Business Law

Buying or selling a business is a complex venture that requires buyers and sellers to adhere to specific legal processes, and necessitates careful planning. Sales agreements are legal documents that outline the terms and conditions associated with the transaction and enable a meaningful evaluation of all company assets and liabilities. The type of sales agreement you use will depend on the reason for the sale, the timing of the sale, the performance of the business, and its structure. The following are some of the most commonly used sales agreements for buying and selling businesses.  Asset Purchase Agreement An asset purchase agreement (APA), also known as an asset sale agreement or business purchase agreement, is a written document that formalizes the sale of the significant business assets of a business.  It outlines the structure of the agreement, price, exclusions, and warranties.   There are many types of assets that can be purchased, including: Equipment Licenses Intellectual property Real estate properties In an asset purchase agreement, the buyer agrees to purchase certain assets from a company but the selling entity retains liabilities, and retains the ownership of the corporate entity selling the assets.  This often leads to the selling entity thereafter going through a “wind down” or “dissolution” to cease operations and close the business.  It can be advantageous for buyers and sellers to enter into an APA when they want flexibility in the transaction. Furthermore, an APA may be part of a more significant transaction, such as a merger or acquisition. Share Purchase Agreement A share purchase agreement transfers ownership of shares (also called stocks) in a company from a seller to a buyer. A share (or stock) is a unit of ownership in a corporation (xxx, Inc.) that is divided up among shareholders and includes an ownership interest in the profits and losses of the corporate entity. A share purchase agreement generally includes information about: Who is selling the shares Who is buying the shares Number of shares being sold and their value The type and class of the shares being sold  Company the shares are being transferred from Payment details, such as the amount of the down payment and the date of closing   A share purchase agreement can be used to sell shares from one shareholder to another shareholder in the same company, or to an outsider who wants to join the ownership of a company.  It is important to review the Shareholder Agreement or the Articles of Incorporation regarding and rules or restrictions on selling shares. Membership Sales Agreement Members of a limited liability company (LLC) can buy or sell their interest in the LLC (and thus their interest in the LLC’s assets and liabilities) using a membership sales agreement. Sale of interest in an LLC can happen between current co-members of the LLC, or to an outsider who wants to join the LLC.  Sometimes membership sales are required if a member is forcibly removed from the LLC.  An LLC membership purchase agreement can be used for any transaction involving the exchange of money for the surrender of LLC interests.  An LLC’s articles of organization, certificates of formation, or other founding documents describing ownership, organization, and voting rights may need to be amended if the LLC has been in operation for a while. A membership sales agreement specifies how much of the seller’s interest is being transferred, the purchase price, how and when money will be transferred, the closing date of the sale, and whether consent is required from other LLC members. Our Business Attorneys Can Help with the Sale or Purchase of a Business No matter how confident you are in the valuation and conditions of a sale, you should not attempt to buy or sell a business on your own.  Selling or buying assets or an interest in a business can have significant tax and estate planning ramifications.  When so much is at stake, it is always wise to enlist the help of legal professionals. An experienced business attorney can protect your best interests throughout the transaction.  At Morefield Speicher Bachman, LC, our business law attorneys pride themselves on helping businesses efficiently achieve their goals and resolve disputes. If you have questions or need guidance on buying or selling a business, call (913) 839 2808 today to speak with one of our business law and litigation attorneys.  

When you have been injured or when you are involved in a dispute about money, there can be a tendency to rush the decision to sue. It’s important to remember that the money you recover in a lawsuit comes at a cost, such as lawsuit filing fees, attorney’s fees, and the time and trouble it takes to go to court. Lawsuits are about more than money, though. They are about justice. That’s why it’s important to consider everything you might gain or lose by filing suit, including the opportunity to right a wrong. Below are a few things to consider before you file a lawsuit against a company or person. Suing on Principle The purpose of civil lawsuits is to allow you to obtain justice for a wrong you suffered. When someone violates important principles such as honesty, carefulness or fairness and causes you a personal or financial injury, a lawsuit is one way to balance the scales of justice.   You may be tempted to sue even if the goal of litigation is something other than money. If a person or company has wronged you, the “principle” of pursuing justice and righting this wrong may be your ultimate goal even if the lawsuit does not directly or immediately improve your financial condition. When your primary motivator is the principle, rather than the money, you need to evaluate with your attorney whether the cost of litigation is worth it to you. In some cases, a strategic lawsuit can be used to send a message that you or your company will not tolerate certain types of misconduct. If there is a risk that others will harm you in the same way in the future, a lawsuit may be a sensible way to protect you or your company. But, litigation is expensive. As the proverb says, “You should count the cost before you build the house.” Make sure that filing suit over principle is something you can afford and that the time, expense, and aggravation are worth what you hope to gain. Remember that there may be other ways you can address the problem. In many cases, your lawyer can negotiate a settlement with the other sides. While the wrong you suffered may be deeply upsetting and you feel as though a lawsuit is the answer, you should consider the burden of a lawsuit on your personal life. Lawsuits are expensive in terms of time and dollars. Lawsuits can be emotionally draining as well. You may find that a lawsuit interferes with the time you have for your work, business, family, and social life. There will be paperwork to complete, court hearings to attend, and orders provided by the judge to follow. And, there may be a loss of privacy as the other party investigates your claims. But, the justice you receive may well be worth the cost. We can help you consider the pros and cons of filing a lawsuit. Suing for Principal (“the money”) In a civil lawsuit, you can recover money damages. In some cases you can get a court order enjoining the other party from acting in certain ways. Lawsuits are a tremendous tool for resolving disputes, but they are expensive. Before filing a lawsuit, it is important to have a frank discussion with your attorney about whether a lawsuit is likely to improve your financial condition or cost you more than you recover. You also will want to evaluate whether the defendant has the ability to pay any judgment you obtain. Fortunately, many cases settle before trial – well over 90% settle in the United States. It is always important to balance cost and benefit and to consider the “principal” and the “principles” involved. This is one reason that we handle many lawsuits on a contingency fee basis. When you hire an attorney on a contingency fee, you only pay attorneys fees if your attorneys recover money for you. The attorneys charge a fee that is a percentage of the money they recover for you. Typically you will also be responsible for the case costs. Contingency fees can make it feasible for you to bring a lawsuit without risking your financial well-being. In Conclusion… Before rushing to file a lawsuit, it is important to consider all of the options for solving your legal problem. It may be possible to negotiate a mutually beneficial compromise directly with the other party. Another option is to hire a mediator. This neutral third party will help you and your opponent evaluate your goals and options in order to come up with a solution that works for everyone. You may also be able to submit your dispute to binding arbitration.  Our team at Morefield Speicher Bachman will ensure you understand the financial and personal cost of all of your options. Our goal is to help you solve your legal issues in the manner that best fits your needs and your situation.

America’s work climate has changed over the last several decades. Companies like Amazon, Uber and Ebay have paved the way in creating a new way to work. There are currently 57 million people who are part of the new “gig economy.” This type of work can be full time or part time and allows people to pick and choose who they want to work for, how many hours they want to put in, and ultimately become their own boss. Recently after a rash of delivery truck accidents, this new way of working has come under scrutiny. To keep up with growing demand, delivery drivers are being held to impossibly tight delivery schedules and have been involved in serious accidents, causing injuries and deaths. The companies have attempted to avoid any liability for many of these accidents, arguing that because the delivery drivers are independent, they are not liable. In many cases, the position taken by delivery services companies is morally and legally wrong. What is the difference between an independent contractor and an employee? This is an evolving area of law. As more and more people move into this type of work, state and federal agencies have increased their scrutiny in classifying workers. Classifying a worker as an independent contractor can benefit a company. Companies who employ independent contractors don’t have to pay payroll taxes, unemployment insurance, or benefits. They argue that they are free from liability if the contractor gets into a work-related collision. Although companies like to describe workers as independent contractors, in many cases the relationship looks more like a normal employer-employee relationship. There are several different ways to determine whether a worker is an independent contractor or an employee. Both the Department of Labor and the Internal Revenue Service have their own criteria, which varies in accordance to their specific departmental needs. One of the concepts that is evaluated is whether there is “economic dependence” present. In other words, does the individual performing the service derive a substantial portion of their income from the services rendered. For example, is the so-called independent contractor contracting with anyone other than the big online retailer?  Other factors that are considered include : Financial: How is the worker is paid? Does the employer reimburse the worker for expenses and do they provide the tools to do the job? Contractual: Are there any written contracts between the employer and the worker? Does the worker receive any benefits such as pension, paid vacation or health insurance? Degree of Control: Does the company have control over how the worker does their job? If the above issues are answered in the affirmative, it is possible that the worker is an employee. Delivery Truck Drivers as Independent Contractors State and federal laws regarding this issue may vary, and each situation is unique. As this applies to Amazon, WalMart, UPS and other companies who use a gig business model, this can be a grey area. They argue that their delivery drivers are independent contractors, and should an accident occur, they are not liable.  However, many of these companies assert considerable control about how the workers do their jobs, including: The driver’s routes The delivery schedules, for example same day delivery,  Customer requirements like specific location of delivery, Number of packages that must be delivered in a day or other time deadlines. Whether the driver is working alone, or through a third-party delivery company, often their primary client, and sometimes their only client is the retailer. In the case with Amazon, workers have commented that everything they did while working was under the company’s control. They were told where to go, how to deliver the packages and how to interact with the customers. It remains to be seen how these cases will ultimately be decided, as they are pending in court. At Morefield, Speicher, Bachman, LC we believe that many delivery service drivers are ultimately working on behalf of the companies that they are providing delivery services for. And, we believe those retailers should be held responsible for the accidents caused by the drivers they control. If you or a loved one has been the victim of a delivery truck accident or feel your rights have been violated by being a misclassified worker, please come speak to us as soon as the accident occurs. We are here to ensure that your rights are protected, and you deserve compensation for any injuries you have suffered. Call us today at 913-839-2808.