Business Law

As the year winds down and you gather with family or your dedicated employees, there’s a unique opportunity to start an important conversation about what’s next for your business. At MSB Law, we’ve been privileged to guide countless leaders—just like you—through the transition from “today’s business owner” to “tomorrow’s legacy maker.” Whether it’s over a cup of coffee with your kids or a heartfelt toast at the holiday party, now is the time to think about the future of your business and the legacy you want to leave behind. You’ve spent decades building your business and now you may be feeling ready to step away from the day-to-day demands, and embrace the next chapter of your life. Succession planning isn’t just about paperwork; it’s about deciding what matters most to you and ensuring your values and goals continue, even after you move on. Here are five essential things to help start the discussion with your family or employees as you consider your business’s future: 1. WHO: Choosing Your Successor Who is the right person to carry your legacy forward? This is often the most emotional part of the conversation—deciding who will take over the business you’ve put so much into. Is there someone within your family, or a trusted employee on your team, who is passionate about the business? Are they capable of leading it into the future, or do they need more mentorship before they’re ready?  Alternatively, would it make more sense to look for an external partner or even consider a merger or third-party sale? This decision requires a careful evaluation of both skillsets and desires. Choosing the “who” is about making sure that your values, your work, and your relationships can continue with someone who will honor and grow them. It’s also important to openly communicate with the potential successor(s) to ensure they are willing and prepared for the role. 2. WHAT: Defining What You’re Passing On What are you transitioning—is it ownership of the company as a whole, or perhaps specific assets? Do you want to pass along the entire business at once, or do it gradually? Would selling to a key employee, an employee stock ownership plan (ESOP), or a family trust make more sense for you?  The “what” helps begin defining the structure of your succession plan. Think about whether you want to retain any involvement in the business, such as an advisory role, or whether you’d prefer a clean break. It’s important to align these decisions with what’s best for you, your family, and your business. It’s also critical to have a valuation of the business performed, so you can be sure you are receiving fair value and making informed decisions about what exactly you are transitioning. 3. WHEN: Establishing the Right Timeline Timing is crucial in succession planning. When is the right time to begin planning this transition? When is it time to execute the transition? Are you looking to step away completely in the next year? Or do you see yourself transitioning out over a few years’ time, and  remaining involved in some capacity during the transition to ensure a smooth handover?  Establishing a timeline not only gives you peace of mind but also helps those around you prepare for their own futures. Setting clear expectations for “when” helps everyone plan accordingly, and reduces uncertainty for your family, your employees, and your clients. Consider the financial aspects as well—tax planning and structuring, and options for things like tax-advantaged charitable giving, can vary greatly depending on when the transition takes place.  It’s imperative to have a team of professional advisors (business lawyer, financial planner, CPA, tax strategist, etc) helping you determine the best strategy for timing.. 4. WHERE: Envisioning Your Next Chapter Where do you want to be after you’ve passed the torch? Visualizing your next chapter is key to planning your transition. Whether it’s spending winters in a warmer climate, moving closer to family, or even starting a new venture entirely, understanding where you see yourself—both physically and emotionally—will shape the steps you take today. Where you plan to live, what lifestyle you envision, and what kind of personal fulfillment you seek are all questions to reflect on.  Also consider how “where” impacts the future of the business itself. Do you want to relocate the business, keep it local, or expand into new regions? Having a clear vision of your own future helps ensure the plans you make today align with the life you want to lead tomorrow. 5. WHY: Clarifying Your Purpose Why are you considering making this transition? Why is it important to you to make the transition a success? Understanding your motivations is essential. Are you transitioning for health reasons, to finally enjoy your retirement, or to spend more time with loved ones? What drives you? For some, it’s about maximizing financial returns. For others, it’s about preserving family and customer relationships or continuing a positive community presence and impact.  You might be driven by the desire to see your family continue in the same industry. Or perhaps you have a charitable intent that allows your business to make a greater community impact. Clearly identifying your “why” helps guide the decisions and conversations you have along the way. It also ensures that those taking over understand your purpose, so they can continue to act in a way that honors your original goals. Succession planning is so much more than a task to cross off your to-do list. It’s about creating a bridge from where you are now to where you want to be, and helping those around you come along for the journey. As you gather together during this holiday season and spend time with those you hold most dear, both personally and professionally, we encourage you to take a moment to reflect, share, and plan. At MSB Law, we’re here to help you navigate these complex, deeply personal choices. We bring our experience, our understanding, and our values to every conversation because we know how much

Over the past 40 years, we’ve seen the impact of a business and corporate world driven by shareholders, and specifically the goal of maximizing shareholder wealth. The overly-aggressive pursuit of profits often harms those who make up the core of a company, its true “stakeholders” – all the employees, customers, and members of its community it touches.  Many business owners, especially those driven by values, have felt the strain of operating in an environment that seems at odds with their most closely held beliefs.  We can relate. For business owners motivated by their principles and values, the purpose of business extends beyond profit. It’s about building something that aligns with their deeper motivations, pursues a higher calling, and contributes to the greater good. The debate between “shareholder capitalism” and “stakeholder capitalism” has often centered on governance, ethics, and long-term impact. Yet, those who run values-driven businesses already know what matters: integrity, respect, and a commitment to lifting up not just the shareholders who primarily seek to maximize their ROI, but all the real stakeholders, i.e. all the participants who are critical to the business’s health, success, and impact.  This perspective is not a fleeting trend, but a deeply held belief by many about how business should be conducted. It’s about creating workplaces where employees are valued, fostering thriving communities through responsible practices, and seeing success as more than just the bottom line. A Shared Vision for Businesses and Society At its heart, values-driven business is about putting people’s whole wellbeing at the center of every decision. This idea echoes the sentiments expressed in discussions about stakeholder capitalism: the notion that a business’s true owners are not merely its shareholders who earn a return on profits, but rather everyone who contributes to its success. This is not a new concept. In fact, companies used to operate this way—investing in their employees, supporting their local communities, and focusing on long-term health rather than only quarterly returns. And those who embrace values-driven business leadership have already seen the impacts on their bottom line. Teams with a shared sense of purpose and values perform 17% better than teams without a strong sense of purpose and values. And some of the world’s most ethical companies are also some of the most popular and profitable (Chick-Fil-A, anyone?) Many business owners today find themselves drawn to this values-driven model, not as a reaction against the status quo but as a return to what business was always meant to be: a force for good in society. They understand that focusing on stakeholder well-being is good for society, but also leads to a more resilient, thriving company. What they are often lacking are like-minded advisors who understand their values and can help them navigate the complexities, legal and financial and otherwise, of running such a business. Supporting the Unique Needs of Values-Driven Businesses Values-driven businesses often face complex challenges in aligning their operations with ethical principles, while striving for profitability and long-term success. Balancing  financial goals with fair treatment of employees, community engagement, and sustainable practices requires careful navigation. Each decision must reflect core beliefs and consider the impact on all stakeholders. To support this journey, businesses need trusted partners who understand the weight of these choices. Thoughtful legal counsel plays a vital role here, helping to implement governance structures that reflect values, craft equitable contracts, and develop policies that support the well-being of employees, customers, and the community. This kind of support is essential for pursuing growth that benefits not just the company, but everyone it touches. Finding the Right Legal Partner to Support Your Vision Businesses that lead with values know that their mission requires more than passion; it requires practical support from trusted guides who understand the complexities of their journey.  A law firm that aligns with their values can be an invaluable advisor, helping them integrate their valued principles into every aspect of business. It’s about finding legal counsel that doesn’t just focus on risk mitigation or compliance, but instead empowers business owners to lead with integrity and purpose. The right legal partner will assist in: shaping governance structure to reflect ethical commitments; crafting contracts that honor fair relationships; and developing and implementing growth strategies that echo a dedication to employee well-being. They will walk with clients through the legal intricacies, allowing the business’s values to shine through in every business decision. Moving Forward Together You don’t need to be convinced that values-driven business works. You’ve experienced it firsthand. What you need is a legal partner who sees the world as you do, who understands that the path to success is not paved solely by profits but by the positive impact you create along the way. At MSB Law, our approach to legal support is grounded in the same principles that guide your business. We help you integrate your values into your business practices in ways that are legally sound and reflective of who you are. Our services are not just about risk mitigation or compliance; they are about empowering you to lead with integrity and purpose. We live in a time when the call for values-driven business owners to stand up and lead is stronger than ever. As you continue on this journey, remember that you are not alone. The complexities you face, the choices you make, and the impact you create are all part of a broader movement toward a more equitable and sustainable future. At MSB Law, we are honored to support businesses like yours. We do more than just offer legal advice—we strive to serve as a trusted guide that respects your mission and helps you realize your values-driven vision. Together, we can build not only successful companies but also a legacy of positive impact on people and our communities that extends far beyond the confines of business. In the end, running a values-driven business is about staying true to what matters most. It’s about leading in a way that lifts others up and leaves a lasting and positive impact

The Department of Labor’s (DOL) recent overhaul of overtime regulations, effective July 1, 2024, has sent ripples through the business world. The increased salary threshold to qualify for the white-collar exemptions has expanded the pool of employees eligible for overtime pay, necessitating a comprehensive re-evaluation of workforce classifications for many employers. As the DOL states, “The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, and outside sales employees.” This adjustment is a significant departure from previous standards and may have far-reaching implications for you as a business owner.    The Impact of the New Overtime Regulations on Businesses The elevated salary threshold means that millions of workers who were previously classified as exempt from overtime rules may now be eligible to receive overtime pay. While this change aims to provide additional financial security for workers, it presents substantial challenges for employers. Increased labor costs due to overtime payments are a direct consequence. Furthermore, the risk of misclassification claims has escalated, with potential penalties and damages significantly impacting a company’s bottom line. To mitigate these risks, business owners should: Review each employee’s role: Revisit each member of your team’s classification and determine if they are exempt or non-exempt. Review job duties, responsibilities, and the exercise of discretion and independent judgment. Update employee handbooks and policies: Ensure that these documents accurately reflect the new overtime regulations. Clear and up-to-date policies can help prevent misunderstandings and disputes. Implement robust timekeeping systems: Accurate timekeeping is paramount for calculating overtime pay correctly. Reliable timekeeping systems are essential for complying with the new regulations. Train managers and supervisors: Provide appropriate training to managers and supervisors on the new overtime rules to ensure consistent application and avoid costly errors. Stay informed about developments: Labor laws are subject to change, so businesses must stay informed about any modifications or interpretations of the overtime regulations. The Importance of Legal Counsel The new overtime regulations present a significant challenge for businesses of all sizes. Failure to comply can result in substantial financial penalties and reputational damage. It’s essential to recognize that these changes are not merely administrative adjustments; they represent a fundamental shift in labor law that impacts the core operations of many businesses.  We encourage you to find trusted legal counsel to help guide you. Why does this change matter to businesses? It’s important for business owners to stay up to date with the latest legal developments for both protecting their businesses and also ensuring they are keeping their employees’ best interests in mind. Failure to comply with updated regulations could result in: Increased Labor Costs: The expansion of overtime eligibility can lead to significant increases in payroll expenses. Compliance Risks: Misclassification of employees can result in costly lawsuits, penalties, and back wages. Operational Disruptions: Implementing new timekeeping systems and adjusting payroll processes can be time-consuming and disruptive. Competitive Disadvantages: Businesses that fail to comply with the new rules may face unfair competitive pressures. Given the complexities of the new overtime regulations, seeking experienced legal counsel well-versed in the nuances of business law in Kansas and Missouri is highly recommended. Business law attorneys can provide informed and grounded guidance on: Assessing your current classification practices Developing strategies for compliance Implementing new policies and procedures Mitigating the risk of litigation Understanding the potential impact of the new rules on your business By partnering with trusted business lawyers, business owners can navigate these changes with confidence and minimize the potential negative consequences. Remember, prevention is key. Proactive steps taken now can save your business time, money, and headaches in the long run. How MSB Law Can Support Your Business At MSB Law, we understand how overwhelming the new overtime regulations can be for business owners like you. You’re not just running a business; you’re supporting employees, families, and a community. We’re here to walk with you through these changes, providing the guidance and care you need to protect what you’ve worked so hard to build.  Let us help you navigate this transition with confidence, ensuring your business stays compliant and your team stays secure. Contact us to request a free consultation.

On April 23, 2024, the US Federal Trade Commission issued a final rule banning many noncompete agreements nationally, with some exceptions. This came months after California led the charge with Senate Bill 699 and Assembly Bill 1076, which went into effect on the first of this year. The FTC estimates that by freeing employees from the clutches of noncompete clauses, more than 8,500 new startups will be created per year, as well as an average annual pay increase of $524. The FTC’s change is expected to have the biggest impact in the tech sector, which some people claim unfairly binds employees to what they call an “exploitative” practice in order to protect intellectual property. But despite some people’s fear that banning noncompetes will let businesses’ hard-earned trade secrets leak out to their competitors, some recent scholarship concludes that banning these agreements may not lead to an increase in trade litigation. So, noncompetes are DOA, business will be booming, and everyone’s trade secrets are safe. Right? Well, it’s not that simple. Who is exempt from the ban on noncompete agreements? Not every employee is free from the limitations of a noncompete agreement just yet. As one example, under the FTC’s new rule, existing noncompetes for senior executives, defined as those earning more than $151,164, can remain in effect. However, employers may be prevented from enforcing any new noncompetes, even for senior execs. While the FTC says this number represents less than .75% of the working population, this still opens the door to litigation for those who are uninformed. When does the noncompete ban take effect? Despite news headlines everywhere announcing the end of noncompete agreements, they are not truly over…just yet. The FTC’s final rule was not scheduled to take effect until 120 days after it was published in the Federal Register. That means the earliest possible date we could have seen the ban take effect would have been August 22, 2024. However, a court decision on August 20, 2024 (Ryan LLC v. Federal Trade Commission), ruled that the FTC’s noncompete rule is unlawful and ordered that the FTC’s noncompete rule shall not take effect against any company nationwide. Are there any alternatives to a noncompete agreement if the ban is upheld? If the ban on noncompetes is eventually upheld, there are still many other ways businesses can protect themselves from having their hard-earned trade secrets leaked to their competition or otherwise out of their hands or from other actions that could harm their competitive advantage. Trade secret laws, non-disclosure agreements (NDAs), other confidentiality agreements, and non-solicitation agreements are all ways to protect well-meaning employers. According to the FTC, research estimates that over 95% of workers who signed a noncompete agreement additionally signed an NDA. What will the noncompete ban mean for employers if enforced? The FTC’s final rule would require employers to provide clear notice to employees (“workers”) that their noncompete clause cannot and will not be legally enforced before the effective date. Long-term, the ban could encourage employers to distinguish themselves from competitors through comprehensive benefits packages and a positive, productive working environment. For workers, the ban is freeing. For employers, it will be imperative to adopt updated policies to continue protecting important confidential information and competitive advantage without violating the law. What should employers do next? Employers should stay apprised of any updates related to this FTC ruling. We expect this issue to be tied up in litigation for some time, but the situation can quickly change. Business owners who want to stay out of the courts will want to stay informed and be ready to pivot during any time of transition. The FTC believes their proposed rule is largely promising, freeing workers from restrictive clauses that pin them to an unhappy job and giving them, in the words of the FTC Chair Lina M. Khan, “the freedom to pursue a new job, start a new business, or bring a new idea to market.” By eliminating noncompetes, the FTC hopes to foster healthy competition that fosters innovation from new voices. However, as with any form of change, there can be confusion and unintended consequences. Employers and employees alike who have questions about how the latest FTC ruling affects them should always feel comfortable reaching out to an attorney who specializes in business and corporate law. Have questions about the status of the FTC’s final rule banning noncompete agreements nationwide? The team at MSB Law has been in your shoes. We’re business owners ourselves, and we know how challenging changing federal regulations can be, especially for business owners to understand and navigate. Contact us or give us a call at 913-839-2808. We would welcome the opportunity to serve as your trusted legal counsel for all your business law needs.

With the rise of entrepreneurship and the “gig economy”, more and more people in Kansas and Missouri are engaging in multiple business ventures. While this can be extremely profitable, it can also create a complicated web of legal obligations that need to be managed. One option is choosing to form a holding company.  There are numerous benefits and potential pitfalls of organizing your business interests with a holding company.  How a Holding Company Can Untangle Your Business Ventures A holding company, also sometimes known as a “parent company”, is a business entity that owns other business entities. It acts as a parent or umbrella organization for the subsidiary businesses it owns, allowing them to operate under its name if the parent company wishes. It can be used for consolidating different investments and businesses together in order to increase efficiency and organization, while also creating additional layers of liability protection for the members or shareholders of the parent company. The holding company does not actually take part in the daily operations of its subsidiaries; rather, it serves as an owner or manager of such entities.  To Merge or Not to Merge? When making the decision whether to bring all your different businesses under one umbrella, the key advantage of creating a holding company is that it can further protect you from liability exposure. Furthermore, it may provide valuable tax savings when business owners are able to take advantage of federal and state tax deductions. However, there are potential drawbacks to consider when deciding if a holding company is appropriate for your needs. Primarily, the complexity of the business structure may make it difficult to manage multiple interests without proper guidance from an experienced lawyer. Our Business Lawyers Can Help Creating a holding company can be an effective way for entrepreneurs in Kansas and Missouri to further protect themselves from risk and liability exposure, while also providing continuing between management of their various business interests. However, with this approach comes potential risk. Before making the decision, it’s important to weigh both the pros and cons thoroughly with help from an experienced business lawyer so that you can make an informed decision. Contact Morefield Speicher Bachman to discuss and determine whether a holding company is right for you!

Contracts can be oral or in writing. Good business practice is to always reduce your agreement to writing. Regardless whether oral or written, a contract is an agreement between two parties that binds them to carry out (or not carry out) certain or specific actions. The requirements of a contract are an offer, an acceptance of that offer, and some type of “consideration” such as payment in exchange for services provided. A written contract should be the manifestation of the parties’ meeting of minds over those basic elements. A written contract is easier to enforce than a verbal contract, especially when it is well written and clearly outlines the rights and responsibilities of the parties. Written contracts also help avoid future disputes that arise from confusion or disagreement about what may have been verbally agreed to. Strong, healthy, and mutually beneficial business relationships are often based on written contracts. In a contract, the expectations between the parties (the people or businesses signing the contract) are defined, and agreements are clarified, so all parties involved know what to expect from the other party, and what is expected of them. A solid contract that details your expectations and explains your rights and remedies is critical to protecting your interests. Contracts Should Be Specific, Not General Informal or short summary agreements may feel easier to maintain, or feel like an expression of trust and honor. However, without clearly detailing the agreed terms, an informal or short agreement may place you at unnecessary risk and threaten to destroy business relationships. Contracts that are first negotiated, then well-drafted in detail, can clear up discrepancies and prevent misunderstandings that lead to wasted time, money, and resources in the future. If a party is uninformed or unsure of what to expect in a business relationship, it can lead to controversy and lawsuits. It is imperative to make it very clear in the contract the expectations of the parties. Be careful not to use vague or open-ended terminology.  By being specific, many conflicts can be avoided. In order to be successful, all parties must be on the same page! Could Uniform Contracts Be a Good Fit for Your Organization? It can be a great idea to have a standardized form contract, if you provide the same goods and services to the same kind of clients on a regular basis.  When you need to develop a standard form contract that best meets your needs, it is always advisable to seek the help of a qualified business lawyer. Business law attorneys will help ensure the standardized contract is well written and includes all the protections you and your business need. Contract Termination Details: Why Are They Important? Before a contract is signed, it should be carefully read and renegotiated if any terms seem difficult to meet. Business law attorneys can assist clients with this process. If the terms do not satisfy all parties, the contract can be abandoned and the parties can walk away with no agreement.  Once the contract is signed, however, it can only be terminated in certain circumstances.  Defining in the agreement when a contract can be terminated can be a valuable tool to prevent future disputes. Terminating a contract refers to ending it before the parties have completely fulfilled all terms.  A termination may be allowed when permitted by certain laws or the terms of the contract.  These reasons sometimes include the following: impossibility of performance or execution, mutual agreement, or breach (violation) of certain terms of the contract.  Sometimes, this means a party may be released from finishing their obligations under the contract.  But sometimes, terminating a contract without good cause or legal justification can lead to an expensive lawsuit.  As a result, good legal advice should be sought when considering terminating a contract.  How Should You Go About Building a Contract? When drafting a contract, it is best to seek the legal assistance of an experienced attorney. Our business law attorneys at Morefield Speicher Bachman understand the laws governing contracts and best-practices procedures, which allows us to determine the language and terms that will best protect you and your business.  Businesses frequently encounter disputes and other issues over contracts. It doesn’t mean that your business can’t continue operations. Our business law attorneys at Morefield Speicher Bachman can help you resolve business disputes, and litigate claims when necessary.  As a business owner or leader, you can rely on us to help you successfully navigate every step of the dispute resolution process while you stay focused on operations. Call (913) 839-2808 today to speak with one of our business law and litigation attorneys.