Understanding the Difference Between an Asset Sale and Stock Sale

It is complicated to decide whether to structure a business sale as an asset or stock sale, as both structures can benefit the parties involved. Buyers generally prefer asset sales, while sellers prefer stock sales. This article highlights some of the primary differences between the two. Asset Sale In an asset sale, the seller maintains ownership of the entity, while the buyer purchases the company's individual Read More

You Can’t Take It With You: What Happens When an LLC Member Dies

Death sucks. Besides the whole downside of not being alive anymore, it may cause a lot of problems for others after you’re gone. This is especially so if you own a membership interest in a mutli-member limited liability company (LLC).   An LLC is an entity owned by its members.  What happens to the LLC upon the death of a member depends upon a number of factors. Customarily, a deceased Read More

Warning: Covenant Not to Compete Ahead

A Covenant Not to Compete, sometimes called a Non-Compete Clause, is an agreement where one party agrees not to enter into or start a similar business, profession or trade in competition against another party.  These agreements are often found in employment situations, especially when employees are leaving their employment. Here’s the warning:  Be VERY careful whenever signing a document that contains Read More

Piercing the Corporate Veil: 3 Ways Business Owners Expose Their Personal Assets

The worst fear of many business owners is to lose their home, money or other personal assets in a lawsuit. To avoid this, they will often incorporate their businesses to form a limited liability company (LLC). If you are the owner of a corporation or LLC, your personal assets will generally be protected from legal action against your business.  This is because such entities are considered separate legal entities from Read More

Do I Need an Operating Agreement For My Multi-Member LLC (Hint: Yes, You Do!)

Many people form limited liability companies (LLCs) to own and operate their businesses. Much like corporations, LLCs offer limited liability protection without the requisite formalities of a corporation (for example, a board of directors, annual meetings, etc.). The Operating Agreement is the primary document of an LLC, as it describes the framework of the business; financial and operational processes, Read More

Do I Need an Operating Agreement For My Single-Member LLC? (Hint: Yes, You Do!

Many people form limited liability companies (LLCs) to own and operate their businesses. Much like corporations, LLCs offer limited liability protection without the requisite formalities of a corporation (for example, a board of directors, annual meetings, etc.). The Operating Agreement is the primary document of an LLC, as it describes the framework of the business; financial and operational processes, Read More

5 Things to Know About Corporate By-Laws

Every corporation requires by-laws.  They are a necessary document for every corporate entity.   The problem is that most people who form corporations aren’t quite certain what by-laws actually are, nor what they do. Below are five (5) basic concepts regarding corporate by-laws. 1.  They are a Blueprint for Your Corporate Operations By-laws are a written document that contains the rules and Read More

Is Arbitration Right For Me?

Arbitration is a procedure that parties to an agreement may use in order to resolve their disputes outside of the courts.   Litigating in court is often an expensive, time-consuming and emotionally draining experience.  In order to avoid this, many parties to a contract agree to arbitrate, rather than litigate, through a contractual provision called an arbitration clause. Read More

Understanding the Due Diligence Period in a Real Estate Transaction

Due diligence in real estate is broadly defined as the time when buyers have expressed their intention to buy, but they need a few things to make sure they want to finalize the deal. In a real estate transaction, the steps a buyer takes to close a deal after an offer has been made are commonly referred to as the "due diligence" period. These items are: Research the market - What are other homes in the area Read More

Why You Should Never Use a Single Entity to Own Multiple Businesses

Many business owners use entities such as corporations and limited liability companies (LLCs) to hold their business assets.  This is because these types of entities offer business owners something called limited liability. With an entity such as a corporation or LLC, a person’s liability is limited solely to their ownership interest in that entity.   Should the entity incur liability or other debt, Read More