You want to go into business. Congratulations! Is it better to buy a going business? Should I take over that business’s name and entity form or do I want to form a new business entity and change the name? What about the Seller’ creditors and liabilities (existing or potential future responsibilities)?
You want to start from scratch. Good thinking - or did you think enough? Should I be a “C” corporation, Sub-S Corporation or need I be a corporation at all? What about a Limited Liability Company (LLC) or how about a Limited Liability Partnership (LLP) or just a straight partnership?
Do you need a license for what you want to do or can you just hang out the sign “Open for Business”? If you are buying the business, did you protect yourself from the Seller competing with you in the future (how far in the future)? Can he/she open up on the next block, community, city or how about the next state? And if you are the Seller, can the buyer come back and claim against you, for how long and for what? What if you, the Seller, cannot find another job or business and you want to go back and do what you knew how to do, can you? Do you sell your business and take back a loan that is now in default - what can you do? How did you protect yourself?
What about your “partner”? Is he/she a partner or a stockholder like you? Do you have a Partnership Agreement or Shareholder Agreement that spells out your rights, obligations and duties? What happens if someone gets ill or dies, what happens to his/her share? How many weeks of vacation and/or sick leave does each of you get? What happens to your widow(er) and children as to your interest in the business? Your son or daughter just finished school and wants to come work for you, can he/she?
These are just a few of the many intricate and delicate questions that we answer and advise our clients on a regular basis. There is no single and simple answer because each case requires a very thorough examination of the facts between the client and attorney. We look at what the client’s goals and aspirations are and try to mold the solutions to their specific requirements.