When people come together to begin a business, they may not think the time will come when they will not get along. But if, after many years, you and your business partner no longer see eye-to-eye when it comes to how to operate your business, what is to be done? The late Mickey Rooney once quipped: “A lot of people have asked me how short I am. Since my last divorce, I think I’m about $100,000 short.” There are many who could say the same thing about a business divorce, and you are going to need an experienced business attorney to help you.
If you planned ahead, then you may have a detailed agreement to direct you on how to move forward. Such direction may involve one partner buying out another, for example. However, if you failed to plan ahead, you may be facing the possibility of leaving the fate of your business up to a court.
Under Arizona’s statutory scheme, a shareholder of a corporation or a member of a limited liability company can petition a court for the dissolution of a company if there is a deadlock in the management of the company which adversely affects the business. See, A.R.S. §§ 10-1430, 29-785 To Read Click Here. And even though the court might allow one shareholder to buy out another in order for the business to continue on (see A.R.S. § 10-1434) To Read Click Here, there is no guarantee that the business will survive one owner’s efforts at dissolution. Such an action may even involve the appointment of a receiver to take over the operations of the business while the court case plays out. Whether or not the business survives such a court action, the financial cost to the business and its owners may be enormous. This is especially true if the action involves claims of wrongdoing.
At Rowley Chapman & Barney, we have experienced business law attorneys and we can help you prepare for disagreements that may arise between business partners by use of such things as a shareholder agreement, operating agreement or buy/sell agreement. If you are past that point, we are also experienced in litigating business divorces and will aggressively fight to protect your interests. Please give us a call today if you are facing these or other legal issues.
Attorney Profile: Nathaniel Wadsworth, Business & Litigation Attorney
With the start of a new year, many people begin thinking of resolutions related to personal fitness and weight control. “This year I will lose X number of pounds,” is a common goal. However, many may testify that it is easier to never to gain extra weight in the first place.
In legal matters, it is also easier to avoid legal difficulties than to have to fight a lawsuit after the fact. One example of this is in a company’s employment practices. Many companies have out-of-date non-compete agreements with their employees which may not be enforceable in court. An employer may discover only when it is too late that its non-compete agreement does not provide the protection intended. Non-compete agreements must be narrowly-tailored and limited in time and geographic scope, or a court will not enforce them. If you have not had your employment policies and non-compete agreements reviewed recently, you may save your business a lot of risk and trouble by having them reviewed and revised by an experienced employment and business law attorney. Call me today at (480) 833-1113 to make an appointment to have your non-compete agreements reviewed before you need to enforce them.
Pope Benedict XVI announced recently that he will be resigning his position as the leader of the Catholic Church. While a Pope’s resignation is not common, it is common for leaders of businesses to resign their positions, either because of age, a sale of the business, a forced resignation by others with an interest in the business, or any number of other reasons. When these situations arise, it is imperative that the business follow the legal and corporate requirements for the changes to be effective and enforceable. If you need help in these or other corporate matters, you will be well-served by seeking the assistance of an experienced business law attorney. Call us at (480) 833-1113 and one of our experienced business lawyers will help you with whatever transition you are facing.
Are you an entrepreneur struggling to decide how to form your business? You may be wondering whether you should:
- start the business without assistance;
- use an online platform to assist in filing; or
- hire an attorney.
Which option to choose depends on the complexity of your business and its structure.
1. STARTING A BUSINESS WITHOUT ASSISTANCE
There is a wealth of information on the internet that can provide you general concepts on how to form a business. Articles, websites, and blogs are readily available that outline the fundamental differences, advantages, and disadvantages of various types of legal entities. They often provide free sample forms, checklists, explanations, and state or federal filing fee schedules.
The greatest disadvantage with this approach, however, is that such sources do not offer legal advice, and cannot explain how to adapt or apply the complex legalities to your entity. Thus, while the internet is a wonderful resource to gain the initial understanding of what legal entities are available, you may be left with unanswered questions as to how your particular entity should be structured.
2. USING AN ONLINE PLATFORM
If the prospect of forming or restructuring a business alone seems too daunting, or questions remain after an online search, you may think about looking to various online platforms. These platforms charge hundreds, sometimes thousands, of dollars to “assist” in starting or restructuring a business. They provide research materials, forms, and fee schedules. They are required by law, however, to disclose that they can neither offer legal advice nor provide specific, detailed guidance to help in determining what entity you should form.This option is remarkably similar to the first, starting a business without any assistance, with one major difference: it costs money. It seems that the role of an online platform is to provide a form-filling template that expedites the process. Ultimately, along with significant costs, you are left to decide how to structure your business.
3. USING AN ATTORNEY
If researching online articles, blogs, and websites, or attempting to use an online platform leaves questions unanswered as to how the confusing concepts apply to your business, the assistance of a qualified attorney is the solution. Only an attorney, unlike the two options above, can offer detailed advice as to how to best structure your business to reach your unique business goals.
If you are an entrepreneur and have questions about the structure or complexity of your entity, contact us at (480) 833-1113.
Shakespeare reminds us that a rose by any other name would smell as sweet. However, this metaphor only goes so far. A contract signed in any other name is not necessarily enforceable in the same way.
Some business owners, for example, have made the mistake of signing their personal name to a contract without making any indication in the document that they are signing on behalf of their company. If a problem arises, the other party to the contract then may attempt to hold the individual owner liable on the contract instead of or in addition to the business. Much litigation can be spared if people are careful in the way they sign their contracts.
Call us at 480-833-1113 and our experienced contract and litigation attorneys will make sure your name is protected!
Attorney Profile: Nathaniel Wadsworth, Contract & Litigation Attorney