I am the sole owner of an existing business and I want to bring in a business partner as a 50% owner and sell half of the shares of the business. Can this be accomplished with a buy-sell agreement? Or what is the appropriate document?
When you add another owner to the business, you must document the new owner's purchase of his or her shares and update the corporate records. In addition, it is highly advisable to execute a Buy/Sell Agreement (also known as an Operating Agreement for an LLC or Shareholder Agreement for a corporation). This document discusses governance of the company as well as restrictions on transfer of the ownership if an owner withdraws, quits, dies, or other exit from the business.See question
I need to start my business (LLC?), I also need to protect my intellectual property and also properly respect the copyrights of ideas and publications of those I reference in presentations that are part of the business (a health oriented workshop)...
You should have a legal advisor that understands your business and can guide you through the issues you will encounter as your launch and grow the business. Large companies have a "General Counsel" position; small companies usually do not, but they should have a legal advisor they regularly contact to help them understand risks and take steps that mitigate these risks. The law firm should help you think through all your business relationships including formation, contracts with third parties such as partners, employees, contractors, and customers and intellectual property protection.See question
Pros vs Cons?
There is a distinct difference in a non-profit and for-profit entity. A non-profit functions for the benefit of its constituents. A for-profit entity functions for the benefit of its owners or shareholders. If you are operating a non-profit, you do not 'own' it. Instead, it has a Board of Directors and Officers that make decisions but any money made goes back into the operations. You may receive a salary if you're working in the organization but if you dissolve or sell the non-profit, you personally do not get any proceeds from that transaction. With a for-profit entity, you are an owner, operating for-profit, so if you build the entity so that it is profitable, you personally benefit from that profitability in addition to any salary you may receive for work performed. A for-profit entity also has governing people (Directors and Officers) but they serve for the benefit of the owners.
Hope this helps you as you make your decision.See question
I am planning to start a website & app that will contain peoples financial data. Which state would be best to protect my business? I've read that Delaware may be best because of the chancery court. Also if the business will start with one owner an...
As others have stated, the questions you raise are important and complex. The answers depend on your long term goals. You want to setup the business with the long term goals in mind. Key considerations include who the owners will be, who will manage the business, taxation of the business and owners, liability protection and administrative costs. The short term costs of engaging a CPA and attorney to set the company up correctly will be greatly outweighed by the ease of growing the company because it's setup properly for its future. Delaware has historically been a favorite due to its favorable corporate laws but many other states have adopted similar structures. Delaware is also a common choice when venture capital and IPO is in the mix. Delaware, however, adds additional costs because you have to have a local presence in Delaware as well as setup separately in the other state(s) where you're doing business. Again, there are a lot of issues to consider in this decision.
As far as the trademark goes, you should protect any marks that connect your customers to your products/services. Whether you do this immediately or later in the process depends on how certain you are that the marks won't change as you launch and grow the company. We've seen a number of companies change their name/brand/logo once they've launched due to customer response.
You will also need good contracts with your customers - both the subscribers and advertisers.
As others have said, the issues you raise are complex and require the input of an attorney and a CPA.See question
For example if I registered "Sugar and Whisk"as my business can I use "Sugar & Whisk" for the logo? If these are distinguishable, can I register both names under one license? Thank you!
I agree with the prior attorneys but wanted to add one point. Trademarks and tradenames (or DBAs) are different things. When you mention your logo, you are discussing trademark which has nothing to do with the tradename. You must register all tradenames (i.e. any name or brand you are doing business under) with your entity at the state level. Your trademark is the words, graphics, colors or other elements that connect the customer to your business (think of the Nike swoosh or the word "Starbucks"). These are protected under common law or under federal or state trademark law which requires registration. The state does not regulate tradenames and will allow mulitple companies to register the same tradename. Your tradename, however, may also be your trademark and it's your responsibility to monitor and police the use of it.See question
Two consultants are entering into a JOA to offer a set of services for which they will split all expenses and net profits. The subject of the JOA has been approved as a DBA for one of the consultant's companies, which is itself organized as an LLC...
From what you've provided, it appears that the individual will be in a contractual relationship with the LLC. To do so, she would be required to operate as some sort of business entity (a sole proprietorship or new entity if she's not using her existing corporation). The rights of each party to use the DBA might be a provision of the contract. She would not have protection by the LLC for liability purposes if she is not a member, manager, or employee of the LLC. However, the LLC could elect to cover her actions under its liablity insurance policy. The contract should provide specifics regarding the allocation of liabilty in provisions such as limitation on liability, indemnification, and insurance would govern liability associated with each party's activities under the contract. There are a number of issues here and you need to consider the goals and risks of each party to determine the right structure for this relationship.See question
Business partner is not sharing the books and I'm afraid I will be liable for his actions regarding not paying bills including taxes, etc. Should I just give him the company to no longer be responsible for debt he has occurred without my permission?
As a Member of an LLC, you will not be personally responsible for most debts of the business. However, some debts such as wages and taxes can flow through to the owners and any contract you personally guaranteed will be your responsiblity. If you have an Operating Agreement, its terms may address how a buyout would occur. Even if no Operating Agreement exists, you can negotiate a buyout that releases you from liability associated with the business. This release doesn't prevent tax collectors from pursuing you for the amounts due, it just means the company and/or partner is responsible for reimbursing you. Withdrawing from the LLC doesn't necessarily relieve you of liability that occurred while you were there but would likely limit your liability for any actions by your partner after your withdrawal.See question
October of last year I entered into a small start up business with an associate. She approached me and asked if I would be interested in being a business partner in a mail and more type store. We agreed to both contribute 10,000 dollars in capit...
From your post, it sounds like you were listed on the business license intially. This is evidence of the intent to be partners. You should look at what information you have showing your initial agreement -- emails, draft documents, business license filings -- these will also show the intent of the partnership. One owner cannot unilaterally remove the other owner, so there must be some agreement between the two of you as to how you will split up. She cannot assume that she gets to keep your investment and continue to operate the business and take its profits unilaterally. The next question, though, is what you want to occur in this situation -- do you want the business, your money back, some portion of future profits or other remedies? A return of your investment may or may not be reasonable based on the business' financial situation and growth potetial, so what would make you whole in this situation? Any agreed upon resolution should be clearly documented.See question
Lets assume that I work for a company who does A LOT of different things: blogging, publishing, hardware manufacturing, technology infrastructure, Ecommerce, and a lot more. Lets say I work in one area, lets say shipping goods to purchasers, but ...
In addition to Ms. Young's suggestions, I would look closely at the language of the non-compete. Often what initially seems like a very broad non-compete is actually narrower and less restrictive when you parse out each word or segment of the provision. An attorney can help determine based on your particular situation whether the provision is enforceable and what rights you have.See question
I am currently trying to figure out whether or not to partner in an LLC that is forming. I am equally vested into the company, financially and with the workload, and would like to be a partner but do not know if I will be in the area longer than ...
It is good that you are addressing these issues before becoming a "member" (or owner) of the LLC. As part of your business formation/setup, you and the other members should execute an Operating Agreement that describes how various transfer scenarios such as death, disability or withdrawal will be handled. The document should address how much the other members or the company will pay you for your ownership interest when you leave (often a valuation formula) and how those amounts will be paid. If you know you may withdraw in a year, you all can discuss what that might look like for the business and incorporate any obligations of either the company or you individually. The Operating Agreementis flexible and can incorporate the desires of the members. It is a legal document and should be drafted or reviewed by an attorney. If you do not execute an Operating Agreement, the handling of the withdrawal will be governed by the Washington LLC Act and can be very complicated and expensive.
Your comment about becoming a member for "legal" reasons raises a number of questions that you need to be addressed specifically by an attorney who can advise how best to proceed to ensure you do not inadvertently violate any tax or securities laws.See question