SMALL BUSINESS FORMATION, ORGANIZATION, AND DISSOLUTION

While it is simple to form a legal entity for the operation of a business, it is necessary to respect certain formalities in order to gain the benefit of any limited liability.

We can assist you in the process of choosing the appropriate form of entity for your intended use; and can provide you with guidance on how best to use that entity to minimize your personal liabilities.

Corporations have many more regulatory requirements than LLCs.  Corporations are required to create and maintain bylaws, issue stock to owners, maintain a stock transfer ledger, hold annual meetings of their directors and shareholders, pay corporate taxes, and file annual reports.  LLCs are only required to file annual reports.  Despite the fact that LLCs have only a single regulatory requirement, performing certain regulatory functions of a corporation will increase the likelihood that the LLC is treated as a separate entity.  

We can assist you in preparing and maintaining the documents, including consents, resolutions, operating agreements, and stock ledgers, necessary or recommended for the proper operation of your small business entity. 

Dissolution or cancellation of your small business after the operating business has been wound down may cap the shareholders/members liability exposure.  We can assist you in performing the regulatory requirements and pre-requisites to formally terminating the existence of your small business entity so as to finalize and maximize the limitations of your personal liability with reference to that entity.

SUCCESSION PLANNING

Whether a small business is run by a single family, or is a broader coalition of business associates and friends, coordinating and planning the fate of the business in the event of the death or incapacity of a principal figure in the operation of the business is essential.

The most common tool used in business succession planning is the buy-sell agreement.  

A buy-sell agreement allows the shareholders/members of an entity to negotiate and establish a price, or a formula by which a price would be established, for the buy-out of the interest of a deceased or disabled shareholder/member, and to allow for continuity of management and control, in the event of the death or disability of one of them, at a time when they have full ability and capacity to make an informed decision.  Frequently, buy-sell agreements are funded by means of insurance on the lives of the shareholder/members.

We have assisted in the negotiation and preparation of many buy-sell agreements for a vast range of businesses, with various shareholder/member structures.

In the case of a family run business, succession planning is often done in conjunction with or as part of a broader estate plan.   Where a child or children are active in the business, an equalization clause in the founder’s testamentary document will allow for offsetting liquid distribution to other children.  Alternatively, children who are not active in the business could be given an interest in passive assets related to the business.  We can assist you in deciding on and enacting a proper structure to provide for your intentions, and to minimize the likelihood of familial disharmony after the passing of the founder.

MERGERS 

Mergers can be used both to combine two separate businesses into a single entity in order to leverage the positions of one or both of them; or can be used to change the form of an entity into a different structure, i.e., to convert a corporation or a limited partnership into a limited liability company.  We have experience in both types of merger and are able to assist with the preparation and filing of the necessary paperwork.

JOINT VENTURES

While it is generally considered preferable to form a separate legal entity for the operation of a business, on occasion – particularly for less formal or short term circumstances – parties prefer to create an informal association.  Even in the event of a less formal or short term association, however, the parties to the association are well served by reducing the nature and terms of their association to writing.  One way to do this is by the creation of a joint venture agreement. 

CONTRACT NEGOTIATION, DRAFTING, AND REVIEW

In the daily course of the conduct of your business, it may be necessary to enter into all manner of contracts, including purchase and sale agreements of business contracts, waivers, employment agreements, independent contractor agreements, consulting agreements, non-disclosure/non-compete/non-solicitation agreements, profit sharing agreements, and many others. 

We have experience drafting, reviewing, and negotiating all manner of agreements and contracts, which may be necessary in the conduct and operation of your business.

COMMERCIAL REAL ESTATE SALES AND LEASING

The leasing or sale of commercial real estate is typically more complex than the conveyance of an interest in residential real estate.  There are simultaneously more regulations, which may be required of the landlord/grantor, and fewer consumer safeguards for the tenant/grantee.  

We have significant experience with the drafting, review, and negotiation of commercial real estate contracts and leases, and serve as the sole attorneys of commercial landlords and property managers in both New Jersey and New York City.

If you have questions or require assistance in any of these areas please contact Sean Rankin at 908-277-2410 or Srankin@summitlawyers.net .