If you are considering selling your business, you may know that there are many steps involved. There are several things to do long before the parties execute a comprehensive contract. There are negotiations and preliminary documents. A letter of intent to sell your business is one of these preliminary documents. Though it may not be binding, the letter of intent is still a critical part of the business sale process. The letter of intent is the key document when it comes to negotiating a business sale transaction. It’s the working draft of the final purchase agreement. Business Transaction Attorney Trevor Brewer In this article, we’ll discuss letters of intent, also called LOIs, from the seller’s perspective. We’ll also include 6 tips that will help in the sale of your business. What is a Letter of Intent? A letter of intent is a preliminary document in the sale of a business. It usually comes after a buyer and seller have already had significant discussions. In the sale process, the LOI comes after the parties have already decided on the basic terms but before the final contract. In an LOI, the buyer and seller can outline their expectations before crafting and executing a binding written agreement. Usually, LOIs are non-binding. However, there may be terms contained within the LOI that should be binding, discussed further below. After the parties sign an LOI, the buyer will then complete their due diligence. If everything goes according to plan, the terms of the LOI generally turn into the terms of the final contract. Sometimes, an LOI may come with a deposit from the buyer. This may happen at the seller’s request if they wish to gauge the seriousness of the buyer’s interest. Generally, however, at the LOI stage, it is clear to the parties that they both wish to finalize the sale. 6 Important Tips for Your Letter of Intent to Sell Your Business You may be at the stage where it’s time to consider a letter of intent to sell your business. If so, there are several tips you should consider. 1. Hire a Lawyer. Much of the time, since a letter of intent for the sale of a business is non-binding, the buyer and the seller won’t bother with attorneys. However, it is a much better strategy to hire a lawyer at this stage. It generally won’t cost a lot to have an experienced business attorney draft your intent to sell letter. Additionally, hiring an attorney at this stage signifies to the buyer that you are a sophisticated seller. If you don’t have prior experience selling a business, an attorney can be an invaluable asset for you at this time. 2. Think It Through. Even though the letter of intent is generally non-binding, this is not the time to quickly throw together some terms without giving it a lot of thought. Between sophisticated buyers and sellers, changing the terms of the letter of intent before the final written contract is not viewed favorably. In other words, although the document may not technically be legally binding, it is an extremely significant document between the parties of the sale. This is another reason to seriously consider getting an attorney to help you with your letter of intent. An attorney can help you make sure you’re not leaving important terms out of the LOI. 3. Keep Your Negotiating Power in Mind. For a seller, the period just before the letter of intent is signed is the best time for negotiating. After the basic terms of the deal go into the letter of intent to sell your business, you won’t have as much leeway to negotiate. Therefore, if there are terms that are extremely important to you, now is the time to discuss them with the buyer and have them put into the LOI. Additionally, don’t sign the document too quickly and give the impression of being overeager for the deal. 4. Include Some Provisions That Are Binding. Although the specific terms of the sale may not be binding, you should include some provisions in the letter of intent that are binding. For example, the buyer may wish to have a no-shop clause, so that they don’t have to worry about competing offers during their due diligence. As a seller, you will likely want to have a confidentiality provision to protect yourself if the sale doesn’t go through. You also may want a clause that details the parties’ exclusivity in the negotiating process. 5. Make Clear Which Provisions Are Binding and Which Are Not. To avoid having a court decide that your entire letter of intent is binding, make clear which portions are and aren’t. This should be drafted within the text of the letter of intent itself. 6. Consider Including Basic Legal Terms as Well as Business Sale Terms. You’ll want to include some of the same boilerplate terms you would include in a contract. For example, your buyer may wish to include terms about your non-competition after the sale. For the letter of intent itself, you will likely want to include a governing law provision, as well as a dispute resolution provision, in case the deal does not go through. Get Started with Your Letter of Intent Selling your business is a significant proposition. It’s one that often warrants the assistance of a lawyer. If you are considering the sale of a business, or are at the stage where you need a letter of intent drafted, contact BrewerLong. We have years of experience helping business owners through all stages of selling a business.
Are you thinking of licensing out something that you own, but aren’t sure about the various types of licensing agreements? There are a few ways to license intellectual property (or “IP”). To do so, you must first understand the different types of license agreements. Here, we’ll discuss what a license agreement is and how you can decide which is right for you. What is a licensing agreement? A licensing agreement is a legal contract by which one party that owns certain IP allows another party to use that IP. The party who owns the IP (the licensor) receives payment (a royalty) when the other party (the licensee) uses the IP. Licensing agreements can be broken down by the types of IP they license. They can be further broken down into exclusivity and duration. How to decide between types of licensing agreements 1. Decide which IP you need to license. Patent Licensing Patents cover science and innovation. Patent licensing agreements are the documents through which a patent owner allows someone else to use their patent. In practice, patent owners choose to license their patents so that they can have it manufactured and distributed widely. The individuals and businesses that create patentable material (like new inventions) aren’t usually the same parties that can easily manufacture and distribute it. It’s easier to allow someone else to handle the business side of the patent while continuing to earn royalty payments. These are generally the most complex types of license agreements because of everything involved in obtaining and maintaining a patent. Trademark Licensing Trademarks are signifiers of commercial source, namely, brand names and logos or slogans. Trademark licensing agreements allow trademark owners to let others use their IP. Most often, trademark owners license their trademarks for commercial goods, like clothing, iPhone cases, or food products. Copyright Licensing Copyright is the artwork of the IP world. Copyrights exist in, for example, works of visual art, like paintings, or movies, or songs. Copyrights also exist in characters, like Mickey Mouse. Copyright licensing agreements are often used for consumer goods, just like trademark licenses. They are also used for distributorships, such as with musical works or movies. Trade Secret Licensing Trade secrets are unique, in that they are not registered with the government. Patents, trademarks, and copyrights are most valuable when they have been registered with the federal government. Trade secrets are protected only through their secrecy. Two of the most famous examples of trade secrets are the formulas for Coca-Cola and the recipe for KFC chicken. Trade secret licensing agreements often come with non-disclosure agreements (or NDAs). NDAs state that the party receiving certain confidential information cannot share it with anyone. 2. Decide whether you’d like your license to be exclusive. Exclusive Exclusive licenses are those that create a unique relationship between the licensor and the licensee. In these types of licensing agreements, the licensor agrees that the licensee is the only one who can make use of the IP. These usually cost more for the licensee. Non-exclusive In a non-exclusive license, the licensor may be licensing the IP out to more than one licensee. These types of license agreements usually cost less for the licensee. Sole In a sole license, the licensor agrees to use just one licensee, but the licensor reserves the right to continue to use their IP, as well. 3. Decide on the duration of your license. There are also two different types of license agreement durations. Perpetual A perpetual license is one where the licensee buys the right to use the IP just once and then can use it for a lifetime. Often, these are the more expensive type of license because the licensor won’t receive ongoing royalties. Perpetual licenses can be seen most commonly in software. Term A term license is organized one of two ways: (1) the licensee can pay a one-time fee for a certain term or (2) the license can pay per use (these are traditional royalties). Term licenses are much more common across all industries. Although many people don’t think of it this way, when you pay Netflix each month, part of that fee is a license to use their proprietary digital software. According to BrewLong attorney, Ashely Brewer: “Licensing agreements are like lease agreements. A lot depends on the property involved and the relationship of the parties.” CONTACT BREWERLONG TODAY FOR YOUR LICENSING NEEDS As you can see, there are many types of licensing. An experienced IP attorney can help you figure out what type of license agreement you need, as well as what needs to go into that agreement. To schedule a consultation about your IP licensing, call our office at 407-660-2964, contact us online, or email us at firstname.lastname@example.org.
If you’re a limited liability company (LLC) owner with a growing business, you may be wondering how to legally expand your business to other states. Most states, like Florida, require out-of-state LLCs to register before transacting business there. Here, we’ll walk you through the steps needed to register your established LLC in the state of Florida. What is a Florida Foreign LLC? A Florida Foreign LLC is an LLC formed in another state that wishes to transact business in Florida. In this case, “foreign” refers to the company being from another state, not from another country. The process for a Florida Foreign LLC to register to do business in Florida is called foreign qualification. “Transacting business” isn’t explicitly defined in Florida state law, although the Florida statues include a partial of activities that do not constitute transacting business in the state. If you have a physical presence (like an office or store) or employees within the state, you’ll likely need to apply for foreign qualification. How can a foreign LLC register to do business in Florida? Below is a step-by-step guide to foreign qualification in Florida. 1. Order a Certificate of Existence from your state. Florida requires the foreign LLC to file a Certificate of Existence. A Certificate of Existence is a document issued by your home state that shows your LLC is in good standing. “Good standing” means that you’ve met state requirements and paid the necessary fees. It’s a good idea to order your Certificate of Existence as soon as you decide to file for foreign qualification. 2. Make sure you meet Florida’s registration requirements. Florida requires certain items for their foreign LLCs. The requirements may be similar to the ones in your state. The name of the Florida Foreign LLC must be unique. It must contain the designation “Limited Liability Company,” “L.L.C.,” or “LLC.” The LLC must also appoint a registered agent, who can accept service of process. Additional Florida requirements for the qualification include: The name and contact information of the individual responsible for the LLC application The name of the LLC in your home state The state where you initially organized your LLC If applicable, your Federal Employer Identification Number/Employer Identification Number (FEI/EIN) The physical address of your LLC The mailing address of your LLC, if it’s different The name, address, and title of all the members, managers, and authorized persons of the LLC 3. Fill out an Application for Authorization to Transact Business in Florida. Once you’ve gathered all of the information and made sure you’ve met the requirements, the next step is to fill out the application. This is called the Application by Foreign Limited Liability Company for Authorization to Transact Business in Florida. It is available online. It can be filled out online and printed, or printed and then filled out in pen. Finally, someone with authority for the LLC must sign the application, along with the registered agent. 4. File the application, along with the required fee, and a cover letter. Once filled out, you should mail the application, a cover letter, the Certificate of Existence, and the required fee to: Division of Corporations Registration Section P.O. Box 6327 Tallahassee, FL 32314 The basic fee is $125, which includes the filing fee and the designation of a registered agent. You can also get a certified copy or a Certificate of Status for additional fees. 5. Once registered, file an Annual Report each year before May 1. Once the LLC is registered in Florida, make sure you file an annual report each year. The first one is not due until the year after you’ve registered in Florida. After that, you must pay the $138.75 fee each year, along with filing the annual report, before May 1. If you don’t, you may lose your “active” status in Florida. “Out-of-state companies that do business in Florida may face a big surprise if they are sued. Either pay all the annual report fees and late fees that they were required to pay or be prohibited from adequately defending itself in court.” According to BrewerLong attorney, Trevor Brewer Follow these steps to get started conducting business in Florida. If you’re looking for a little assistance, an experienced Florida attorney can help make sure your LLC is all set up and ready to go. CONTACT BREWERLONG FOR YOUR FLORIDA FOREIGN LLC QUALIFICATION To get some help registering your foreign LLC in Florida, call our office at 407-660-2964, contact us online, or email us at email@example.com.
If you’re like many Florida business owners, you may view retirement with both excitement and misgivings. Even as you look forward to having more time to enjoy favorite activities, the idea of moving on from your livelihood can be anxiety-inducing. One option that allows you to step away and still experience the benefits of retirement is bringing family into the picture. The formal requirements under the Florida Business Corporation Act aren’t too complicated, but there’s a bigger picture to consider when you transfer business ownership to a family member. As soon as you begin seriously thinking about retiring, time is of the essence to start planning. You’re in a better position to leave on your own terms, maintain control over the process, and reap the benefits of a steady retirement income. You should discuss the specifics with an experienced Florida business law attorney, especially three key topics that may guide your decision making. BEFORE TRANSFERRING BUSINESS OWNERSHIP CONSIDER: 1. Your Company’s Value There are numerous factors to consider about your own retirement situation, but you may also have concerns about your company’s well-being and longevity in moving forward without you. For many closely held companies, there’s significant value attached to the people that built them. When your own unique, personal input is an asset to the business, you need to assess the extent to which the company can survive after you sell it – or whether it can maintain a good proportion of its value by transferring business ownership to a family member. The analysis starts with an unofficial business valuation, typically a basic review of assets, expenses, accounts receivable, and debts, along with the value of your personal reputation and good will. Then, you’d determine whether the total dollar figure could be enough for a comfortable retirement, exclusive of other savings, pensions, and investment income. If you’re convinced that your business would perform well without you at the helm, you need to work out an official business valuation through generally accepted accounting standards. Not only is this necessary for making a decision on transfer or sale, but also for the tax implications in evaluating your expected retirement income. BEFORE TRANSFERRING BUSINESS OWNERSHIP THINK ABOUT: 2. Your Individual Retirement Needs Retirement is a major life transition for anyone, and even more so for someone who owns a business. When considering your own needs for income, you must assess how far your retirement will go for a wide range of expenses, such as: Your basic needs, including your mortgage, utilities Health insurance and medical costs; Car leases; Services you’re used to gaining through the company, such as tax preparation, and club memberships; and, Other expenses that you’ll now be responsible for covering yourself. You must also consider how to apportion your retirement income to cover these costs, especially the amount that comes from transferring your business as compared to your income from investments and other assets. For this reason, as early on as possible in your planning, you should be contributing to a retirement fund that will suit your needs – aside from what you’d make through a sale of your business or transfer to a family member. Keep in mind that you could make arrangements to stay on and play a role with your company when you transfer ownership to a close relative. Many former business owners can serve on the board of directors or in a consultative role, enabling them to make an income without taking full control of operations. You can make an important contribution if you’re serving and maintaining relationships with customers who have been dealing with you directly for years. BEFORE TRANSFERRING BUSINESS OWNERSHIP TO YOUR FAMILY MEMBER CONSIDER: 3. Options for Structuring the Transfer If you’re leaning toward transferring ownership of your business to family members or trusted employees – as opposed to a third party – there are multiple options and structures to consider. You should discuss the specific pros and cons with a business law attorney, but you might look into: Gift Transfer: You could transfer ownership to the other party as a gift, with the caveat that you’ll earn income form the new owners. As of 2017, the Internal Revenue Code allows you to claim an individual gift exemption of $10 million – or $20 million if you execute the deal with a spouse. Because the laws allow for annual adjustments for inflation, the exemption is $11.4 million and $22.8 million for 2019, respectively. The amounts increase for the next few years. This means you could leverage the business transfer as a gift without adverse tax implications, in some cases. Once the business is no longer part of your estate upon your death, you won’t incur tax liability when the company expands Financed Sale: You may opt to act as a lender in transferring the business to a family member, and there are many ways to structure the transaction. Through a promissory note, you can obtain payments directly from the buyer based upon an amortized schedule – or installment payments followed by a balloon. During the pendency of the arrangement, you’ll make a steady, regular income to maintain a comfortable retirement lifestyle. Partial Sale & Lease Back: If your company has considerable holdings in real estate, a building, or other property, you could sell the business – but retain ownership over these assets. Then, you can rent them back to your family members as new owners of the company. There are tax advantages, but the key benefit is that you can fund your retirement through the lease payments. Keep in mind that you need to include specific provisions when drafting the documents to transfer your business, as disputes can arise when family members are caught off-guard by a lease relationship. “Succession planning, particularly where it involves transferring ownership or operation of a business to children or other family members, must start with the question: ‘What is the best interest of each party?’ Sometimes its easier to jump ahead to talking about available…
If you’re new to commercial leasing, you’re probably quite amazed by the highly technical, meticulous nature of the contract. Leases for these spaces are very different from residential agreements, especially since landlords may require you to pay an amount in addition to your actual rent. This payment often covers taxes, maintenance, and insurance (TMI). When you find out that you’re obligated to pay, it could have a significant effect on whether the space is affordable. A Florida contract attorney can explain the details, but it’s helpful to review some answers to frequently asked questions about TMI in a commercial lease. What’s included in TMI? In most cases, the bulk of your TMI will go toward your landlord’s property taxes and some insurance costs. Beyond these amounts, you might think of TMI as including many of the same maintenance costs that you’d pay as a homeowner in an HOA. Examples include: Landscaping, waste removal, and cleaning of common areas; Paying for building management costs; Administrative fees; and, Ongoing repairs and maintenance for the roof, HVAC, plumbing, and related costs. “The division of maintenance obligations is one of the most significant items requiring negotiation and attention to specifics.” BrewerLong Attorney Ashley V. Brewer In addition, Florida imposes sales tax on leases of commercial property, so some of these amounts are also built-in to TMI. Why is TMI separate from the base rent? It’s a common practice for landlords to present their monthly rent in terms of a price per square foot, so tenants like you can compare different spaces. Companies separate out TMI in leases because the tenants are the actually using the property and taking advantage of the features that additional rent supports financially – usually in the form of more customer traffic due to the enhanced appearance of the space. How does the landlord calculate TMI? Usually, your landlord will add up the total costs for annual taxes, insurance, and maintenance, and then divide it by the total square feet of the building. From there, the company multiplies the per square price by the number of square feet in your individual space. The total is the amount of TMI that you’ll be responsible for paying, though the formula may vary depending on your circumstances. Does TMI fluctuate over time? Because property taxes make up a good proportion of the total TMI amount, you can expect your additional rent payments to increase or decrease. As key systems age, including the roof, HVAC, and plumbing, the costs may also fluctuate. Can I negotiate TMI? It can be challenging for a prospective tenant to negotiate changes to TMI. Landlords know that their tenants talk, and they don’t want to create conflict by offering one business a lower TMI as compared to others. Discuss Commercial Leases with an Orlando, FL Contract Lawyer If you have additional questions about TMI in a commercial lease, please contact BrewerLong. Our team advises business owners through Central Florida, including Orlando, Sanford, and Winter Park. We can schedule a free consultation to provide more information on commercial leasing issues.
When you’re buying or selling a business, some of your main considerations will be price, the structure of the transactions, complying with transfer regulations established by the Florida Division of Corporations, and related details. One key issue that may not cross your mind is an exclusivity period. This prohibits a seller from dealing with any other potential buyers while the transaction is still pending. To determine whether you’d want one, you should understand what exclusivity means, learn about the key clauses, and consult with a Florida business law attorney about the pros and cons. Overview of Exclusivity Clauses in Business Transactions An exclusivity provision defines a length of time, typically 1-2 months, where a seller cannot deal with any party other than the prospective buyer regarding the sale of the business. Exclusivity covers a wide range of activities involving a transaction, including: Advertising the business as being for sale; Entertaining an offer made by another party; Entering into negotiations regarding the sale of the business; or, Accepting an offer. The specific terms, including the duration and itemized list of prohibited activities, will be included in the exclusivity section of the letter of intent executed by the buyer and seller. Purpose of an Exclusivity Period These provisions are essential to protect both buyer and seller in a transaction involving sale of a business. In general, the transaction doesn’t proceed in the same fashion as the purchase of a home or car. There are formalities, due diligence periods, and other tasks that cannot be accomplished overnight. That means exclusivity periods offer advantages to both parties to the transaction. Buyer Benefits: As a potential buyer, you need time to go through the books of the target business and conduct your own assessment of whether the deal is fair. Reviewing the essential information takes time, and you don’t want to feel rushed. Seller Benefits: If you’re on the other side of the transaction, you don’t want to go through the effort and time in selling your business – only to have the buyer proceed lackadaisically or dwell on minute details. After all, even though you have a letter of intent, you don’t have a complete agreement. If the buyer ultimately backs out, you’ll have to start the entire process from scratch, which could affect your business value and bottom line. For this reason, sellers have power to negotiate a reasonable amount of time for the exclusivity period. “A carefully drafted exclusivity provision—as part of a purchase offer, Term Sheet, or Letter of Intent—is key to the negotiation process. It gives the parties time and space to work out the details of a transaction, and even decide whether a transaction can happen, without either party risking terrible consequences.” BrewerLong Attorney Trevor Brewer Key Provisions in an Exclusivity Agreement Though they’re usually part of a larger document as the letter of intent, there are several key clauses that comprise the exclusivity arrangement between a buyer and seller. Some of the more important provisions include: No Shop Provisions: The crux of an exclusivity agreement is the seller’s promise to not solicit, negotiate, or enter into agreements regarding alternative transactions with other prospective buyers. It’s also possible to include the requirement that the seller end any existing sale discussions with third parties. Exclusivity Period: The start and end dates are the key details for this section of the agreement. Usually, the period begins when the buyer has a meaningful indication of interest, often by signing a letter of intent. However, there are other documents that can contain exclusivity clauses, such as a term sheet or offer for sale. The end of the exclusivity is typically marked by both parties’ signatures on an acquisition contract or bill of sale. Obviously, a buyer will want a longer period to address due diligence, but a seller may want to negotiate a shorter duration – such as 1-3 weeks. Termination: Both parties should give themselves an “out” in case the transaction doesn’t measure up to expectations. As the buyer, you may uncover issues that affect the sale price or intentions for the business. The seller could negotiate terms that terminate the exclusivity period if the buyer isn’t making progress toward completing the transaction. Duty of Good Faith: Any purchase agreement should require parties to act in good faith throughout the exclusivity period. A failure to include such terms – or refusal to sign – demonstrates that either the buyer or seller isn’t committed to completing the deal. Consult with an Orlando, FL Business Law Attorney About Exclusivity Issues For more information on how exclusivity periods work in the sale or purchase of a business, please contact BrewerLong. You can set up a free appointment by calling 407.660.2964 or visiting us online. Our team serves business clients in Orlando, Sanford, and throughout Central Florida, and we’re happy to advise you on the key legal issues.
Whatever the reason behind your decision to dissolve your business, it’s important to understand that it’s not as easy as just closing your business doors and moving on. There are multiple requirements under the Florida Business Corporation Act, and noncompliance can lead to serious legal consequences. Though many business owners were fully prepared to start up their company, fewer know exactly how to dissolve a corporation in Florida. The details will vary depending on the nature and where your organization stands within a typical corporate lifecycle, so it’s wise to trust a Florida business law attorney for assistance. A general overview of the steps to dissolve a Florida corporation can also help you learn what to expect. Determine Dissolution Requirements If you never issued shares to stakeholders and haven’t launched operations, your plan for terminating your business is relatively straightforward. You need to complete the necessary forms to dissolve. The paperwork is available online, but you can’t submit your documents through the Division of Corporations website. Instead, you might have to type your information into the relevant fields, and then print everything out and send it through US mail. For corporations that have issued shares and accepted funds or other items of value for an ownership interest, the requirements are different. Notify Stakeholders If people have invested in your company by purchasing shares of stock, they are owners. You couldn’t sell or otherwise cease operations without their consent, so you’ll need to notify them that you intend to dissolve your corporation. Your Articles of Incorporation and Bylaws contain the details on how to call a meeting for purposes of terminating your company, so you’ll need to strictly comply with these rules. During the meeting, members of your board of directors need to officially bring up the issue of dissolution for a vote and recommend it to the shareholders. Then, you must get consent from a majority of the shareholders to dissolve. In some situations involving small businesses, members of the board of directors will also be shareholders. That could make the process easier; however, it’s possible that not all stakeholders agree. Alternatively, there may be many shareholders in a larger company, further complicated the process. “Corporate dissolution should not be seen as the first resort in solving disputes among business owners, managers, and investors. The ideal situation is for parties to engage in a negotiated settlement of their difference, so that the corporation can continue to survive.” BrewerLong Attorney Michael Long Fill Out Dissolution Forms Once you have agreement from all shareholders, you’re ready to fill out the necessary paperwork to wrap up your business. The form is Articles of Dissolution and, though it may seem easy, you need to fully understand the details. You must include: The full, legal corporate name of your company as registered with the Division of Corporations; The date that you originally filed your Articles of Incorporation; The date that you intend for your corporation’s dissolution to officially become effective, which must be within the next 90 days after filing; and, Some details on how your company voted to dissolve, which would typically be a corporate resolution. If you didn’t initiate operations and never issued shares, you must supply the name and relevant dates as mentioned above. In addition, you must include an attestation, i.e., a sworn statement that: You have not issued any shares; Your company didn’t conduct any business; Your corporation has no outstanding debts or legal obligations; and, Members of the board of directors or the original incorporators agreed to dissolution. Complete a Notice of Dissolution Though not mandatory to dissolve your company, you may opt to prepare this notice. The document officially states that your business has ceased, which can be useful in dealing with any debts or legal obligations. If creditors contact you seeking payment, you can use this form to establish the requirements necessary to make their claims and get payment. The document also acts as official notice that creditors cannot bring any new claims for debts you’ve resolved. Submit Materials Along with Fees The final step in how to dissolve a corporation in Florida is sending everything into the Division of Corporations. You should include a cover letter that itemizes everything that you’re including in the packet. It’s also necessary to provide a check, along with all necessary fees – which will vary depending on the method of dissolution. Get Legal Help from an Orlando, FL Business Law Attorney At BrewerLong, our lawyers have decades of combined experience advising business clients throughout Central Florida. We can explain how to dissolve a corporation in Florida, and we’re prepared to help you navigate the process. To schedule a free consultation with a member of our team, please call 407.660.2964 or fill out an online contact form.
Buying an established business can be a great way to hit the ground running. More people are pursuing this path than ever before — according to data from Small Business Trends, the total number of companies bought and sold in the United States hit a record level in 2018. As lucrative as buying a business can be, it is worth noting that, if proper precautions are not taken, purchasing an established company can be a major mistake. This is a complicated transaction. Before you take the plunge, you should consult with an experienced buying a business lawyer in Orlando. Four Reasons You Need an Attorney When Purchasing a Business 1. Conducting Due Diligence Review Are there hidden liability landmines in the business? A comprehensive due diligence review is the only way to know for sure. All of the company’s contracts agreements, warranties, and past business practices must be carefully examined. An experienced Florida business law attorney will help you with his critical step. 2. Negotiation of the Sale Once you have a clear understanding of the strength and weaknesses of the company, you will be in a position to negotiate the best possible deal. Effective negotiation is key. Remember, buying the best business in the world is still a mistake if you get a bad price. You do not have to go through negotiation alone. A top-rated Orlando, FL buying a business lawyer — a professional who has been through the process many times before — will represent your interest during negotiation of the agreement. 3. Structuring the Transaction Buying a business is a complex process. Even if you and the other party are essentially on the same page, you can still run into major problems if you do not know how to properly structure the transaction. Our Florida business lawyers can help you find a structure for the purchase agreement that best protects your interests. 4. Drafting and Executing the Business Purchase Agreement Finally, the purchase agreement must be drafted and carried out. Of course, buying the business is only the first step of the process. When you are making such a significant transaction, you need to make sure that get everything right. With a well-drafted, business purchase agreement, you will be in the best position to build a thriving and successful company. Discuss Your Case With Our Buying a Business Lawyer in Central Florida At BrewerLong, our skilled Florida commercial law attorneys have extensive experience representing clients who are preparing to purchase a business. We are proud to be diligent, sophisticated advocates for our clients. We are here to protect your interests. To arrange a free, completely confidential introductory phone call with our attorneys, please contact our legal team right away. With a law office in Maitland, we represent clients throughout Central Florida, including in Orange County, Osceola County, Brevard County, and Seminole County.
Going into business with one or more other people can be exciting, but it can also be a stressful experience when one or more of your partners does not live up to the terms of the partnership agreement. When one or more of the partners fails to abide by the terms of the partnership agreement, this is known as a breach of the agreement, or a breach of contract. In such situations, the remaining partner(s) want to know about options that may be available with a breach of partnership agreement. We want to provide you with more information about partnerships generally and the importance of partnership agreements, and then to provide you with options that may be available to you if one of your partners breaches the partnership agreement. What is a Partnership? The U.S. Small Business Administration (SBA) explains that partnerships are the most basic business structure available to two or more people who want to go into business together. If two or more people decide on a partnership, they have to decide between one of two options: a limited partnership (LP) or a limited liability partnership (LLP). A limited partnership, or LP, is a business structure in which one general partner has unlimited liability while the other partner(s) have limited liability. The general partner with unlimited liability tends to have greater control over the company, while the remaining partners with limited liability often have less control over the company. A limited liability partnership, or LLP, is a business structure in which all partners or owners of the business have limited liability and share generally in control over the business. Limited liability means that you are not responsible for the actions of any of your other partners, and you are not responsible personally for debts associated with the partnership. In both LPs and LLPs, profits are passed through to personal tax returns. What Should Go Into a Partnership Agreement? Whether you have an LP or an LLP should be outlined clearly in a partnership agreement. In addition to clarifying whether you have an LP or LLP, the partnership agreement is also an important tool for handling breaches by one or more of the partners. An article in Forbes explains that the following elements should go into every partnership agreement. While the agreement need not necessarily be in writing, having a written partnership agreement can be extremely helpful: Each partner’s financial contributions; How the partners will split the profits; What will happen if one partner leaves the business or dies; What will happen if you need to close the business; What will happen in the event of bankruptcy; How partners will share in decision-making; How partners will resolve disputes (e.g., mediation, arbitration, lawsuits); Liquidated damages in the event of a partnership breach; and Dissolution of the business. Handling a Breach of the Partnership Agreement Generally speaking, the best scenario for handling a breach of a partnership agreement is if your partnership agreement specifically outlines your options in such a situation. If your partnership agreement requires mediation or arbitration in the event of a dispute, you should speak with a lawyer about moving forward with mediation or arbitration. However, your partnership agreement also could make clear that you are able to file a lawsuit against the other partner for your losses. In addition, your partnership agreement also might make clear whether you can seek liquidated damages and the amount available. If your partnership agreement does not specify what to do in the event of a dispute or a breach, then you may have one of several options available to you with the help of a business lawyer: Expel the partner from the partnership; File a lawsuit against the partner for the breach; Seek liquidated damages from the partner; and/or Negotiate a settlement. The above options need not be mutually exclusive. For example, you may be able to expel the partner from the business and file a lawsuit against that partner. Depending upon the terms of your partnership agreement, you also may be able to seek liquidated damages for actual or anticipated damages in your lawsuit. Contact a Florida Business Lawyer If you need help handling a partnership dispute, you should speak with a Florida business lawyer about your case. Contact BrewerLong today for more information.
If you are thinking about starting a business, there are many things you need to know about the importance of hiring a lawyer. Many entrepreneurs in Florida have exciting and innovative ideas for creating a new business venture or running a business, but they may not have experience choosing a business structure. Also, they may not have experience handling day-to-day issues that impact a business, incorporating a business and obtaining licenses and other necessary documents, and managing other legal issues associated with a new company. When you are considering a startup, you may be searching for information with terms like “lawyer for business startup.” The following are some reasons from articles in The Muse and Entrepreneur about why you might need a business lawyer for your startup. Choosing Your Business Structure When you are thinking about starting a new business, one of the first things you will need to do is decide on the best structure for your business. While you might be using the term “startup” to describe your business, as an article in Forbes makes clear, a “startup” is not a business structure. Rather, “startup” is a term that is typically used to describe plans for starting a new business that is “working to solve a problem where the solution is not obvious and success is not guaranteed.” Others might describe a startup business in terms of culture as opposed to business structure, in which you engage in “a culture and mentality of innovating on existing ideas to solve critical pain points,” or when people agree to go into business with you with the implicit acknowledgement that they will “forgo stability in exchange for the promise of tremendous growth and the excitement of making immediate impact.” Accordingly, if you are thinking about a startup, you should begin working with a business lawyer to determine what type of business structure is best for you. The following are among the most common options for businesses: Sole proprietorship: This is the simplest type of business structure, and it is the most common for individuals who plan to go into business solo. If you are thinking about a startup and want to own the business yourself—and to hire employees who will not necessarily have a stake in the business—then a sole proprietorship usually is best. With a sole proprietorship, any expenses and income go through your personal tax return. For legal purposes, you and your business are, in effect, the same entity. This means you are responsible personally for any of the company’s liabilities. Partnership: You can choose between a general partnership where all partners have limited liability (an LLP) or a limited partnership (LP) in which a general partner has unlimited liability and all other partners have limited liability. This is a low-cost type of business structure that is relatively simple, and all profits and losses go through your personal tax return. Partnerships typically are best when two—or only a few—people want to go into business together. Corporation: There are a number of different types of corporations, including the common S-corp and the C-corp. Corporations are much more complicated than sole proprietorships or partnerships, and they cost more to create and to run. Corporations always are separate legal entities, which means that individuals are not personally accountable for the corporation’s liabilities (in most situations), and there is the possibility of higher rewards. Corporations also offer flexibility for companies that may grow substantially. Limited liability company (LLC): An LLC has some benefits of a corporation (liability protection) but without double taxation since earnings and losses pass through to the owners through individual income tax returns. LLCs are also relatively flexible and typically are best for businesses that are just starting out. LLCs can be especially popular for startups. Managing Situations That Require Legal Counsel In addition to choosing a business structure, there may be many legal issues that you have not yet even considered. The following kinds of legal issues may need attention when you are starting out with your startup: State and federal laws: There are numerous Florida state and federal laws that govern businesses in a variety of ways, including taxation. It is important to make sure that you engage in appropriate tax planning, and that you pay careful attention to the state and federal laws that may govern your startup. Managing risk: Whenever you create a startup that involves engagement with third parties (people beyond your business partners, such as employees or suppliers) and members of the public (such as customers), it is important to ensure that you know your rights and responsibilities under state and federal law. For example, you will need to be aware of rights and responsibilities under the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act of 1964, and various other laws. Creating a business agreement: Whether you are forming a partnership and need to create a partnership agreement or need assistance with bylaws, it is important to work with a lawyer to ensure that you have methods in place for handling business disputes, unexpected situations, and the possibility of dissolution. Incorporation: If you need to incorporate your business, you will need help from a lawyer to ensure that you provide the necessary documentation for your startup. Employment contracts and hiring employees: When you hire employees, it is essential to understand an employer’s rights and responsibilities, as well as to understand the rights that employees have under state and federal law. We can help you to draft employment contracts, to develop an employee handbook, and to help you manage best practices for hiring. Business contracts: Developing enforceable business contracts with suppliers and other entities can be complicated, but a Florida business attorney can assist you. Contact a Business Law Attorney in Florida Are you thinking about options for a startup? It is extremely important to have an experienced Florida business law attorney to assist you from the early stages of your business. Not only can a lawyer help you to choose…