, Inc., or Co.—businesses that do not want to use that designation in marketing must register a DBA. Florida requires DBA registration to protect the public from business owners who might want to hide their identity behind an alias. Registration of a DBA allows consumers to search public records and determine which individual or business is behind a fictitious name. If you fail to file a DBA in Florida, you can be charged with a second-degree misdemeanor. This could carry penalties of up to 60 days in jail, a fine of up to $500, or both. Choosing Your DBA When selecting a fictitious name, it is best to choose one that is not already being used. You can search Florida business records to determine whether your DBA is being used by another business. Florida DBAs aren’t permitted to include business entity designations such as “LLC,” “corp,” “incorporated,” etc. Registering your DBA doesn’t protect your business name against other people using it. So if you want to have the exclusive use of your business name, you will need to register it as a trademark. This cannot be overstated: registering a fictitious name is not a substitute for federal or state trademark registration. You can register any name you choose, but using that name might infringe another business’s trademark rights. Likewise, your registering a name doesn’t prevent anyone else from registering the same name. Business and Trademark Attorney Ashley Brewer How to File a DBA in Florida Filing a Florida DBA involves several steps. We discuss them in detail here. Legal Notice Before you can file a DBA, you have to publish notice of your intent to register with at least one newspaper in the county of your principal place of business. The newspaper notice will likely cost somewhere between $30 and $100. Once it has run, the newspaper should send you a certification to confirm the publication. Filling Out a Fictitious Name Form Once you have published your notice with the newspaper, you can proceed to fill out your registration form. The form must include: Proposed fictitious name, Business’s mailing address, Name of the county where the business has its principal office, Names and addresses of business owners, Business’s EIN number, and Business’s Florida Document Number (for entities registered with the state). An owner of the business must sign the form, certifying that it is correct and that they have complied with the requirement to advertise notice of the intent to file. Filing Your Form You have the option to either file your form online or fill out a pdf version and submit it by mail to: Fictitious Name RegistrationPO Box 6327Tallahassee, FL 32314 The cost to file your form is $50. If filing your form by mail, you should make checks payable to the Department of State. If you file online, you will receive a confirmation email within 24 hours of posting your registration. If you apply by mail, you will receive confirmation by U.S. mail. Applications are generally reviewed and approved within a few days. Update Your Registration DBA…

Contract for Equity in Your Company

A contract for equity provides a powerful path to business success while preserving cash assets. Sometimes called an employee equity agreement, these contracts allow you to compensate employees—all or in part—by conveying an equity share in your business. Your company can put its cash to work in other ways while equity employees work harder to ensure company success. A business employment lawyer can discuss the best way to use contracts for equity to help grow your business. What Is a Contract for Equity in a Business? A contract for equity is a type of employment agreement that allows employees to earn a share of ownership in your company. Typically, employers use equity agreements in addition to traditional compensation. Equity stake employees will earn a portion of their compensation through a salary or hourly wage. Workers will earn the balance of their compensation through an incremental stake of company ownership. Although you can explore the potential of paying employees purely in equity, most will require some financial compensation as well. You can also use an equity-for-services agreement with independent contractors. However, many businesses prefer to apply this useful tool for their own in-house employees. How Can You Use an Employee Equity Agreement to Grow Your Business? Small businesses and start-ups rarely have an excess of cash at their disposal. Consequently, you might lack the financial resources to hire and retain top talent. If you have a lucrative concept and a persuasive pitch, you can use these assets to lure in the employees you need for success. When savvy employees recognize the potential you have to offer, they will be eager to grab a ground-floor stake. Another key advantage of using equity compensation agreements is the engagement these arrangements generate. When you bring someone on board in exchange for a share of the company, that employee essentially becomes an owner. With an ownership interest, employees understand they’re working for the success of their own future. You can’t generate this level of engagement with traditional salaried or hourly employment arrangements. Why Potential Employees Will Value a Contract for Equity in a Company Today’s employees recognize the value they can contribute to their employer. At the same time, they can feel resentment when their hard work goes exclusively to the benefit of someone else. One of the most talented and fastest-growing segments of today’s workforce are millennials. This demographic grew up on success stories like Mark Zuckerberg and Facebook. Facebook used contracts for equity in the early stages of its start-up. After Facebook’s IPO, those ground-floor employees enjoyed the fruits of their labor and a very valuable ownership interest. Business owners can use contracts for equity to court their industry’s top talent for positions throughout the company. In the case of Facebook and Google, company founders brought in executives and high-level managers they couldn’t otherwise afford, using equity as compensation. What Forms of Equity Can You Offer Potential Employees? Your business structure will dictate the details of your employee equity compensation agreement. The most common forms of equity you can offer potential employees include: Granted shares of stock, Stock options, and Stock warrants. Structuring your equity offering requires careful consideration. You must carefully oversee the administration of your program also. As employees become vested over time, both you and the employee must file various tax documents. You and your employees could also incur unexpected costs. Talk to an attorney who has experience in these matters to ensure everyone clearly understands the program. Setting expectations in advance will help ensure smooth sailing as your company begins to grow and expand. How a Business Lawyer Can Help with Your Equity Compensation Agreement Using equity as compensation offers a variety of compelling benefits for business owners. Unless you take great care in structuring these agreements, however, you could encounter costly legal hassles. Drafting a contract for equity in a company requires advanced legal expertise in areas that include: Employment laws and regulations, Taxation laws, and Securities laws. Your attorney will also assist you in determining the appropriate value of equity to offer each level of employee. This calculation is based on the potential value the employee contributes to the business. For elite talent, you might want to offer a larger percentage stake, to provide the best possible incentive. Equity compensation arrangements are a great way to incentivize and engage talented employees, but they have to be very well designed and managed. There are a lot of hidden traps, like imputed taxable wages, that require experienced handling. Florida Business Attorney Trevor Brewer Contact a Florida Contract for Equity Lawyer Today Brewer Long provides comprehensive legal services to small- and medium-sized businesses in Florida. We have deep experience in the areas of business including employment law for employers. We understand the struggles that small companies and start-ups face in today’s competitive marketplace. We can help you craft strategies that minimize your liability while helping grow your company. To learn more about using contracts for equity with your employees, contact us today

Joint Venture Agreements in Florida

Are you thinking of starting a joint venture in Florida? If you are considering a specific business opportunity with another person, a joint venture may be the best fit for you. A joint venture is any kind of business partnership formed between two or more individuals. These business partnerships are memorialized in a Joint Venture Agreement. People can form joint ventures for long-term business purposes, like launching an ongoing marketing campaign together. They can also form joint ventures for short-term projects, like putting on one specific event together. The great benefit of a joint venture is its flexibility. It is well suited to situations that are more complicated than simple sale-and-purchase transactions. Business Organizations Attorney Trevor Brewer In a Joint Venture Agreement in Florida, the parties can outline the terms of their relationship. There are several important terms to include in a Joint Venture Agreement. Key Provisions In A Joint Venture Agreement The following key provisions must be included in a Joint Venture Agreement for both parties to protect themselves. The Parties’ Contributions. Among the most important elements of a Joint Venture Agreement are the parties’ specific contributions. In other words, what is each party bringing to the joint venture? Here, you can discuss both monetary contributions and work contributions. The Joint Venture’s Purpose. Why are the parties entering into their joint venture? Although it may seem basic, outlining the purpose of the joint venture in Florida is extremely important so that each party is on the same page. The Term. How long will the joint venture last? Is there a set end date? Are there deadlines that the parties need to meet in the middle? These are all important questions to answer in your Joint Venture Agreement in Florida. The Profit/Loss Split. Will the parties split the profits and losses 50/50? Or will they earn money and split loss based on their contributions? Set this out clearly to avoid disputes down the line. Intellectual Property Ownership. Who owns the intellectual property associated with the joint venture? If both parties do, will there be rules on who can use what? Will the trademarks and copyrights be registered federally? Depending on the particular joint venture, the intellectual property can be the most valuable part. It’s important to answer these questions before the joint venture gets started. How to Handle Someone Leaving. What if someone wants to terminate the parties’ agreement before the purpose of the joint venture is complete? How will you handle that, and what will happen to the joint venture? Include the answers to these questions in the text of the document to handle this unexpected situation. Dispute Resolution. If the parties find themselves in a disagreement that they can’t work around, what will they do? Will they mediate or terminate their agreement? Disputes between the parties will happen in a joint venture, so it’s important to work out how to handle them early on. Along with including all of these terms, it is also important to customize your Joint Venture Agreement. In other words, it’s not a good idea to simply pull a template document online and try to figure it out yourself. It’s much better to contact an experienced business law attorney to help you draft your Joint Venture Agreement. Duties The Parties Owe Each Other In a joint venture, the parties owe each other specific duties. They include: The duty of loyalty, The duty of good faith, and The duty of fairness and honesty. These duties are relatively straightforward. The joint venturers must act with loyalty towards each other, act in the best interest of the joint venture, and act with fairness and honesty. Contact an Experienced Business Law Attorney in Florida If you’re ready to enter into a joint venture in Florida, contact an experienced business law attorney. At BrewerLong, we’ve helped many clients draft comprehensive and binding joint venture agreements. Get in touch with us today.

What is Promissory Estoppel in Florida?

In a promissory estoppel situation, there are two parties who essentially acted as though there was a contract. These situations arise more frequently than you would think according to Business Disputes Attorney Michael Long. It happens all the time, where one or both parties act like a contract is done and settled before it actually is. In those cases promissory estoppel might be the best legal cause of action for a damaged party. Business Disputes Attorney Michael Long Usually, one party is claiming the other party made them a promise and then did not deliver on that promise. Promissory estoppel in Florida is a claim that someone can bring when there are no contract claims available. These types of claims are also known as “detrimental reliance” claims. In practice, the party seeking relief will bring a promissory estoppel claim because the court has already determined that there are no contract claims available. In other words, the situation is such that the parties have not formed a viable contract. Promissory estoppel is technically an exception to contract law. There may be good public policy arguments for this type of claim. After all, parties make promises to each other in the real world all the time without fully formed contracts. If one of the parties acted based on something they expected the other party to do, they might be in a tough situation through no fault of their own. Elements of Promissory Estoppel in Florida There are three specific elements of promissory estoppel in Florida: The defendant promised the plaintiff something and should have expected the plaintiff to act or not act based on that promise (called “affirmative representation”); The plaintiff actually relied on the defendant’s promise and did or didn’t do something (called “detrimental reliance”); and Enforcing the promise is necessary to avoid injustice to the plaintiff. If a plaintiff is able to show these elements to a court of law, they may be successful on their promissory estoppel claim. Damages Available for Promissory Estoppel in Florida Usually, in a promissory estoppel case, the court will award the plaintiff reliance damages instead of expectation damages. Expectation damages are those that put the plaintiff in the position they would have been in if the defendant had completed their promise. For example, imagine the defendant offered the plaintiff a job. The plaintiff then moved to a new state in reliance on that job. Expectation damages might include the salary the plaintiff would have received. Reliance damages, in contrast, are those that put the plaintiff back in the position they were in before they relied on the promise. In the example above, reliance damages would mean, perhaps, the moving expenses that the plaintiff incurred, but not the salary they were expecting. Courts mostly award reliance damages for promissory estoppel cases. Defenses to Promissory Estoppel The defendant may have several options available to them in a promissory estoppel lawsuit. They may argue that there was an actual contract between the parties. If a contract does exist, then a promissory estoppel claim cannot go forward. They may also argue that they did not clearly make an affirmative representation to the plaintiff. The defendant could also say that there is no detrimental reliance. Finally, the defendant could argue that there is no injustice, even if they didn’t keep their promise. Contact an Experienced Contract Attorney in Florida If you have relied on someone’s false promises, it’s important that you contact a knowledgeable contract attorney. The attorneys at BrewerLong have years of experience in contract law. You will receive professional service and personal attention to help you navigate your promissory estoppel claim. Get in touch with us today.

Why You Should Consider a Florida Benefit Corporation

A Florida benefit corporation is a relatively new entity that is available for companies that benefit the public. Under Florida state law, a Florida benefit corporation must have “a material, positive effect on society and the environment, taken as a whole.” This type of corporation was only recently created in Florida in 2014. The goal is to allow companies to focus on charitable causes and the betterment of society or the environment. If you would like to form an organization for social or environmental purposes, you may wish to consider a Florida benefit corporation. Here, we will discuss the advantages of a Florida benefit corporation, as well as how to form one. Florida benefit corporations were created to give business leaders a middle path between tradional for profit corporations and not for profit corporations. Florida Business Attorney Ashley Brewer Advantages of a Florida Benefit Corporation The main advantage of a Florida benefit corporation is that board members receive protection from lawsuits for considering things beyond the interests of the stockholders. In a traditional corporation, the interests of the stockholders are paramount. In a benefit corporation, the board can consider their stated social or environmental cause when making decisions. Additionally, Florida benefit corporations are eligible for certification by B Lab, a global nonprofit organization aimed at promoting the highest standards of social and environmental performance, public transparency, and legal accountability. While certification requires paying an annual fee and re-certifying every 3 years, Certified B Corporations are permitted to use the “Certified (B) Corporation” logo. However, certification is not a requirement to maintain a Florida benefit corporation. What Are the Requirements of a Florida Benefit Corporation? There are three key characteristics of a Florida benefit corporation. 1. The Corporation Is Designed to Engage in Specific Benefit Activities. A benefit corporation must generally have a positive impact on society. The benefit corporation may also outline specific public benefits in its Articles of Incorporation that it wishes to focus on. 2. The Officers and Directors Have a Statutory Mandate to Consider the Corporation’s Public-Benefit Goals. Instead of just considering the interests of its shareholders, as noted above, the officers and directors of a benefit corporation must keep their stated public benefit in mind when making decisions. This can be considered the primary advantage, as most incorporators will want to focus on their cause during the life of their business. 3. The Corporation Must Make a Mandatory Annual Report to Its Shareholders Discussing Its Efforts Toward Its Public-Benefit Goals. This is more than just a financial annual report. This annual report considers everything the corporation did during the year in furtherance of its charitable goals. How to Become a Benefit Corporation in 4 Simple Steps The process of filing as a Florida benefit corporation is very similar to starting a regular C Corp or S Corp in Florida. 1. Choose a Business Name. The name for your corporation must be unique. You can search for a corporate name on the Florida Division of Corporations’ website. 2. File Your Articles of Incorporation. You will then file your articles of incorporation with the State of Florida. Your articles will give important information about your benefit corporation to the state, such as: The business name, including a business designator like “Inc.” or “Corp.”; Principal and mailing address; General and/or specific public benefit; Shares of stock; Registered agent information; Name and address of the incorporator; and Optional information about benefit directors and officers, as well as benefit director qualifications, if any. 3. Draft Bylaws. Your Florida benefit corporation will need a set of bylaws to detail information on the board of directors, meetings, and stock information, among other things. 4. Keep Up With Your Annual Reports. As discussed above, the specific requirements for a Florida benefit corporation annual report are different than the requirements for a for-profit corporation. After your benefit corporation is formed, make sure to keep up with your annual report filing every year. Additional Details About Your Florida Benefit Corporation Benefit corporations in Florida can elect to be taxed as a C Corp or S Corp, just like all other corporations in the state. You may notice several marketing and human resource benefits to having a Florida benefit corporation, such as: Attracting talent in line with your cause, Maintaining employee engagement over time, and High-speed growth because of your appeal to social consciousness. Overall, a Florida benefit corporation can be a wonderful way to make a contribution to society or the environment. Contact Us If you are considering starting a Florida benefit corporation, BrewerLong can help. This type of corporation is an immensely fulfilling way to do business. For any questions or help getting started, give us a call at 407-660-2964 or contact us online.