Memorialize that Deal in Writing!

Since I am in the business of memorializing deals for people, my repeated message of "get it in writing" might seem somewhat self-serving.  Thankfully, non-lawyers point it out too:  Lema Korshid on Mindpetals had a post yesterday entitled "Memorialize that Deal in Writing."  She writes: Entrepreneurs, save yourselves from future headaches! Ask your attorney draw … Read More

Why many Small Businesses still choose an S Corporation over an LLC

If your goal is to limit liability of your business and deduct business losses from your non-business income, your choices for a business entity basically boil down to a New York limited liability company (LLC) or an S corporation (which is a New York corporation that has elected pass-through tax treatment by filing Form 2553 … Read More

Should we incorporate our Small Business in Delaware?

More often than not, a small business operating out of New York is well advised to incorporate in the Empire State. While you could theoretically incorporate in any of the 50 states (including Delaware), incorporating in another state such as Delaware adds additional costs and almost no benefits to the small business corporation. Let’s look … Read More

Keep Your Legal Fees in Check!

Most attorneys and law firms still charge  by the hour.  Even though flat fees seem to be more common nowadays for certain routine agreements and matters, the meter usually starts running as soon as you start talking to your attorney.  Here are a few tips on how to keep legal fees under control.

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Going into Business Together: Don’t Rely on a Handshake!

Great – you have found people who share your vision to own and grow a business. But don’t forget that going into business with other people requires you to think ahead and be clear about the relationship. This is your livelihood and future. Do not think for a minute that conflicts can be resolved as you go along. Even the best of friends can end up in serious conflict over issues that might seem minor.

While you may be tempted to save the money that an attorney might charge to document your agreement, think about the thousands of dollars you may have to pay to litigate a conflict or the money you might lose because such a conflict keeps you from operating a profitable business.

Regardless of the legal entity you may choose for your business, think about every issue that might be relevant for your particular situation, and have your attorney draft the appropriate legal papers. Naturally, you cannot foresee every possible disagreement that might arise in the future. Beware of business partners who need to agree on every minute detail of the business-to-be. (That could be a hint that going into business with that particular person might not work out for you in the long term.)

Following are some of the basic issues you need to agree on with your fellow business partners.

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Who should draft the Agreement?

Once you know there will be a written agreement, someone has to draft it.  Should it be your lawyer or the other party’s lawyer? Some say make your lawyer insist on preparing the first draft.  I tend to agree with that.  It gives you the opportunity to set the stage for later negotiations and control … Read More

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